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High Court Of Delhi
CLASSIC MOTORS LIMITED - Appellant
Versus
MARUTI UDYOG LIMITED - Respondent
Interim Application 9896 of 1994
Decided On : 12/13/1996
Section 39 — Dealership agreement — Cancellation of — Applicability of — Powers to cancel dealership agreement — Plaintiff breached the terms of contract — Sought stay of cancellation of — Stayed vacated — Various rounds of litigation — SLPs to Supreme Court — Remanded to trial Court — Provisions of Section 39 of the Act not applicable to facts and circumstances of the present case — Contract legally and validly terminated.
Contract/agreement — Specific performance of — Injunction — Determination of — Relief of compensation against determination of — Agreement cancelled — Nature of agreement permanent and indeterminable or determinable enforceable or not — Injunction against determination of — No specific performance permissible — No declaration and injunction could be granted to plaintiff — Suit dismissed.
Private Agreement — Private law — Termination of agreement between the parties — Clause of "without assigning any reason — Agreement cancelled — Challenged in civil suit — Commercial transactions — Free will — Applicability — Restrictions on parties — Effect of — Agreement not intended to be permanent or held to be perpetual unless intended or specified construction of agreement — Effect of — Termination is valid without cause in common law.
Waiver — Dealership agreement — Cancellation of — Powers of — Both parties to cancel the contract — Show cause notice issued to cancel contract — Action plan issued — Plaintiff invested huge amount — Pleaded in view of investments — Show cause notice deemed to have been waived — Sought injunction by approaching to Supreme Court in SLP — Injunction granted and told to treat as dealer by the respondent — Not to be deemed to be an act of waiver.
Constitution of India 1950 - Article 12 — Authority — Maruti Udyog Ltd. — Defined — Dealership contract — Private/ commercial contract — Cancellation of — Action plan issued — Plaintiff invested huge amount in business in pursuance of action plan — Economic duress and uhconscionability pleaded by plaintiff — Availability of plea — In private contract and against cancellation of — Pleas not available — Transaction purely commercial between private parties.
( 1 ) THIS is a petition under section 20 of the Arbitration Act filed by the petitioner against the respondents seeking for an order to the respondents to file the agreement dated 15. 1. 1988 as modified by communication dated 23. 2. 1988 and on filing of the said agreement the disputes/ Differences arising between the parties out of the said agreement and enumerated in the petition be referred to arbitration in terms of arbitration clause No. 36 contained in the said agreement
( 2 ) THE petitioner was appointed as a dealer by the respondent No. 1 and a dealership agreement dated 15. 1. 1988 was executed between the parties. The said dealership agreement contained an arbitration clause being clause No. 36 wherein it is stated that if any dispute and difference arises between the parties as to the construction or true intent and meaning of any of the terms and conditions contained in the agreement or as to any payment to be made in pursuance thereof or to any other matter arising out of or in connection therewith or incidental thereto such differences or Disputes shall be referred to the Tribunal of Arbitration of Indian Chambers of Commerce, Delhi.
( 3 ) THE petitioner received a communication dated 6. 4. 1991 from respondent No. 1 alleging various violations on the part of the petitioner of the sales policy of the respondent. It is stated that the petitioner has not violated any sales policy of respondent No. 1 and that even if any such violation had occurred of the provisions of the sales policy, the said sale policy not being a part of the contract between the parties, the same gives rise to disputes between the parties, which could be adjudicated upon by the arbitrator in accordance with the aforesaid arbitration clause.
( 4 ) HOWEVER, during the pendency of the aforesaid petition and in respect of the injunction order passed by this court in respect of the aforesaid show cause, notice the matter was agitated before the Supreme Court in which the Supreme Court directed that it would be open to the petitioner to file its reply as against the aforesaid show cause notice issued on 6. 4. 1991. The petitioner, however, did not avail of the said okpportunity and till date has not filed any answer to the show cause.
( 5 ) BE that as it may, subsequent thereto the respondent No. 1 has issued a notice terminating the contract w. e. f. 29. 11. 1994 under their communication dated 31. 8. 1994 invoking the provisions of clause 21 of the agreement. As against the aforesaid termination of the contract the petitioner filed a petition in this court under Section 20 of the Arbitration Act seeking for filing of the arbitration agreement and for referring the disputes arising between the parties out of the said actions on the part of the defendant No. 1 in terms of the arbitration agreement. Subsequently, however, the petitioner without withdrawing the said petition filed under Section 20 of the Arbitration Act filed a suit which was registered and numbered as Suit No. 2544/1994. In the said suit the petitioner, amongst others raised similar issues as raised in the present petition alongwith an additional issue challenging the validity of claim 21 of the agreement. Subsequently, however, the petitioner withdrew the said petition filed under Section 20.
( 6 ) ON the basis of the pleadings of the parties in that suit three issues were framed and evidence was led on behalf of the parties. The arguments on the said suit were heard by me and by judgment and order which is passed today the said suit has been dismissed with costs.
( 7 ) IN view of the subsequent development that has taken place after filing of the present petition and the dealership agreement itself of the petitioner having been terminated by the respondent No. 1 and the suit challenging the aforesaid action having been decided against the petitioner, in my considered opinion, the present petition does not survive and accordingly, is held to have become infructuous. The
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