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The obligations under the agreement are to be performed by parties

Nihal Thareja ,
  22 June 2020       Share Bookmark

Court :
Calcutta High Court
Brief :
The court held that the contentions of the defendant do not appear to be correct in the facts of the present case. The contract in itself had indicated the terms in which the respective obligations were to be performed by the parties. The court provided that damages would be a better remedy than granting an order of injunction. The stay prayed, in this case, was refused with costs and leave was granted to summon defendants.
Citation :
VIJAYA MINERALS PVT. LTD. VS. BIKASH CHANDRA DEB & ANR. CITATION: AIR 1996 Cal 67

BENCH: S K SEN, J

FACTS:

  • There was an agreement for sale and delivery ex-pit mouth of the entire Manganese ore and Iron ore from the mine at Ingani Jharan Village, Orissa.
  • An advance sum of Rs. 15,00,000 was paid by the plaintiff which was to be treated as an advance against the purchase and hence be adjusted from the sale price
  • The agreement contained a covenant where the buyer would solely hold all the rights of Manganese and iron ore.
  • The Defendant entered into the said Agreement and after receiving the sum of Rs. 15,00,000/- refused to sell and deliver the Manganese and iron ore to the Plaintiff, this led to the plaintiff filing a suit for injunction

ISSUE:

Whether a negative covenant under an agreement could be enforced Plaintiff based on terms stipulated under the agreement

CONTENTIONS BY PLAINTIFF:

  • That clause 12 of the agreement contained a negative covenant against the selling of iron ore to any other buyer
  • That s42 of the Specific Relief Act provides for an  injunction to perform a negative agreement

CONTENTIONS BY DEFENDANT:

  • That the sum of Rs. 15,00,000 was not received by the defendant
  • That the plaintiff had not taken the steps stipulated in agreement to obtain the delivery of the iron ore

JUDGEMENT:

The court held that the contentions of the defendant do not appear to be correct in the facts of the present case. The contract in itself had indicated the terms in which the respective obligations were to be performed by the parties. The court provided that damages would be a better remedy than granting an order of injunction. The stay prayed, in this case, was refused with costs and leave was granted to summon defendants.

 
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