A junk selling contract existed between the two parties. It might be ended by either party given 15 days' notice. The petitioner sought interim relief, claiming that the respondent would award contract work to a third party while the contract was still in effect. It asked the court to order the respondent to comply with the contract and, pending the petition's final disposition, to grant an injunction prohibiting the respondent from creating any third-party rights.
In the instant case titled Chetan Iron LLP v. NRC Ltd the issue raised before the Bombay High Court for clarification was:
Whether the Court, acting under Section 9 of the Act, can order the specific performance of a determinable contract?
With regard to this issue, The Bombay High Court held that the court exercising powers under Section 9 of the Act cannot direct the specific performance of a determinable contract. Further, the principles contained in Section 14(d) r/w Section 41(e) of the Specific Relief Act are applicable even when a court is considering an application u/s 9 of the Arbitration Act, 1996.
The Court also held that an injunction cannot be obtained to prevent the breach of a contract whose performance would not be explicitly enforced, according to Section 41 (e) SRA. The Court reasoned that it would be "idle" to undertake something that may be "instantly undone by one of the parties." The court also stated that Section 42 SRA did not apply, and that a temporary injunction could not be granted because the final relief of specific performance could not be granted. However, the court appointed an arbitrator at the parties' request.
The Court categorically held that:
"Having heard learned Counsel for the parties and having perused the record, it is quite clear that the contract as awarded by the respondent to the petitioner has not been terminated and/or that the contract is partly performed by the petitioner by lifting some material on payment of the price to the respondent. However, even in these circumstances, when a question arises before the Court, to consider granting of reliefs in the nature as prayed for by the petitioner, in my opinion, the basic consideration for the Court would be to examine as to what is the nature of the contract between the parties."