1996 (12) TMI 404 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the agreement in favor of the plaintiff is legally and validly terminated by the defendant?
2. Whether the plaintiff is entitled to claim the decree for specific performance of the agreement dated 15.1.1988 between him and defendant No.1?
3. Whether the plaintiff is entitled to get a decree for injunction as sought for?
4. What order and decree?

Summary:

Issue No. 1:
The court examined whether the termination notice dated 31.8.1994 issued by the defendant was legal and valid. The plaintiff argued that the termination was illegal, void, and an abuse of the process of the court, contending that Clause 21 of the franchise agreement was void u/s 23 of the Indian Contract Act. The plaintiff also claimed the agreement was a franchise agreement, permanent and indeterminable in nature. The defendant countered that the suit was an abuse of the court process and argued that the agreement was not permanent and could be terminated with 90 days' notice without assigning any cause. The court found that Clause 21, allowing termination without cause, was valid and not against public policy. The court held that the agreement was legally and validly terminated by the defendant.

Issue No. 2:
The plaintiff sought specific performance of the agreement dated 15.1.1988. The court referred to Section 14 of the Specific Relief Act, which states that a contract which is in its nature determinable cannot be specifically enforced. The court held that the agreement was determinable and thus could not be specifically enforced. Compensation in money would be an adequate relief.

Issue No. 3:
The plaintiff sought an injunction to prevent the termination of the agreement. The court found that since the agreement was determinable and could not be specifically enforced, the plaintiff was not entitled to the injunction sought.

Order and Decree:
The suit filed by the plaintiff was dismissed with costs. The court concluded that the agreement was legally and validly terminated, and the plaintiff was not entitled to specific performance or an injunction.