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2018 DIGILAW 745 (ORI)

Torrent Advertisers v. OPPO Mobiles, Orissa Private Ltd.

2018-08-20

A.K.RATH

body2018
JUDGMENT Dr.A.K.RATH, J.- This appeal is directed against the order dated 4.5.2018 passed by the learned District Judge, Khurda at Bhubaneswar in Arb(P) No.05 of 2018, whereby the learned District Judge, Khurda dismissed the application filed by the appellant under Section 9 of the Arbitration and Conciliation Act, 1996 ( in short ‘the Act’). 2. The appellant-petitioner filed an application under Section 9 of the Act before the learned District Judge, Khurda praying, inter alia, to stay the letter dated 17.11.2007 issued by the respondent-opposite party, not to appoint any other person to carry on advertisement on the locations, payment of monthly rental fee as per the terms of the agreement and for a direction to the opposite party to furnish a Bank guarantee of rupees ten crores till dispute is arbitrated. The case of the petitioner is that it is a registered partnership firm having its registered office at Bhubaneswar. It is engaged in offering advertisement service by means of hoardings, etc.. The opposite party is a company, which runs wholesale trading, marketing of mobile handsets, accessories etc. The opposite party approached the petitioner for rendering advertisement service. A contract was entered into between the parties on 14.7.2017 for a period of two years with a condition that it cannot be cancelled by either of the parties, unless the situation is beyond the control of the service provider. After the contract, the petitioner installed the hoardings at different places and locations and invested huge amount of money by engaging men and material on payment of monthly remuneration. But all of a sudden, the opposite party sent a notice on 14.11.2017 intimating cancellation of the contract in all 84 locations with effect from 10.11.2017. There is no deficiency in service. Termination of the contract is illegal. With this factual scenario, the petitioner filed an application seeking the reliefs mentioned supra. 3. The opposite party filed objection denying the allegations made in the petition. It is stated that the petitioner has raised hoardings ignoring the specifications and design. It suffered loss for which the agreement has been terminated with effect from 10.11.2017. The petitioner is not entitled to any monthly rent, since the contract has already been terminated by the opposite party’s notice dated 14.11.2017. The petitioner has already been paid for the actual work. 4. It suffered loss for which the agreement has been terminated with effect from 10.11.2017. The petitioner is not entitled to any monthly rent, since the contract has already been terminated by the opposite party’s notice dated 14.11.2017. The petitioner has already been paid for the actual work. 4. Learned District Judge came to hold that the petitioner has prima facie chance of success, the balance of convenience tilts in favour of the petitioner. The existence of a valid contract can be agitated in arbitration. The loss incurred by the petitioner can be compensated. Held so, it dismissed the application. 5. Heard Mr.Ranjan Kumar Rout, learned Advocate for the appellant and Mr.Tushar Kanti Satpathy, learned Advocate for the opposite party. 6. Mr.Rout, learned Advocate for the appellant submitted that the petitioner took lease of land from different persons, railways authority and municipality for display of the advertisement of hoardings in 84 locations. Referring to the agreement is for providing advertisement services, he submitted that the contract period is for two years i.e., from 15.5.2017 to 14.5.2019. The contract can only be cancelled at the option of service provider i.e., the petitioner. The same cannot be cancelled by the opposite party. The opposite party cancelled the contract unilaterally. The petitioner employed number of employees. The petitioner is unable to pay the salary, dues of municipality, railway and private land owners. The petitioner is still continuing. The service charges for the month of October, 2017 and November, 2017 have not been paid. The opposite party may not be available after the award is passed. Thus, the award cannot be enforced. The petitioner has sustained approximately loss of rupees ten crores. He further submitted that the petitioner has a prima facie chance of success, the balance of convenience tilts heavily in favour of the petitioner and moreover the petitioner will suffer irreparable injury, if injunction is not granted. The finding of the court below that the petitioner will not suffer irreparable injury is perverse. 7. Per contra, Mr.Satpathy, learned Advocate for the respondent submitted that clause providing cancellation of contract is applicable to Airports Authority of India. The loss quantified by the petitioner is imaginary. The allegation that the opposite party will flee from the country is baseless. Further, the petitioner has filed ARBP No.6 of 2018 before this Court for appointment of Arbitrator. 7. Per contra, Mr.Satpathy, learned Advocate for the respondent submitted that clause providing cancellation of contract is applicable to Airports Authority of India. The loss quantified by the petitioner is imaginary. The allegation that the opposite party will flee from the country is baseless. Further, the petitioner has filed ARBP No.6 of 2018 before this Court for appointment of Arbitrator. The petitioner violated the terms and conditions of the contract and engaged the outsiders for which contract was cancelled. 8. The relevant clauses of the agreement are quoted hereunder:- “Contract Period:- The contract period for the above advertisement will be for a minimum of 2 years w.e.f. date: 15.05.2017 to 14.05.2019 and cannot be cancelled in between other than for reasons beyond the control of “Service Provider” e.g. AAI rules and regulations etc. Dispute Resolution Process:- In cases of disputes between parties hereto arising out of this Agreement or in relation thereto or regarding the interpretation of this Agreement, shall be referred to an arbitrator appointed by OPPO and the provisions of the Indian Arbitration and Conciliation Act, 1996 or any statutory modification thereof shall be applicable to such reference.” 9. The cardinal principles of grant of interlocutory injunction are well known. While exercising the discretion, the Court normally applies the following tests:- (i) Whether the plaintiff has a prima facie case; (ii) Whether the balance of convenience tilts in favour of the plaintiff ; and (iii) Whether the plaintiff would suffer an irreparable injury in the event his application is rejected. In Dalpat Kumar and another vs. Prahlad Singh and others, AIR 1993 SC 276 , the apex Court that “the phrases ‘prima facie case’, ‘balance of convenience’ and’ irreparable loss’ are not rhetoric phrases for incantation, but words of width and elasticity, to meet myriad situations presented by man’s ingenuity in given facts and circumstances, but always is hedged with sound exercise of judicial discretion to meet the ends of justice. All the three essentials to be kept in view while granting temporary injunction. 10. Mandatory injunction is granted in rarest of rare cases, as it amounts to granting the final relief. All the three essentials to be kept in view while granting temporary injunction. 10. Mandatory injunction is granted in rarest of rare cases, as it amounts to granting the final relief. In Dorab Cawasji Warden vs. Coomi Sorab Warden and others, AIR 1990 SC 867 , the apex Court held thus: “The relief of interlocutory mandatory injunctions are thus granted generally to preserve or restore the status quo of the last non-contested-status which preceded the pending controversy until the final hearing when full relief may be granted or to compel the undoing of those acts that have been illegally done or the restoration of that which was wrongfully taken from the party complaining. But since the granting of such an injunction to a party who fails or would fail to establish his right at the trial may cause great injustice or irreparable harm to the party against whom it was granted or alternatively not granting of it to a party who succeeds or would succeed may equally cause great injustice or irreparable harm. (1) The plaintiff has a strong case for trial. That is, it shall be of a higher standard than a prima facie case that is normally required for a prohibitory injunction. (2) It is necessary to prevent irreparable or serious injury which normally cannot be compensated in terms of money. (3) The balance of convenience is in favour of the one seeking such relief. Being essentially an equitable relief the grant or refusal of an interlocutory mandatory injunction shall ultimately rest in the sound judicial discretion of the court to be exercised in the light of the facts and circumstances in each case. Though the above guidelines are neither exhaustive nor complete or absolute rules, and there may be exceptional circumstances needing action, applying them as a pre-requisite for the grant or refusal of such injunctions would be a sound exercise of a judicial discretion.” It is settled law that even if all the necessary ingredients are established, the court may refuse to grant an interim injunction. 11. On a survey of the decisions of the apex Court, a Division Bench of this Court in the case of Maa Sarala Distributor vrs. Hindustan C. Beverages Pvt. Ltd., CLT (2008) Supplement 832 held that mandatory injunction should be granted in rarest of the rare cases as it amounts to granting the final relief. 11. On a survey of the decisions of the apex Court, a Division Bench of this Court in the case of Maa Sarala Distributor vrs. Hindustan C. Beverages Pvt. Ltd., CLT (2008) Supplement 832 held that mandatory injunction should be granted in rarest of the rare cases as it amounts to granting the final relief. It can be passed only to restore status quo and not to establish a new state of things, differing from the state which existed at the date, when the suit was instituted. 12. The contract has been cancelled. The petitioner has filed ARBP No.6 of 2018 before this Court under Section 11 of the Act for appointment of Arbitrator. The same is sub-judice. The alleged loss sustained by the petitioner can be quantified. Learned court below has rightly held that the petitioner will not suffer any irreparable loss and injury. There is neither any jurisdictional error nor perversity in the order passed by the learned court below. 13. A priori, the appeal fails and is dismissed. Appeal dismissed.