(1.)This appeal by special leave is by the Indian Oil Corporation Ltd. against the judgment of the Punjab and Haryana High court in Civil Revision No. 2340 of 1984, decided on 5/11/1984, dismissing the revision against the order dated 28/07/1984, passed by the Additional District Judge, Amritsar, in C. M. A. No. 22 of the 1983, affirming the order dated 19/10/1983 of the Sub-Judge, 1st Class, Amritsar, in Suit No. 376 of 1983 by which the appellant's application made under S. 34 of the Arbitration Act for stay of the suit was dismissed. The brief facts giving rise to this appeal and indicating the points for decision herein are now stated.
(2.)A Distributorship Agreement dated 1/04/1976 was made between the Indian Oil Corporation Ltd. (hereinafter called as 'the Corporation') and the Amritsar Gas Service, respondent 1, as distributor of the Corporation for sale of the Corporation's Liquefied Petroleum Gas (LPG) known as 'indane' in cylinders only for household consumers and commercial consumers in the area at Amritsar, specified in the agreement. The terms and conditions of distributorship were specified in the agreement. Clause 27 of the agreement provided for termination of the agreement by the Corporation forthwith on the happening of any of certain specified events. Clause 28 permitted either party 'without prejudice to the foregoing provision or anything to the contrary' contained in the agreement to terminate the agreement by 30 days' notice to the other party 'without assigning any reason for such termination'. Clause 37 provided for adjudication of any dispute or difference of any nature by arbitration.
(3.)It appears that the appellant-corporation received certain complaints about the working of the distributorship alleging unauthorised connections being given and tampering of the waiting list of customers by the distributor which were acts prejudicial to the interest, reputation and products of the appellant-corporation. Accordingly, the appellant corporation invoked clause 27 of the Distributorship Agreement and by its letter No. LPG/001 dated 11/03/1983, it terminated forthwith the distributorship. The said notice reads as under:
"M/s Amritsar Gas Service Madan Mohan Malviya Road, Amritsar City. Dear Sirs, Re: Indane Distributorship at Amritsar
Please refer to the LPG Distributorship Agreement dated 1/04/1976 executed between you and the Indian Oil Corporation. Clause 27 of the Distributorship Agreement reads as under:
"27.Notwithstanding anything to the contrary herein contained, the Corporation shall also be at liberty at its entire discretion to terminate this agreement forthwith upon or at any time after the happening of any of the following events, namely:
(B) If the distributor does not adhere to the instructions issued from time to time by the Corporation in connection with safe practices to be followed by him in the supply and storage of the Corporation's products or otherwise;
(I) If the distributor shall give out unauthorised connections to any person without the Corporation receipt/subscription voucher or otherwise howsoever;
(N) If the distributor shall either by himself or by his servants or agents commit or suffer to be committed any act which, in the opinion of the Regional Manager of the Corporation for the time being at New Delhi, whose decision in that behalf shall be final, is prejudicial to the interest or good name of the Corporation or its products; the Regional Manager shall not be bound to give reasons for such decision. "it has come to our knowledge that either you or your servants or agents have committed the following:
1. That you have released unauthorised connections by tampering with the waiting list registration record.
2. That you have issued connections to those people who had not booked themselves for gas connections.
3. That you have sold refill to unauthorised customers.
4. That you have issued duplicate issue slips.
The above acts jointly and severely in my opinion are acts which are prejudicial to the interest or good name of the Corporation or its products and accordingly in exercising my right under the above noted clause, I hereby order that the LPG Distributorship Agreement stands forthwith terminated and cancelled and you shall cease to be our LPG distributor at Amritsar with immediate effect.
You are hereby called upon to settle all your accounts with the Corporation and immediately hand over, return and re-deliver the entire stock of LPG filled, empty cylinders, equipments lying with you. You are hereby also advised to hand over all the documents, statfactery and other relevant papers of the said distributorship to the authorised representative of the Corporation who would be calling on you shortly.
Yours faithfully, for and on behalf of Indian Oil Corporation Ltd. Sd/- (S. K. Bakshi) General Manager"