( 1 ) THE appellant was appointed a dealer of the first respondent to distribute liquified petroleum gas. The contract in this behalf contained a Clause by reason of which the distributorship could be terminated if the dealer did anything which was prejudicial to the interests of good name of the principal of its products. It was the case of the respondent that the appellant had stored spurious gas cylinders; therefore, the dealership of the appellant was terminated under the terms of the said Clause.

( 2 ) THE appellant filed a writ petition in the High Court of Karnataka seeking restoration of the distributorship. The writ petition was dismissed because the learned Single Judge found that there was an arbitration Clause in the contract between the parties. He said: "in this behalf, all that is necessary to observe is that it is open for the petitioner to raise these points in the dispute and plead before the Arbitrator that the termination of distributorship agreement was arbitrary and that the material on the basis of which the opinion was formed did not exist or did not justify the formation of such an opinion, If such a plea is raised, the Arbitrator is duty bound to consider