Research › Browse › Judgment

Rajasthan High Court · body

1992 DIGILAW 430 (RAJ)

Dharm Vrat Arya & Co. v. M/s. Indian Oil Corporation Ltd.

1992-05-04

NAVIN CHANDRA SHARMA

body1992
JUDGMENT 1. 1. I have heard at length the learned counsel for the parties in this miscellaneous appeal and I have perused the record of the trial Court. 2. The learned Addl. District Judge No.1, Bhartpur, while rejecting the application for temporary injunction filed by plaintiff-appellant, was very much swayed away by the fact that the plaintiff had previously filed a civil suit against the respondents and in that suit he had filed an application for temporary injunction bearing Civil Misc. Application No. 1/89 and that application had been dismissed by the then Addl. District Judge on August 18, 1990 and according to the Addl. District Judge, the order in the said previous application operated res judicata. The previous suit filed by the appellant had been withdrawn by the plaintiff with liberty to file a fresh suit. In such circumstances the order passed on the application for temporary injunction bearing No. 1/89 filed alongwith that suit could not operate as res-judicata. It is borne out by the decisions reported in AIR 1945 Cal. 317 and AIR 1982 Cal 17 . On behalf of the respondents, Mr. R. C. Kasliwal also did not dispute the preposition that the order of rejection of the previous application for temporary injunction dated 18th August, 1990 did not operate as res judicata in the instant case. 3. It is very pertinent to mention that the Addl. District judge, Bharatpur while dealing with the present application for temporary injunction has prima facie expressed that merely on account of the retirement of Dharm Vrat Arya and Smt. Kastoori Devi from the partnership firm, M/s. Dharm Vrat Arya & Co. the firm did not dissolve. That was the sole ground on which the dealership of the plaintiff firm was terminated by the respondents by their communication dated 27th August, 1991. In this communication it was stated by the respondents that it had been admitted in the letter dated 21st April, 1988 that the original firm M/s. Dharm Vrat Arya & Co. was consisting of two partners, namely, Shri Dram Vrat Arya and Smt. Kastoori Devi in the year 1967. It was further admitted that the firm had undergone reconstitution in the year 1977, 1985 and 1986 and at present firm consisted of two partners, namely, Shri Bharat Singh and Shri Raj Kumar. was consisting of two partners, namely, Shri Dram Vrat Arya and Smt. Kastoori Devi in the year 1967. It was further admitted that the firm had undergone reconstitution in the year 1977, 1985 and 1986 and at present firm consisted of two partners, namely, Shri Bharat Singh and Shri Raj Kumar. It was stated that thus the constitution had not been approved by the Corporation and that the terms and conditions of the agreement have been violated as the dealership has been transferred to a third party. On this question, the Addl. District Judge No. 1, Bharatpur, prima facie, found in favour of the plaintiff-appellant and against the respondents. It would thus appear that the foundation of the order of the Addl. District Judge, Bharatpur on 19th November, 1991 is wholly shakened because neither the previous order in the temporary injunction application filed alongwith the previous suit operated as res judicata and nor according to the Addl. District Judge No. 1, prima facie there was dissolution of the firm M/s Dharm Vrat Arya & Co. 4. It was not disputed that Indian Oil Corporation Ltd. is a Government of India undertaking and is "State" to be within the meaning of Article 12 of the Constitution of India. The dealership agreement dated 20th December, 1967, according to its clause 14, was to remain in force for a period of 120 months from 28th December, 1967. This period of 120 months expired in December, 1979. According to the plaintiff-appellant one more partner named Prom Chand Mittal had been admitted as partner in the firm on 1st April, 1977. Then on 23rd October, 1985 Bharat Singh was taken as a new partner. Thereafter Prem Chand retired with effect from 1st January, 1986. Dharm Vrat Arya and Kastoori Devi are also alleged to have retired. According to the plaintiff's version intimation of change in the constitution had been given on 23rd October, 1985 to the marketing Division, Indian Oil Corporation, and the District Supply Officer, Bharatpur had also sent a letter in this connection to the Divisional Manager of the Corporation on 25th November, 1985. 5. According to the plaintiff's version intimation of change in the constitution had been given on 23rd October, 1985 to the marketing Division, Indian Oil Corporation, and the District Supply Officer, Bharatpur had also sent a letter in this connection to the Divisional Manager of the Corporation on 25th November, 1985. 5. Prima facie it appears that even after the determination of the contract period in December, 1979, the respondents continued to supply petrol to the plaintiff-firm from the end of the year 1979 for about 8 years and it was on 21st April, 1988 that a notice was given by the respondents alleging that the firm has violated condition No. 11 of the agreement. Prima facie from the course of conduct of the parties the dealership agreement continued. 6. Clause 11 of the agreement provides that the dealer will not assign or part with his rights under the agreement or any part thereof. It is a very fair question to be tried in the suit that whether more reconstitution of the partnership firm can amount to assignment of the rights under the agreement and that is a matter which will be decided in the suit by the Trial Court and in somewhat similar circumstances their Lordships of the Supreme Court in Mahabir Auto Stores and others v. Indian Oil Corporation and others, AIR 1990 S.C. 1031 at page 1036, in para 11, have observed that from the nature of the business carried on by the appellants, it was manifest to us that the supply of the lubricants of the type with which the respondent had a monopoly, could be carried on by the appellants only as the supplier from the respondent. That business was not possible otherwise. It was found that the respondent-firm was supplying from 1965 to 1983 large quantity of lubricant oil and from 1983 onwards till 1989 supplied by a contract under the interim order of the High Court of Delhi. 7. It was not disputed by the learned counsel for the respondents that the Indian Oil Corporation is an instrumentality of the Government and is, therefore, State within the meaning of Article 12 of the Constitution of India. 7. It was not disputed by the learned counsel for the respondents that the Indian Oil Corporation is an instrumentality of the Government and is, therefore, State within the meaning of Article 12 of the Constitution of India. It is settled law that the rule of reason and rule against arbitrariness and discrimination, rules of fair play and natural justice are part of the rule of law applicable in situation or action by State instrumentality in dealing with citizens, even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract are subject to the judicial review on the touchstones of relevance and reasonableness, fair play, natural justice equality and non-discrimination for the type of transactions and nature of the dealing as in the present case. 8. The learned counsel for the respondents heavily relied upon the decision of their Lordships of the Supreme Court in Indian Oil Corporation Ltd. v. Amritsar Gas Service and others, 1991 (1) SCC 533 , and he strenuously urged that this was a contract which was in its nature determinable and, therefore the provision contained in Section 14(1) of Specific Relief Act were attracted. He took me through paras 8 to 12 of the reported judgment. Having gone through the Amritsar Gas Service's case and also the plaint of the suit filed by the appellant and his application for temporary injunction, prima facie it appears that the suit of the plaintiff-appellant is not based on breach of contract alone. I may specifically refer to para 12(Sa) of the plaint (at page 7 of the plaint) where the plaintiff has complained of arbitrariness and violation of the principles of natural justice. Similarly the same thing was alleged in his application for temporary injunction. It cannot therefore be said that the suit is only based on breach of contract. I am of the view that further question of public law applicable to contracts on the principles of applicability of Article 14 of the Constitution of India is also involved in this case. The decision in Amritsar Gas Service is therefore distinguishable on facts. 9. It cannot therefore be said that the suit is only based on breach of contract. I am of the view that further question of public law applicable to contracts on the principles of applicability of Article 14 of the Constitution of India is also involved in this case. The decision in Amritsar Gas Service is therefore distinguishable on facts. 9. As a result of the above discussion, I allow this appeal and do hereby restrain the respondents by means of temporary injunction from discontinuing the supplies of the petroleum products to the appellant in accordance with agreement of dealership dated 20th December, 1967. In case the supply has been discontinued, the same shall be restored within one month.Appeal allowed. *******