INDIAN OIL CORPORATION LIMITED Vs. AMRITSAR GAS SERVICE

JUDGEMENT

(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: