AGRAWAL AGENCIES vs GODREJ-GE APPLIANCES LTD.

THE applicant/complainant has moved this Commission raising the grievance that he was appointed dealer of the respondent company by agreement dated 3rd September, 1996 and the appointment has been abruptly terminated by not renewing the dealership agreement. Clause-2 of the agreement may be referred to as below : "2(a) This agreement shall be deemed to come into force from 3.9.1996 and shall continue to remain in force till 31.3.1997 on which date, it shall automatically come to an end. THE agreement may however be renewed for a period of one year by mutual consent of the parties hereto. (b) This agreement or any renewal thereof shall also be liable to be terminated earlier before the expiry thereof under any of the applicable clauses of this agreement."

THE other relevant clause which relates to termination is Clause-22 which may also be reproduced as under : "22. Either party shall have the right to terminate this agreement (without assigning any reason and without incurring any obligation or liability in that behalf) by giving 3 months'' notice in writing to the other. Such termination, however, shall not affect any rights and obligations of either party which shall have arisen prior to such termination."

The respondent did not renew the agreement and issued a communication dated July 5, 1999, which reads as follows : "M/s. Agrawal Agencies LIC Building Sahadatpur MAU - 275 101 (U.P.) Dear Sirs, In light of your poor performance during the last few years, we are not renewing your dealership agreement for this financial year. For Godrej-GE Appliances Ltd. Sd/- Ajay Tandon Vice President - Sales"

The applicant/complainant has argued that the respondent could not terminate the agreement by the above said communication as it was automatically deemed to have renewed till 31st March, 2000 on an interpretation of Clause-2(a) of the agreement. The termination could only be effected from 1st April, 1999. There is force in this contention of the applicant/complainant. The respondent was not entitled to terminate the agreement in the midway and it had to be after completion of one year, i.e., till the date of last renewal. However, no purpose will be served to continue the present proceedings as the agreement in any case has come to an end by efflux of time. We may refer to a short order dated August 2, 2001 passed by the Hon''ble Supreme Court in Civil Appeal No. 130 of 1992 which reads as follows : "The point in issue before the Commission was with regard to the validity of an agreement between the Chemists of All India Organisation of Chemists and Druggists and M/s. Cynamid India Ltd. From the order of the Commission, it appears that the said agreement had come to an end. In this view of the matter, there was no need for the Commission to have considered whether any of the clauses of the said agreement was valid or not. The appeal is dismissed as having become infructuous."

IN view of the above, we do not find any ground to continue the present proceedings which stand disposed of. The respondent shall, however, in the peculiar facts and circumstances of the case, pay a sum of Rs. 5,000/- to the applicant as costs. Proceedings disposed of.