Termination of agreement relying on clause in agreement is not arbitrary.

The present writ petition has been filed by the proprietor of one Raja Service Station. The petitioner is a dealer of Hindustan Petroleum Corporation (hereinafter called as “the Corporation’ for the sake of brevity) and runs a Petrol Bunk on the basis of the dealership agreement. The petitioner prays for the quashing of the communication dated 6. 1998 sent by the first respondent to the petitioner. By the instant Communication, which has been signed by the Senior Regional Manager and fully constituted Attorney of the Corporation, it is informed that the dealership agreement between the Corporation and the petitioner stood terminated, as the explanation of the petitioner dated 23. 1998 to the showcause notice dated 13. 1998 was found to be not satisfactory. It is also directed that as a consequence of this termination of the dealership agreement, the petitioner should hand over vacant and peaceful possession of the premises immediately on receipt of that termination letter.

2. There is a short factual background which has been set forth in the affidavit which would be necessary for us to understand the controversy involved. It is an admitted position that the Petrol Bunk was established somewhere in the year 1960 by a company called Caltex and the petitioner as its dealer. It is an admitted position that the said company was merged and transformed into the present Hindustan Petroleum Corporation. It is also not disputed that the respondent-company is a” State “ as its majority share capital is owned by the Government of India.

3. It seems that on 11. 1997, a communication was received by the petitioner that the samples taken from the said outlet by the second respondent while tested in the laboratory did not meet the specifications. The petitioner submits that probably this report pertained to the samples collected on 7. 1997. Therefore, it seems that the petitioner wrote a letter dated 11. 1997 expressing surprise with the result, as according to the petitioner, he had not tampered with the products which were obtained from the Corporation only. It seems that on 11. 1998 a letter was received by the petitioner from the first respondent and it was expressed that the Corporation was not satisfied with the so-called explanation dated 11. 1997 and, therefore, the Corporation had decided to suspend the supplies. It seems that in that letter, it was for the first time mentioned that the motor spirit and super 2-T sample were collected from the bunk on 27. 1997, as this fact was not mentioned in the earlier so-called showcause notice. The petitioner also asserts that on that date, super-2-T oil was not at all collected. The petitioner, therefore, straightaway moved a writ petition, W.P.No.574 of 1998 whereby, he challenged the communication dated 11. 1998. It further appears that the petitioner also filed an affidavit in that writ petition alleging mala fides against the officers, since the Corporation wanted the site for putting up staff-quarters and since the petitioner had refused to vacate the said site, the action of collecting the samples was being taken with vengeance. It is apparent that the Corporation filed an additional affidavit on 2. 1998 and admitted the fact that though the sample of motor spirit was taken on 27. 1997. The sample of super 2-T engine oil was not collected and it was mistakenly mentioned in the showcause notice that the said sample was also taken. It seems that this Court disposed of this writ petition by its order dated 12. 1998 and held that though there was an arbitration clause in the agreement executed between the petitioner and the respondent-Corporation and though the question of tenability would have to be gone into, since the basic procedure was not complied with by the respondent of supplying the copy of the test report by the Laboratory along with the showcause notice, there was a violation of basic principles of natural justice. The learned Judge further held that it was because o