HARDESH ORES PVT. LTD. versus M/S HEDE & CO.

Citation: [2007] 6 S.C.R. 608 · Decided: 15-05-2007 · Supreme Court of India · Bench: B.P. SINGH · Disposal: Dismissed

Cited by 4 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
HARDESH ORES PVT. LTD. 
v. 
MIS HEDE & CO. 
MAY 15, 2007 
[B.P. SINGH AND H. S. BED!, JJ.] 
Code of Civil Procedure, 1908: Order II Rule 2; Order VII Rule 11 (d)-
limitation Act, I 963 : Articles 54, 58 & I/ 3-Agreements entered into by 
C Jessee with lessor for extraction of ore during lease period-Exercise of 
option of renewal of lease by the Jessee was rejected by the lessor-Suit for 
perpetual injunction filed by the lessee before trial court to restrain the 
lessor from carrying on the work of extraction by asserting its exclusive right 
under the renewed agreement-Lessor filing an application before the trial 
court contending that the suit is for specific performance of the lease which 
D is barred by limitation-Trial Court allowed the application and dismissed 
the suit-High Court upholding the judgment of the trial court-Correctness 
of-Held, renewal of a lease requires execution of a document in accordance 
with Jaw evidencing renewal and there is no concept of automatic renewal 
of lease by mere exercise of option by the lessee-On facts, the prayer for 
relief of perpetual injunction cannot be granted on the ground that there is 
E no subsisting agreement evidenced by a written document or by a declaration 
of a Court-Hence, the suit is barred by limitation-Registration Act, 1908: 
Sections I 7 & 49. 
Appellants entered into separate agreements with respondent-company 
F for extraction of ore from mine and purchase of minerals extracted from the 
mine respectively. The agreement provided that the appellant has the sole option 
to renew the agreements during the period of lease and renewals thereafter 
on the same terms and conditions contained in the original agreement; that 
the respondent shall not in any manner interfere or obstruct the appellant 
from carrying on its work; and that during the subsistence of the agreement, 
G the appellant has the sole right to extract or and the respondent is not entitled 
to authorize ore permit any other person for that purpose and that the 
respondent shall not enter into any agreement with any other party for the 
same work. 
H 
608 
.. 
HARDESH ORES PVT.LTD. v. HEDE & CO. 
609 
' 
The appellants exercised its option to renew the agreement under the A 
original agreement and conveyed its decision to the respondent. The 
respondent replied that the appellants are not entitled to exercise the option 
for renewal. When the appellant came to know that the respondent was 
conducting extraction in the land of surface right owners, the appellant issued 
a notice to the respondent to resist from doing any extraction or selling ore B 
~ 
by asserting its exclusive right under the agreement. The appellants filed 
suits before trial cout for perpetual injunction seeking enforcement of the 
negative covenants under the agreement. The respondent filed an application 
~ 
under Order VII Rule 11 CPC submitting that the suits filed by the appellants 
-
are for specific performance of the contract and they are barred by limitation 
under Article 54 of the Limitation Act, 1963. The Trial court allowed the c 
application and dismissed the suits as barred by limitation. The appeals 
preferred before High Court were also dismissed. 
In appeal to this Court, the appellants contended that the suit is for 
perpetual injunction seeking enforcement of the negative covenants of the 
Extraction Agreement and not a suit for specific performance, that the plaint D 
must be read as a whole to determine the nature of the suit; that the Agreement 
'( 
provides for automatic renewal of the lease once the option is exercised by 
the appellant; and that Article 113 and not Article 54 of the Limitation Act is 
r 
applicable in the case. 
The respondent contended that the trial court and the High Court were E 
right in holding that it is a suit for specific performance and not a mere suit 
for perpetual injunction; that the renewal of a mining lease must be evidenced 
by the execution of a deed incorporating the negative covenants; that there is 
no automatic renewal of lease by mere exercise of option by the appellant; 
that the appellant cannot seek a relief by way of injunction by filing a suit for F 
enforcement of negative covenants without getting first a renewed lease deed 
T 
executed or getting a declaration from a Court of law; and that Article 54 of 
.,,. 
the Limitation Act is applicable in the case and not Articles 58 and 113 of the 
Limitation Act. 
Dismissing the appeals, the Cour

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