Niloufer Siddiqui, Neelofer v. Indian Oil Corporation Ltd.
2007-07-03
S.N.HUSSAIN
body2007
DigiLaw.ai
Judgment S.N.Hussain, J. 1. This Second Appeal has been filed by the plaintiff-appellants against the judgment and decree, by which the learned lower appellate court dismissed the title appeal and affirmed the judgment and decree passed by the trial court, dismissing the title suit filed by plaintiff no.1. 2. Title Suit No. 68 of 1978 was filed by plaintiff-appellant no. 1 only for declaration that the termination of agency of defendant no. 4, who was subsequently transposed as plaintiff no. 2, with regard to distributorship of Indane Gas vide letter dated 16.1.1978 (Ext. 2/D and Ext. B/6), was illegal, unjustified and not in terms of the mutually agreed term of agency and also for issuance of a mandatory injunction for restoring the agency of the said distributorship. The said suit was dismissed by the learned Execution Munsif, Muzaffarpur, by his judgment and decree dated 11.4.1985. Against the said judgment and decree of the trial court, the plaintiffs filed Title Appeal No. 32 of 1985, which was also dismissed by the learned 1st Additional District Judge, Muzaffarpur, by his judgment and decree dated 13.6.1988. 3. The issues, which were framed and considered by the learned court below, were as follows-. (i) Is the suit as framed maintainable? (ii) Whether plaintiffs have got any cause of action or right to sue? (iii) Is. the suit barred by law of limitation? (iv) Is the suit barred by law of res judicata? (v) Had plaintiff no. 2 no right to transfer his share to plaintiff no. 1? (vi) Has defendant no.1 right to terminate the distributorship? (vii) To what other reliefs are the plaintiffs entitled? 4. After considering the pleadings of the parties and the evidence on record, the learned courts below came to the following findings: (a) Cancellation of the Agency of distributorship done by defendant no.1 was not in collusion with defendant no. 2. (b) Defendant M/s Happy Home was no more in existence. (c) Plaintiff no. 2 had no right to execute Baimokasa deed in favour of plaintiff no. 1 and plaintiff no. 1 acquired no title by Ext. A over the distributorship of Indane Gas. (d) Plaintiff no. 2 violated the terms and conditions of agreement by transferring his share in the distributorship of Indane Gas. (e) Defendant no. 1 had absolute right to cancel and terminate the agency of distributorship of Indane Gas.
1 and plaintiff no. 1 acquired no title by Ext. A over the distributorship of Indane Gas. (d) Plaintiff no. 2 violated the terms and conditions of agreement by transferring his share in the distributorship of Indane Gas. (e) Defendant no. 1 had absolute right to cancel and terminate the agency of distributorship of Indane Gas. (f) The suit is hit by principle of res judicata as the matter had earlier been decided by a court of law in Title Suit No. 8 of 1978 . (g) Suit is not maintainable and plaintiffs are not entitled to any relief. On the aforesaid findings, both the suit as well as the appeal filed by the plaintiff-appellants were dismissed by aforesaid judgments and decree of the learned courts below. 5. The abovementioned judgments and decree of the learned courts below have been challenged by the plaintiff-appellants in the instant Second Appeal, which was admitted on 28.11.1991 and following points were formulated as substantial questions of law involved in this appeal: (i) Whether the court below erred in holding that the suit was barred by res judicata; (ii) Whether the court below erred in law in holding that there was an agreement between the parties, which gave power to the Corporation to terminate the agency, when, admittedly, no such agreement was signed. Subsequently another substantial question of law was framed by this Court vide order dated 18.9.2003, which is as follows: (iii) Whether the suit in its present form is maintainable or being barred as contemplated under sec. 14(1)(c) of the Specific Relief Act? 6. In the instant case, the claims of the plaintiff-appellants are as follows: (i) The Indian Oil Corporation Limited (defendant-respondent no. 1) offered distributorship of Indane Gas jointly to respondent no. 3 (defendant no. 3) and appellant no. 2 (defendant no. 4 who was subsequently transposed as plaintiff no. 2 in the suit) vide its letter no. Sales/IG ERN/3623 dated 21.10.1971 (Ext. 2A) on amongst others the conditions that the said allottees would get their firm registered, the appointment of distributor would be subject to the condition contained in Companys Standard Agreement to be sent to the allottees in due course for signature and the Corporation shall be at liberty to terminate the agency without assigning any reason by giving thirty days notice in writing of the intention to terminate.
(ii) When the Corporation did not send the Companys Standard Agreement, plaintiff no. 2 demanded it vide letter dated 4.11.1971, to which the Corporation replied on 12.11.1971 (Ext. 2F) that it would be supplied later as no time was prescribed for the same. Hence on the basis of the letter of allotment (Ext. 2A) plaintiff no. 2 got the partnership firm registered before the Registrar of Firms at Patna on 17.11.1971 (Ext. 1). Thereafter, plaintiff no. 2 again asked the Corporation (defendant no. 1) vide letter dated 16.12.1971 (Ext. 2B) to send the Companys Standard Agreement, but defendant no. 1 replied on 31.12.1971 (Ext. 2C) that the said Standard Agreement would be sent in due course for signatures, when it is ready. Thereafter, the said Companys Standard Agreement was never sent by defendant no. 1 and in March, 1972, plaintiff no. 2 and defendant no. 3 started their business on the basis of the aforesaid letter of allotment (Ext. 2A). (iii) The said distributorship was in the names of plaintiff no. 2 and defendant no. 3 but subsequently on 15.11.1973 (Ext. 2) the other partner (defendant no. 3) gave no objection to plaintiff no. 2 for transferring his interest in the partnership either to his father or to his wife (plaintiff no. 1) and immediately thereafter plaintiff no. 2 wrote letter dated 17.11.1973 (Ext. B) to defendant no.1 for permission to transfer his share to his father or to his wife in the said business, but much later vide letter dated 17.4.1975 ( Ext. B/3) defendant no. 1 refused transfer of interest only with respect to father of plaintiff no. 2. (iv) Hence plaintiff no. 2 (appellant no. 2) published notices in newspaper dated 4.1.1978 (Ext. 5) about his intention to transfer his share to his wife (original plaintiff-appellant no. 1) inviting objection from any person/organisation within fifteen days. Immediately thereafter defendant no. 1 issued the impugned letter of termination dated 16.1.1978 (Ext. 2/D and Ext. B/6) on the allegation that plaintiff no. 2 had violated the terms of agreement by issuing the aforesaid newspaper notice. However, the said letter of termination was itself in breach of clause 8 of the appointment letter (Ext. 2A) as it was issued without giving any thirty days prior notice in writing to plaintiff no. 2 with regard to intention of defendant no. 1 to terminate the distributorship.
However, the said letter of termination was itself in breach of clause 8 of the appointment letter (Ext. 2A) as it was issued without giving any thirty days prior notice in writing to plaintiff no. 2 with regard to intention of defendant no. 1 to terminate the distributorship. (v) Immediately after issuing the said termination letter defendant no. 1 Indane Oil Corporation filed Title Suit No. 8 of 1978 on 18.1.1978 for declaration that defendants of that suit had no legal right or authority to assign or transfer his/their interest/share to anybody and also for appointment of receiver and permanent injunctions. The said title suit of defendant no. 1 was decreed ex parte on 26.2.1983 (Ext.C) and for setting aside the said ex parte decree, the appellants filed Title Suit no. 126 of 1983 and the said title suit was allowed by the trial court on 26.7.1989 restoring Title Suit No. 8 of 1978 to its original file and number, but subsequently the said Title Suit No. 8 of 1978 was also dismissed under Order 9 Rule 8 of the Code of Civil Procedure. However, the said dismissal of Title Suit No. 8 of 1978 was never challenged by anyone and it had attained finality. 7. Defendant-respondent no. 1 Indian Oil Corporation contested the plaintiffs claim and asserted as follows: (i) Since the agreement in question was in its nature determinable, it cannot be specifically enforced by a court of law as per the provision of Sec. 14(1)(c) of the Specific Relief Act, 1963 and hence the reliefs claimed by the plaintiffs cannot be granted as the suit itself was not maintainable. Clause 8 of the letter of allotment of distributorship (Ext. 2A) specifically provided that defendant no. 1 had the authority to terminate the allotment specially in view of Sec. 201 of the Indian Contract Act, 1872 , which provides that an agency is terminated by the principal revoking his authority. In support of his contention learned counsel for defendant-respondent no. 1 relied upon a decision of the Hon ble Apex Court in the case of Indian Oil Corporation Ltd. vs. Amritsar Gas Service & Ors., reported in 1991(1) S.C.C. 533 . (ii) The aforesaid letter of allotment of distributorship (Ext.
In support of his contention learned counsel for defendant-respondent no. 1 relied upon a decision of the Hon ble Apex Court in the case of Indian Oil Corporation Ltd. vs. Amritsar Gas Service & Ors., reported in 1991(1) S.C.C. 533 . (ii) The aforesaid letter of allotment of distributorship (Ext. 2A) was clearly an offer by defendant-respondent no.1 which had been accepted by the allottees as is clear from the conduct of the parties specially the allottees, who continued the business/ agency in terms of the said letter of allotment. There is no statutory provision prescribed in law that a contract has to be in writing, hence, there can be an oral contract between the parties and in the instant case the same is well-proved by the conduct of the parties and the evidence on record. Therefore, the actions of the company in the absence of execution and signing of Companys Standard Agreement cannot legally affect the contract between the parties, specially when the plaintiffs themselves never claimed that there was no contract. In this regard, learned counsel for respondent no.1 relied upon a decision of the Hon ble Apex Court in the case of E. Vankatakrishna vs. Indian Oil Corporation and Another, reported in 2000(7) S.C.C. 764 . (iii) The trial court has found in paragraphs 22, 23, 35 and 36 of its impugned judgment that the plaintiffs were fully aware of the terms and conditions of the Companys Standard Agreement (Ext. A), which finding was affirmed by the judgment of the lower appellate court specially in paragraphs 19, 21, 23 and 26 thereof and hence there being clear and concurrent findings of facts of both the learned courts below, no substantial question of law arises in the instant Second Appeal, which is fit to be dismissed. 8. Defendants No. 2 and 5, who are respondents no. 2 and 4, respectively, in the instant second appeal, did not appear and contest the title suit and title appeal in spite of notices. In the instant second appeal also, they have not appeared. So far defendant no. 3, who is respondent no. 3 in the instant appeal, is concerned, he appeared in the title suit and filed his written statement. He also appeared in this appeal and his claims are as follows: (i) Defendant No. 3 and plaintiff no. 2 (defendant no.
In the instant second appeal also, they have not appeared. So far defendant no. 3, who is respondent no. 3 in the instant appeal, is concerned, he appeared in the title suit and filed his written statement. He also appeared in this appeal and his claims are as follows: (i) Defendant No. 3 and plaintiff no. 2 (defendant no. 4) were running business in partnership and the firm was registered with the Registrar of Firms as M/s Happy Homes (defendant no. 2-respondent no. 2). Letter of allotment of distributorship was issued by defendant no. 1 in favour of the firm of plaintiff no. 2 and defendant no. 3. Although the Companys Standard Agreement could not be signed by the parties, but plaintiff no. 2 and defendant no. 3 were fully acquainted with the said agreement and agreed to all the terms and conditions of the same and only thereafter they accepted the offer of distributorship from defendant no. 1. The said Companys Standard Agreement in Form SL-50 was agreed upon and accepted by the parties and hence its terms were binding on both the parties. The said partnership firm was managed by plaintiff no. 2 as the authorised agent till the date of termination of the distributorship by defendant no. 1 and he misappropriated the income and profit of the firm. (ii) The deed of Baimokasa executed by plaintiff no. 2 in favour of his wife (plaintiff no.1) was absolutely illegal and plaintiff no. 2 had no right to transfer his share as per the agreement. Hence, defendant no. 1 rightly terminated the distributorship in question and automatically M/s Happy Homes (defendant-respondent no. 2) was dissolved by the impugned letter dated 16.1.1978 ( Ext. 2D), whereafter defendant no. 3 approached defendant no. 1 by petition dated 26.4.1968 and prayed for grant of distributorship of Indane Gas at Muzaffarpur, which was allowed and defendant no. 1 granted the same to defendant no. 3 by letter dated 11.5.1978 and executed necessary deed of agreement in Form SL-50, whereafter defendant no. 3 started his business of distributorship of Indane Gas in the name and style of Nishad Gas, which is the sole proprietorship business of defendant no. 3 and is continuously running and hence the plaintiffs had no authority or right left to retain the distributorship. In short, defendant no. 3 (respondent.no. 3) supported the claim of defendant no.1 (respondent no.1). 9.
3 and is continuously running and hence the plaintiffs had no authority or right left to retain the distributorship. In short, defendant no. 3 (respondent.no. 3) supported the claim of defendant no.1 (respondent no.1). 9. Although several issues were framed by the trial court, upon which the title suit and the title appeal were decided, but the main issues were squeezed into three substantial questions of law by this Court at the time of hearing of the second appeal under Order XLI Rule 11 of the Code of Civil Procedure, which are detailed in the above paragraph no. 5 of this judgment. The said questions are being separately considered and decided in the following paragraphs. 10. (i) For the sake of convenience third question is being taken first. It is with regard to the maintainability of the suit in view of the bar as contemplated under sec. 14(1)(c) of the Specific Relief Act, 1963 , which provides that amongst others a contract, which itself is in its nature determinable, cannot be specifically enforced. In this connection, it may be mentioned that the aforesaid question of maintainability of the suit under the provisions of the Specific Relief Act was never raised by the defendant-respondent either before the trial court or before the lower appellate court nor such an issue was framed by the learned courts below. (ii) In the instant case, although there was a partnership between plaintiff no. 2 and defendant no. 3 but that is not an issue in the instant case as neither there was a dispute regarding partnership between defendant no. 3 and plaintiff no. 2 nor the conduct of any partner had imperilled the success of partnership enterprise as even transfer by plaintiff no. 2 in favour of plaintiff no. 1 was made after obtaining no objection from defendant no. 3. The question in the instant case was the agreement of allotment of distributorship by defendant no. 1 in favour of the firm of defendant no. 3 and plaintiff no. 2 as well as its termination. (iii) Furthermore, from the terms of agreement, namely, the letter of allotment and the conduct of the parties, it appears that neither the contract was revocable nor it had become void for any reason whatsoever.
1 in favour of the firm of defendant no. 3 and plaintiff no. 2 as well as its termination. (iii) Furthermore, from the terms of agreement, namely, the letter of allotment and the conduct of the parties, it appears that neither the contract was revocable nor it had become void for any reason whatsoever. Hence, provision of Section 14(1)(c) of the Specific Relief Act is not applicable to the facts and circumstances of the instant case and the suit cannot be legally held to be not maintainable under the said provision. Furthermore, it is apparent from the letter of allotment (Ext. 2A) that there was no arbitration clause therein and hence the plaintiff-appellants had no option, but to file the suit. Had there been any arbitration clause therein, the matter would have been different and the provision of Arbitration Act could have been attracted. Thus, the suit and claim of the plaintiffs were not barred under the provisions of the Specific Relief Act. 11. (i) Now the first question is being taken up i.e. whether the instant title suit bearing Title Suit No. 68 of 1978 was barred by principle of res judicata as it was filed by the plaintiffs subsequent to Title Suit No. 8 of 1978, which was filed earlier by defendant no. 1 with respect to the same matter and was decreed ex parte on 26.2.1983, whereas, the instant title suit was decided subsequently on 11.4.1985. (ii) In this connection, it may be noted that although Title Suit No. 8 of 1978 was filed by defendant no. 1 on 18.1.1978 for declaration that the defendants of that suit (including plaintiff-appellants of the instant case) had no legal right or authority to assign or transfer his/thier interest/share to anybody and the said suit was decreed ex parte on 26.2.1983, but the said ex parte decree was set aside on 26.7.1989 by the same court, which allowed Title Suit No. 126 of 1983 filed by the appellants for restoration of Title Suit No. 8 of 1978. After restoration of Title Suit No. 8 of 1978, it continued for sometime, but subsequently it was dismissed under Order IX Rule 8 of the Code of Civil Procedure, but the said dismissal was never challenged by anyone and it attained finality.
After restoration of Title Suit No. 8 of 1978, it continued for sometime, but subsequently it was dismissed under Order IX Rule 8 of the Code of Civil Procedure, but the said dismissal was never challenged by anyone and it attained finality. (iii) In the said circumstances, the decree dated 26.2.1983 cannot legally act as res judicata as it was itself subsequently set aside and finally the said Title Suit No. 8 of 1978 was dismissed on technical grounds without any consideration of merit, which cannot act as res judicata. In the said circumstances, it is held that the learned courts below wrongly assumed the instant suit (Title Suit No. 68 of 1978) filed by the plaintiff-appellants to be barred by the principle of res judicata. 12. (i) So far the second question with regard to agreement between the parties and the power of the Corporation to terminate the distributorship is concerned, there are some admitted facts. It is not in dispute that the Indian Oil Corporation Ltd. (defendant-respondent no.1) offered distributorship of Indane Gas to defendant no. 3 and plaintiff no. 2 vide its letter dated 21.10.1971 on three conditions which were: (i) that the allottees would get their firm registered; (ii) that the allotment of distributorship would be subject to conditions contained in the Companys Standard Agreement, which was to be provided by the Corporation and was to be signed by the parties; and (iii) that the Corporation (respondent no. 1) shall be at liberty to terminate the agency without assigning any reason by giving thirty days notice indicating intention to terminate. It is also an admitted fact that plaintiff no. 2 got the partnership firm registered as per the terms of the agreement and at least twice requested the Corporation (defendant no. 1) to send the Companys Standard Agreement for signature, but the Corporation never sent it to the allottees and hence the Companys Standard Agreement in Form SL-50 was never executed, but in spite of that the allottees started and continued their business on the basis of the letter of allotment dated 21.10.1971. (ii) In the aforesaid facts and circumstances, it is quite apparent that the allottees fulfilled all the conditions and terms of the letter of allotment and it was the Corporation (defendant no.
(ii) In the aforesaid facts and circumstances, it is quite apparent that the allottees fulfilled all the conditions and terms of the letter of allotment and it was the Corporation (defendant no. 1) itself, which violated the conditions and did not send the Companys Standard Agreement to the allottees, which it had to send as per the terms and conditions of the said letters of allotment. This fact would be apparent from the repeated letters sent by plaintiff no. 2 to defendant no. 1 dated 4.11.1971 and 16.12.1971 (Ext. 3C) as well as the replies of the Corporation (defendant no. 1) dated 12.11.1971 ( Ext. 2F) and 31.12.1971 (Ext. 2C). It is also apparent from the records that for more than two years, the Corporation (respondent no. 1) sat over the matter and did not send the Companys Standard Agreement to the allottees till the letter of termination dated 16.01.1978 (Ext. 2D) although it was bound to do so immediately as per their own letter of allotment dated 21.10.1971 (Ext. 2A). (iii) Thus, it is an undeniable fact that the Corporation (respondent no. 1) itself violated the terms of letter of allotment and never sent Companys Standard Agreement to the allottees for being executed. It is also quite apparent that a document/agreement, which is not executed by the parties, cannot be legally made enforceable. The claim of the defendantrespondent that the plaintiff-appellants were aware of the Companys Standard Agreement cannot serve the purpose, specially when there is nothing to show that the plaintiff-appellants had any knowledge or had ever agreed to the terms of the Companys Standard Agreement, rather it is their specific claim that they were absolutely unaware of its terms. Hence, the terms and conditions of the Companys Standard Agreement in Form SL-50 cannot be legally held to be binding upon the plaintiff-appellants. Section 7 of the Indian Contract Act, 1872 , specifically provides that in order to convert a proposal into a promise, the acceptance must be absolute and unqualified and be expressed in some usual and reasonable manner, unless the proposal prescribes the manner in which it is to be accepted. In the said circumstances, the agreement in question cannot be deemed to be a concluded contract. (iv) The entire argument of the defendant-respondents is based on Companys Standard Agreement (Ext. A), which was admittedly never executed by the parties.
In the said circumstances, the agreement in question cannot be deemed to be a concluded contract. (iv) The entire argument of the defendant-respondents is based on Companys Standard Agreement (Ext. A), which was admittedly never executed by the parties. In that regard Clause 28 of the Companys Standard Agreement has been pressed by defendant-respondent, but according to the deposition of D.W. 1 himself no form of standard agreement was available at that particular time. Hence, no such agreement having been given by the defendant-respondent no. 1 nor any such Companys Standard Agreement being available with the appellants at the relevant time nor having been signed by any of the parties, the plaintiff-appellants cannot be non-suited on the ground of Clause 28 or for that purpose any clause of the said Companys Standard Agreement. (v) In the aforesaid facts and circumstances of the instant case, only the letter of allotment issued by defendant-respondent no.1 dated 21.10.1971 (Ext. 2A) alongwith the conduct of the parties can be the basis of agreement and may be binding upon them. According to Section 50 of the Indian Contract Act, agreement has to be carried out exactly in terms of agreement arrived at between the parties. But it is clear from the aforesaid facts that the plaintiff-appellants followed the terms given in the allotment letter by getting their firm registered and starting their business in terms of the said letter of allotment, whereas, it was defendant-respondent no. 1 itself, which violated the terms of the said letter of allotment by refusing to send the Companys Standard Agreement to the plaintiff-appellants and failing to give any thirty days written notice to the piaintiff-appellants with respect to their intention to terminate the contract. (vi) According to the principle of law, if any agreement between the parties (in this case the letter of allotment) states that a particular act relating to the furtherance of the contract was to be done in a particular manner, then it should be done in that manner and it is not open to the concerned party to chalk out its own manner of performing his part of contract. This view is supported by a decision of the Division Bench of the Allahabad High Court in the case of Bishambhar Nath Agrawal vs. Kishan Chand & Ors., reported in A.I.R. 1990 Allahabad 65.
This view is supported by a decision of the Division Bench of the Allahabad High Court in the case of Bishambhar Nath Agrawal vs. Kishan Chand & Ors., reported in A.I.R. 1990 Allahabad 65. Even the State or its authorities or even its instrumentalities cannot be legally allowed to act in an arbitrary manner against the specific terms of the agreement, rather they are expected to act in a more responsible manner strictly in terms thereof. (vii) So far the allegation of violation of terms of agreement by the plaintiffappellants is concerned, it has already been held above that the Companys Standard Agreement, which was never executed by the parties, cannot legally be the basis of any agreement between them. Hence, Clause 28 of the Companys Standard Agreement cannot be binding upon either of the parties. It has also been held above that the basis of the agreement between the parties can only be the terms provided in the letter of allotment and none of those provided any bar upon transfer of interest/share in the business to any other person. Furthermore, it is apparent from Ext. 2 that the other partner, namely, defendant no. 3 (respondent no. 3) gave no objection to plaintiff no. 2 for transferring his interest/share in the partnership either to his father or to his wife (plaintiff no. 1), whereafter plaintiff no. 2 sent letter dated 17.11.1973 (Ext. B) to the Corporation (defendant no. 1) for permission to transfer his share or interest to his father or to his wife and in reply thereto the Corporation (respondent no. 1) sent letter dated 17.4.1975 ( Ext. B/3) restraining him from transferring his share to his father, but nothing was mentioned regarding his wife. Thus, it is clear that neither the terms of letter of allotment, nor the other partner (defendant no. 3) and nor even the Corporation (defendant no. 1) stopped plaintiff no. 2 from transferring his share/interest to his wife (plaintiff no. 1) rather defendant no. 1 and defendant no. 3 clearly wrote that they had no objection to it. Hence the impugned order of termination passed by defendant no. 1 on that ground cannot be sustained in law. (viii) In the said circumstances, neither the publication of notice by plaintiff no. 2 in the newspaper dated 14.1.1978 (Ext. 5) showing his intention to transfer his share/interest to his wife (plaintiff no.
Hence the impugned order of termination passed by defendant no. 1 on that ground cannot be sustained in law. (viii) In the said circumstances, neither the publication of notice by plaintiff no. 2 in the newspaper dated 14.1.1978 (Ext. 5) showing his intention to transfer his share/interest to his wife (plaintiff no. 1) nor the execution of the deed of Baimokasa dated 23.1.1978 (Ext. 3) by plaintiff no. 2 in favour of his wife (plaintiff no. 1) can legally be held either illegal or violative of the terms of agreement. (xi) From the impugned order of termination of distributorship dated 16.1.1978 (Ext. 2D) issued by the Corporation (defendant no. 1), it appears that it was based only upon the allegation mentioned above. Hence, it is clearly penal in nature, but no prior notice was sent to the plaintiff-appellants regarding the said allegation nor any opportunity was given to them to explain the alleged violation of the terms of the agreement. Hence the said order is clearly violative of rule of natural justice. It further transpires that the impugned order of termination is on the basis of some clauses of the Companys Standard Agreement, which was neither executed by the parties nor it had any legal value as has been discussed above. Hence, any of the clause of the Companys Standard Agreement cannot be binding upon the parties and termination of the distributorship on that ground is clearly illegal. (xii) In this connection, it may be stated that the order of termination can only be based on the terms agreed by the parties and in the instant case it has already been held above that the letter of allotment (Ext. 2A) and the conduct of the parties can only be deemed to be the basis of agreement between the parties. Clause 8 of the letter of allotment (Ext. 2A) specifically provided that the Corporation (defendant no. 1) can terminate the distributorship only after giving thirty days notice to enable the allottees to give their explanation, but the Corporation completely violated the said terms mentioned in Clause 8 of the letter of allotment, and issued the impugned order of termination without giving any notice to the allottees.
2A) specifically provided that the Corporation (defendant no. 1) can terminate the distributorship only after giving thirty days notice to enable the allottees to give their explanation, but the Corporation completely violated the said terms mentioned in Clause 8 of the letter of allotment, and issued the impugned order of termination without giving any notice to the allottees. It is, thus, clear that the terms provided in the letter of allotment were in accordance with the principle of natural justice, which was a sine qua non for termination of lease, but it was given a complete go-bye by the Corporation (defendant no. 1) and consequently the order of termination of the distributorship cannot be sustained in law. (xiii) In this connection, reference may be made to a decision of the Division Bench of the Delhi High Court in the case of Dharam Veer vs. Union of India & Ors., reported in A.I.R. 1989 Delhi 227. In this connection, reference may also be made to a decision of the Hon ble Apex Court in the case of State of Haryana vs. Ram Kishan & Ors., reported in A.I.R. 1988 S.C. 1301. (xiv) The learned courts below completely ignored the aforesaid admitted facts as well as the provisions of law and the case laws while deciding the issues with respect to the abovementioned question and based their judgments merely relying upon the Companys Standard Agreement (Ext. A), which was, admittedly, never executed by the parties, nor it was proved that the allottees had any information of the terms thereof, nor even the Corporation sent it to the allottees in terms of the letter of allotment. Apart from the aforesaid Form SL-50, the unsigned Companys Standard Agreement, there was no other material or evidence produced by defendant-respondent no. 1 to justify the impugned order of termination of distributorship. It is already held in the above sub-paragraphs of this judgment that the terms and conditions of the Companys Standard Agreement in Form SL-50 cannot be legally held to be binding upon the plaintiff-appellants and they cannot be non-suited on the ground of any clause thereof. On the other hand, the plaintiffappellants have been able to prove that the agreement between the parties was based upon the letter of allotment issued by defendant no. 1 in favour of plaintiff no. 2 and defendant no.
On the other hand, the plaintiffappellants have been able to prove that the agreement between the parties was based upon the letter of allotment issued by defendant no. 1 in favour of plaintiff no. 2 and defendant no. 3 as well as the conduct of the parties and the allottees never violated the terms thereof and even the transfer made by plaintiff no. 2 in favour of his wife (plaintiff no. 1) was not violative of the terms of the letter of allotment and was made after taking no objection from the other partner as well as from the Corporation itself. 13. Considering the aforesaid facts and circumstances, it is held that the aforesaid, questions no. (i) and (ii) raised by the plaintiff-appellants are substantial questions of law and the learned courts below have committed serious errors of law in deciding the aforesaid questions, which are with respect to pure questions of law as most of the relevant facts are admitted in the instant case. The learned courts below not only committed errors of record by misconstruing the facts, but they also ignored the specific provisions of law as well as the case laws, which were relevant and necessary for determination of the issues involved in this case and also wrongly assumed that the suit was barred by principle of res judicata. 14. As a result, this appeal succeeds, the judgments and decree of both the learned courts below are hereby set aside and the claim raised by the plaintiffappellants in the title suit is decreed and it is declared that the letter of termination dated 16.1.1978 (Ext. 2D) sent by defendant no.1 to plaintiff no. 2 was illegal, unjustified and arbitrary having no legal effect and hence neither distributorship of Indian (sicIndane?) Gas vide letter of allotment dated 21.10.1971 (Ext. 2A) issued by defendant no. 1 in favour of plaintiff no. 2 and defendant no. 3 has been terminated, nor any act done by any of the defendant-respondents in violation of the aforesaid letter of allotment dated 21.10.1971 (Ext. 2A) or any act done by them in accordance with the letter of termination dated 16.1.1978 (Ext. 2D) can be held to be sustainable in law. However, in the facts and circumstances, there shall be no order as to costs.