M/S Gesture Hotels And Foods Pvt. ... vs New Delhi Municipal Council
2014 Latest Caselaw 1986 Del

     IN THE HIGH COURT OF DELHI AT NEW DELHI

                           Order Reserved on: 06 th March, 2014
                          Order Pronounced on: 22 n d April, 2014

                        CS(OS) 1914/2012

M/S GESTURE H OTE LS      AND   FOODS P V T. L TD     ...... P LA IN TIFF

                          Through:      Mr. Sudhir Nandrajog, Sr.
                                        Advocate with Mr. Manish
                                        Sangwan and Mr. Mayank
                                        Wadhwa, Advocates

                                versus

N EW D ELH I M UNIC IPA L C OUNCIL                  .......D EFENDAN T

                          Through:      Mr. Parag Tripathi, Sr.
                                        Advocate with Ms. Rachna
                                        Golcha,   Ms.    Monisha
                                        Handa and Mr. Arvind Sah,
                                        Advocates

       CORAM:

       HON'BLE MR. JUSTICE SANJEEV SACHDEVA

SANJEEV SACHDEVA, J.

IA No. 11822/2012 (under Order 39 Rule 1 & 2 CPC)

1. On 6.3.2014, arguments on the above application

under Order 39 rule 1 and 2 were heard and order was

reserved. However, on account of a typographic al

error, in the order sheet, IA No. was show n as

11823/2013.

2. The plaintiff has filed the present suit for specific

performance and permanent injunction in respect of

premises allotted to the plaintiff at Akbar Bhawan

Annexe, Chanakya Puri, New Delhi. The case of the

plaintiff is that the plaintiff was allotted the premises

ground/lower ground floor at Akbar Bhawan Annexe,

Chanakya Lane, New Delhi by the New Delhi

Municipal Corporation (NDMC) for running a

restaurant-cum-banquet hall and allied trade.

3. As per the plaintiff, on 30.05.2002 notice inviting

tender was issued by NDM C for 9657 sq. ft. space

under the category of office spaces/shops/stalls etc.

Mr. Devraj, the erstwhile Director of the plaintiff

company, offered a rate of Rs. 36.99 per sq. ft. for the

purposes of restaurant-cum-banquet hall and allied

trade.

4. The case of the plaintiff is that the offer made by the

plaintiff was con sidered and put up before the

Chairman, NDMC, who approved the offer on

25.2.2002 and on 3.07.2002 acceptance letter was

issued by the NDM C to Mr. Devraj and he was asked

to form a partnership/private limited company in whose

name the licence deed was to be executed.

Accordingly, the plaintiff company was incorporated.

5. On 24.9.2002, a licence deed was executed between

the plaintiff and the defendant NDM C. The term of the

licence stipulated a period of 10 years. As per the

plaintiff, the premises were in a dilapidated state and,

accordingly, the plaintiff invested a huge amount in

renovation and repair of the premises a nd put the

premises to use for commercial venture only in March,

2003. On 7.10.2002, an additional agreement was

executed between the plaintiff and defendant in

respect of adjacent area to the suit premises as

"GRE EN PATCH" .

6. As per the plaintiff on 23.07 .2003 the plaintiff was

intimated by the defendant that the plaintiff should pay

the licence fee in accordance with the area under his

occupation and also that the plaintiff had encroached

upon open space measuring 24361 sq. ft.

7. On 25.7.2003, an FIR was allegedly registered against

the Chairman and the other officials of the defendant

alleging that the said Chairman and officers had

conspired with the Directors of the plaintiff to create

favourable conditions for the Plaintiff by changing land

use and ignor ing and overriding other objections. On

12.08.2003, a show cause notice was issued to the

plaintiff to show cause as to why the licence deed

should not be cancelled or revoked. There was also a

dispute pertaining to the area in occupation of the

plaintiff and also the licence fee paid by the plaintiff.

However, the said dispute is not germane for the

purposes of deciding the present injunction

application.

8. As per the plaintiff, the licence deed dated 24.09.2002

contains a renewal clause with the option (t o be

exercised by the plaintiff for renewal/extension of the

licence deed for another 10 years). In the plaint, the

plaintiff has extracted only a part of the said renewal

clause as under:

"...... it shall be renewed/extended for a further period as decided by the Licensor from the day following the date on which the term of the Licence expires..... provided Licencee exercises his option for renewal of Licence in writing for another term of 10 years within 60 days before the date of expiry in the present Licence and the Licencee completes all the required formalities for renewal of Licence within the stipulated period to the satisfaction of the Licensor, it shall be presumed that the Licensee is not interested in further extension/renewal of his/ her Licence beyond the date of expiry of the term of the Licence....."

9. As per the plaintiff, the plaintiff exercised its option for

renewal/extension of the licence deed for another 10

years on 02.02.2012 which was followed by various

reminders. As per the plaintiff, the defendant NDM C

rejected the request of the plaintiff for

renewal/extension.

10. Plaintiff has relied on a policy decision dated

18.03.1999 and 30.08.2000 of NDM C pertaining to

renewal/extension of licence deeds to contend that the

defendant is bound to renew the licence agreement.

Further the plaintiff has contended that the defendant

NDMC has accepted the licence fee after the period

stipulated by the original licence deed expired thereby

creating a promissory estoppel against them. The

plaintiff has thus, sought a decree of specific

performance directing the defendants to renew/extend

the licence deed dated 24.09.2002 for another period

of 10 years w.e.f. 12.07.2012 to 11.07.2022.

11. The plaintiff by the present application has sought a

restraint against defendant from evicting the plaintiff

from the suit premises and from disconnecting the

electricity and water supply and from creating any

hindrance in the peaceful enjoyment of the suit

premises by the plaintiff.

12. The defendant has opposed the relief cl aimed by the

plaintiff and has contended that the licence period

expired by efflux of time on 11.07.2012. Further that

the licence deed was extendable only at the option of

the defendant by means of written intimation to the

plaintiff. No such option was exercised by the

defendants and, accordingly, the licence stood expired

on the expiry of the term of the licence as stipulated by

the original licence agreement. The defendant has

disputed the contention of the plaintiff in respect of the

area in occupation of the plaintiff and also the licence

fee paid by the plaintiff. However, the same is not

relevant for the purposes of disposal of the present

interim application.

13. The stand of the defendant is that the plaintiff was

allotted the said premises on licen ce basis for a fixed

period of 10 years ending on 11.07.2012 and on

account of the plaintiff having occupied an extra

covered area and open space, case was registered by

the CBI. As per the defendants, as per Clause (1) of

the licence agreement, the licen ce was for a fixed

period of 10 years only and it was in the entire

discretion of the defendant to extend or not to extend

the period of licence. Further, the plaintiff could not

seek renewal of the agreement under any

circumstances whatsoever.

14. As per the defendants, a committee was constituted

comprising of three officials of the defendant to give

recommendation with regard to the future course of

action and the Committee vide its report dated

22.02.2012 recommended that the licence for the said

premises should not be renewed in favour of the

plaintiff and that the premises should be allotted to

some Government department on a higher revenue.

There were other reasons also mentioned by the

Committee in not extending the licence. As per the

defendants, the plaintiff was informed that the

competent authority had not acceded to the request

for renewal of the licence.

15. As per the defendants, the defendant NDM C is not

under any contractual obligation to extend or renew

the licence and keeping in view the phe nomenal

increase in the prices, the NDMC has taken a decision

not to renew the licence and the decision is a well

thought about and deliberated upon executive decision

by a Special Committee.

16. For grant of ad-interim injunction the plaintiff has to

satisfy three requirements. Plaintiff has to show a

strong prima -facie case for grant of an ad-interim

injunction, the balance of convenience has to tilt in

favour of the plaintiff and in favour of grant of ad -

interim injunction and the plaintiff has to show that in

case the ad -interim injunction is not granted the

plaintiff shall suffer an irreparable loss and injury.

Unless all the three requirements are satisfied the

plaintiff is not entitled to the relief of injunction.

17. The plaintiff is seeking specific perfor mance of the

licence deed dated 24.09.2002. Specific performance

of a contract is permissible only where the contract

stipulates a condition which needs to be performed by

the defendants. The plaintiff in a suit for specific

performance can seek a direction directing the

defendants to perform its obligations under the

contract. For the purposes of specific performance,

the plaintiff has to show that the contract stipulates an

obligation on the part of the defendant and the

defendant is refusing to perform that obligation. Unless

there is an obligation on the part of the defendant to

perform a condition, there can be no direction to the

defendant to perform the condition. Where there is no

condition stipulated in the agreement, the defendant

cannot be force d to perform that condition. Specific

performance presupposes a condition that has to be

performed by the defendant and a refusal on the part

of the defendant to perform that condition.

18. Plaintiff in the plaint has extracted incomplete Clause

(I) of the licence agreement and when the complete

Clause (I) is compared with the extracted portion of

Clause (I) of the licence agreement in the plaint, it is

apparent why the plaintiff has extracted only a portion

of the said Clause. The comparison between the

clause quoted by the plaintiff and the actual clause (I)

is as under:

Clause quoted by the Complete Clause(I) plaintiff

.................... it shall be That the licence shall be for renewed/extended for a a period of 10 years ending further period as decided by upto 11-7-2012 and the Licensor from the day thereafter it shall be the following the date on which entire discretion of the the term of the Licence licensor to extend or not to expires ............... provided extend the period of licence. Licencee exercises his option In case it is decided by the for renewal of Licence in licensor that the licence be writing for another term of renewed/extended, it shall 10 years within 60 days be renewed/extended for a before the date of expiry in further period as decided by the present Licence and the the Licensor from the day

Licencee completes all the following the date on which required formalities for the term of the Licence renewal of Licence within the expires at a monthly licence stipulated period to the fee payable under the satisfaction of the Licensor, it present licence plus its 5% shall be presumed that the (or by the percentage as Licensee is not interested in applicable under the policy further extension/renewal of of the council for the time his/ her Licence beyond the being in for ce) as monthly date of expiry of the term of lice nce fee of the renewed the Licence ......... licence provided the licensee exercises his option for renewal of Licence in writing for another term of 10 years within 60 days before the date of expiry in the present Licence and the Licencee completes all the required formalities for renewal of Licence within the stipulated period of 60 days. In case the option for renewal is not so exercised and/or the formalities are not completed within the stipulated period to the satisfaction of the Licensor, it shall be presumed that the Licensee is not interested in further extension/renewal of his/ her Licence beyond the date of expiry of the term of the Licence and in the even of the licensee not surrendering the vacant

possession of the shop within the stipulated period under this deed, the licensee shall render himself/herself liable for action for eviction and recovery of damages under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971.

(portion extracted by plaintiff is underlined)

19. Perusal of Clause, as contained in licence deed dated

24.09.2002, clearly shows that the term of the licence

is for a fixed period of 10 years ending with

11.07.2012 and further the said clause gives an

absolute discretion to the officers of the Defendant to

extend or not to extend the term of the licence. The

discretion of the officers is absolute and unfettered. It

is only where the licensor decides to exercise the

discretion of exten ding the period of licence that the

other formalities as stipulated by the said Clause are

to be performed by the licensee.

20. Even the allotment letter dated 03.07.2002 relied upon

by the Plaintiff stipulates only a term of 10 years.

There is no stipulation or clause in the said allotment

letter dated 03.07.2002 permitting an extension. The

Clause (I) of the licence agreement stipulates an

increase in licence fee by 5% (or by the percentage as

applicable under the policy of the Council for the time

being in force). The reference in the said Clause to the

policy of the Council is only for the purposes of the

percentage of increase in the licence fee.

21. By reference to the policy in the said Clause , all the

policies of the NDMC are not ipso facto made

applicable. The said Clause further stipulates that if

the licensor decides not to extend the period of

licence, the licencee shall be liable for action of

eviction and recovery of damages under the Public

Premises (Eviction of Unauthorised Occupants) Act,

1971.

22. The policy dated 18.03.1999 relied upon by the

plaintiff deals mainly with the issue relating to the

increase in licence fee for rehabilitation of markets

and other squatter units in NDM C markets which are

governed under resolution 55 dated 07.07.1987 read

with resolution No.1 dated 07.07.1978. The reference

to renewal in the said policy is only for the purposes of

the enhancement of the licence fee on unit basis.

23. The reliance of the counsel for the plaintiff on the

policy/guideline dated 30.08.2000 is unfounded as the

said policy refers to a decision that in case of renewal

of shop/kiosk/thada/office unit/restaurant , the licence

would be renewed for a period of 10 years on an year

to year basis. The said Clause of the policy comes

into play only in ca ses where there is a decision to

renew the licence. Where a renewal is decided to be

granted in those cases, the renewal shall be for a

period of 10 years. This policy does not stipulate or

lay down that in every case irrespective of its facts and

circumstances renewal has to be granted. In case,

where the defendant NDM C decides not to renew the

licence, the said policy clearly would have no

applicability.

24. Learned senior counsel for the plaintiff relied upon the

response of the defendant dated 22.01.2012 to the

RTI query dated on 08.12.2011 raised on behalf of the

plaintiff to contend that the NDM C has conceded that

priority is granted to existing licence holders, who

were carrying out permitted business from the

premises owned by NDM C, in matters of

licence/renewal thereof, if such existing licencee did

not have any outstanding against the NDM C at the

time when such licence came up for renewal.

25. Reliance on the said response to the query would

have no applicability in the facts of the present case

as according priority to an existing licence holder is

completely different from the renewal of the term of a

licence.

26. For the purposes of seeking specific performance of a

term of a licence, it is necessary that there should be

an obligation on the defendants to renew the term of

the licence under the agreement. Where there is no

obligation on a party to do a particular act, the specific

performance of such an obligation cannot be sought.

The specific performance can be sought of an

obligation which is mandato ry. Where discretion is

given to the party to perform or not to perform the

obligation and the discretion is unfettered or absolute,

specific performance cannot be granted.

27. Only if there was an obligation on the defendant to

renew the term of the licence could the plaintiff seek

specific performance of the said obligation and that

also if the defendant had failed or refused to perform

the said obligation of renewal. Where there is no

obligation to renew the term of the licen ce and it lies in

the sole discr etion of the defendant to renew or not to

renew the term of the licence, the plaintiff cannot seek

a direction, thereby directing the defendant to renew

the term of the licence.

28. The licence agreement stipulates that the allotment of

the licensed premises in favour of the licensee was

purely temporary which could be revoked at any point

of time without assigning any reason and in the event

of the revocation , the licencee was bound to evict the

premises without any claim for compensation.

29. If the Defendants had not considered the request of

the Plaintiff to consider the case of the Plaintiff for

grant of an extension/renewal, the Plaintiff at best

could have sought a direction for the Defendant to

consider it's request. But in the present case, the

Defendants have contended that a Sub-committee

was appointed by the Chairman of the NDM C to

consider the wrongful termination or otherwise

extension of the licence agreement. The sub -

committee by its report dated 22.02.2012 examine d

the manner of allotment to the p laintiff in the very first

instance. The committee found that an inquiry was

conducted and a charge sheet had been registered

against the then Chairman and other officials of NDM C

for misusing their official position and acting in

conspiracy with the Dire ctors of the plaintiff and on

recommendations of the CBI, major penalty was

recommended against the then Chairman and the then

Director of the NDM C. The committee recommended

not to extend the licence and, accordingly, the plaintiff

was communicated the decision that the licence was

not being extended.

30. Even otherwise in the light of section 141 (2) of the

NDMC Act, 1994, it is lawful for the Defendants to try

to get maximum profits from its properties as has been

held by the Supreme Court of India in the case of

A GGARWAL & M ODI E NTERPRISES (P) LTD . & A NOTHER

V ERSUS N EW D ELHI M UNICIPA L C OUNCIL : (2007) 8 SCC

31. The decision of the Supreme Court of India in

A GGARWAL & M ODI E NTERPRISES (S UPRA ) and the

provision of section 141 (2) of the NDM C Act 1994,

are a complete answer to the contention of the plaintiff

that it were being clubbed with hotels and Cinema

halls for the purposes of eviction whereas under the

policy the plaintiff was to be clubbed with

shops/kiosks/restaurants as the rental for

shops/kiosks/r estaurant and office s were higher. Even

otherwise the Plaintiff ha s not been able to point out

any instance of a similarly shop, kiosk, restaurant or

office with which it could claim parity.

32. Further there is no merit in the plea raised by the

plaintiff of discrimination as there is no policy whereby

a renewal was to be mandatorily granted. The policy

relied upon, as held hereinabove, comes into play only

in case of a favourable decision to renew and not

otherwise.

33. There is no contractual terms between the parties that

makes it obligatory for the defendants to renew the

licence. On the contrary, the clauses give an absolute

discretion to the defendants to renew or not to renew

the terms of the licence.

34. The dispute between the parties is purely contractua l

and the rights and obligations of the parties have to be

determined in view of the terms of the licence and not

on the principles of equality or public law. There is

also no allegation of a personal bias against any of the

officers of the Defendant.

35. The Supreme Court in the case of H A JEE S.V.M.

M OHAMED J AMALUDDEN B ROS .& C O . V. GOVERNMENT OF

TAMILNADU ; 1997 (3) SCC 466 has laid down as under:

9. Section 2 of the Grants Act insulates all grants and all transfers of land or any interest therein made by the Government from the checks of the provisions of Transfer of Property Act. Section 3 of the Grants Act protects the terms of such grant from the provisions of any other law. We extract the above two provisions hereunder:

"2. Transfer of Property Act, 1882, not to apply to Government grants.--Nothing in the Transfer of Property Act, 1882, contained shall apply or be deemed ever to have applied to any grant or other transfer of land or of any interest therein heretofore made or hereafter to be made by or on behalf of the Government to, or in favour of, any person whomsoever; but every such grant and transfer shall be construed and take effect as if the said Act had not been passed.

3. Government grants to take effect according to their tenor.--All provisions, restrictions, conditions and limitations over contained in any such grant or transfer as aforesaid shall be valid and take effect according to their tenor, any rule of law, statute or enactment of the Legislature to the contrary notwithstanding."

10. The combined effect of the above two sections of the Grants Act is that terms of any grant or terms of any transfer of land made by a Government would stand insulated from the tentacles of any statutory law. Section 3 places the terms of such grant beyond the reach of any restrictive provision contained in any enacted law or even the equitable principles of justice, equity and good conscience adumbrated by common law if such principles are inconsistent with such terms. The two provisions are so framed as to confer unfettered discretion on the Government to enforce any condition or limitation or restriction in all types of grants made by the Government to any person. In other words, the rights, privileges and obligations of any grantee of the Government would be completely regulated by the terms of the grant, even if such terms are inconsistent with the provisions of any other law.

11. The above legal position was recognised by the courts in India before the Constitution of India came into being. (Surja Kanta Roy

Choudhury v. Secy. of State [AIR 1938 Cal 229 : 42 CWN 239] and Raza Husain Khan v. Saiyid Mohd. [AIR 1938 Oudh 175 : ILR 14 Luck 22] ) The position continued to be so even after the Constitution came into force (State of U.P. v. Zahoor Ahmad [(1973) 2 SCC 547 : (1974) 1 SCR 344] ).

12. An attempt was made to show that the transaction evidenced by the agreement was not a grant but a lease of land. Though it is not now open to the appellant to raise such a contention (in view of the clear finding of the learned Single Judge that it was not a lease but only a licence coupled with interest, which finding was not challenged by the appellant before the Division Bench) assuming that it was a lease of land, still the appellant cannot succeed because lease made by the Government is also covered by the protection envisaged in Sections 2 and 3 of the Act.

36. The Supreme Court of India in the case of H A JEE

S.V.M. M OHAMED J AMALUDDEN B ROS .& C O . (S UPRA )

has laid down that Section 2 of the Government

Grants Act insulates all grants and all transfers of land

or any interest therein made by the government from

the checks of the provisions of Transfer of Property

Act. The terms of any grant or terms of any transfer of

land made by a government stand insulated from the

tentacles of any statutory law. The terms of such

grant are beyond the reach of any restrictive provision

contained in any enacted law or even the equitable

principles of justice, equity and good conscience

adumbrated by common law if such principles are

inconsistent with such terms. The two provisions are

so framed as to confer unfettered discretion on the

government to enforce any condition or limitation or

restriction in all types of grants made by the

government to any person. In other words, the rights,

privileges and obligations of any grantee of the

government would be completely regulated by the

terms of the grant, even if such terms are incon sistent

with the provisions of any other law. The Supreme

Court further in the facts of the said case, while

interpreting a similar clause , held that the said clause

adequately empowered the government to uniformly

terminate the arrangement or revoke the grant without

assigning any reason whatsoever and that the said

clause was valid and could be enforced by the

government at any time and hence the action of the

government in rescinding that contract was held to be

valid. The Supreme Court held that Grant included not

only a licence but also a lease granted by the

government.

37. Similarly, in the present case, the rights and

obligations of the plaintiff would be governed by the

licence granted to the plaintiff. The terms of the

licence would be insulated from the tentacles of any

statutory law or policy and would be beyond the reach

of any restrictive provision contained i n the same. The

licence confers unfettered discretion on the defendant

to renew or not to renew the terms of the licence and

any contrary provision of statute or policy would be

overridden by the terms of the licence.

38. The Division Bench of this High Court in the case of

R AJAS THAN B REWERIES LTD . V ERSUS THE S TROH

B REWERY C O . AIR 2000 D ELH I 450 laid down as under:

13. .......... However, the principles of equity governing specific performance are almost same in Indian law and English law. The discretion of the Courts of England while enforcing the specific performance of a contract is subject to the same constraints as are applicable in the Courts in India. Under the English law specific performance of contractual obligation is available only in equity and is subject to various restrictions, which have been explained by G.H. Treitel in his work "The Law of Contracts" 6th Edition pages 764 to 775 as follows:

(i) Specific performance will not be ordered where damages are adequate remedy.

(ii) If the party applying for relief is guilty of a breach of the contract or is guilty of wrongful conduct.

(iii) If the Contract involves personal service.

(iv) If the contract requires constant supervision.

(v) If the party against whom specific performance is sought is entitled to terminate the contract."

At page 775, it is stated in the aforementioned work:

"If the party against whom specific performance is sought, is entitled to terminate the contract, the order will be refused as the defendant could render it nugatory by exercising his powers to terminate. This principle - applies whether the contract is terminable under its express terms or on account of the conduct of the party seeking specific performance."

14. The effect of breach of a contract by a party seeking to specifically enforce the contract under the Indian law is enshrined in Section 16(c) read with Section 41(e) of the Specific Relief Act, 1963. Clause (e) of Section 41 of the Specific Relief Act provides that injunction

cannot be granted to prevent the breach of contract, the performance of which would not be specifically enforced. Clause (c) of Section 41 enumerates the nature of contracts, which could not be specifically enforced. Clause (c) to sub-section (1) of Section 14 says that a contract which is in its nature determinable cannot be specifically enforced. Learned Single Judge thus was justified in saying that if it is found that a contract which by its very nature is determinable, the same not only cannot be enforced but in respect of such a contract no injunction could also be granted and this is mandate of law. This, however, is subject to an exception, as provided in Section 42 that where a contract comprises an affirmative agreement to do a certain act, coupled with a negative agreement, express or implied, not to do a certain act, the circumstances that the court is unable to compel specific performance of the affirmative agreement shall not preclude it from granting an injunction to perform the negative agreement.

........

19. Even in the absence of specific clause authorising and enabling either party to terminate the agreement in the event of happening of the events specified therein, from the very nature of the agreement, which is private commercial transaction, the same could be terminated even without assigning any reason by serving a reasonable notice. At the most, in case ultimately it is found that termination was bad in law or contrary to the terms of the agreement or of any understanding between the parties or for any other reason, the remedy of the appellants would be to seek compensation for wrongful termination but not a claim for specific performance of the agreements and for that view of the matter learned Single Judge was justified in coming to the conclusion that the appellant had sought for an injunction seeking to specifically enforce the agreement. Such an injunction is statutorily prohibited with respect of a contract, which is determinable in nature. The application being under the provisions of Section 9(ii) (e) of the Arbitration and

Conciliation Act, relief was not granted in view of Section 14(i) (c) read with Section 41 of the Specific Relief Act. It was rightly held that other clauses of Section 9 of the Act shall not apply to the contract, which is otherwise determinable in respect of which the prayer is made specifically to enforce the same.

39. The Division Bench in the case of R A JAS THAN

B REWERIES L TD . (S UPRA ) has laid down that Specific

performance will not be ordered where damages are

adequate remedy or where the party applying for relief

is guilty of a breach of the contract or is guilty of

wrongful conduct or where the contract involves

personal service or where the contract requires

constant supervision or where the party against whom

specific performance is sought is e ntitled to terminate

the contract. If the party against whom specific

performance is sought, is entitled to terminate the

contract, the order will be refused as the defendant

could render the direction to perform nugatory by

exercising his powers to terminate. This principle has

been held to be applicable whether the contract is

terminable under its express terms or on account of

the conduct of the party seeking specific performance.

Further it has been laid down that clause (e) of Section

41 of the Specific Relief Act, 1963 lays down that

injunction cannot be granted to prevent the breach of

contract, the performance of which would not be

specifically enforced. If it is found that a contract which

by its very nature is determinable, the same not only

cannot be enforced but in respect of such a contract

no injunction could also be granted and this is

mandate of law. This, however, has been held subject

to the exception that where a contract comprises an

affirmative agreement to do a certain act, coupled with

a negative agreement, express or implied, not to do a

certain act, the circumstances that the court is unable

to compel specific performance of the affirmative

agreement shall not preclude it from granting an

injunction to perform the negative agreement. The

Division Bench has further held that if it is ultimately

found that termination was bad in law or contrary to

the terms of the agreement or of any understanding

between the parties or for any other reason, the

remedy of the plaintiff would be to seek co mpensation

for wrongful termination but not a claim for specific

performance of the agreements.

40. In view of the above, prima facie I find that the rights

and obligations of the plaintiff would be governed by

the licence granted to the plaintiff. The terms of the

licence would be insulated from the tentacles of any

statutory law or policy and would be beyond the reach

of any restrictive provision contained therein. The

licence confers unfettered discretion on the defendant

to renew or not to renew the terms of the licence and

any contrary provision of statute or policy would be

overridden by the terms of the licence. Since the

Defendants additionally have the right to terminate the

licence, no direction can be issued to the defendants

to renew the licence. Even otherwise where

compensation is an adequate remedy, specific

performance cannot be granted. In case ultimately it is

found that termination was bad in law or contrary to

the terms of the agreement or of any understanding

between the parties or for any o ther reason, the

remedy of the plaintiff would be to seek compensation

for wrongful termination but not a claim for specific

performance of the agreement.

41. The Plaintiff has failed to show any prima facie case

for grant of an ad -interim injunction. The application of

the Plaintiff is accordingly dismissed.

SANJEEV SACHDEVA, J April 22, 2014 sv