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2008 DIGILAW 979 (ORI)

GOYAL MG GASES PVT. LTD. (GMGL) v. NEELACHAL ISPAT NIGAM LTD. (NINL)

2008-10-31

SANJU PANDA

body2008
JUDGMENT : Sanju Panda, J. - The present Appellant as Petitioner filed ARBP No. 358 of 2007 before the learned District Judge, Khurda u/s 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') seeking interim relief against the Respondent on the allegation that it caused breach of the terms and conditions of the agreement dated 6.10.1999 executed between the parties. The Respondent appeared in the said proceeding and filed its objection. The learned District Judge, Khurda vide order dated 22nd August, 2008 dismissed the said application of the Appellant. Challenging the said order, this appeal has been filed by the Appellant. The learned District Judge held that the contract dated 6.10.1999 did not have a termination clause, the same had expired by efflux of time and none of the conditions, i.e. prima facie case, balance of convenience and irreparable injury for grant of injunction, did exist and the prayer of the Petitioner being for specific performance of contract, the same could not be granted as the arbitrator, even, could not pass such order. On the above grounds, he rejected the Petitioner's application. 2. The brief facts of the case are as follows: The Appellant is a Private Limited Company engaged in the business of manufacturing and supplying industrial gasses including Oxygen, Nitrogen and Argon. The Respondent is a joint venture Company of MMTC and Government of Orissa. The Respondent set up 1.1 million tone integrated Iron and Steel Plant at Kalinga Nagar Industrial Complex, Dubri in the district of Jajpur, Orissa and for that, required substantial quantities of Oxygen, Nitrogen and Argon at required purity, pressure and flow rates. For that purpose, the Respondent floated a tender inviting application from persons having expertise in manufacturing and supplying industrial gasses including Oxygen, Nitrogen and Argon. The Appellant was one of the bidders to take part in the tender process and was the successful bidder amongst the other bidders. For that purpose, the Respondent floated a tender inviting application from persons having expertise in manufacturing and supplying industrial gasses including Oxygen, Nitrogen and Argon. The Appellant was one of the bidders to take part in the tender process and was the successful bidder amongst the other bidders. Accordingly, a contract was signed between the and the Respondent on 61 October, 1999 for supply of gases to the Respondent by setting up an Air Separation Unit (ASU) on Build, Own & Operate (BOO) basis for exclusively meeting the entire requirement of Oxygen, Nitrogen and Argon of the Respondent and its associate company Konark Metcoke Ltd. As per the said agreement, the Appellant alone was depicted as the Seller whereas the Respondent was shown to be the Buyer. 3. For better appreciation, the relevant Clauses of the said contract are extracted below: xxx xxx xxx 3.There are no understandings or Contracts between the BUYER and the SELLER, which are not fully expressed hereunder, and no proposal, statement or Contracts, oral or written made prior to or at the signing here up shall have any validity. No modification of the Contract including annexures hereto shall be valid unless the same is agreed in writing by the parties hereto and issued as an, amendment to the Contract. EFFECT DATE 4. The Effective Date of the Contract shall be the date of the signing of the Contract i.e. 6.10.1999. EQUITY PARTICIPATION 5. SELLER shall contribute to the equity of the BUYER to the extent of Rs. l crore concurrently with the release of the commitment deposit of Rs. 2 crores in terms of Article 14.16. 6. It is clearly understood between the parties that the SELLER shall be solely responsible for the completion of the Production Facility in time, for its successful sustained integrated operation and maintenance so that the gases are available to the plant on time. SELLER's SCOPE of WORK 8.1.1. The scope of work of the SELLER shall be to supply required quantity of Oxygen, Nitrogen and Argon at the fence of the SELLER's ASU limit (battery Limits) of specified purities and minimum pressures by setting up a production facility to manufacture/storage of the gases, operation and maintenance on continuous basis. SELLER's SCOPE of WORK 8.1.1. The scope of work of the SELLER shall be to supply required quantity of Oxygen, Nitrogen and Argon at the fence of the SELLER's ASU limit (battery Limits) of specified purities and minimum pressures by setting up a production facility to manufacture/storage of the gases, operation and maintenance on continuous basis. During any accidental break down/shut down of the ASU, the SELLER has to supply the gases from buffer liquid storage or from the outside sources as per the agreed terms and conditions mentioned hereinafter. xxx xxx xxx Time Schedule & Implementation Plan 11.1 The SELLER shall complete installation of the ASU and commence commercial production in 26 (twenty six) months from effective date of Contract as the BOF is scheduled to be commissioned within the said period. 11.2 If there is any delay in commissioning of BOF, SELLER and BUYER shall jointly review the progress at site, in the 12th month from the effective date of the Contract and take suitable actions. BUYER may grant extension of the date of commissioning of ASU upto 4 months beyond the scheduled commissioning date of 26 months from the effective date of contract. xxx xxx xxx DELAY IN COMMISSIONING and SUPPLIES 15.1 If there is delay in commissioning the ASU beyond the completion date as extended completion date and the BUYER has fulfilled all its obligations liquidated damages shall be levied on SELLER ' Rs. 5 lakhs per day subject to a maximum of Rs. 5 Crores. The amount shall be recoverable from initial payments to SELLER. VALIDITY of THE CONTRACT 18(i)The Contract shall be valid for a period of fifteen (15) years from the date fixed facility charge becomes payable by BUYER to the SELLER in terms of the Contract. Whereupon the production facility shall be transferred to the BUYER as provided hereinafter. 18(iv)After expiry of 15 years Contract period and conclusion of the deal, the BUYER shall have the option to operate and' manage the plant by themselves or outside parties other than SELLER/by SELLER on mutually acceptable terms and conditions. RESPONSIBILITY FOR PERFORMANCE of CONTRACT 19.1 The SELLER and the BUYER shall be responsible and liable for the due and faithful performance of the Contract in all respects. RESPONSIBILITY FOR PERFORMANCE of CONTRACT 19.1 The SELLER and the BUYER shall be responsible and liable for the due and faithful performance of the Contract in all respects. ARBITRATION 24.1 In the event of any dispute relating to or arising out of this contract, the same shall be resolved amicable by the parties, failing which the same shall be settled by Arbitration of the three Arbitrators in accordance with the Arbitration and Conciliation Act, 1996. Each party shall nominate its Arbitrator. xxx xxx xxx APPLICABLE LAW 25. This Contract will be governed by Indian Laws and Courts at Bhubaneswar, Orissa shall have exclusive legal jurisdiction. 4. The Learned Counsel for the Appellant submitted that the contract between the parties was a composite contract as it included commissioning, owning, operating and providing the gases by the Seller to the Buyer for a' minimum period of 15 years and the fixed facility charge was defined that the Buyer should pay to the Seller Rs. 155.0 lakhs per month for 15 years and should be applicable from the date of commissioning (i.e. start of commercial production) of steel making facility (BOF) of the Buyer. Admittedly the Respondent did not install its plant and process. He submitted that as per Clause 11.1 the seller should complete the installation of ASU and commence commercial production in 26 months from the effective date of contract as the BOF was scheduled to be commissioned within the said period and the Appellant was not able to install its plant within the said period as the Buyer did not provide site for the said purpose. As per the contractual term, it makes clear that the Respondent was to have its BOF commissioned first and thereafter for the said BOF as gases are required, the Appellant was obliged to install ASU within the said period of 26 months. The requirement of gases has been described in the contract. Sections 51 and 52 of the Indian Contract Act envisage that when a contract consists of reciprocal promises to be simultaneously performed, no promisor need to perform his promise unless the promisee is ready and willing to perform his reciprocal promises. Section 52 of the Contract Act provides that where the order in which reciprocal promises are to be performed is expressly fixed by the contract, they shall be performed in that order which the nature of the transaction requires. Section 52 of the Contract Act provides that where the order in which reciprocal promises are to be performed is expressly fixed by the contract, they shall be performed in that order which the nature of the transaction requires. Since the Respondent did not process its BOF, the Appellant's non-performing its part of the contract did not arise. He further submitted that as the ASU was required for providing gases to the BOF, the Appellant had been persisting with the Respondent to provide definite schedule by which the BOF would be commissioned so that by the said time it would be able to complete the commissioning of its ASU for supply of gases to the BOF but the Respondent failed to respond to the same. Finally, on 7.11.2005 the Respondent informed the Appellant as follow: the board has taken a decision to construct and commission steel melting shop in three years time. Main contract with SMS Demag for Basic Oxygen Furnace (BOF), Continuous Casting Plant (CCP) and Gas Cleaning Plant (GCP) has already been negotiated and amendment is expected to be signed by mid November, 2005. Based 0)1 the amendment to the main contract with SMS Demag, there are certain changes in the concept and capacity of the plant. Since NINL has already entered into the contract with you for supply gases. We will refer to negotiate with you the modification of the original contract with revised scope and delivery, the way it has been done with SMS Demag. In case this interests you please confirm by return fax so that we can start negotiation with you for finalizing the amendment to the original contract. 5. From the above, it was clear that the Respondent was not sure about its installation of BOF as it was going to have an amended contract signed by mid November, 2005 with its supplier SMS Demag and admittedly the BOF was not installed/functional. Therefore, unless such a contract was finalized and the BOF was commissioned, the question of the ASU being commissioned did not arise at all. By the amendment of the main contract with SMS Demag, there were certain changes in the concept of capacity of the plant. The Respondent wanted to have some modification of the original contract with revised scope and delivery for which the Appellant was required to confirm its interest by return fax. By the amendment of the main contract with SMS Demag, there were certain changes in the concept of capacity of the plant. The Respondent wanted to have some modification of the original contract with revised scope and delivery for which the Appellant was required to confirm its interest by return fax. Accordingly, the Appellant in response to the said proposal issued an affirmative reply on 8th November, 2005. The Appellant was not only ready and willing to perform its part of contract, but also tried to implement the contract by every means and bounds. In pursuance of the request made by the Appellant for a meeting to discuss the issue raised after 2005, a meting was held with the Respondent in the Respondent's office on 28.4.2006. As per its advise, the Appellant confirmed that the design and engineering of ASU would be vetted by M.N. Dastur & Company After considering and satisfying the Appellant, the Respondent confirmed that the Respondent did not act on the recommendation of its consultant MECON Ltd. and by letter dated 4.7.2006 confirmed the revival of the contract with the Appellant. Respondent also advised its consultant' to further discuss the matter with the Appellant. Pursuant thereto, MECON Ltd., the consultant of the Respondent requested the Appellant to have a meeting on 17.7.2006 at MECON's Office at Ranchi and requested the company to bring all relevant documents. Accordingly, the meeting was held on 20th and 21 st July, 2007 wherein the Appellant submitted all the required documents to MECON Ltd. In the said meeting MECON Limited requested the Appellant to have the design vetted by LINDE to which the Appellant responded negatively that LINDE being the competitor of the Appellant shall not do such vetting. It also showed that MECON Ltd. was prejudiced with the Appellant whereas the Respondent was having no objection by getting the design and engineering vetted by M.N. Dastur & Company and MECON Ltd. was insisting knowingly to be vetted by a competitor. 6. Thereafter, MECON Ltd. wanted a presentation to be done by the Appellant's Chinese ASU suppliers. Accordingly, the Appellant called the Chinese ASU supplier for the said purpose and a detailed presentation was done on 8th September, 2006. 6. Thereafter, MECON Ltd. wanted a presentation to be done by the Appellant's Chinese ASU suppliers. Accordingly, the Appellant called the Chinese ASU supplier for the said purpose and a detailed presentation was done on 8th September, 2006. The Respondent vide its letter dated 26.10.2006 asked the Appellant for specific response with corporate commitment on certain points which could form a part of the contract amendment and invited for a meeting on 10.11.2006 at the Respondent's office at Dubri to be chaired by its Managing Director. Thereafter, a meeting was held on 11.11.2006 and in the said meeting the Appellant confirmed that it will be in a position to set up the ASU plant and commission the same within 20 months from the date of amendment of the contract. As per that time, the Respondent and its consultant were fully satisfied with the capability and capacity of the Appellant to set up the said ASU Plant. Accordingly, Appellant submitted its commercial offer by letter dated 20.11.2006 to the Respondent covering all the issues which clearly established that the technical offer of the Appellant with amendments had been totally accepted by the Respondent. The Appellant by letter dated 5.1.2007 reiterated that it was ready and willing to perform its obligations under the contract and the Respondent had completely failed to perform its obligations. Again on 15.3.2007, the Appellant requested the Respondent to call for a negotiation to make necessary amendment in the contract which is necessary consequent to the slight change in the capacities so that the Appellant can proceed with the implementation of the project within the time. It was also emphasized by the Appellant that since four months had already expired by that time, in case of further delay, it would be difficult to set up the project within the agreed time because the time could be reduced only to certain extent and the Appellant again had a meeting with MECON Ltd. on 18.4.2007 and MECON Ltd. accepted the proposal of the Appellant regarding vetting of ASU design. The same was also confirmed to the Respondent by letter dated 23.4.2007. The same was also confirmed to the Respondent by letter dated 23.4.2007. Again on 15-3.-2007 the Appellant wrote a letter to the Respondent suggesting that a joint visit by NINL/MECON team to the designing and manufacturing base of HHCL, China as well as to visit an operating plant supplied by HHCL in China is absolutely essential to ascertain their capabilities conclusively in designing, engineering, supplying 'and installation and to make necessary amendment in the contract. The Respondent after having discussions of more than 11/2 years and exchange of various correspondence, finally constituted a sub-committee of the Directors of Respondent and by letter dated 6.6.2007 requested the Appellant to depute their authorized representative to attend the meeting of sub-committee of the Directors of the Respondent scheduled to be held on 8.6.2007 in New Delhi and on that date there was no whisper either from the side of Respondent, their consultant or from their senior officers even the sub-committee of the Directors that they were not satisfied to the capability and capacity of the Appellant to set up the required project or they would not go ahead to carry out necessary amendment in the contract dated 6.10.1999. However, the Appellant submitted that it was a great shock and surprise to it when the.respondent issued a letter dated 2.7.2007 informing the Appellant that the Board of Directors of the Respondent decided to have its own captive oxygen plant d they would not be able to pursue the oxygen plant on BOO basis. The Appellant submitted that it spent a huge amount and time on various activities and for implementation of the project since October, 1999 till date. The Appellant performed its obligations under the contract and was ready and willing to perform the said obligations for setting up the ASU plant but the Respondent despite its promises, assurances and without any justification miserably failed to perform its obligations. Therefore, the letter dated 2.7.2007 was issued by the Respondent to the Appellant was illegal, unjustified and denying the legitimate rights of the Appellants. Hence, the Appellant filed an application invoking the jurisdiction u/s 9 of the Act before the learned District Judge, Khurda. 7. The learned District Judge issued notice to the present Respondent u/s 9 of the Act. While issuing notice, he did not grant the ex parte injunction. Hence, the Appellant filed an application invoking the jurisdiction u/s 9 of the Act before the learned District Judge, Khurda. 7. The learned District Judge issued notice to the present Respondent u/s 9 of the Act. While issuing notice, he did not grant the ex parte injunction. Therefore, the present Appellant filed ARBA No. 19 of 2007 before this Court which was disposed of on 25.9.2007. While disposing of the appeal, this Court directed the learned District Judge, Bhubaneswar to take up the Misc. Case filed u/s 9 of the Act on 5.10.2007 if the Respondent enters appearance. This Court further directed that if it was found that notice was not sufficient on the Respondent, the court should also pass an order on the prayer for granting ex parte injunction. Till 5.10.2007, the Respondent was directed not to create any third party interest without leave of the learned District Judge, Bhubaneswar. The Respondent appeared in the said case and categorically stated that Clause 11.1 of the contract stipulated that the seller should complete the installation within 26 months from the date of the contract and start commercial production and in case of delay the Buyer might grant extension of time up to four months beyond the fixed period of 26 months. It was admitted that the work did not even start within the stipulated period, nor even thereafter. Clause 18.1 provided that the contract shall be valid for a period of 15 years from the date the fixed facility charges becomes payable by the Buyer to the Seller in terms of the contract. When admittedly the work did not even start, the question of payment of fixed facility charges did not arise at all. Thus, a conjoint reading of the above provisions and the admitted circumstances makes the contention of validity of the contract for 15 years a misnomer. Thus, the stipulated period expired after 26 months i.e. from October, 1996 to December, 2001. It is an admitted fact that no extension of time by written agreement was made as per the terms of the contract. Whatever transpired between the parties thereafter only relate to correspondences, proposals, offers, denials etc. and those were beyond the scope of the contract. They also admitted that there was no termination clause in the contract. It is an admitted fact that no extension of time by written agreement was made as per the terms of the contract. Whatever transpired between the parties thereafter only relate to correspondences, proposals, offers, denials etc. and those were beyond the scope of the contract. They also admitted that there was no termination clause in the contract. As the Seller neither installed the plant within 26 months from the date of the contract nor was the time extended for completion of that plant, 26 months period of contract expired by efflux of time and by the time of filing of the application u/s 9 of the Act, about 6 years had elapsed from the date of the contract: It was stated that as the contract had expired by efflux of time, the Appellant was not entitled to any relief by way of injunction and even for the sake of argument, if the contract was still alive making the parties subject to the arbitration clause, still in the given circumstances, no reasonable relief could be granted u/s 9 of the Act because the sole purpose of granting the relief u/s 9 of the Act is to keep the subject mater of the dispute in status quo till finalization of the arbitration proceeding so that the final award does not get frustrated. However, in the present case, as the contract was not at all acted upon, the Respondent decided and intimated the Appellant to install its captive plant. The bank guarantee given by the Appellant had been taken back. The original German partner of the Appellant having been changed, the Respondent was not agreeable to accept the Chinese counterpart. Subsequent correspondences and negotiations between the parties related to fresh proposals and amendments which would give rise to all-absolute new contract. The period of the contract had expired by efflux of time. The relief, if any, available to the Appellant was damage for the laches of the Respondent relating to the contract and those damages could never be said to be irreparable. The Appellant as well as the Respondent are parties to the agreement. If one party to the agreement committed breach, it could only be liable to pay compensation to the other to the extent of loss or prejudice caused and could not seek an injunction restraining the Respondent from installing its own plaint. The Appellant as well as the Respondent are parties to the agreement. If one party to the agreement committed breach, it could only be liable to pay compensation to the other to the extent of loss or prejudice caused and could not seek an injunction restraining the Respondent from installing its own plaint. The Respondent also specifically stated by letter dated 23.10.2000 that the Appellant company sought extension of time in terms of Clause-II of the contract by four months. The same was not allowed by the Respondent due to loss of confidence apart from non-adherence to/breach of the contract. As the Respondent did not accept the Appellant's proposal dated 23.1 0.2000 for extension of time of the contract, a dispute arose in terms of Clause-24 of the contract in December, 2001. They did not seek any reference of the said dispute to arbitration as per Clause-24 even within three years from that date. Therefore, the question of raising a dispute after six 'years, by notice dated 27.11.2007 u/s 21 of the Act was hopelessly barred by limitation. The scope of work under the contract dated 6.10.1999 being for setting up an ASU on BOO basis, question of restraining the Respondent from proceeding with a consistently different tender for its "captive plant" does not arise. The Appellant company finally conveyed on 28.2.2006 that its collaboration with German company no longer existed and M/s. Greisheim Gmb-H, Germany opted out from their operation in India and accordingly the final decision of the Respondent was conveyed to the Appellant company by MECON's communication dated 15.4.2006 wherein it was made clear that (a) all efforts to revive the old contract were ceased, and (b) the Respondent was constrained to look for alternative recourse to set up an ASU of increased capacity, and the Sub-Committee of the Directors of the Respondent company insisted for waiver of Clause-6 of the contract. The Appellant also did not initiate any action for revival of the old contract with amended terMs. The learned District Judge after hearing both the parties and going through the documents available on record held that the contract job had not at all started. The original German partner of the Petitioner having been changed, the Respondent was not agreeable to accept the Chinese counterpart. The learned District Judge after hearing both the parties and going through the documents available on record held that the contract job had not at all started. The original German partner of the Petitioner having been changed, the Respondent was not agreeable to accept the Chinese counterpart. None of the ingredients like prima facie case, balance of convenience or possibility of irreparable injury in favour of the Petitioner so as to get any discretionary relief was available. Therefore, he dismissed the petition filed by the Appellant. 8. The Learned Counsel appearing for the Appellant submitted that the case of the Appellant was not a pure case of injunction simpliciter. The Appellant prayed for the relief u/s 9(ii) of the Act and it also showed that its loss could not be quantified whereas the loss going to be suffered by the Respondent was very much quantified under Clause-15 of the contract. In case status quo was not maintained and the Respondent was successful in installing its own plant, the very purpose of the contract and the rights of the Appellant would be defeated which would make it inequitable to enforce the contract and the Appellant is always ready and willing to do the substantial act and has already spent huge money, time and efforts to implement the contract capable of specific performance. Therefore, the Appellant is entitled to the relief u/s 20(3) and (4) of the Specific Relief Act. Apart from the above, M/S. Griesheim Gmb-H has withdrawn its share from Goyal Gases and the Appellant company is a juristic person and legal entity under the Companies Act. If some of the share holders withdraw their shares from the company then also the company will remain as such. So far as withdrawal of the bank guarantees is concerned, the Appellant company submitted bank guarantee, but the Respondent failed to comply with its contemporaneous obligations to deposit two crores with the Appellant as per Clause 4 read with Clauses 14 and 16. The bank guarantee was returned only after its expiry and a request was made to the Respondent to refund bank guarantee of Rs. 10 lakhs towards EMD. As per practice, once the contract is signed, the EMD is to be refunded. Therefore, no ill intention could be attributed against the Appellant for taking return of bank guarantee of Rs. l 0 lakhs. 10 lakhs towards EMD. As per practice, once the contract is signed, the EMD is to be refunded. Therefore, no ill intention could be attributed against the Appellant for taking return of bank guarantee of Rs. l 0 lakhs. It also informed the Respondent that the bank guarantee was again furnished to the Respondent to release the deposit made as per the commitment. As per Section 21 of the Act, as there was a dispute between the parties to the contract, they filed an application u/s 9 of the Act which was maintainable. The Appellant is willing to complete the work within 20 months. Therefore, the question of amendment of the contract does not arise. 9. The Learned Counsel appearing for the Respondent submitted that the duties and the responsibilities of the Appellant were not limited to merely show their readiness to execute the contract and to write series of letters to the Respondent seeking the schedule of requirement of gases before setting up the ASU. The Appellant's duty was to build, own, operate, maintain and transfer the ASU as per the "Time, Schedule and Implementation Plan" as defined under Clause-II of the contract at its own cost. The ASU was to be commissioned/built by the Appellant within 26 months. The Appellant neither built/commissioned the ASU within 26 months, nor did it seek extension of time beyond 5.12.2001. Therefore, when the ASU is not built, the question of owning, operating, maintaining and transferring the same to the Respondent remains academic. 10. The Learned Counsel appearing for the Appellant in support of his submission cited decisions of the Supreme Court in the cases of Transmission Corporation of A.P. Ltd. and Others Vs. Lanco Kondapalli Power Pvt. Ltd., and Hindustan Petroleum Corporation Ltd. Vs. Sri Sriman Narayan and Another, and the decisions of this Court in the case of Industrial Development Corporation of Orissa Ltd. and Anr. v. Utkal Moulders Limited reported in 2003(Supp.) OLR 665 and Shyama Kishore Bal v. Kishore Talkies at Nanpur and Ors. reported in 79(1995) CLT 252 wherein the Supreme Court as well as this Court held that interim direction ordinarily would precede finding of a prima facie case. When existence of a prima facie case is established, the Court shall consider other relevant factors, namely, balance of convenience and irreparable loss. 11. reported in 79(1995) CLT 252 wherein the Supreme Court as well as this Court held that interim direction ordinarily would precede finding of a prima facie case. When existence of a prima facie case is established, the Court shall consider other relevant factors, namely, balance of convenience and irreparable loss. 11. The Learned Counsel appearing for the Respondent in support of his submission cited decisions of the Supreme Court in the case of M/s. Arvind Constructions Company Pvt. Ltd. v. Kalinga Mining Corporation and Ors. reported in AIR 2007 SCW 3677 and M/s. Rickmers Verwaltung GMB H Vs. The Indian Oil Corporation Ltd., and U.P. Rajkiya Nirman Nigam Ltd. Vs. Indure Pvt. Ltd. and others, and the decision of this Court in the case of National Highway Authority of India and Ors. v. Bumihiway DDB Ltd. (JV) and Ors. reported in 2004(11) OLR 664. 12. Section 14(1) of the Specific Relief Act specifically provides that a contract, which is in its nature determinable, cannot be specifically enforced and no injunction can be granted. The same position is reiterated u/s 41(e) of the Specific Relief Act, which provides that injunction cannot be granted to prevent the breach of a contract, the performance of which would not be specifically enforced. The apex Court in the case of Percept D Mark (India) Pvt. Ltd. v. Zaheer Khan and Anr. reported in 2006 (3) Supreme 186 has clarified that in a case of a contract for a specific period or in a contract which is terminable on the happening of a particular event, it would be presumed that the contract has come to an end and interim arrangement or injunction would not normally be made after efflux of the period of contract or after happening of the events stipulated. If ultimately it would be found that the termination of contract is bad in law or contrary to the terms of the agreement, the remedy would be to seek compensation for wrongly termination, but not by claiming specific performance of agreement and for that reason, in such a situation no injunction is to be granted. 13. A close reading of Section 9 of the Act would show that the power of the Court is limited. 13. A close reading of Section 9 of the Act would show that the power of the Court is limited. The Court cannot enter into the area of dispute raised by the parties as those disputes are to be adjudicated by the arbitrator in arbitration proceeding and any opinion expressed by the Court in that regard would be premature and may cause prejudice to the parties during the arbitration proceeding. The only thing that the Court can examine is whether interim relief till the finalization of the arbitration proceeding is required to be made or not. It is well settled that the principle, which applies to the grant of temporary injunction under Order 39 Rules 1 and 2 of the CPC in a civil proceeding, also applies to a proceeding u/s 9 of the Act. Therefore, in order to obtain an interim arrangement u/s 9 of the Act, the party seeking the interim arrangement must establish the three essential ingredients, namely, (a) prima facie case, (b) balance of convenience and (c) irreparable loss if the interim measure prayed for is not granted. The Court has to consider whether the contract is terminable as per the terms and conditions stipulated in the contract or whether it would continue till terminated by mutual consent of the parties is a matter to be decided by the Arbitrator. However, for the sake of finding out if the Respondent has a prima facie case, a cursory glance into the facts and circumstances of the case is necessary and discussed hereunder: 14. From the contentions of the parties and the documents filed by them, it appears that there was a written contract between the parties on 6.10.1999 and as per the said contract the Appellant was to install ASU plant within 26 months from 6.10.1999 and the same time already expired. Thereafter, the said time was extended as per the terms and conditions of the contract for a period of four months. Even though correspondences were made between the parties, neither there was any approved legal contract, nor was it extended. Admittedly, the Respondent is a Government Undertaking Company. Thereafter, the said time was extended as per the terms and conditions of the contract for a period of four months. Even though correspondences were made between the parties, neither there was any approved legal contract, nor was it extended. Admittedly, the Respondent is a Government Undertaking Company. As per Article 299 of the Constitution of India, Government contract made in exercise of the executive power of the Union or of a State shall be expressed to be made by the President, or by the Governor of the State and that power shall be executed on behalf of the President or the Government by such persons and in such manner as he may direct or authorize and if the said requirement is not fulfilled, the Government is not bound by the contract. 15. In the present case, the proposal given by the Appellant to complete the plant within 20 months in the year 2005 and the proposal was given after expiry of the 26 months as stipulated in the contract was neither accepted by the Respondent nor was there any amended contract executed between the parties. Therefore, unless there is acceptance by the Respondent to the offers of the Appellant, no concluded contract can be said to have emerged. Since the Respondent is a Government Undertaking Company and unless the contract is duly executed in accordance with Article 299 of the Constitution of India, the Respondent is not bound by any such terms and conditions. The apex Court in the case of U.P. Rajkiya Nirman Nigam Ltd. (supra) has held that there was no duly signed agreement by a competent officer on behalf of the Appellant. The doctrine of "indoor management" cannot be extended to formation of the contract or essential terms of the contract unless the contract with other parties is duly approved and signed on behalf of a public undertaking or the Government with its seal by an authorized or competent officer. Otherwise, it would be hazardous for public undertakings or Government or its instrumentalities to deal on contractual relations with third parties. 16. Otherwise, it would be hazardous for public undertakings or Government or its instrumentalities to deal on contractual relations with third parties. 16. In the present case, since 'the Appellant company did not install its plant within the stipulated time of 26 months from the date of the contract i.e. 6.10.1999 and the German Company i.e. M/s. Griesheim Gmb-H who was to vet, design and engineer the ASU, withdrew from the Appellant company and a new company i.e. Chinese counterpart joined with the Appellant and thereafter several correspondences were made between the parties, admittedly there was no written amended contract duly signed by the parties. In view of the decision of the apex Court in U.P. Rajkiya Nirman Nigam Ltd. (supra) and in view of the above fact, the Respondent is not bound by the aforesaid correspondences made between the parties after expiry of the 26 months. Therefore, the Appellant has no prima facie case to get an order of injunction. 17. So far as irreparable loss is concerned, since there was a clause of arbitration and a dispute has already arisen between the parties and both the parties have moved the appropriate authority for appointment of arbitrator, the loss sustained by the parties can be adjudicated in the arbitration proceeding. So, it cannot be concluded that the Appellant has sustained irreparable loss and injury. Balance of convenience is also not in favour of the Appellant as the dispute is to be adjudicated by the Arbitrator. Therefore, this Court is not inclined to grant the relief of injunction in the present case. 18. Accordingly, the appeal as well as misc. cases are dismissed. No costs. Final Result : Dismissed