(May 21, 2001) 2001 (TLS)125342

2001-DLT-93-74 :: 2001-AD (Del)-6-490

NATIONAL AUTO IMPEX Vs. Autocop (India) Private Limited

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 between them on 1/02/1995 has become outdated in many respects and since the petitioner has in spite of being requisitioned several times to sign a new agreement has not entered into a new agreement, the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 ho