Case: Fort Motor Equipment Co. &amp; Others Vs. I.B.P. Co. Ltd

1. The appellants had been appointed as a retail outlet dealer for the sale of motor spirit, high speed diesel and other products by the predecessors in interest of the respondent Company more than 70 years back. The appellants entered into a fresh agreement with the respondent Company on 12-7-1996. The licence agreement was entered into between the parties by which the respondent Company granted a licence to the appellants to enter upon and use the establishment at Cumballa Hill, Mumbai, for high speed diesel and other petroleum products. 2. On 4-2-1998/5-2-1998, allegedly the respondent Company received information from the Crime Branch of Mumbai Police, in relation to the alleged commission of irregularities at the outlet of the appellants. A team of officers of the Company visited the outlet and carried out an inspection which revealed certain irregularities. The most serious of the said irregularities was that a tanker lorry bearing Registration No. MH-04-P-516 was found at the establishment of the appellants loaded with motor spirit without valid documents. The tanker lorry was stated to be in a position of decantation with the hose pipe connected to the delivery manifold of the tank lorry and the decantation pipe of the underground MS tank. According to the respondent Company this indicated that the appellants had purchased motor spirit from unauthorised sources with an intent to sell the same. The respondent Company issued letter of termination dated 9-2-1998 recording that the breaches which had been found constituted a violation of Clause.4, 6(c), 7B and sub clauses (a), (c), (g) (l), (n) and (4) of Clause.9 of the Dealership Agreement. It was recorded that the breaches were serious and as a result thereof in the exercise of the power conferred by sub clauses (d), (f) and (g) of Clause.19, the Dealership Licence Agreement stood terminated.3. The appellants instituted a suit in the Bombay City Civil Court seeking, inter alia, a declaration that the termination was illegal together with a mandatory order restraining the respondent Company from obstructing the appellants in carrying on business at the outlet. In the notice of motion in the suit the appellants prayed for mandatory order and direction restraining the respondent Company from obstructing the appellants in their business in using the pump and interfering in any manner with the supply of petrol and diesel to the outlet continuously, as was being done in the past.4. The trial court refused the temporary injunction, aggrieved against which the appellants filed an appeal from order in the High Court of Bombay. Learned Single Judge by the impugned order dismissed the appeal with the observations that the termination of licence which had taken place was in accordance with the contractual provisions and the factual foundation on the basis of which the termination took place laid a sufficiently serious charge of a breach of contract to warrant an order of termination. Having regard to the nature of the breach, it was held that the appellants were not entitled to the temporary injunction prayed for. It may be mentioned here that the High Court while admitting the appeal had granted a temporary injunction and permitted the appellants to continue with the running of the outlet. After the dismissal of the appeal by the High Court, this Court had also granted the interim stay of the High Court order on 4-2-2002. It was ordered that the interim order granted by the High Court shall continue until further orders. The interim order was confirmed by this Court while granting leave in the special leave petition. 5. Since the appellants have been operating the outlet for more than 70 years, including 6-1/2 years under the interim orders of the courts after the termination of licence, without expressing any opinion on the merits of the dispute, we deem it appropriate that the interim order passed by this Court be made absolute and continued till the disposal of the suit by the trial court.6. We have not adverted to the merits of the dispute lest it may prejudice any of the parties before us. Since the suit has been pending at the initial stage for the last six years, the trial court is directed to dispose of the suit as soon as possible, preferably within a period of one year from the receipt/production of a certified copy of this order. The trial court shall decide the suit without taking into consideration any of the observations made by it in its order while refusing the temporary injunction or by taking into consideration any of the observations made by the High Court while dismissing the appeal against order.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]5. Since the appellants have been operating the outlet for more than 70 years, includingyears under the interim orders of the courts after the termination of licence, without expressing any opinion on the merits of the dispute, we deem it appropriate that the interim order passed by this Court be made absolute and continued till the disposal of the suit by the trial court.6. We have not adverted to the merits of the dispute lest it may prejudice any of the parties before us. Since the suit has been pending at the initial stage for the last six years, the trial court is directed to dispose of the suit as soon as possible, preferably within a period of one year from the receipt/production of a certified copy of this order. The trial court shall decide the suit without taking into consideration any of the observations made by it in its order while refusing the temporary injunction or by taking into consideration any of the observations made by the High Court while dismissing the appeal against order.