The court upheld the validity of clause (3) of the dealership agreement, which allowed either party to terminate the agreement by giving three months notice in writing. The court emphasized that the acceptance of a notice of termination is not necessary for its effectiveness under clause (3).

JUDGMENT

K.M. Joseph, J.

1. Leave granted.

2. In Civil Appeal arising out of SLP(C) 5698 OF 2021, the appellants are the Indian Oil Corporation Ltd., (hereinafter referred to as “IOC”, for short), the Chief Divisional Retail Sales Manager of the first appellant, Bangalore and the Chief Divisional Retail Sales Manager of the Mangalore Division. The second respondent in the said appeal is one Smt. M.P. Parvati, referred to as new dealer, who is the appellant in the other appeal, namely, civil Appeal arising out of SLP(C) 5591 OF 2021.

THE FACTS

3. On 31.10.2003, IOC entered into petrol/hsd pump dealer agreement with the first respondent. Clause (3) of the agreement read as follows:

“(3) The Agreement shall remain in force for fifteen year from day of 13th Oct 2003 and continue thereafter for successive periods of five year each until determined by either party by giving three months notice in writing to the other of its intention to termination this agreement and upon the expiration of any such notice this Agreement and the Licence granted as aforesaid shall stand cancelled and revoked but without prejudice to such termination provided that nothing contained in this clause shall to the rights of either party against the other in respect of any matter or thing antecedent to such termination Provided that nothing contained in this clause shall to such prejudice the rights of the Corporation to terminate this Agreement earlier on the happening of the events mentioned in Clause 56 of this Agreement.”

4. On 25.09.2006, the first respondent addressed the following communication to the second appellant:

“Date: - 25-09-2006

To,

The Chief Divisional Retail Sales Manager

Indian Oil Corporation Limited

Marketing Division, Bangalore Divisional Office,

Indian Oil Bhavan # 29,

P. Kalinga Rao Road, (Mission Road)

Bangalore - 560027.

Dear sir,

Sub : With drawl from R.O. Dealership Ref: Your Letter No. BD0/242 dated 23rd Oct, 2003

With reference to the above subject we are very grateful to you and IOC family members for giving us support and cooperation for all these years for running the R.O.

I would like to bring to your kind notice, that we have shifted to Bangalore for our children's education. Hence, we are not able to look after the R.O.

Hence, kindly withdraw from R.O. dealership and appoint new R.O. dealers before three months as per our agreement Dt: 31st Oct. 2003.

Hope you will consider our humble request and do the needful.

Thanking you,

Yours faithfully,

For SRI SATYANARAYANA SWAMY SERVICE STATION

(P.S. SURESH)     (JYOTI SURESH)

    Partner  Partner

CC To : The Sales Officer Mysore

//TRUE TYPED COPY//”

5. It is not in dispute that on 30.09.2006 there was a physical interaction in the course of which IOC insisted that the request of the first respondent be notarised. There is also no dispute that a notarised version of letter dated 25.09.2006 was received on 16.11.2006. It was apparently notarised earlier on 3.10.2006. A reply was sent to the same dated 22.11.2006 by the second appellant. It reads as follows:

“November 22, 2006

Regd. Post A.O.

Shri. P. S. Suresh & Smt Jyothi Suresh Partners

Sri. Sathyanarayanaswamy Service Station Mysore -Bantwal Road

Periyapatna 5 71107

MYSORE DISTRICT

Dear sir,

SUBJECT : Resignation from Dealership

This has reference to the notarized letter dated 3rd October 2006 received by our office on 16th November 2006 informing us of your intention to retire from our retail outlet dealership.

This notarized letter sent by you, with reference to the recognition letter sent by us to you vide reference BDO : 242 dated 23. 10.2003 along with the dealership agreement recognizing both of you as the dealers of our 'A' site retail outlet at periyapatna, run by you under the name and style M/s. Sathyanarayanaswamy Service Station.

As stated in your letter, we have taken note of your intention to resign from our dealership. We request you to continue operation till we make an alternative arrangement.

We thank you for your association with our organiza