Goyal Mg Gases Ltd. and anr. Vs. Griesheim Gmbh - Court Judgment

Excerpt:
civil procedure code 1908 - order 39 rule 1 & 2--interim injunction--existence of arbitration agreement--remedy of arbitration already availed and application under section 9 of arbitration and conciliation act, 1996 pending--relief of interim injunction cannot be granted.;the said contract admittedly contains an arbitration agreement which requires the parties to go for an arbitration in case any dispute arising between them. the said clause provides that all disputes arising in connection with the said agreement, which the parties are unable to resolve within 28 days would be finally settled under the rules of conciliation and arbitration of the international chamber of commerce, paris. the provisions of the said clause expressly intended that it would survive the termination of the.....dr. m.k. sharma, j.1. this order shall dispose of the application filed by the plaintiff under order 39 rules 1 & 2 of the code of civil procedure praying for grant of ad interim injunction restraining the defendant from taking any step in pursuance of the share purchase agreement dated 20.3.1997 and also in pursuance of the letter of offer dated 6.8.1998 to acquire shares of m/s. bombay oxygen corporation ltd. (hereinafter referred to for short as bocl), the plaintiff no.2 and the defendant entered into a commercial agreement on 12.5.1995 under the title 'share purchase and co-operation agreement'. a copy of the said agreement has been placed on record. some of the relevant clauses which shall have some bearing with the context of the present application are extracted below:9......

Judgment:

Dr. M.K. Sharma, J.

1. This order shall dispose of the application filed by the plaintiff under Order 39 Rules 1 & 2 of the Code of Civil Procedure praying for grant of ad interim injunction restraining the defendant from taking any step in pursuance of the Share Purchase Agreement Dated 20.3.1997 and also in pursuance of the letter of offer dated 6.8.1998 to acquire shares of M/s. Bombay Oxygen Corporation Ltd. (hereinafter referred to for short as BOCL), The plaintiff No.2 and the defendant entered into a commercial agreement on 12.5.1995 under the title 'Share Purchase and Co-operation Agreement'. A copy of the said agreement has been placed on record. Some of the relevant clauses which shall have some bearing with the context of the present application are extracted below:

9. Non-Competition Clause.

GGL and all Goyal Group Companies will co-operate in the Indian market with right to first refusal basis with MGG and will not for the duration of this co-operation support in any way-directly or indirectly-the activities of MGG'S competitors with regard to gas business. MGG will give written information to GGL about every business opportunity it plans to take in the Indian market in regard to industrial gases and related business and GGL may decide if it wants to participate in it (right of first refusal). In case GGL does not within a period of two months after receiving MGG'S notice declare in writing that it is willing and able to participate in the planned business, MGG is free to proceed with this business on its own. However, MGG will give due consideration to the interest of GGL being its group company. Such new business which MGG undertakes should be business of gas supply to few major dedicated customers only and not to general market supply.

12.1 This Agreement shall become effective upon being signed by the parties and shall stay in force as long as MGG or its legal successor holds an equity not less than 25% in GGL.

13.2. Arbitration

All disputes arising in connection with the present Agreement which the parties are unable to resolve within 28 days (or such other period as the parties may agree in writing) shall be finally settled under the rules of Conciliation and Arbitration of the International Chamber of Commerce, Paris, to be carried over under the ambience of Indo-German Chamber of Commerce, by three Arbitrators appointed in accordance with said rules.

The language of the arbitration procedure shall be in English, the same applies for written documents handed in to the Arbitration Board.

The Arbitration Board shall sit in Delhi, India, and shall decide in final manner with exclusion of recourse to the ordinary Courts of Law, and its decision shall be binding on both parties.

The provisions of this Clause shall survive the termination of this Agreement.

The aforesaid agreement between the plaintiff No.2 and the defendant was given effect to and in pursuance thereof the name of the defendant No.2 was changed to plaintiff No 1. The defendant holds 49% equity shareholding of the plaintiff No. 1 and the Associates of plaintiff No.2 hold 51% equity shareholding of plaintiff No. 1. However, by an amendment agreement dated 17.11.1996 some amendments were brought in to the aforesaid Share Purchase and Co-operation Agreement which however, is not of much relevance for the present case. The defendant No. 1 stated to have entered into a Share Purchase Agreement with the major promoter of Bombay Oxygen Corporation Limited (in short BOCL) on 23.6.1997 to take over BOCL without any information and intimation to plaintiff No.2. It has been alleged in the plaint that the defendant wrongfully signed the said agreement with the major promoter of BOCL and agreed to purchase 45,001 equity shares of Rs. 100/- each at a price of Rs. 3,000/- per share for cash, representing 30% plus one share of the equity shares of BOCL. An application was also made by the defendant to the Foreign Investment Promotion Board for permission to invest in BOCL and such permission has been granted by the Foreign Investment Promotion Board. In pursuance thereof a public advertisement was also made in that regard. The plaintiffs on coming to know about the aforesaid development taking place behind the back of the plaintiffs protested to defendant No. 1 about the aforesaid illegal activities of the defendant in violation of the Share Purchase and Co-operation Agreement. The defendant then entered into an agreement with the plaintiff No. 1 on 8.11.1997 wherein it was stated that in terms of the understanding between the plaintiff No. 1 and the defendant they have agreed to effect acquisition of BOCL. It was further stipulated in the said agreement that BOCL engaged in the production and distribution of gases is available for acquisition as a target company and negotiated take-over has been agreed between its existing promoters and the parties to the said agreement which will be reduced to writing by a separate agreement. Under the aforesaid agreement the parties agreed that the defendant would acquire 25,001 equity shares and that Goyal MG would acquire 50, 000 equity shares of the said BOCL. The aforesaid agreement was however, signed on 8.12.1997. Relevant clauses of the said agreement are extracted below:

Whereas in terms of the understanding between the aforesaid two parties, the said parties have agreed to effect acquisition of M/s. Bombay Oxygen Corporation Ltd., a company incorporated under the Companies Act, 1956 having its registered office at LBS Marg, Mulund (West) Mumbai-400 080 India.

And Whereas Bombay Oxygen Corporation Ltd., a public limited quoted company engaged in the production and distribution of gases is available for acquisition as a target company and negotiated take over has been agreed between its existing promoters and the parties hereto which will be reduced to writing by a separate agreement.

And Whereas the acquisition of Bombay Oxygen Corporation Ltd., is agreed to be carried on between Goyal MG and Messer Griesheim the parties hereto on the following terms and conditions:

Not it is agreed by and between the parties as under:

1. That is agreed between the parties that M/s. Bombay Oxygen Corporation Ltd., will be acquired by Goyal MG and Messer Griesheim, jointly and acting in concert the details whereof are as follows:

(a) Messer Griesheim will acquire 25,001 equity shares of Rs. 100 each of M/s. Bombay Oxygen Corporation Ltd., from the existing promoters of M/s. Bombay Oxygen Corporation Ltd., at a price as agreed between the parties hereto and the existing promoters of M/s. Bombay Oxygen Corporation Ltd.

(b) Goyal MG will acquire 50,000 shares of M/s. Bombay Oxygen Corporation Ltd., from the existing promoters of M/s. Bombay Oxygen Corporation Ltd., at a price as may be agreed between the parties hereto and the existing promoters of M/s. Bombay Oxygen Corporation Ltd.

Subsequently, however, the defendant wrote a letter to plaintiff No. 1 on 7.5.1998 stating that the promoters of BOCL had taken a stand that they would only sell their shares to the defendant and not jointly to plaintiff No. 1 and the defendant. The defendant further stated that thereforee, it was not possible to implement the agreement dated 8.11.1997 and the same had become void. Accordingly, the said agreement was terminated by the defendant on 7.5.1998.

2. The plaintiff No. 1 however, protested about the aforesaid termination and informed the defendant, upon which the defendant took a stand that they are still willing and prepared to acquire BOCL in the manner agreed upon in the agreement dated 8.11.1997. However, the defendant proceeded to acquire the shares of BOCL singly and thereforee, the present suit was instituted by the plaintiff to give effect to the provisions of the Share Purchase and Co-operation Agreement as also the subsequent agreement entered into on 8.11.1997 and signed on 8.12.1997.

3. It must however, be indicated at this stage that subsequent to the filing of the present suit the plaintiff sent a letter to the defendant on 8.9.1998 bringing to the notice of the defendant about the share purchase and co-operation agreement dated 12.5.1995 subsisting between the plaintiff No.2 and the defendant and also the agreement dated 8.11.1997 executed on 8.12.1997. In the said letter it was stated that the agreement dated 12.5.1995 contains an arbitration clause requiring the parties to refer their disputes for adjudication through the process of arbitration in case of disputes arising in connection with the said agreement. It was stated that as disputes have arisen between the parties in view of the defendant proceeding to acquire the majority shares of BOCL singly, which it is not entitled to do under the agreements dated 12.5.1995 and 8.11.1997 and other understandings arrived at between the parties. It was also stated that disputes have also arisen in view of the fact that the defendant has sought to enter into agreement dated 23.6.1997 with the promoters of BOCL and has also issued a letter of offer dated 6,8.1998 contrary to the understanding between the parties to make a joint acquisition and not to compete with each other. It was indicated that such disputes which have arisen between the parties are referable to arbitration under Clause 13.2 of the agreements dated 12.5.1995. It was also indicated that the case of the plaintiff No. 1 is based on the agreement dated 12.5.1995 as also 8.11.1997 and that the plaintiff No. 1 is invoking Clause 13.2 of the aforesaid agreements to resolve the differences by arbitration in accordance with the procedure established under the said Clause 13.2. The plaintiff, thereafter also filed an application in this Court under Section 9 of the Arbitration and Conciliation Act which is registered as O.M.P, No. 205/1998.

4. The defendant has filed its reply contending inter alias that the suit instituted by the plaintiff is in breach of the arbitration clause and that existence of the aforesaid arbitration clause debars the Court from proceeding with the suit any further and accordingly, the interim, application is not maintainable. It was also stated that steps for acquisition of shares of BOCL were taken by the defendant on 23.6.1997 and public announcement to that effect was made on 27.6.1997 and thus the plaintiff is not entitled to any interim injunction at this stage in view of the inordinate delay in approaching the Court. It is further stated that so far the first agreement dated 12.5.1995 is concerned the same contains an arbitration clause and thereforee, this Court is not competent to grant ad interim injunction for the rights, if any, arising out of the said contract. So far as the subsequent agreements dated 8.11.1997 executed on 8.12.1997 is concerned, it was stated by the defendant that the said agreement does not contain any negative convenant. It was further stated that the promoters of BOCL have refused to be associated with the plaintiff No. 1 and the said promoter Mr. Shyam Ruia has made it clear in his letter dated 5.5.1998 that he and his associates could not sell the shares to plaintiff No. 1 and defendants jointly. It is stated that under such circumstances the aforesaid agreement which was a contingent contract has been frustrated and accordingly the said agreement was terminated by the defendant and as such no injunction could be granted by this Court to give effect to the stipulations made in the aforesaid agreement.

5. Mr. Rohtagi appearing for the plaintiff, during the course of his arguments submitted that the defendant is not entitled to invest and/or take over BOCL in view of the non-competing clause in the agreement dated 12.5.1995 and also in view of the contents of the agreement executed on 8.12.1997 without the participation of plaintiff No. 1 since the plaintiff No. 1 has already informed the defendant of its intention to participate in the said project. He further submitted that inspire of termination of the agreement executed on 8.12.1997 the said agreement survives and the defendant is not entitled to acquire the shares of BOCL singly. He further submitted that the share purchase agreement dated 23.6.1997 and letter of offer dated 6.8.1998 are contrary to Clause 9 of the agreement dated 12.5.1995 which is a non-competing clause and reiterated in the agreement dated 8.11.1997. Since the defendant is threatening to breach the express and/or implied negative convenant contained in Clause 9 of the agreement dated 12.5.1995 and also in the agreement dated 8.11.1997 and executed on 8.12.1997 the plaintiff No. 1 is entitled to enforce the negative convenant appearing in both the agreements and thereforee, has an equitable right to seek for and grant of an ad interim injunction as prayed for in the suit.

Subsequently however, during the course of his arguments the learned Counsel modified his stand contending inter alias that since the plaintiff has already invoked Clause 13.2 which is an arbitration agreement in the contract dated 12.5.1995 and an application under Section 9 of the Arbitration and Conciliation Act is pending for giving effect to the non-competing Clause No.9 in the said agreement, the issue with regard to giving effect to Clause 9 of the said agreement could be raised by the plaintiffs in the said petition and need not be gone into in the present case. He however, submitted that so far as the agreement executed on 8.12.1997 is concerned the same when read Along with the contemporaneous documents till 11.8.1998 would lead lo the conclusion that the said agreement also contained a negative stipulation which could be enforced through the present suit and injunction could also be granted to give effect to the aforesaid negative convenant.

6. In support of his submissions the learned Counsel relied upon a catena of decisions in Jairam Valjeet v. Indian Iron & Steel Co. Ltd. : AIR1940Cal466 ; Kirlyanand Sinha v. Ramanand Sinha and Ors. : AIR1936Pat456 ; Gujarat Bottling Co. Ltd. v. Coca Cola Co., : AIR1995SC2372 . In support of his submissions the learned Counsel also relied upon certain passages from Halsbury's Laws of England, IV Edition, Volume 24 page 901 and Chitty on Contract, 27th, Edition, page 1310. Learned Counsel also relied upon the decision in John Michael Design plc v. Cooke and Anr., (1987) 2 All E R 332; Attorney General v. Barker and Anr., (1990) 3 All E R 257; Office Overload Ltd. v. Gunn, 1977 3 F S P L R 39; and also the case of Lumley v. Wagner, (1843) All E R 368. In support of his submission that the contract could not be terminated unilaterally the learned Counsel also relied upon the decision of the Supreme Court in Damodar Valley Corporation v. K.K. Kar : [1974]2SCR240 .

7. Mr. P. Chidambaram and Mr. Arun Jaitely, appearing for the defendant however, submitted that the disputes that have arisen between the plaintiff and the defendant are covered by the Arbitration agreement as would also be apparent from the stand taken by the plaintiff in the subsequent letter written by the plaintiff No. 1 to the defendant on 8.9.1998. It was submitted that since there is an arbitration clause in the contract to which the parties agreed to comply with in case of disputes arising between the parties, the Court should decline to exercise jurisdiction and refer the parties to arbitration in terms of Section 45 of the Arbitration Act. In support of his submission the learned Counsel relied upon the provisions of Sections 2(l)(d), 5,44 and 45 of the Arbitration and Conciliation Act, 1996 and also on passages from the Commentary on Arbitration and Conciliation Act by Dr. P.C. Rao and The New York Convention of 1958 by Albert Jan Van Den Berg. Mr. Chidambaram further submitted that the agreement dated 8.11.1997 did not contain any negative convenant and the said agreement was not a contract within the meaning of section 2 of the Contract Act. He further submitted that even assuming the said agreement is a contract the same could at best be a contingent contract. Relying on the contents of the agreement he argued that the purpose for entering into the said contract stands frustrated in view of the promoters of BOCL refusing to sell the shares lo the plaintiff No. 1 and as such the said agreement has been rendered void and cannot be acted upon and was rightly terminated by the defendant. He further submitted that the injunction prayed for now by the plaintiff No. 1 in respect of the agreement executed on 8.12.1997 is beyond the scope of the pleadings and the reliefs in the plaint and as such no injunction could be granted in the present case. In support of the aforesaid submissions the learned Counsel relied upon the decision in Vinod Chandra Hira Lal Gandhi v. Vivekanand Mills Ltd., : AIR1967Guj255 Shree Ambarnath Mills Corporation v. D.B. Godbole, Custodian of Evacuee Property and Anr., : AIR1957Bom119 & Fairbarin Ltd. v. Tolaini Bros. (Hotels) Ltd. and Anr., (1975) 1 All E R 716,; and Martin Baker Aircraft Co. Ltd. v. Murison, 1955(2) All E R 722. He also submitted that even assuming the agreement dated 8.11.1997 subsists and is a contract the said contract was determinable and breach thereof, if any, could be remedied by damages and no by specific performance as is laid down under Section 14 of the Specific Relief Act. In support of the aforesaid contention the learned Counsel relied upon the decision of the Supreme Court in Indian Oil Corporation v. Amritsar Gas Service and Ors., : (1991)1SCC533 . He however, submitted that on a reasonable and fair reading and interpretation of the agreement dated 8.11.1997 it would be crystal clear that the same provides for one method of acquiring the shares of BOCL and the same does not rule out any other method of acquisition so long as ultimately the plaintiff and defendant can participate in the benefit of the acquisition. It was also urged that the said agreement does not prohibit the defendant from acquiring BOCL by any other method, and that the defendant is ready and willing to adopt one of such other alternative methods, of acquiring the shares of the BOCL as was indicated to the plaintiff by the defendant under letter dated 7.5.1998.

8. In the light of the aforesaid submissions of the learned Counsel appearing for the parties let me now consider and decide whether the plaintiffs could be granted an interim injunction as sought for by the plaintiff. Relevant clauses of the agreement dated 12.5.1995 have been extracted above. The said contract admittedly contains an arbitration agreement which requires the parties to go for an arbitration in case any dispute arising between them. The said clause provides that all disputes arising in connection with the said agreement, which the parties are unable to resolve within 28 days would be finally settled under the rules of Conciliation and Arbitration of the International Chamber of Commerce, Paris. The provisions of the said clause expressly intended that it would survive the termination of the agreement. The provisions of Section 45 of the Arbitration and Conciliation Act are also clear and apparent that a judicial authority when seized of an action in a mailer in respect of which the parties have made an agreement in the nature of and as provided for under Section 44 refer the parties to arbitration at the request of one of the parties or any person claiming through or under him. The plaintiffs have sought for enforcement and implementation of the arbitration agreement to resolve the differences through the process of arbitration. In fact the plaintiff No. 1 has already filed an application under Section 9 seeking for restraining the defendant from proceeding with acquisition of the shares of the BOCL and also seeking to enforce Clause 9 of the said contract. Thus in respect of any dispute arising out of the said agreement dated 12.5.1995 this Court should not exercise powers and jurisdiction and also should not grant an injunction in respect of the same in the present suit particularly when the plaintiff has already invoked the remedy available to it under the Arbitration and Conciliation Act, 1996 and to give effect to Clause 9 of the said contract, a separate proceeding has been initiated under Section 9 of the Act. The matter for grant of ad interim injunction to give effect to Clause 9 could be effectively dealt with in the said proceedings.

9. Learned Counsel for the plaintiff also submitted that so far the present suit is concerned this suit could be maintained for 1997 agreement and the contents of the said agreement when read Along with the contemporaneous documents as available till 11.9.1998 would lead to the conclusion that the said contract also included a negative covenant and thereforee, the said negative covenant could be given effect to and be specifically enforced by way of an injunction as contemplated under Section 42 of the Specific Relief Act.

10. In the light of the aforesaid submissions of the learned Counsel appearing for the parties it would be necessary to look into and to come to a prima facie finding at this stage as to whether the said agreement dated 8.11.1997 is a valid and binding contract or not and whether it contains a negative covenant or not and also as to whether the said agreement is contingent contract and/or whether the said agreement became impossible to be performed and thereforee, became void. It is true that all agreements are not contracts although all contracts are agreements. An agreement is a contract when the same could be enforced in a Court of Law. A contingent contract is defined under Section 31 of the Contract Act. A contingent contract is a contract to do or not to do something if some event collateral to such contract does or does not happen. Section 32 of the Contract Act provides that contingent contracts to do or not to do anything if an uncertain future event happens, cannot be enforced by law unless and until that event has happened. It is also provided that if the event becomes impossible such contracts become void.

Reference was also made to provisions of Section 56 of the Contract Act which provides that an agreement to do an act impossible in itself is void. It further provides that a contract to do an act which after the contract is made becomes impossible or by reason of some event which the promisor could not prevent makes it unlawful, becomes void when the act becomes impossible or unlawful.

11. Submission of Mr. Chidambaram that the agreement dated 8.11.1998 and executed on 8.12.1997 is hot a contract but only an agreement unenforceable in a Court of Law, prima facie cannot be accepted. On careful perusal of the said agreement I am prima facie satisfied that there is a proposal which was accepted and in pursuance of which the aforesaid agreement came to be executed. In my considered opinion there was also consideration for entering into the aforesaid agreement for both the parties i.e., to acquire shares in the BOCL. So far the price factor is concerned, as against the defendant the same was fixed and as far as the plaintiffs are concerned it was to be fixed up on agreement with promoters of BOCL. But this agreement is not sought to be enforced now against the said promoter but against the defendant. Thus the aforesaid agreement was a contract between the plaintiffs and the defendant and it satisfied the pre-conditions for being a contract in the eye of law.

The said agreement although is a contract was dependent upon the happening of a future event i.e., the sale of the shares of BOCL by its promoters both to plaintiff as also to defendant. Thus the said contract could be said to be in the nature of a contingent contract and such a contingent contract based on happening of an uncertain future event, cannot be enforced by law unless and until that event has happened. In respect of the present contract the plaintiff and the defendant agreed to acquire shares but the same was dependent on happening of an uncertain future event i.e., the promoters of BOCL selling their shares to each one of them. The defendant has placed on record, which the plaintiff also admits, that the promoter of the BOCL has refused to sell their shares to plaintiffs. Thus sale of shares to the plaintiffs having been rendered impossible to be performed, it appears to me prima facie, that the aforesaid contract itself had become void and could not be performed in view of the stand taken by Mr. Shyam Ruia, promoter of EOCL. The agreement clearly stipulated that the plaintiff would acquire 50,000 shares of BOCL from its existing promoters. When the promoters of BOCL have refused to sell the shares to the plaintiffs I cannot see as to how the aforesaid agreement could be given effect to and could be enforced. Even Mr. Shyam Ruia has not been made a party to the present suit and in his absence and he being unwilling to sell the shares to the plaintiff there is no possibility of Goyal MG i.e. the plaintiff No. 1 acquiring any share in the said BOCL and thereforee, the contract -has become impossible to be performed and as such the same has become void. Even otherwise, in my considered opinion the provisions of Section 56 are also applicable to the facts and circumstances of the present case and to the agreement in question. The said contract which was entered into, by which both the plaintiff and the defendant agreed to acquire shares from the promoters of BOCL have become impossible to be performed after the contract is made and thus under the provisions of Section 56 of the Contract Act also the said agreement to do an act impossible in itself has become void. Mr. Rohtagi submitted that a contract may have two parts and thereforee, even if one part of the contract namely the positive stipulation therein has become void, the other part of the contract namely - the negative covenant would survive and thus the Court is empowered to give effect to the same. In support of his submission he relied upon the decision in the Nalhati Jute Mills Ltd. v. Khyaliram Jagannath; : [1968]1SCR821 ,

To appreciate the said contention, it would be necessary to look into some of the provisions of the Contract Act. Section 42 of the Specific Relief Act becomes applicable in case of a contract having both positive and negative covenants. Section 2(e) of the Specific Relief Act states that all words and expressions used in the Specific Relief Act and not defined therein would carry the meaning assigned in the Contract Act. thereforee, in order to understand the meaning of the word 'contract' as used in Section 42 of the Specific Relief Act I am to refer to the meaning of the word contract assigned under the Contract Act so as to prima facie decide as to whether anything in the contract would survive and could be specifically enforced when the contract has been rendered impossible to be performed. Section 2(g)(h) and (j) lays down that an agreement enforceable by law is a contract and such an agreement if not enforceable by law is void. Further when a contract ceases to be enforceable by law becomes void when it cases to be enforceable. Thus when a contract is rendered impossible to be performed it becomes void and cannot be enforced in its entirety. The decision relied upon by the Counsel for the plaintiffs in Naihati Jute Mills (supra) lays down that in case of frustration, it is the performance of the contract which comes to an end but the contract would still be in existence for the purpose of resolution of disputes through arbitration. The 'aforesaid ratio, in my considered opinion negates the contention of the Counsel that even in case of frustration, doctrine of severability would apply enabling the Court to specifically enforce performance of negative covenant. When a contract is frustrated it is void in its entirety but for the arbitration clause and no performance of the same could be enforced as it comes to an end.

12. inspire of the aforesaid prima facie conclusions arrived at by me I am inclined to look into the other submissions of the learned Counsel appearing for the plaintiff that the aforesaid agreement contains a negative covenant. On a fair and reasonable reading and interpretation of the agreement dated 8.11.1997 it is crystal clear that the said agreement contains only positive covenant and assertions and even when the contents . thereof are read either in part or as a whole it does not convey at any stage that it also contains a negative covenant and/or stipulation. The said agreement spells out the mode of acquisition of the shares of BOCL individually by the plaintiff as also by the defendant although it uses by expression 'jointly' and in a concerted manner' but the acts were to be done individually by each one of them and to acquire shares directly from the promoters of BOCL. The decisions relied upon by the Counsel for the petitioner are distinguishable on facts. Except for Calcutta High Court case all the other cases contained a specifically negative stipulation. Even the decision of the Calcutta High Court strides on a separate footing altogether. Negative intention or stipulation was clear in view of the nature of the expression used in the agreement. No such expression conveying any negative stipulation could be read in the present agreement. Mere inclusion of an affirmative agreement or positive covenant does not imply a negative covenant to do anything inconsistent. In my prima facie opinion, the negative covenant cannot be read in the contract in question even impliedly. The plaintiff has also not pleaded in the plaint that the agreement dated 8.11.1997 and executed on 8.12.1997 contains a negative covenant. Neither has it sought a relief in that regard in the plaint nor sought to get the said agreement dated 8.11.1997 specifically enforced. 13. I have also considered the factors of balance of convenience and irreparable injury to be caused to the parties in the present case and weighed the scale both ways that is granting an injunction and refusing to grant an injunction as prayed for. In Gujarat Bottling Co. Ltd. v. Coca Cola Co. : AIR1995SC2372 , the Supreme Court in paragraph 45 laid down that even though under Section 42 of the Specific Relief Act the Court is competent to grant an injunction to perform negative agreement but such Court is not bound to grant an injunction in every case and on equitable grounds the same could also be refused. It was also reiterated that for grant of such injunction all the three tests namely - existence of a prima facie case, balance of convenience and irreparable injury to be causes to the parties are to be applied and considered by the Court. In the background of the aforesaid settled positions of law, I propose to apply the aforesaid tests to the facts of the present case. I have on appreciation of the documents on record come to the prima facie conclusion that the agreement dated 8.11.1997 has become void and rendered impossible to be performed and that it has only positive stipulations and no negative convenant. For breach of such positive covenant or stipulation payment of damage could be the sufficient remedy. As the said agreement does hot contain any negative covenant it cannot be specifically enforced and thus, the plaintiffs do not have any prima facie case in their favour. The plaintiff has sought for grant of an injunction in the nature of restraining the defendant from entering into the contract with the promoters of BOCL and also restraining the said defendant from acquiring any shares in the BOCL. If such an injunction as prayed for by the plaintiff, is granted the defendant would be restrained from acquiring shares of BOCL which it has already sought to acquire on the basis of understanding and agreement arrived at with the promoters of BOCL in pursuance of which number of steps have already been taken in that regard including obtaining permission from the Foreign Investment Promotion Board. If a restraint order is issued not only all those actions would be frustrated but the effect would also be that the entire agreement to sell and purchase of the shares of BOCL would fall through, which would to some extent amount to interfering with the right of the defendant to carry on trade. Besides, once the defendant is restrained as prayed for, the shares of BOCL would be acquired by some third party and in that event both the plaintiff and the defendant would suffer irreparable injury and future damage. If on the other hand, the defendant is allowed to acquire the shares in terms of their agreement with the promoters of BOCL there could be a possibility of the plaintiff also getting advantage of the same as the defendant has proposed to the plaintiff by its letter dated 11.8.1998, that it would at a subsequent stage make an endeavor to give effect to the stipulations made in the share purchase and co-operation agreement dated 12.5.1995.

Counsel for the defendant categorically stated during the course of his submissions that the defendant still stands firm on its commitment made in the letter dated 11.8.1998. It was also stated by him that if the defendant is allowed to acquire the aforesaid shares at this stage all endeavours would be made to give effect to the promise made by the defendant to the plaintiff in its letter dated 11.8.1998. Thus balance of convenience is against the plaintiff and in favor of the defendant and it is prima facie proved & established that irreparable injury would be suffered by the defendant if an injunction is granted in the nature sought for in the suit. Thus on all counts as slated herein above, the plaintiff has not been able to make out a prima facie case for grant of a temporary injunction and to get the positive covenants of the agreement dated 8.11.1997 specifically enforced by way of an injunction. Since the defendant stands by its commitment as stated in its letter dated 11.8.1998 and as the plaintiffs has sought for reference of the disputes arising between the parties to be resolved through the process of arbitration as stated in the letter of the plaintiff dated 1.6.1998 and further positive action taken through letter dated 8.9.1998 the disputes would be resolved through the process of arbitration. In the connected O.M.P. 205/1998 under Section 9 application an interim injunction with restricted effect has been passed by me by a separate order. Subject to the same, the present application stands dismissed as having no merit.

13. It is made clear that whatever views and expressions have been made herein the same shall be treated as only a prima facie and tentative opinion at this stage and shall not be considered as any final opinion on the merits of the suit.