Ms. Usha Mehra, J. ( 1 ) IN the suit as well as in this application plaintiff hasraised questions of far reaching public importance, concerning the rights of thefranchisor to terminate the franchise/dealership agreement entered into with thefranchisee "without assigning any cause". Beside challenging the legality of anysuch clause or term contained in the standardised form of contract, conferring rightto take such action. ( 2 ) IN order to appreciate the challenge made by the plaintiff to the right ofthe defendant (hereinafter called the frenchiser) regarding terminating ofplaintiff s contract of dealership, we have to first muster facts of this case. ( 3 ) IN 1985, M/s. Maruti Udyog Ltd. (In short MUL) published anadvertisement in various newspapers, inviting application for dealership for thevehicles manufactured by it in various aties of India including Union Territory ofdelhi. The criteria for selection and for the appointment of dealer was; (i) theability of the dealer to provide standard of customer service which is comparableto that available in developed countries; (ii) to maximise the market for Marutiand to project and develop the highest possible image of the company; (iii) Wherenecessary, dealer was required to make suitable arrangements for the sale andservice of vehicles in towns other than their head quarters but included within theirterritorial jurisdiction in a manner acceptable to MUL; (iv) MUL was to provideto the dealer with designs for the show room, layout and equipment andspecifications for the workshop; (v) minimum spare parts stocks to becarried aswell as; (vi) facilities for training of servicing engineers and mechanics. ( 4 ) THE partnership firm known as M/s Competent Builders of which Mr. Anand and Mr. Chopra were partners applied for grant of this dealership. Theiroffer was accepted and the dealership was granted. The automobile business wasstarted in the name of M/s Competent Motors. This again was a partnershipconcern. M/s Competent Motors established its show room in Connaught Placeand service station at Mathura Road, New Delhi, involving an investment of hugecapital expenditure. While the workshop at Mathura Road and show room at F-14, Connaught Place, New Delhi, were in the process of completion, the defendantasked the said partners of the Competent Motors to execute a formal agreementcalled the dealership agreement. It is further the case of the plaintiff that the saidagreement was executed on a standardised form of contract in the year 1983. It is further the case of the plaintiff that the saidagreement was executed on a standardised form of contract in the year 1983. Every dealer, whose offer was accepted in response to the advertisement, wascalled upon to sign identical agreement on the dotted lines. There was nonegotiation with regard to any of the terms of the aforesaid standardised form ofthe contract between the defendant and the dealer. ( 5 ) THAT for the purpose of carrying out the obligation enjoyed upon thedealer, the dealer had to engage large number of staff for the establishment of theshow room and the service station. As per the Balance Sheet of Competentmotors, as on 31/03/1985, an amount of Rs. 43,19,598. 79paise was spent onshow room and service station. On 8/12/1985 another show room wasopenedat5, Bhikaji Cama Place with the consent of the defendant, there by furtherlarge sums were spent. The total value of the capital assets established bycompetent Motors by way of show room, service station amounted to Rs. 1,06,41,691. 00 as per the Balance Sheet as on 31/03/1986. On the advertisementand publicity as well as on repair and maintenance of show rooms as well asservice station from April, 1984 to 1987, Competent Motors spent worth crores ofrupees details of which are given in para 74 of the plaint. ( 6 ) IN l986,dispute arose between the partners of M/s Competent Motors, asaresult of which, they entered into an agreement for exploitation of the dealershipon altogether new terms by separating the assets between themselves which werebeing used inconnection with the dealership and for this purpose executed amodification deed dated 30/09/1986. By the said agreement, showroomat Bhikaji Cama Place was assigned to Mr. Anand. Whereas show room atconnaught Place was assigned to Mr. Chopra. Litigation which was startedbetween the two partners regarding the division of assets of their businessultimately culminated into dissolving the partnership business of Competentmotors. By the said agreement, showroomat Bhikaji Cama Place was assigned to Mr. Anand. Whereas show room atconnaught Place was assigned to Mr. Chopra. Litigation which was startedbetween the two partners regarding the division of assets of their businessultimately culminated into dissolving the partnership business of Competentmotors. On being approached, the MUL vide letter dated 9/01/1988agreed to allow these two partners to separate and establish independentdealership subject to following conditions: (A) The existing dealership will cease to exist w. e. f. a date to be determined by the MUL; (b) Separate agreement for dealership by Shri Raj Chopra and Shri Narender Anand will be executed with MUL; (c) Show room for sale and work shops for service facilities for both thedealerships would be approved by MUL; (d) Separate security deposits as applicable would be paid by both thedealerships to MUL; (e) Appropriate names for the dealership-would be approved by MUL. ( 7 ) FRESH agreement was executed on the standardised form of contract,which the defendant had been entering with every other dealer only the names ofthe parties were changed. The question of having any negotiation capacity withthe defendant was much less at that time as huge amounts had already beeninvested by the plaintiff as partner of the Competent Motors. Thus on 20thjanuary, 1988 dealership which stood in the name of M/s. Competent Motors stoodsurrendered and separate dealership was granted by the defendant to theerstwhile two partners namely Shri Raj Chopra in the name of M/s Competentautomobiles (P) Ltd. and Shri Narender Anand M/s. Classic Motors. ( 8 ) M/s. Classic Motors Ltd. (in short the Company) is a company incorporated under the Companies Act. This Company entered into a dealershipagreement with MUL on 23/02/1988. The MUL is also a Limitedcompany. It came into existence as a result of collaboration between the Government of India and the manufacturers of Suzuki Cars in Japan, namely, Suzukimotors Corporation. MUL is the manufacturer of Maruti Vehicles and enjoys thetotal and exclusive monopoly of production of Maruti Vehicles in India. Theplaintiff is one of the dealers of the defendant having undertaken under thedealership agreement to provide entire infrastructure like show rooms, servicestations, publicity, the customer service, after sale service etc. of the said vehicles. By letter of 20/01/1988 the defendant approved the show room ofm/s. Classic Motors at Bhikajicama Place and its workshop at A-38,mohancoop. Industrial Estate, Main Mathura Road, New Delhi. of the said vehicles. By letter of 20/01/1988 the defendant approved the show room ofm/s. Classic Motors at Bhikajicama Place and its workshop at A-38,mohancoop. Industrial Estate, Main Mathura Road, New Delhi. The Dealershipagreement executed between the Company and the MUL was also on thestandardised form of contract which had been executed by Competent Motors andother dealers in 1983 onwards. Subsequently, by a letter it was requested that thedealership which had been granted to M/s Classic Motors should betransferredto the plaintiff. This was acceded to by the MUL vide letter dated 2 3/02/1988. Transfer was allowed on the condition that terms and conditionswhich were contained in agreement dated 15/01/1988 would apply to thedealership in favour of the plaintiff. ( 9 ) FROM 1988 to 1994, the plaintiff made investments and created fixed assetsincluding the building and maintenance of show room worth crores of rupees. Theplaintiff also raised loans worth lakhs by way of overdraft facilities from bank andother financial institutions in order to fulfil the above obligations. With theconsent of the defendant, plaintiff established three additional show rooms atconnaught Place, Shahdara and Mathura Road respectively. ( 10 ) THAT to augment the sale of the vehicles and to build better goodwill ofthe defendant, an "action Plan" was given by the defendant for the year 1994-95. In compliance with this "action Plan 1994-95" entered into by MUL with plaintiff,the plaintiff has already spent approximately thirty lakhs of rupees. ( 11 ) THAT inspite of plaintiff fulfilling the obligations laid down in theadvertisement inviting the offer as well as in the terms and clauses of thedealership agreement, defendant issued show cause notice alleging certainbreaches against the plaintiff. Plaintiff filed petition under Section 20 of thearbitration Act wanting that the matter be REFERRED TO to arbitration and in themeantime, defendant be restrained from terminating his dealership agreement. Interim injunction was granted restraining the defendant from terminating thecontract under Clause 21 of the agreement. Against this Special Leave Petition was filed in thesupreme Court. The Supreme Court remanded the case with observation thatdefendant would not be restrained from exercising the power under Clause,21of the agreement. Vide the impugned notice, alleged to be issued under Clause 21,the defendants have terminated the agreement without assigning any cause. Hence the notice is invalid, bad in law and so is the action of the defendant. The Supreme Court remanded the case with observation thatdefendant would not be restrained from exercising the power under Clause,21of the agreement. Vide the impugned notice, alleged to be issued under Clause 21,the defendants have terminated the agreement without assigning any cause. Hence the notice is invalid, bad in law and so is the action of the defendant. ( 12 ) THAT MUL in its defence took the plea that for termination of this contract,no reason is required to be assigned. Clause 21 of the Agreement makes it dear thatno reasons are to be stated in the notice. The suit has, in fact, been filed with amalafide intention to circumvent the order passed by the Supreme Court dated 26/09/1994. Even otherwise this suit is barred by the principles ofresjudicata. Since the main suit is not maintainable, hence the interlocutoryapplication would not lie. Principle of estoppel would apply because ofacquiescence and delay. The challenge to the provisions of Clauses 21 and 3 (c) ofthe Agreement cannot be at this belated stage i. e. almost after six years of havingtaken the advantage of this agreement. The suit is barred by 0rder2 Rule 2 C. P. C. These Clauses ought to have been challenged when plaintiff filed earlier twosuits. The action of the defendant is based on the specific, clear and categoricalterm of the agreement which gives right to either party to terminate theagreement without assigning any cause. This agreement being based on mutuality, therefore, the action of the defendant as per Clause 21 is neither Arbitrary nor malafide. It is based on just and good reasons. The allegation of unequalbargaining power for signing the standardised form of contract are afterthought. This plea is not available in such high commmercial contract. Theplaintiff after having taken full benefit of the entire dealership agreement nowcannot turn round and ask this Court to declare the agreement as unconscionableor void. This being a commercial contract where both the parties are businesspersons, therefore, the principle of inequality or lack of bargaining power does notarise. It was never the intention of the parties that contract will continue till perpetuity, nor the contract or dealership can be speficially enforced in view of thefact that the said contract/dealership in its very nature is terminable. This reliefin the main suit cannot be given, therefore, all the more areason it cannot be givenby way of interlocutory order. It was never the intention of the parties that contract will continue till perpetuity, nor the contract or dealership can be speficially enforced in view of thefact that the said contract/dealership in its very nature is terminable. This reliefin the main suit cannot be given, therefore, all the more areason it cannot be givenby way of interlocutory order. The plaintiff cannot pick and chose any clauseof agreement for challenge. It is a composite agreement setting out mutual rightsof the parties. ( 13 ) 1 have heard the learned Counsel for the parties and perused the record. Mr. Madan Bhatia, Senior Advocate appearing for the plaintiff contended that theagreement in question has the colouring and flavour of a franchise agreement. Therelationship between the franchisor and the franchisee has attributes of apartnership or at least a venture in common. A franchise agreement as observedby George Vesely is not a mere contract for the sale of goods. It possesses many unique features and creates goodwill which is effectively deprived by termination of the agreement Taking clue from the interpretation of the franchiseagreement REFERRED TO to above, Mr. Bhatia urged that the agreement of dealershipin question is nothing but a venture in common. It was a condition precedent forthe grant of dealership by the defendant that the dealer would have the ability,capacity and financial resources for the purpose of providing standard ofcustomer service, maximise the market and to project and development the highestpossible image of the defendant, make suitable arrangement for sale and serviceof vehicles, to establish show rooms and work shops according to thespecifications of the defendant and to make investments. Thus the dealer wasexpected to invest capital expenditure worth crores of rupees and was alsorequired to provide continuous running expenditure for maintenance of this bigestablishments, publicity, stocks of spare parts, advertisement, campaign,maximise of market for vehicles and after-sale-service to customers, projection ofhighest possible image for the defendant. Because of the expenditure involved inorder to achieve these objects, it was expected that the dealership would be ofpermanent and perpetual in nature, not terminable at the Will of the defendant. From the nature of the obligations required to be performed by the dealer, it wasevident that dealer would be part of the joint venture of the defendant. Thedefendant was to manufacture vehicles while its sale and other activities connected therewith were the responsibility of the dealer. From the nature of the obligations required to be performed by the dealer, it wasevident that dealer would be part of the joint venture of the defendant. Thedefendant was to manufacture vehicles while its sale and other activities connected therewith were the responsibility of the dealer. The defendant was toconfine its investment to the manufacture of the vehicles and spare parts which inturn were to be utilised by the dealer while making capital investments. Thedealer was also to create a market for the defendant and build a goodwill for thesale of vehicles. In terms it was a venture in common. There is an implied termin the franchise agreement that the power to terminate shall not be exercisedarbitrarily or in bad faith. ( 14 ) THE terms, conditions and obligation which the dealer was required tofulfil and perform are specially stated in the contract, inter alia, as follows: " (A) The Dealer shall ensure that it, and where relevant its Sub dealersshall, vigorously promote, develop and maintain sales and service ofparts, vehicles and used vehicles within the territory to the satisfactionof and in the manner required by the company. 12. Sales and Servicingthe dealer shall make arrangements for sale and servicing of products atsuch locations and in such numbers as the company may from time tto timerequire. 13. Premises Equipment Staff and Training (a) The number, location and the size, appearance and display facilitiesof the Dealer s premises and the equipment and facilities therein shallat all times comply with such requirements and standards as thecompany may from time to time indicate. In relation to parts andservicing, the dealer shall observe the minimum operating standardsstipulated from time to time by the company. (b) The dealer shall employ at its place or places of business sufficienttrained staff who are competent, efficient and Courteous. (c) To assist the dealer in discharging its obligations hereunder thecompany shall as and when it seem fit arrange training courses andthe dealer shall at its own expense sent suitable representatives tosuch training courses as the company may reasonably require fromtime to time. (d) The company shall provide from time to time to the dealerinformation, advice, and literature to enable the dealer to giveadequate attention to customers through a proper knowledge of thecompany s products and policies. The dealer shall pay for suchinformation, advice and literature etc. 15. (d) The company shall provide from time to time to the dealerinformation, advice, and literature to enable the dealer to giveadequate attention to customers through a proper knowledge of thecompany s products and policies. The dealer shall pay for suchinformation, advice and literature etc. 15. Stock (c) The dealer shall obtain, sell and deliver all parts from the company orsuch other sources as the company may approve in writing. Thedealer shall not deal in second hand parts. (d) The dealer shall not keep on his premises, or on the premises of anyother concern directly or indirectly related to the dealer, parts obtained from sources not approved by the company. (e) The company shall sell spare parts to the dealer at the company scurrent Net prices. The company reserves the right at any time tochange its prices without incurring any liability whatsoever. 16. After Sale Service (a) The dealer shall give prompt attention to any vehicle, of the samemake or mark as the vehicles covered by this agreement, producedby or for the Company whether the vehicle was sold by the Dealer ornot. (b) The Dealer shall establish or cause to be established in the Territoryservice premises which shall have such number of trained staff, servicetools, service equipment and all other facilities as the Company shallconsider necessary for the provision of a quick and efficient Serviceof Products to the standards required by the Company. (e) The dealer shall carry out or cause to be carried out promptly andproperly any modification to any product required or recommendended by the company. 17. Warranty (d) The Dealer shall provide 3 free services to the Retail customer. (e) The dealer agrees to take full responsibility for and to hold thecompany harmless against any action or claim which may arisethrough the sale of standard or non-standard products for operationin conditions for which they were not intended or constructed. 19. Publicity (a) The Dealer shall advertise and/or promote parts, vehicles usedvehicles and Service facilities insuch a manner as to secure adequateand effective publicity to the satisfaction of the Company. (b) The minimum amount to be spent by the Dealer on publicising parts,vehicles, used vehicles and Service facilities shall be that amountagreed between the Company and Dealer. (g) The Dealer shall employ at his own expense, such sales man as may,in the opinion of the Company, be considered necessary, to thoroughly cover his Territory. (b) The minimum amount to be spent by the Dealer on publicising parts,vehicles, used vehicles and Service facilities shall be that amountagreed between the Company and Dealer. (g) The Dealer shall employ at his own expense, such sales man as may,in the opinion of the Company, be considered necessary, to thoroughly cover his Territory. " ( 15 ) THESE terms and conditions show that the dealer was expected to incurheavy expenditure, labour efforts and skill, with the result it was clearlyunderstood by the parties that the agreement in question was permanent andperpetual in nature. It could be determined only if the dealer committed anybreach of the terms of the agreement. This intention was well understood bymul when it issued show cause notice dated 16/04/1994 which is a matter ofdispute in Suit No-1224/91. ( 16 ) WHEN the formal agreement was executed, defendant inserted in thestandardised form of contract Clauses 3 (c) and 21 which were not negotiated norany chance was given to the plaintiff or its predecessor-in-interest to object thesame. By inserting these clauses in the formal agreement, the defendant arrogatedto itself the right to terminate this franchise by giving 90 days notice withoutassigning any cause. These clauses were not there nor formed part of the term ofadvertisement which had been published by the defendant, pursuance to which theoffer to take dealership was made by the plaintiff through its predecessor in interestand which offer was accepted by the defendant. The advertisement conveyed thatthe dealership would be permanent and perpetual,if the dealer fulfills and performall the obligations quoted therein. The plaintiff has fulfilled all the obligations sofar. Clause 21 has been couched in such a fashion as if consent of the dealer wasobtained for the same which in fact was never given by plaintiff of his free will orof his own volition. The parties did not stand on equal footing and did not enjoythe same bargaining power. Clause 21 conferred absolute and arbitrary anduncanalized power as it did not set out any guidelines for the exercise of thispower. ( 17 ) THE plaintiff has in fact incurred huge expenditure for example Rs. 53,08,744. 00and Rs. 50,06,682. 00on repairs and maintenance. Besides the plaintiffinvested in fixed assets like Building and Maintenance of show rooms, to thetune of Rs. 74,70,533. 00 and Rs. 24,02,541. 00. ( 17 ) THE plaintiff has in fact incurred huge expenditure for example Rs. 53,08,744. 00and Rs. 50,06,682. 00on repairs and maintenance. Besides the plaintiffinvested in fixed assets like Building and Maintenance of show rooms, to thetune of Rs. 74,70,533. 00 and Rs. 24,02,541. 00. During this period also he madeinvestment in fixed assets like machinery installed in the show room and workshop amounting to Rs. 1,00,36,419. 00 and on advertisement Rs. 36,46,668. 00. Thepayment made to the employees and various benefits and perquisits amounting tors. 53,12,601. 00. Plaintiff has spent crores of rupees beside it has taken loan worthcrores of rupees from the bank and other financial institutions. If now defendantis allowed by simply issuing notice of termination without there being any cause,then such an action on the part of the defendant is nothing but a colourable exerciseof arbitrary powers used in bad faith and with ulterior motive. This act is unjustand unconscionable. It cannot be sustained by any Court. If such an act is justified,the plaintiff would suffer irreparable loss and injury which cannot be compensatedby costs. There were reasonable expectation by the plaintiff and it was sounderstood that this contract would continue unless some serious breach goingto the roots of the contract were committed by the plaintiff. No sane person wouldhave incurred huge expenditure and his life savings in this venture in order to earngoodwill for the defendant, had he any inclination that this contract is terminableat the Will of the defendant. In fact for terminating the contract two conditionsmust be satisfied (i) Breach and (ii) Notice of 90 days. In the absence of any breachthe impugned notice is bad in law. ( 18 ) REFUTING the arguments of Mr. Arun Jaitley, that this Court has beendebarred by Supreme Court from granting any interim relief, Mr. Madan Bhatiacontended that the Supreme Court in its order dated 26/09/1994 was notconcerned with the relief sought in this suit. In Suit No. 2005/94, the petition wasundersection 20 of the Arbitration Act. MUL had raised preliminary objectionregarding the maintainability of that petition on the ground that after terminationof the agreement arbitration clause did not survive. Moreover the dispute oftermination of agreement was not referable to Arbitrator. In Suit No. 2005/94, the petition wasundersection 20 of the Arbitration Act. MUL had raised preliminary objectionregarding the maintainability of that petition on the ground that after terminationof the agreement arbitration clause did not survive. Moreover the dispute oftermination of agreement was not referable to Arbitrator. It was in this background that the Supreme Court held that without passing any such interim orders,the Court would first determine the right of the parties and only after the finaloutcome of the matter any order could be passed meaning thereby that Courtshould decide whether relief of specific performance can be a dispute referable toarbitration. How these observations are applicable in the present case, Mr. Jaitley has prima facie failed to explain. There appears to be a force in thesubmissions of Mr. Bhatia thatsince the Arbitrator could not grant the relief ofspecific performance, hence no relief on an interlocutory application could begranted. That would tantamount to exceeding the jurisdiction. But in a suitlikethe present one where specifically Clauses 21 and 3 (c) of the agreement are underattack on the ground of being inconscionable and bad in law, because it does notset out any guidelines for the exercise of that power. It was inserted in theagreement without the free consent of the plaintiff. The plaintiff had no bargainingpower nor these clauses were negotiated. In view of these challenges it cannot besaid that suit is not maintainable. A party has a right to challenge the term orclause of a contract, be that it a franchise or a simple sale contract on the groundof it being unfair, void and unconscionable. ( 19 ) WHILE deciding to grant or not to grant an interim relief we have to keepin mind three principles governing the grant of interim injunction; namely (i)prima facie case; (ii) Balance of Convenience and (Hi) Irreparable loss. Inorderto find out whether the plaintiff has made out a prima facie case we have firstto examine Clauses 21 and 3 (c) of the agreement which are reproduced as under:- CLAUSE 3 (c):3. Duration/cancellation of Previous Agreement (c) This Agreement shall be deemed to have commenced and taken effectfrom the day of one thousand nine hundred and eighty three and (subject to the other provisions for termination herein contained) shallcontinue until terminated by either party giving to the other 90 daysprior written notice to that effect expiring on any date. Clause 21:21. Duration/cancellation of Previous Agreement (c) This Agreement shall be deemed to have commenced and taken effectfrom the day of one thousand nine hundred and eighty three and (subject to the other provisions for termination herein contained) shallcontinue until terminated by either party giving to the other 90 daysprior written notice to that effect expiring on any date. Clause 21:21. Termination of Agreementthis agreement shall remain and continue in force and govern all transactionsbetween the parties hereto until cancelled or terminated in the mannerhereinafter expressed. Notwithstanding the provisions of any Clause here ofeither party may by giving the other 90 days notice in writing terminate thisagreement without assigning any cause. ( 20 ) WHAT does the word "without assigning any cause" appearing in clause21 means? Does it mean that there should not be any cause whatsoever forterminating the contractor does it mean cause exists butneed not be assigned? Mr. Jaitley contended that the termination under clause 21 can be without cause beingavailable. Since the power vest with the party under clause 21 of the agreement,therefore, irrespective of the cause such power can be exercised. Mr. Lalit Bhasin,appearing for defendant on 14/12/1994 when asked whether any causeexists on defendant s records other than shown in notice dated 6. 4. 91, he repliedthat cause was shown in the show cause notice dated 6/04/1991. Breachesare mentioned therein. No other breaches are thereafter available on the files. Toshow cause notice plaintiff did not reply, therefore, inference drawn that heaccepted those breaches. Hence impugned notice is justified. Moreover, this isan independent action upheld by the Supreme Court thereby permitting the defendant to invoke clause 21 and accordingly MUL invoked Clause 21 and terminatedthe dealership. ( 21 ) REFUTING these arguments, Mr. Bhatia contended that reading of Clause 21does not indicate that there has not to be any cause for invoking it. The reason maynot be assigned. But once the aggrieved party challenges the same, the Court shallgo into the question as to whether there exists reasons or not. The words "withoutassigning any reason came up for interpretation before the Supreme Court in thecase of Bajaj Auto Ltd. ,poona v. NX. Finodia, AIR 1971 SC 321 . Whileinterpreting these words, the Court held that it does not mean that there will beno reason available. Assigning the reason is one thing, not to have the reason orcause is another thing. The words "withoutassigning any reason came up for interpretation before the Supreme Court in thecase of Bajaj Auto Ltd. ,poona v. NX. Finodia, AIR 1971 SC 321 . Whileinterpreting these words, the Court held that it does not mean that there will beno reason available. Assigning the reason is one thing, not to have the reason orcause is another thing. Therefore, in the present case not to assign the reason asstipulated under clause-21 is one thing but not to have any reason shows thearbitrariness on the part of the defendant. In the instant case breaches werecommunicated by the defendant when it issued the show cause notice dated 6/04/1991. Against that, the suit is already pending in this Court bearings. No-1224/91. Once cause is shown it become subject to judicial review andclause-21 stand exhausted. Matter being subjudice the defendant cannot beallowed to circumvent the proceedings by issuing this notice without there beingany fresh cause or reason available on the files. At first instance it was only athreat but now agreement has been terminated with a malafide and ulteriormotive. ( 22 ) THAT the defendant for invoking clause-21 cannot take recourse to theorder passed by the Supreme Court. The Supreme Court only upheld the rightto invoke clause-21. The Apex Court never upheld the order of termination norheld that for issuing the impugned notice there need not be any cause or that theagreement could be terminated on the basis of alleged breaches as indicated innotice dated 6/04/1991. To appreciate the arguments of the Counsel for theparties we have to see the order of the Supreme Court passed in the Special Leave Petition on 1 8/08/1994- "orderleave granted. Heard. "several arguments were advanced by the two sides in support of andagainst the impugned order made by the High Court. Inview of the order wepropose to make, we consider it unnecessary to refer to or decide any of them. It is sufficient to observe that all the points urged by the two sides wouldremain open for a fresh consideration by the High Court in the first instancewhile deciding the main matter on merits. The observations made on any ofthe points including Clause-21 of the agreement in the impugned order willbe treated by the High Court as its tentative opinion only, which the two sideswould be entitled to reagitate for obtaining a fresh decision at the final stagein the High Court. The observations made on any ofthe points including Clause-21 of the agreement in the impugned order willbe treated by the High Court as its tentative opinion only, which the two sideswould be entitled to reagitate for obtaining a fresh decision at the final stagein the High Court. For the present appeal, it is sufficient to say that the order of injunction issuedby the High Court against the appellants would not be construed asrestraining the appellants from exercising the power they may have underclause-21 of the agreement and in case the appellants choose to exercisetheir power under Clause-21 of the agreement, the parties would be entitledto their respective rights as a result thereof as may be available to them inaccordance with law. The High Court s order dated 20/04/1991 readwith the order dated 18th November,1991 shall be beconstrued and understoodin the manner indicated herein by us. " ( 23 ) WHAT the Supreme Court mentioned Mr. Bhatia contended is very dearthat the defendant (appellant before the Supreme Court) could not be restrainedfrom exercising the power under Clause-21. But at the same time the respondent (plaintiff herein) was given the right to challenge the same. Nobody can deny thatthe defendant may exercise the right under Clause-21 but it has to be seen as tounder what circumstances. When such a right is challenged the defendant hasto justify the same by proving breaches on the part of the plaintiff, which in thepresent case defendant has prima facie failed to prove. Hence it is a serious matterrequiring adjudi cation. The contentions of the defendant that the right to terminatethe contract is an independent right even though no cause is available, to my mind,prima facie cannot be appreciated. There cannot be any independent right toterminate. Right to terminate flows from the agreement. Breach has to be there toterminate the agreement. The Supreme Court, in fact, while accepting the powerof MUL to invoke clause-21 permitted the aggrieved party to challenge such anaction of course on the legal grounds of malafide or without reasons. Clause-21does not envisage that termination can be without cause. It only indicates thatsuch cause may not be assigned. In Bajaj Autoltd. s case (Supra) Supreme Courtobserved that discretion does not mean a bare affirmation or negation of aproposal. Discretion implies just and proper consideration of the proposal onfacts and circumstances of the case. Clause-21does not envisage that termination can be without cause. It only indicates thatsuch cause may not be assigned. In Bajaj Autoltd. s case (Supra) Supreme Courtobserved that discretion does not mean a bare affirmation or negation of aproposal. Discretion implies just and proper consideration of the proposal onfacts and circumstances of the case. Without stating the reason the Court willpresume that the discretion was exercised reasonably and bonafide. Those whoallege to the contrary would have to prove and establish the same by evidence. In this case evidence and proof has yet to come. Mr. Jaitley s contention that noreliance can be placed on Bajaj Auto Ltd. s case because it was under Company sact where Directors were required to exercise statutory right merits noconsideration because, the Court was interpreting the discretionary right and laiddown the law which on all force apply. Primafacie, there is no independent rightto terminate this agreement apart from Clause 21. The notice dated 6/04/1991was issued to elicit the explanation of the plaintiff. That matter is still subjudicein Suit No-1224/91. The question raised in this suit is the validity ofclause-21ofthe agreement. I have refrained from expressing any opinion with regard to thevalidity of the said clause at this stage while deciding this application. Mr. Bhatia s contention that even for the sake of arguments if we presume that thedefendant exercised the right to terminate the contract by the impugned noticeyet the exercise of this power became ineffective once the notice of show causewas issued on 16. 4. 1991 disclosing the reasons and causes on the basis of whichthe defendant intended to terminate the contract. Clause 21 as reproducedabove, clearly shows that notice terminating the agreement need not assigningany cause, but in the instant case, defendant did disdose the cause and theintention to terminate the contract which was clearly depicted in the notice issuedon 6/04/1991. Having disdosed the reason and cause on the basis of whichit wanted to terminate the contract and that being subject matter in Suit No. 1224-A/91, validity of the impugned notice of termination is primafacie seriously indoubt. To my mind, the question involved in this suit cannot be called vaxatious,frivolous and malafide, rather the allegations being serious requires proof andare to be established by evidence. ( 24 ) ACCORDING to Mr. Bhatia this case raises question of far reaching publicimportance concerning the right of the parties to the contract. To my mind, the question involved in this suit cannot be called vaxatious,frivolous and malafide, rather the allegations being serious requires proof andare to be established by evidence. ( 24 ) ACCORDING to Mr. Bhatia this case raises question of far reaching publicimportance concerning the right of the parties to the contract. The issues involvedin this case are global incharacter. In the context of the reality of the modem worldfor which big multi-national Corporations or gigantic manufacturing concernsenjoying the monopoly of production of different kinds of goods with popularbrand names are keen to take advantage of the capital, the investment, the labour,the effort, the marketing knowledge and managerial skill of the franchisee for thepurpose of avoiding the investment of their own capital on these matters and thefranchisee are attracted by the prospect of permanent regular income from thefranchise. They may not be in a position to negotiate the terms of contract withsuch multinational corporations much less unequal bargaining power. The multinational companies with international brand names can dictate to the Indianenterprenures to sign standard form of contract, the terms of which are notnegotiated, i. e. take it or leave it. This Court in the case of M/s. Unikal Bottlers Ltd. v. M/s. Dhillon Kool Drinks was called upon to interpret almost similar clauseregarding termination of the contract. The matter was left open because in thatcase parties had entered into a supplemental agreement superceeding theoriginal agreement. Moreover the term of the supplemental agreement was aboutto expire. In para 7 of the that judgment it was observed that: "the francise cannot be made to stick to a party which does not come up toits standard and in the process ruin its goodwill and brand name. For thesereasons commercial contracts can never be in perpetuity and even if in acontract there is no termination clause, the contract will be allowed to beterminated through a reasonable notice if the power to terminate is sought to be exercised bonafide. "in para 8 it was observed that: "the plaintiff committed defaults in performance of its obligations underthe agreement, therefore, as per the terms of the agreement PFL was entitledto terminate the same. According to PFL there were serious defaults on thepart of the plaintiff. "in para 8 it was observed that: "the plaintiff committed defaults in performance of its obligations underthe agreement, therefore, as per the terms of the agreement PFL was entitledto terminate the same. According to PFL there were serious defaults on thepart of the plaintiff. " ( 25 ) IN that case plaintiff took full advantage of the supplemental agreementand thereafter, challenged the terms of original agreement as well as ofsupplemental agreement after it was almostover Court found that the supplemental agreement was fully negotiated and discussed. This supplemental agreementwas arrived after the original agreement was terminated. Therefore, Courtobserved that supplemental agreement was duly negotiated agreement. Terms ofthe same were mutually agreed, the question of bargaining power, dures/coercion etc. did not arise. Instead of entering into supplemental agreement,plaintiff should have raised its voice and sought remedy in Court at that stage. Hence reliance on this judgment by defendant is misplaced. Rather observationof Arun Kumar,j. quotedabove supports the plaintiff, that unless serious chargesare levelled regarding breach against the plaintiff contract cannot be terminated. Whereas in the case in hand, as per defendant s own showing it has no fresh causeor reason against the plaintiff for terminating the agreement except what werestated in the show cause notice dated 6/04/1991. The impugned notice couldnot be issued on those breaches mentioned in notice dated 6/04/1991 becausethat matter is sub-judice and notice dated 6. 4. 91 is already under stay. If thatbe so, prima facie it can be said that exercise of such power without cause isarbitrary, unjust and unreasonable. In fact, exercise of power under Clause 21 hasto be reasonable and bonafide. ( 26 ) THAT Medival notions of justice are no longer justified in the modern dayglobal commercial realities, particularly in the developing countries and India inparticular which has opened the policy of liberalisation and has opened its doorto the free entry of gigantic multi-national corporations which are coming in andentering into franchise agreements with Indian enterprenures. Gelhom in histreatise "limitations on Contract Termination Rights and Franchise Cancellation" stated at page 316 as follows:- "if fairness is the concern, the effect, actual as well as expected, of nonnegotiated terms on the policies should also be a measure of theirenforcability. Disregarding inequalities innegotiating ability, latter needsin fairness may also cause negotiated provisions to operate unfairly. Gelhom in histreatise "limitations on Contract Termination Rights and Franchise Cancellation" stated at page 316 as follows:- "if fairness is the concern, the effect, actual as well as expected, of nonnegotiated terms on the policies should also be a measure of theirenforcability. Disregarding inequalities innegotiating ability, latter needsin fairness may also cause negotiated provisions to operate unfairly. Nor isit any answer to contend as a freedom of contract that where the parties havefreely elected the reasons, the terminated party should "leave that thebargain hehaspnade and not be the beneficiary of special judicial relief". ( 27 ) FROM the advertisement given in the newspaper pursuance to which theoffer was given by the plaintiff and accepted by MUL a franchise agreement cameinto existence. Even clause-2 of the agreement indicate it to be a Franchiseagreement. In the context book "equity - Doctrine and Remedies" by R. P. Meagherqc in Chapter 5 at page 124 it has been observed that a joint venture agreementcreates a fiduciary relationship. The franchise agreement between a franchisor anda franchisee is in the nature of a joint venture. The franchisor manufactures thegoods and enters into an agreement with the franchisee to utilise the latter scapital, investment, marketing knowledge and expertise, managerial skill, localmarketing knowledge, labour and efforts for the sale of its products and havegeneration of goodwill for itself without having to invest its own capital on theseactivities. The franchisee is induced to enter into such a contract by the lure of thefact that by performing the aforesaid activities and investing the capital, he willbe assured a regular permanent income. The goodwill that is generated by thefranchisee is not only the goodwill of the products of the franchisor but thegoodwill of the business conducted by the franchisee as well. It was futhercontended that in view of such relationship existing between the parties, it is notopen to the MUL to exercise any contractual power to terminate franchiseagreement in bad faith for corrupt motive and against equity, justice and goodconscience and at the same time unjustly enrich itself with the goodwill generatedby the plaintiff in which the plaintiff has proprietory interest, while completely atthe same time destroying the plaintiff and his business and leaving him financiallyhigh and dry. There was no bargaining power so far as the plain tiff was concerned. There was no bargaining power so far as the plain tiff was concerned. It was a standardised form of contract which he was asked to sign on the dottedlines on the basis of take it or leave it. Various clauses of the agreement if gonethrough would show the enormous obligations imposed on the plaintiff by thedefendant. These clauses of the agreement which were got signed from all thedealers including the plaintiff would show that this was a common venture thisis clear from the obligation imposed namely, the product of Maruti vehicle andtheir sale in the market to the public including the generation of thegoodwillthrough after sales customer service, publicity etc. The main criteria for appointment of dealers was the ability of the dealer to provide standard of customerservice which was to be comparable to that available in developed countries, tomaximise the market for Maruti and to project and develop the highest image ofthe company. The plaintiff has complied with the criteria laid down and theobligations imposed, there cannot be any reason to terminate the contract unlessbreach committed and alleged. The agreement cannot be terminated unilaterally,arbitrarily or at the whim and fency of the defendant so as to completely ruin anddestroy the plaintiff, deprive him of his proprietory right in the goodwill muchless that it is open to the defendant to act in bad faith. No party has a right to actqua the other against justice, equity and good conscience. ( 28 ) MR. Bhatia relying on the observation of the Lord Denning in Gillespicbrothers Ltd. v. Roy Bowls Ltd. 1973 I All England Reports 193 urged that thejudges have even sanctioned a departure of ordinary meaning of a clause in orderto make it reasonable. The agreement has to be construed as a whole. Clause-21 ofthe agreement has to be read in consonance with other clauses of the agreement. The harmonious construction of Clause-21 with other terms would show that thisis a permanent contract. ( 29 ) THAT the present case is a case of multi national company which whileutilising the capital, material, services of Indian interprenures wants to exercisethe power to repudiate when it deems fit, even though the contract stipulateslong duration based on the economics of the project, by inserting such power inthe contract. ( 29 ) THAT the present case is a case of multi national company which whileutilising the capital, material, services of Indian interprenures wants to exercisethe power to repudiate when it deems fit, even though the contract stipulateslong duration based on the economics of the project, by inserting such power inthe contract. When the plaintiff has made his investment, built his infrastructure,incurred the expenses on building the goodwill for the product of the defendant,and when the contract stipulates its duration as permanent on the basis ofeconomic implications, defendant now cannot turn around and terminate thecontract purporting to act under one of its terms. Such a contract can only be theresult of unequal bargaining power and not the results of mutual negotiations. Thecourt will strain the language of such clause or clauses giving power oftermination to keep them within reasonable limits. Where, however, languagecannot be stretched beyond a limit, there is the vigilence of the common law whichwhile allowing freedom of contract watches to see that it is not abused. ( 30 ) IN the instant case, reasons have already been disclosed in notice dated 6/04/1991. Judicial review has already been invoked by the plaintiff. Thepower to terminate the agreement under Clause 21 gets exhausted. It is circumscribed by the causes which are so assigned or disclosed by the defendant andunless and until those causes or reasons are decided no fresh action can be taken. Placing reliance on Section 39 of the Indian Contract Act (in short the Act) Mr. Bhatia contended that there is no power left with the defendant to terminate theagreement except for breach of contract. Alleged breaches are subject matter ofshow cause notice which is subject matter of adjudication. The jurisdiction of thecourts or judicial review cannot be ousted by again invoking clause 21 withoutassigning any reason. In the impugned notice no breach has been alleged nor causeis available with defendant, hence impugned notice is illegal and void. Evenotherwise clauses 21 and 3 (c) are void because they are inconsisted with the otherterms of the contract which make this contract permanent. Any clause in thecontract which provide for termination without assigning any cause would bevoid undersection 39 read with Section 28 of the Act. This case is not merely acase of the plaintiff beinga buyeror a seller. Evenotherwise clauses 21 and 3 (c) are void because they are inconsisted with the otherterms of the contract which make this contract permanent. Any clause in thecontract which provide for termination without assigning any cause would bevoid undersection 39 read with Section 28 of the Act. This case is not merely acase of the plaintiff beinga buyeror a seller. The vehicles are the monopoly of themultinational MUL which wanted to utilised the capital, labour and and servicesof Indian intreprenures for sale of its products in the Indian Market. Hence thetermination is a very serious and drastic act. It requires adjudication. ( 31 ) MR. Jatley s reliance on the decision of this Court in the case of P. B. Ghayalord v. M/s. Maaruti Udyog Ltd. and Ors. has no bearing on the facts of thiscase. In that case the Court merely dealt with the question as to whether the Marutiudyog Ltd. was an instrumentality of the State as defined under Article 12 of theconstitution. Monopoly status vis-a-vis an employee. Monopoly of Maruti Car isin fact with the defendant. The plaintiff has built up its establishment, kept spareparts, specialised staff only for sale and after sale service of Maruti Cars, hencein this context it can be said defendant has a monopoly. Similarly reliance by Mr. Jaitely on the decision reported in 1993 Sup (4) SCC page 136 is of no help in thefacts of this case. On the contrary Supreme Court in the case of IBP Companyltd. v. Sh. Bal Kishan Mittal, 1993 (1) UJ SC page 603 clearly observed thattermination cannot be arbitrary. If it is based on justice and bonafide reason, insuch an eventuality grant of injunction is not proper. But in the case in hand whatto talk of arbitrary, malafide or otherwise, the defendant has taken the stand thatit has no reason nor any cause available after April, 1991 and still terminated thecontract because clause 21 of the agreement empowers it to do so. This exercise ofthe discretion, to my mind, without cause cannot be called justice, reasonable orbonafide. It is not the right of one party to push the other through the wall andthe Courts be silent spectators nor the Courts are so powerless. It is the result ofconcentration of particular kind of business in one hand or in few hands. It is yetto be determined as to whether clause 21 was negotiated and valid. It is not the right of one party to push the other through the wall andthe Courts be silent spectators nor the Courts are so powerless. It is the result ofconcentration of particular kind of business in one hand or in few hands. It is yetto be determined as to whether clause 21 was negotiated and valid. According toplaintiff this was not the term when offer was given and accepted by the defendant. A contract came into existence. By formal agreement this clause could not bepurported to have been inserted with plaintiff s free will. These challengesrequire trial and cannot be dealt with in detail at this stage. ( 32 ) THE power to terminate a contract is a very drastic power and is justifiable. It is subject to various conditions which govern the judicial discretion. All thesequestions have to be determined because not to have a cause and still terminatethe contractis subject to judicial review. It is a drastic right. The contracts are madeto be performed and not to be avoided. ( 33 ) SECTION 39 of the Act provides that a party must be guilty of failure toperform the contract in its entirety which alone will give the right to terminate thecontract. The expression "in its entirety" to mean that the breach must be suchas would go to the very root of the contract. Therefore,relying on the observationsof the Supreme Court in AIR 1980 SC 1717 and (1986) 3 SCC 156 , plaintiff wants thiscourt to declare Clauses 3 (c) and 21 being void. Any term giving right to terminatethe contract must spell out very specifically, precisely and expressly and theparticular obligation, breach of which would give the right to terminate thecontract. If this is not so, such a clause is hit by Section 39 on account of uncertaintyand hence void. Mr. Jaitfey s challenge to the maintainability of the suit on theground that the plaintiff filed two suits earlier in which these clauses were notchallenged, to my mind has no force. Since the defendant raised objections to themaintainability of the petition under Section 20 of the Arbitration Act against theimpugned notice, this defence was accepted by the plaintiff. Insuch aneventualityprima facie Order 2, Rule 2,cpc,is not attracted. If arbitration clause cannot beinvoked it does not mean that that party would be left remedyless. Since the defendant raised objections to themaintainability of the petition under Section 20 of the Arbitration Act against theimpugned notice, this defence was accepted by the plaintiff. Insuch aneventualityprima facie Order 2, Rule 2,cpc,is not attracted. If arbitration clause cannot beinvoked it does not mean that that party would be left remedyless. ( 34 ) IN support of their submissions and contentions the learned Counsel forthe parties cited various judgments beside texts from renowned authors on thesubject. ( 35 ) THAT the present suit cannot be said to be barred by the principle ofacquiescence and delay. Admittedly, the existence of this clause was known to theplaintiff since 1983 when as a partner of Competent Motors he executed identicalagreement. He was also aware of these clauses when he entered into agreementon 15. 1. 88 as sole proprietor of Classic Motors, but the plaintiff could initiate thelegal proceedings only when Clause-21 was invoked. It was only when thedefendant exercised its power under Clause 21 that the right to challenge accruedin favour of the plaintiff. The challenge could not have been invacuum. Both theparties have relied on the observations of Supreme Court in the case of Centralinland Water Transport Corporation, 1986 (3) SCC page 156. In the said case thecontract was of employment entered into in 1980. Termination notice was issuedin 1983. The employee challenged the validity of the clause of termination beingunjust and void in 1983. The Court upheld the contention of the employee andstruck down the said clause as unconscionable. The question of delay was ignoredbecause the cause of action arose in favour of that plaintiff only when the clausewas invoked. There was no question of challenging it in vacuum. As regards theobservation as to whether the principle of unconscionable is applicable to a privatecommercial contract or not, much can be said. But suffice it to say thatobservation of Supreme Court in the Central Inland Water case are not againstthe plaintiff as such. It has to be proved by evidence whether had the bargainingpower or not and whether clause 21 was negotiated or not? ( 36 ) IN this case, to my mind, the right to challenge accrued when defendantserved him with the impugned notice. The defendant, as rightly contended by Mr. It has to be proved by evidence whether had the bargainingpower or not and whether clause 21 was negotiated or not? ( 36 ) IN this case, to my mind, the right to challenge accrued when defendantserved him with the impugned notice. The defendant, as rightly contended by Mr. Bhatia, was in full knowledge of the expectations of the dealer and his trust in thegood faith of the defendant that if plaintiff fulfil his obligations under theagreement then the agreement shall not be terminated arbitrarily. This fact has notbeen denied by defendants in their reply. Therefore, the challenge to the relief onthe ground of acquiescence or delay, on the facts of this case is not prima facietenable. Clause 21 as understood by both the parties shows that the agreementcould be terminated on just and reasonable cause. This was the stand taken by thedefendant itself when it issued show cause notice to the plaintiff dated 6/04/1991. Inspite of directions no record was produced for Court scrutiny, ratherthe Counsel had stated that except the reasons given in the show cause noticedated 6. 4. 91 no other reason exists on the file and that on the basis of the breachesmentioned in the show cause notice dated 6. 4. 91 as well as on account ofindependent right available under Clause 21 that the impugned notice wasissued. This exercise of power, prima facie, to my mind is contrary to well settledprinciple of law that without just cause a commercial contract where hugeinvestment has been made cannot be terminated. Moreover, defendant in replyhad stated that there was bonafide reason and cause to terminate the dealership. That the defendant had cogent, bonafide and sound reasons to terminate theagreement. If the cogent reasons are given in the show cause notice, then on thatbasis the impugned notice would prima facie be bad in law, because that matteris subjudice and notice is under stay. In a franchise agreement there is an impliedterm that it will not be terminated arbitrarily or in bad faith. If these pleas of theplaintiff are accepted then Clauses 21 and 3 (c) are liable to be declared void. Thesepleas arose in favour of the plaintiff when there was termination notice. Therefore,the question of acquiescence or delay, to my mind, could not have arisen earlier ( 37 ) AS regards the averment of frivolous litigation and reliance by Mr. If these pleas of theplaintiff are accepted then Clauses 21 and 3 (c) are liable to be declared void. Thesepleas arose in favour of the plaintiff when there was termination notice. Therefore,the question of acquiescence or delay, to my mind, could not have arisen earlier ( 37 ) AS regards the averment of frivolous litigation and reliance by Mr. Jaitleyon Supreme Court judgment in the case of Bloom Dekor Ltd. v. Subhash Himatlaldesai 6- Ors. reported in (1994) 6 SCC page 322 is of no help to defendant becauseof the facts of this case. Plaintiff s first case is still pending. Stay granted in thatcase has not been vacated as such by the Supreme Court. Matter being subjudiceit does not lie in the mouth of the defendant to say that previous litigation isfriyolous. As regards the second suit that stood withdrawn on account of the legalobjection raised by the defendant. Hence the principles of law laid down in Bloomdekor Ltd. s case (Supra) is of no help to the defendant. ( 38 ) MR. Bhatia contended that this agreement cannot be compared with anordinary sales or Agency agreement. Moreover, the matter has not rested only ininvestment of expenses by the plaintiff at the time of execution of the agreement orthereafter as part of fulfilling the obligations under the agreement. The plaintiff haseven now been made to incur an amount of approximately Rs. 30 lacs on the"action Plan 1994-95" given by the defendant. The "action Plan for 1994-95"clearly show that by now i. e. till the "action Plan" was given the defendant hadno cause or grievance against the plaintiff. Plaintiff s dealership was to continue. Since the plaintiff on this Action Plan has incurred huge amount hence thedefendant is estopped from terminating this agreement at its will. ( 39 ) WHAT were the intention of the parties, whether the contract waspermanent or temprorary in nature? These are the questions which requireconsideration and can be decided after recording evidence. On account of theinterpretation given to Clause-21 read with defendant s admission that except thecause shown in the notice dated 6. 4. 91 there is no other cause available with thedefendant, to my mind, a primafacie case has been made out by the plaintiff. These are the questions which requireconsideration and can be decided after recording evidence. On account of theinterpretation given to Clause-21 read with defendant s admission that except thecause shown in the notice dated 6. 4. 91 there is no other cause available with thedefendant, to my mind, a primafacie case has been made out by the plaintiff. Eventhe subsequent conduct of the defendant i. e. the "action Plan 1994-95" havingbeen executed by the defendant with the plaintiff, thereby letting plaintiff to incurhuge expenditure, to my mind, would lead to the conclusion that the agreementcould not be terminated at the "will" of the defendant without there being anycause available. It can primafacie be said that the intention of the parties was notto terminate the contract at the whim and fency of either party. So far as thegrounds of breach alleged against the plaintiff vide show cause notice dated 6/04/1991 is concerned that matter is pending adjudication. Hence for that causeimpugned notice could not have been issued. It was conceded by the Counsel forthe defendant that the impugned notice is based on theallegations contained inthe show cause notice which is under stay. If that be so and there are no other causeavailable then what prompted the defendant to terminate the contract? Thisrequire adjudication. It requires trial. ( 40 ) CONTENTIONS of the defendant that dehore the breaches or cause,defendant has power to terminate the contract at will, to my mind, is without force. It requires adjudication. This question is of far Teaching public importanceeffecting the relationship between the multinational corporations and the Indianentrepreneurs particularly when India has entered into new era of free trade andhas lifted the barriers against the operation of multinational companies in Indianmarket. The legal questions involved in the case revolves around the role ofjudicial process to ensure fair trade in the aforesaid circumstances. The presentcase is not merely a case being of buyer and seller. The vehicles are the monopolyof the defendant which wanted to utililse the capital, labour and services of theplaintiff for sale of its products in Indian market. If it is allowed, this would givethe multi-national company power to render all the expenses and trouble therebyoccasioned by an Indian entrepreneur wholly fruitless by revoking theagreement. The vehicles are the monopolyof the defendant which wanted to utililse the capital, labour and services of theplaintiff for sale of its products in Indian market. If it is allowed, this would givethe multi-national company power to render all the expenses and trouble therebyoccasioned by an Indian entrepreneur wholly fruitless by revoking theagreement. Such power of termination contained in any term in the contractbecomes much more invidious when a party is allowed to make investment ofcapital, labour and services on the understanding that he will have a contract in itsfavour to sell the products of the company. But when he has done all that, the partyunilaterally frustrate the contract, this would be the result of domination of thewill of the parties to obtain unfair advantage. The power to terminate a contractis very drastic power and is subject to various conditions, which govern thejudicial discretion. All these questions will fall for determination after theevidence is recorded. Therefore, prima facie, to my mind, the plaintiff has madeout a case for grant of injunction, because at the time of granting temporaryinjunction, the Court is not holding the trial of various issues. The Court is merelyconcerned to see whether the case involves bonafide contentions between theparties or a serious question to be tried. These principles have been elucidated in 1992 (1) SCC 719 . ( 41 ) AS already observed, substantial questions have been raised whichrequires investigation and decision on merits, therefore, a prima facie case has beenmade out. If at this stage, the Court does not interfere, it would result in irreparableinjury, which may not be compensated by costs. Mr. Bhatia rightly contendedthat the goods sold by Maruti Udyog Ltd. , i. e. the Maruti Cars is a monopoly ofthe defendants. These goods are not available elsewhere to the plaintiff. Plaintiffhas already spent huge amount in infrastructural plants and machinery,engagement of labour, managerial staff, ministrial staff and has also incurredexpenditures subsequently for the years 1994-95 on account of the "action Plan"and has taken loan worth crores of rupees for building up the goodwill of thedefendant-MUL. Now, if the defendant is allowed to terminate the contract, itwould not only be crippling the plaintiff, but would also amount to throwing thelabourers and the managerial staff on the road which will create human problemto a large extent. The people who would be retrenched and their families wouldbe an added problem to the society. Now, if the defendant is allowed to terminate the contract, itwould not only be crippling the plaintiff, but would also amount to throwing thelabourers and the managerial staff on the road which will create human problemto a large extent. The people who would be retrenched and their families wouldbe an added problem to the society. Machinery and plants, the infrastructure andthe spare parts stocked by the plaintiff will be of no value and may not havemarket value. If the dealership is allowed to be terminated these things are goingto go waste. On the other hand, if injunction is granted, no injury would be causedto the defendant because the defendant has not made any investment in theplaintiff s work. Defendant has only to appoint another dealer, which can wait tillthe decision of the suit. Hence the balance of convenience is also in favour of theplaintiff. For the reasons stated above the implementation of the impugned noticedated 31/08/1994is hereby stayed. The observation made above wouldhave no bearing on the merits of the case. These are only tentative and prima facie.