Orissa High Court
Sri Sri Param Premamaya vs Stride Hospital Pvt. Ltd. And ... on 23 February, 2022
IN THE HIGH COURT OF ORISSA AT CUTTACK
ARBA No.17 Of 2021
(Through hybrid mode)
Sri Sri Param Premamaya .... Appellants
Purusottam Trust and others
Mr. A. Mahanta, Advocate
-versus-
Stride Hospital Pvt. Ltd. and others .... Respondents
Mr. A. Tripathy,
Caveator
CORAM: JUSTICE ARINDAM SINHA
Order ORDER
No. 23.02.2022
3. 1. Mr. Mahanta, learned advocate appears on behalf of appellants
and submits, impugned judgment dated 10th November, 2021 is liable
to and should be set aside in appeal. He submits, parties entered into a
Memorandum of Understanding (MOU) dated 2nd February, 2018. His
client is first party in the document while respondent is second party.
Clause-8 in the MOU provides for termination. On his client having
noticed breaches and irregularities committed by respondents,
ultimately his client issued noticed dated 8th September, 2021 calling
for mutual termination as on 30th September, 2021. Respondents
issued notice dated 19th September, 2021 invoking arbitration clause in
the MOU. Immediately subsequent thereto, respondents approached
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the District Judge and obtained ex parte order of status quo and by
impugned judgment, confirmed the same.
2. He submits, the MOU is a contract, which cannot be said to be
specifically enforceable. He relies on clause (d) in section 14 of
Special Relief Act, 1963 to submit, the contract itself says it is
terminable so it is one, in its nature determinable. Such a contract has
been mandated by section 14 to be unenforceable. He then relies on
clause (e) under section 41 to submit, the Court not have granted
injunction and the prayer was to be refused. The injunction was
granted purportedly to prevent breach of the termination clause in the
contract but the contract not being specifically enforceable,
respondents were not entitled to injunction.
3. Mr. Tripathy, learned advocate appears on behalf of
respondents and submits with reference to the MOU clause 8 that six
months notice was necessary to be given. Such notice could only be
given if there was compliance of clause (b) under sub-clause (8.1) in
clause 8. Said clause requires prior 90 days rectification notice to have
been issued by appellants. Furthermore, within the notice period
appellants were required to repay outstanding in the interest fee loan
granted by his client. Since these requirements were not fulfilled by
appellants, there should be no interference with impugned judgment.
// 3 //
4. On query from Court Mr. Mohanty draws attention to letter
dated 15th April, 2019 issued by his client to respondents saying, inter
alia, as follows.
"4. You are requested to clarify immediately
as to what measures you are proposing to take to
improve the situation. You may clearly say whether
you are capable of fulfilling your financial
commitments made in the MOU. You may also
clarify why provisions of the clauses 8.1(a), (b), (c)
of the MOU dated 2.2.2018 will not be invoked."
5. Section 42 provides for injunction to perform negative
agreement. The requirement in the MOU on termination by appellants,
negative its right thereunder to immediately terminate. As such,
impugned order granting the injunction of status quo cannot be faulted
as offending provisions in section 14 or section 49. However, the
termination, which appellants thought would be mutual, was
interpreted by respondents to be unilateral, against which they were
advised to and initiated litigation by seeking reference to arbitration
and approach to Court. So it turns out that the termination must be
read as w.e.f. 30th September, 2021. The direction for status quo
therefore, can only survive upto 28th February, 2022. So far as
respondents' contention of 90 days notice prior to termination is
concerned, that stands fulfilled by appellants having issued letter dated
15th April, 2019 and subsequent letters.
// 4 //
6. Impugned order is modified to extent that there will be
termination of the MOU on the date when appellants repay entirely,
the interest free loan granted to them by respondents. Appellants are
directed to do so and thereupon approach the District Judge for
recording compliance and order vacating the status quo.
7. The appeal is disposed of.
(Arindam Sinha)
Judge
Sks
