An agency agreement cannot be terminated without proper notice, and it is quite contrary to the principles established by law.

JUDGMENT :- This second appeal arises out of a suit instituted by the plaintiff, the proprietor of International Oil Co. against the Indian Oil Corporation, for an injunction restraining the defendant from withholding the supply of kerosene to the plaintiff. The supply of kerosene was on the basis of a contract entered into between the parties on 6-2-1964 (Ex. A-1). The defence to the suit is that since the plaintiff had not complied with the terms of the agreement embodied in Ex. A-1, he is not entitled for any continuous supply of kerosene and in any event, the suit itself is not maintainable. The plaintiff after some correspondence with the defendant had to file a suit for an injunction restraining the defendant, Indian Oil Corporation, from continuing the breach of contract, namely, withholding supply of kerosene and for damages for non-supply of kerosene. After the suit was filed, the Indian Oil Corporation by its letter dated 19-12-1964, terminated the contract itself. The questions that were considered by the Courts below were whether the suit for injunction is maintainable, whether the defendant committed a breach of the contract and whether the plaintiff is entitled to damages.

The Courts below gave a concurrent finding that the plaintiff is not entitled to any injunction against the Indian Oil Corporation as there was a valid termination of the agency, that the Corporation did not commit any breach of contract when it did not supply any kerosene to the plaintiff and that the plaintiff is not entitled to claim any damages. The suit was dismissed. Now it is against the dismissal of the suit, the second appeal is preferred.

2. The only question that arises for my consideration is whether the Indian Oil Corporation can terminate the agency with the plaintiff without any notice. It is conceded by the learned counsel for the Corporation that Ex. A-1 was entered into between the parties on the basis of an agency agreement. It will be convenient to extract the relevant portion of Ex. A-1 as hereunder :

"We have the pleasure in appointing you as our dealer for the distribution of kerosene in Madras. The appointment is made on the understanding that you will distribute at least 150 kilolitres per month to start with and increase our offtake in the subsequent months. You are advised that this appointment does not preclude us from appointing more agents for the same area. We also reserve the right to terminate your dealership without assigning reasons. Your actual area of operation will be intimated to you by our sales officer". It is on the basis of this agreement that this Court has to interpret whether the suit is maintainable for an injunction and whether the Corporation can terminate the agency without any notice. The learned Appellate Judge is of the opinion that the Corporation is not bound to supply kerosene to the appellant on the basis of the agreement. I am unable to agree with the said observation made by the learned appellate Judge.

3. It is necessary for me now to state the circumstances under which the agency agreement was terminated. The parties entered into the agreement on 6-2-1964. It states that the plaintiff must sell at least 150 kilolitres of kerosene per month. Actually there was a sale of 120 kilolitres in April, 200 kilolitres in May, 160 kilolitres in June, 170 kilolitres in July and 37 kilolitres by the end of August 1964. On 24-8-1964, the Indian Oil Corporation sent a notice to the appellant stating that they were very much depressed to note that the offtake during the month till date (24-8-1964) was only 37 kilolitres. They further stated that since the plaintiff was having access at the same time to Western India Oil Distributing Co, as well as the Indian Oil Corporation, the sales were not pushed through as per the agency agreement. The corporation also advised the plaintiff "to make arrangements for complete switch over to us before the 10th September 1964." This letter of warning is given