A suit for an injunction under Section 55 of the Specific Relief Act is maintainable to prevent the breach of an obligation and compel the performance of certain acts. The interpretation of agreements is a question of law and the court will determine the rights and obligations of the parties based on the terms of the agreement.

1. These two appeals by a company, Messrs Delhi Gate. Services Private Ltd., Delhi, have arisen out of cross suits filed by the appellants and the respondents, Messrs Caltex (India) Ltd., Delhi, which were consolidated at the stage of trial, the suit in which the appellants are the plaintiffs being dismissed and that of the respondents decreed. Both these orders were upheld in first appeal.

2. The facts are that the appellant company entered into a petrol dealers agreement in the standard from with the Caltex company on the 1st of August 1952. This was followed by a second agreement called the equipment and loan agreement dated the 9th of March 1953, under which the Caltex Company agreed to supply equipment to the company at a nominal rent of Re. 1/- p.m. A third agreement was entered into also in the standard form on the 15th of September 1955, relating to the supply and sale of diesel fuel. The gist of all these agreements was that the Delhi Gate company was required to sell only such quantities of petroleum products and Hi-speed diesel oil as were supplied to them by the Caltex Company, to whom no liability was attached for any failure or refusal to make supplies, and the agreements were terminable by either party on giving one months notice.

3. A fourth agreement was entered into between the parties on the 1st December 1956, called the "Service Station agreement" in which the Delhi Gate Company was clearly described as a licensee under the Caltex company and entitled only to temporary use of the service station in common with the Caltex Company during the continuance of the petrol dealers agreement. It was specified in the agreement that during the continuance of the licence the Delhi Gate Company would remain in sole possession of the property, but this would not be construed as creating any right, interest or tenancy in their favour and their position would remain merely that of licensees and they would be required to pay a licence-fee at the rate of 9 pies per gallon of petrol and 2 pies per gallon of diesel fuel purchased by them from the Caltex Company. This was substituted for the Rent of Re. 1/- per mensem. It was further specified that the agreement would cease in so facto on the termination of the original petrol dealers agreement dated the 1st of August 1952.

4. On the 24th of March 1958, the Caltex Company served a notice on the Delhi Gate Company terminating the dealership agreement with effect from the 24th of April 1958. By a letter dated the 23rd of April 1958 the Delhi Gate Company was also informed of the intention of the Caltex Company of immediately taking possession of the equipment and premises.

5. Before this letter was received, on the 19th of April 1958, the Delhi Gate Company instituted a suit for a declaration that the termination of the petrol dealers agreement and the Hi-speedol agreement by the Caltex Company was illegal, arbitrary and against the principles of natural justice and also for a permanent injunction restraining the Caltex Company from withholding the supplies of petrol and diesel fuel from the plaintiffs and from forcibly evicting the plaintiffs from the premises in dispute. The grounds on which this declaration and injunction were sought were that the site of the service station had been secured for the Caltex Company by the father of the managing director of the plaintiff company by dint of great efforts, and that in spite of the terminology in the agreements between the parties there was a definite understanding that the plaintiffs were to be treated as tenants and not merely licensees. In fact they were given an undertaking, even after the agreement of 1956, that there would be no termination of the agreements in accordance with its terms.

6. The Caltex Company denied the Plaintiffs allegations of fact and maintained that the agreements had been validly terminated. The Court framed these issues in the case of the Delhi gate Company:

(1) Whether the termination of the tw