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IN THE HIGH COURT OF JAMMU AND KASHMIR AT SRINAGAR
Vinod Chatterji Koul, J.
Hindustan Petroleum Corporation & Ors. – Petitioners
Versus
Ab. Rashid Dagga – Respondent
CR No. 05 of 2019
Decided On : 29-04-2021
Order VII Rule 11 - Civil Suit - CPC - [Order VII Rule 11] - The court discussed the provisions of Order VII Rule 11 of the Code of Civil Procedure and emphasized that a plaint can be rejected if it does not disclose a cause of action or if the suit appears to be barred by any law. The court highlighted the importance of judicial time and the need to prevent sham litigations, citing the case of Dahiben v. Arvindbhai Kalyanji Bhanusali and the intent and purpose of Order VII Rule 11. The court concluded that the suit of the plaintiff lacked locus standi and cause of action, and therefore, the civil revision petition was allowed, the impugned order was set aside, and the plaintiff's suit was rejected.
Fact of the Case:
The plaintiff filed a suit seeking a declaration that the impugned orders issued by the defendants cancelling the dealership agreement and terminating the retail outlet dealership agreement were null and void. The defendants filed an application for rejection of the plaint under Order VII Rule 11 of the CPC, stating that the plaintiff had no locus standi and no cause of action against them.
Finding of the Court:
The court found that the plaintiff had no locus standi and no cause of action against the defendants, as there was no dealership agreement between the plaintiff and the petitioner-Corporation. The court held that the suit of the plaintiff lacked locus standi and cause of action, and therefore, the application of the petitioner-Corporation for rejection of the plaint should have been allowed.
Issues: The issues revolved around the locus standi of the plaintiff and whether the plaintiff had a cause of action against the defendants with respect to the dealership in question.
Ratio Decidendi: The court emphasized the provisions of Order VII Rule 11 of the CPC, highlighting that a plaint can be rejected if it does not disclose a cause of action or if the suit appears to be barred by any law. The court also stressed the importance of preventing sham litigations and the efficient use of judicial time.
Final Decision: The civil revision petition was allowed, the impugned order was set aside, and the plaintiff's suit was rejected. As a result, the interim orders passed in the suit were vacated.
JUDGMENT :
1. This civil revision petition is against the Order dated 06.11.2018, passed by Sub-Judge (Chief Judicial Magistrate), Anantnag, (for short “Trial Court”) in a case titled Abdul Rashid Dagga v. HPCL and others, whereby application of petitioners/petitioners, filed under Order VII Rule 11 of the Code of Civil Procedure (CPC), has been dismissed.
2. Plaintiff–respondent herein, has filed a suit before the Trial Court, seeking grant of decree for declaration declaring impugned orders issued by defendants/petitioners qua cancellation of reconstitution of dealership agreement and the termination of retail outlet dealership agreement in respect of retail outlet being run by him at NH-1A Bijbehara, under the name and style of R.K. Auto Care HPCL retail outlet as null and void, ineffective and inoperative. He has also sought grant of a decree for permanent prohibitory injunction restraining petitioners/defendants from causing any sort of interference in the smooth running of retail outlet, viz. R.K. Auto Care HPCL retail outlet Bijbehara and also retraining them from forcibly taking the units installed in the unit of the plaintiff/respondent.
3. Defendants-petitioners herein filed an application under Order VII Rule 11 (a) & (d) of CPC for rejection of plaint, stating that retail outlet was awarded to one Ravinder Kapoor as sole proprietor to run retail dealership of Bijbehara District Anantnag vide dealership agreement dated 09.09.1983; in terms whereof, he was not authorized to assign or transfer dealership licence to any third person. It was also contended by petitioners in their application before the Trial Court that reconstitution proposal submitted by Shri Ravinder Kapoor for inducting Shri Ravinder Kumar as minority partner with 49% share was accepted by petitioners in principle with a condition that the outlet which was under a dealer owned category would be converted as Company Leased category by taking the retail outlet site on lease and, in this regard, dealership agreement dated 23.10.2003, was executed between Sh. Ravinder Kapoor and Sh. Ravinder Kumar as partners of M/s R.K. Auto Care firm. It was also stated that however, later it came to the notice of petitioners that Shri Ravinder Kumar, a new inducted partner, was also a partner and signatory to a dealership agreement of SKO dealership viz. M/s Kathua Service Station, Kathua dated 01.09.2000, which fact was not disclosed by them at the time of reconstitution as a person who is already having SKO dealership, cannot have retail outlet dealership in view of multiple dealership norms of the petitioner-Corporation and, therefore, vide letter dated 04.02.2008, the said reconstitution was cancelled and dealership agreement dated 23.10.2003, was also cancelled.
The said cancellation of reconstitution was never challenged by Shri Ravinder Kapoor or by Shri Ravinder Kumar and, thus, said decision of the petitioners has already attained finality in the year 2008 itself. Thereafter, Shri Ravinder Kapoor was advised vide letter dated 04.02.2008 to sign a fresh dealership agreement with petitioner-Corporation, but he neither came forward to sign dealership agreement nor entered into lease agreement. It was also maintained that petitioner-Corporation was able to lay hands over a copy of Power of Attorney dated 26.07.1990 purportedly executed by Shri Ravinder Kapoor in favour of Shri Ravinder Kumar, whereby Sh. Ravinder Kapoor had handed over the management and control of retail outlet to Sh. Ravinder Kumar in utter violation of terms of the dealership agreement and without seeking prior written permission of the Corporation. Not only that said fact of execution of Power of Attorney dated 26.07.1990, was never brought to the notice of the petitioner-Corporation at the time of reconstitution. In view of said facts, the petitioner-Corporation served Shri Ravinder Kapoor with Show Cause Notice dated 10.09.2015, calling upon him to explain violation of terms of standard dealers
The main legal point established in the judgment is the application of Order VII Rule 11 of the CPC, which allows for the rejection of a plaint if it does not disclose a cause of action or if the sui....
The main legal point established is that the court has the authority to grant restoration of dealership despite the Arbitrator's limitation to grant only compensation, as per the mandate in Sec.14(1)....
A party not privy to a contract lacks standing to challenge its termination, and violations of dealership agreement terms justify termination.
Court emphasized the interpretation of clauses within a dealership agreement, highlighting compliance with contractual provisions for partner induction.
The cancellation of a dealership agreement independently terminates the lease, affirming eviction rights under the Public Premises Act.
The Court emphasized that on an application under Order VII Rule 11 CPC, only the contents of the plaint are to be considered, and the alleged violation of statutory law cannot be determined without ....
The court considered the dealership agreement's clause regarding faithful performance and active management, and the policy for reconstitution of retail outlets in reaching its decision.
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