JUDGMENT

KULDIP SINGH, J.:—Food Corporation of India (FCI) entered into an agreement dated August 14, 1967 with Jagannath Dutta entrusting him the work of clearing, transporting, storing and distribution of foodgrains on behalf of the FCL In other words he was given a storage agency by the FCI. The District Manager, FCI, by his notice dated June 25, 1987, terminated the agreement with effect from August 31, 1987. Jagannath Dutta challenged the validity of the notice by way of a writ petition under Art. 226 of the Constitution of India before the Calcutta High Court. A Division Bench of the High Court by its judgment dated May 31, 1989 allowed the writ petition and set aside the notice dated June 25, 1987. This appeal by way of special leave is against the judgment of the High Court.

2. Clause 37 of the agreement dated August 14, 1967 is as under:

"Notwithstanding anything herein contained, either party may be at liberty without assigning any reason to terminate this agreement on giving two months prior notice in writing so to terminate this agreement."

3. The operative part of the notice dated June 25, 1987 terminating the agreement is as under:-

"According to the Article 37 of the Agr