Point of Law: Absence of specific clause authorising and enabling either party to terminate the agreement in the event of happening of the events specified therein, from the very nature of agreement, which is private commercial transaction, the same could be terminated even without assigning any reason by serving a reasonable notice.

Judgment :-

(Prayer: This application is filed under Order XIV Rule 8 of the Original Side Rules read with Section 9(1)(ii)(e) of Arbitration and Conciliation Act, 1996, praying to grant an interim injunction restraining the respondent, its men, agents, and any person acting on its behalf of respondent herein, from acting upon and giving effect to the termination letter dated 12.01.2021, pending disposal of adjudication of disputes between the parties.)

1. The applicant herein, is the authorised dealer selling and servicing Hyundai products in Hyderabad. He has moved this application under Section 9(1)(ii)(e) of Arbitration and Conciliation Act, 1996, for the following relief.

“to grant an interim injunction restraining the respondent, its men, agents, and any person acting on its behalf of respondent herein, from acting upon and giving effect to the termination letter dated 12.01.2021, pending disposal of adjudication of disputes between the parties.”

Applicant's case:

2. The applicant is a private limited company incorporated in 2013, under the Companies Act, 1956. They are the authorised dealer selling and servicing the Hyundai products. The respondent is also a company, incorporated under the Companies Act, 1956. The respondent is engaged in the business of manufacturing, selling and servicing Hyundai automobile range, accessories, spare parts etc.

3. The applicant is a part of Saboo Motors Group, which was founded in 1973 and was a leading dealer for Kinetic Engineering Limited and Kinetic Motor Company Limited. Taking into consideration of previous experience, the respondent appointed the applicant as an authorised dealer to sell and service the Hyundai products. The applicant and respondent entered into a dealership agreement dated 10.07.2014 for non-exclusive dealership at Hyderabad, for a period of three years i.e., till 09.07.2017. From the year 2014 to 2016, the applicant achieved over and above the targets set by the respondent. For example, it achieved 132%, 108% and 106% of the target through sale of vehicles from its showroom at Mettugunda in 2014, 2015 and 2016, respectively. The applicant has also demonstrated growth in line with or exceeding the market average for service and spare parts.

4. In 2017 and 2018, the business of the applicant along with almost all automobile dealers across the country was hit by numerous external hurdles / obstacles such as demonetization, GST etc. During that time, the applicant received emails from the respondent requesting an investment plan for owned premises to reduce rent burden and increase profitability. The applicant's performance on different parameters, are recognised and appreciated by the respondent from time to time. Further, the applicant has been conferred numerous awards by the respondent for meeting / achieving targets year after year, viz., Interactive Workshop 2015 – Best Overall Performance South, CATI Top performer of the Year – 2016, Best Showroom Preparedness and Launch Award for i20 Active – South 2015, Best YOY Growth Award – 2017, Order Retail Volume Growth – 2017, Best Performance in Service Operations RO Growth 2018 in South Zone, Institutional Certification – 2018, etc.

5. Despite the applicant's determination and focus to deliver on targets like they have done in the past, the applicant was hit by certain unforeseen and unanticipated circumstances viz.,

(i) Worst ever recession in the automobile industry in 2019.

(ii) Disruption from Covid-19 pandemic,

(iii) Abrupt stoppage of property registrations in Telangana

6. The above mentioned incidents had happened beyond the control of the applicant. The applicant is fully committed, willing and ready to execute / implement the plans laid down in the replies to the show cause notices – infuse the requisite funds, bridge the funding gap, deploy the necessary manpower, improve sales performance and enhance consumer satisfaction.

7. The applicant has invested huge sums of money and established two showrooms and two servic