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Andhra Pradesh High Court
NATIONAL AUTO IMPEX - Appellant
Versus
AUTOCOP (INDIA) PRIVATE LIMITED - RESPONDENT
Decided On: 05-21-01

The revocable and determinable nature of the agreement and the petitioner's default barred them from seeking interim protection.

Headnote:

Specific Relief Act - Interim Protection - 14, 34 - The court discussed the provisions of the Specific Relief Act, particularly Section 14 and 34, and their applicability to the case. It highlighted the revocable and determinable nature of the agreement and the termination of the agreement in 1997, emphasizing that the interim relief sought by the petitioner was prima facie barred by the provisions of the Specific Relief Act.

Fact of the Case:

The petitioner sought interim protection to restrain the respondent from selling certain products and to clear outstanding payments based on an agreement. The respondent terminated the agreement due to non-payment and unprofessional conduct of the petitioner.

Finding of the Court:

The court found that the agreement was terminated in 1997 and the petitioner's unclean hands barred them from seeking interim protection.

Issues: Enforceability of the agreement, termination of the agreement, petitioner's default in payment, and applicability of the Specific Relief Act.

Ratio Decidendi: The court held that the agreement was revocable and determinable, and the petitioner's default barred them from seeking interim protection.

Final Decision: The court denied the petitioner's request for interim protection.

J. D. Kapoor

( 1 ) THROUGH this petition, the petitioner has sought an interim protection by way of restraining the respondent, their servants, agents, representatives, dealers, sub-distributors and all other persons on their behalf from selling or offering for sale Car Security and remote Control Central Locking System under the trade mark "piranha" and "autocopxs" and also directing the respondents to supply the aforesaid goods to the petitioner against cash payment or current date cheques and also directing the respondents by way of mandatory injunction to clear the outstanding payment or adjust the outstanding payment.

( 2 ) THE aforesaid interim measures are being asked for on the basis of the agreement executed between the petitioner and respondents 1 and 2 on 1/02/1995 whereby the petitioner was appointed as the distributor to sell the product of the respondent company under the trade name "piranha" for whole of India except Greater Bombay. As per clause 6 of the Agreement it was agreed that no agent will be appointed by the respondents 1 and 2 to sell any other product in the distribution territory. Plaintiff was also given the liberty to appoint sub-agent and dealers in the territory for sale promotion of the products.

( 3 ) AS per clause 15 it was agreed that it will be lawful to the principal to discontinue service of the distributors by giving 3 months notice in writing and in case the distributors are unable to meet their mutually decided conditions, the principal cannot terminate this agreement up to period of six months from the date of this agreement, since at least 3 months will be required by distributors to have a concrete working of the product under this Agreement, after which time a suitable target can be evolved by mutual understanding. In such a case servicing will be totally borne by the principals within warranty period.

( 4 ) HOWEVER, by way of letter dated 20/12/1996, the respondents informed the petitioner that the latter has not been making payments of bills as agreed between them and in spite of the repeated warning to the petitioner the payments were not made regularly, punctually and within the prescribed period and since the agreement which was entered. between them on 1/02/1995 has become outdated in many respects and since the petitioner has in spite of being requisitioned several times to sign a new agreement has not entered into a new agreement, the agreement dated 1/2/21995 be treated as null and void. The petitioner was also called upon to clear dues amounting to Rs. 12,01,520. 00 by 31st of December 1996 along with interest at the rate of 24 per cent per annum and after payment of the same the petitioner may place written purchase orders with the payments towards those orders in advance after which only the further material can be supplied by the petitioner.

( 5 ) AS against this the petitioner has relied upon a letter dated 2/4/2001 to show that the distributorship has not been terminated in terms of clause 15 whereby three months notice was required but the perusal of the said letter shows that the respondents informed the petitioner with great anguish that it has terminated all business relations with the petitioner because of petitioner s unprofessional approach clue to which the respondents had suffered time and again both in terms of money and reputation. In this very letter the petitioner was informed that right from the day one of the agreement dated 1/2/1995 the petitioner has with all impunity flouted each and every commitment made under that agreement with effect from 1/1/1997. The respondents also wanted the petitioner to rectify the breaches committed by it in the following terms:

"we do not understand as to how we can have any business relations with you when you are not paying our moneys due and payable, instructing the banks pot to honour the cheques issued to us, misleading and misrepresenting to the market about us and the products, creating a scarcity in the market by










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