Case: M/S. Transmission Corporation Of A.P.Ltd Vs. M/S. Lanco Kondapalli Power Pvt. Ltd

interlocutory remedy is intended to preserve in status quo, the rights of parties which may appear on a prima facie case. The court also, in restraining a defendant from exercising what he considers his legal right but what the plaintiff would like to be prevented, puts into the scales, as a relevant consideration whether the defendant has yet to commence his enterprise or whether he has already been doing so in which latter case considerations somewhat different from those that apply to a case where the defendant is yet to commence his enterprise, are attracted." [See also M/s Power Control Appliances and Others v. Sumeet Machines Pvt. Ltd. [(1994) 2 SCC 448] . 50. The interim direction ordinarily would precede finding of a prima facie case. When existence of a prima facie case is established, the court shall consider the other relevant factors, namely, balance of convenience and irreparable injuries. The High Court in its impugned judgment although not directly but indirectly has considered this aspect of the matter when on merit it noticed that the Appellant has raised a dispute as regard payment of an excess amount of Rs.35 crores although according to the Respondent a sum of Rs.132 crores is due to it from the Appellant and the Appellant had been paying the amount for the last two years as per the contract.51. Conduct of the parties is also a relevant factor. If the parties had been acting in a particular manner for a long time upon interpreting the terms and conditions of the contract, if pending determination of the lis, an order is passed that the parties would continue to do so, the same would not render the decision as an arbitrary one, as was contended by Mr. Rao. Even the Appellant had prayed for adjudication at the hands of the Commission in the same manner. Thus, it itself thought that the final relief would be granted only by the Arbitrator. 52. The Commission is yet to apply its mind. Even before the Commission, the Appellant has not made any application for a direction in terms of sub-section (2) of Section 94 of the Act. 53. The Respondent has installed the Power Generation Plant. It has continuously been supplying electrical energy to the Appellant. Indisputably, it has to discharge its contractual obligation. The Appellant being the only consumer, the Respondent has no other option but to supply electrical energy to it. In the event, the dispute is referred to the arbitrator, the equity between the parties can be adjusted. Without going into the correctness or otherwise of the claim of the Respondent, we may notice, that according to it, the Appellant owes a hefty sum of Rs.132 crores to it. According to the Appellant, in the event, the disputes and differences between the parties are determined in its favour, it may be held, that it has paid an excess sum of Rs.35 crores only.54. Clause 2 of Article 14 postulates that pending arbitration, the rights and obligations of the parties shall remain in full force and effect pending the award in such arbitration proceedings, which award shall determine whether and when termination of the said agreement if irrelevant shall become effective.55. It is now well-settled that this Court would not interfere with an order of the High Court only because it will be lawful to do so. Article 136 of the Constitution vests this Court with a discretionary jurisdiction. In a given case, it may or may not exercise its power. The question came up for consideration before this Court in Chandra Singh and Others v. State of Rajasthan and Another [(2003) 6 SCC 545] wherein it was observed: "42. In any event, even assuming that there is some force in the contention of the appellants, this Court will be justified in following Taherakhatoon v. Salambin Mohd. wherein this Court declared that even if the appellants contention is right in law having regard to the overall circumstances of the case, this Court would be justified in declining to grant relief under Article 136 while declaring the law in favour of the appellants." [See also State of Punjab v. Savinderjit Kaur, (2004) 4 SCC 58 ] 56. The said principle was reiterated in N.K. Prasada v. Government of India and Others [(2004) 6 SCC 299] stating: "It is trite that in a given case, the Court may refuse to exercise its discretionary jurisdiction under Article 136 of the Constitution." 56. In Inder Parkash Gupta v. State of J&K and Others [(2004) 6 SCC 786] , it was stated: "42. In ordinary course we would have allowed the appeal but we cannot lose sight of the fact that the selections had been made in the year 1994. A valuable period of 10 years has elapsed. The private respondents have been working in their posts for the last 10 years. It is trite that with a view to do complete justice between the parties, this Court in a given case may not exercise its jurisdiction under Article 136 of the Constitution of India." 57. The same principle has been reiterated in State of Uttaranchal Through Collector, Dehradun and Another v. Ajit Singh Bhola and Another [(2004) 6 SCC 800] wherein it was stated: "9 - Having regard to the manner in which the District Magistrate took over possession of the premises, which appears to us as at present advised, to be high-handed, arbitrary and without any legal sanction we are not persuaded to exercise our discretion under Article 136 of the Constitution of India to set aside the interim order passed by the High Court. It is well settled that this Court will not exercise its discretion and quash an order which appears to be illegal, if its effect is to revive another illegal order."58. We, therefore, are of the opinion that it is not a fit case where interference with the High Courts judgment would be a proper exercise of jurisdiction under Article 136 of the Constitution of India.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]24. It is not in dispute that the Commission was constituted in terms of the Act. Section 37 of the said Act contains a non-obstante clause stating that notwithstanding anything contained in the 1996 Act, any dispute arising between the licensees shall be referred to the Commission. The Commission may proceed to act as arbitrator or nominate arbitrator or arbitrators to adjudicate and settle such disputes. Section 28 of the 1998 Act empowers the Commission to issue an interim order as it deems proper for securing compliance if it is satisfied that a licensee is contravening or is likely to contravene any relevant condition or requirement of the licence.The Appellant is a licensee within the meaning of both the 1998 Act and the 2003 Act.29. The question as to whether the Respondent should have taken a licence or permit under the 2003 Act or not is not a matter which requires our immediate attention. The Appellant is a licensee and the Respondent is a generating company in terms of the provisions of the 2003 Act. Section 37 of the 1998 Act deals with disputes between the licensees.The learned Counsel for the parties, as noticed hereinbefore, have argued before us on the interpretation of the provisions of the relevant statutes and agreement for determining the effect and purport thereof.32. As at present advised, however, we refrain ourselves from expressing any opinion one way or the other having regard to the fact that the matter ultimately must receive a detailed consideration at the hands of the High Court both in the writ petition as also in the application filed by the Respondent under Section 11 of the 1996 Act..45. We have referred to Firm Ashok Traders (supra) not because we agree with the principle laid down therein but only to suggest that Section 9 of the 1996 Act should be applied so that status quo may be directed to be maintained having regard to the fact that the parties understood the workability of the agreement in a particular manner.46. A writ court can also grant injunction in exercise of its power under Article 226 of the Constitution of India. If injunction is refused in this proceeding, the interim order passed in the writ proceedings shall continue. It may give rise to a stalemate. It may violate the well-known rule of judicial comity.The High Court, therefore, while noticing the interim order passed in the writ proceedings may have the said principle in mind.The interim direction ordinarily would precede finding of a prima facie case. When existence of a prima facie case is established, the court shall consider the other relevant factors, namely, balance of convenience and irreparable injuries. The High Court in its impugned judgment although not directly but indirectly has considered this aspect of the matter when on merit it noticed that the Appellant has raised a dispute as regard payment of an excess amount of Rs.35 crores although according to the Respondent a sum of Rs.132 crores is due to it from the Appellant and the Appellant had been paying the amount for the last two years as per the contract.51. Conduct of the parties is also a relevant factor. If the parties had been acting in a particular manner for a long time upon interpreting the terms and conditions of the contract, if pending determination of the lis, an order is passed that the parties would continue to do so, the same would not render the decision as an arbitrary one, as was contended by Mr. Rao. Even the Appellant had prayed for adjudication at the hands of the Commission in the same manner. Thus, it itself thought that the final relief would be granted only by the Arbitrator.The Respondent has installed the Power Generation Plant. It has continuously been supplying electrical energy to the Appellant. Indisputably, it has to discharge its contractual obligation. The Appellant being the only consumer, the Respondent has no other option but to supply electrical energy to it. In the event, the dispute is referred to the arbitrator, the equity between the parties can be adjusted. Without going into the correctness or otherwise of the claim of the Respondent, we may notice, that according to it, the Appellant owes a hefty sum of Rs.132 crores to it. According to the Appellant, in the event, the disputes and differences between the parties are determined in its favour, it may be held, that it has paid an excess sum of Rs.35 crores only.54. Clause 2 of Article 14 postulates that pending arbitration, the rights and obligations of the parties shall remain in full force and effect pending the award in such arbitration proceedings, which award shall determine whether and when termination of the said agreement if irrelevant shall become effective.55. It is now well-settled that this Court would not interfere with an order of the High Court only because it will be lawful to do so. Article 136 of the Constitution vests this Court with a discretionary jurisdiction. In a given case, it may or may not exercise its power.58. We, therefore, are of the opinion that it is not a fit case where interference with the High Courts judgment would be a proper exercise of jurisdiction under Article 136 of the Constitution of India.