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Judgment
P. Jyothimani, J.—The writ petition is directed against the order of the second respondent dated 5.6.2007, by which the second respondent,
by giving one month''s time with effect from 5.6.2007, has terminated the Maintenance and Handling contract awarded to the petitioner at No. 40,
Salem Main Road Attur-636 102, Salem District, as per Clause 48 of the contract dated 20.12.2003. It is also stated under the impugned order
that the contract stands terminated with effect from 4.7.2007.
In the letter of the petitioner dated 21.5.2007, the petitioner in uncertain terms has admitted that the contract awarded to him would be expired
on 30.6.2007. However, his only request under the said letter dated 21.5.2007 is for extension of contract period for another year. Admittedly,
the period of contract has not been extended and in a writ petition challenging the order of termination of contract dated 5.6.2007, this Court
cannot grant a direction to the second respondent to extend the period of contract.
Mr. S.Doraisamy, learned Counsel appearing for the petitioner would submit that as per Clause 48 of the contract entered into between the
parties, which is as follows:
Clause 48 - Existing provision under this clause shall be replaced by the following:
This Agreement will be valid for a period of one year effective from 01.10.2005, with automatic renewal for one more year. However, in the event
that the Company wishes to appoint a Dealer in respect of the concerned Retail Outlet, the Company shall notify the Contractor accordingly and
this Agreement will be terminated immediately upon receipt of the notification, as aforesaid, by the Contractor. Without prejudice to the aforesaid,
this Agreement may be terminated at the option of either party by giving at least one months notice in writing to the other party, without assigning
any reason whatsoever. In case of breach of this Agreement, the Company reserves the right to terminate this Agreement forthwith. Unless
otherwise mentioned or renewed in writing this Agreement stands automatically terminated at the end of the agreement period. If any information
given by the M&H Contractor in his application for appointment shall be found to be untrue or incorrect, in material respect, the Company
reserves the right to terminate this Agreement forthwith.
while it is true that the second respondent/Corporation has a right to terminate the existing contractors and appoint any other person, such
appointment shall be made only by way of a notification. In the present case, according to the learned Counsel for the petitioner, no such
notification has been issued, even though it is the case of the learned Counsel for the second respondent/Corporation that such notification was
issued in the year 2004 and the third respondent was appointed in the place of the petitioner. On fact, it may not be correct that such notification,
which is stated to have been issued in the year 2004, a copy of which has not been produced before this Court, can have binding effect on the
contract with the petitioner, which is of the year 2003 and is in subsistence till 2007.
The learned Counsel appearing for the second respondent/Corporation would submit that the agreement of contract contains an arbitration
clause for settlement of disputes between the parties. Clause 51 of the contract, by which the petitioner came to be appointed for rendering certain
services in the retail outlets, is as follows:
Any dispute or difference of any nature whatsoever or regarding any right, liability, act, omission on account of any of the parties hereto arising
out of or in relation to this Agreement or any interpretation of any clause or provision hereof shall be referred to the sole arbitration of the Head of
the Region, of the Company, or of some officer of the Company who may be nominated by the Head of the region. The M & H Contractor will
not be entitled to raise any objection to any such arbitrator on the ground that the arbitrator is an officer of the Company. In the event the arbitrator
the matter is originally referred to is transferred or vacates his office or is unable to act for any reason the Head of the Region as aforesaid at the
time of such transfer, vacating of office or inability to act, shall designate another person to act as an arbitrator in accordance with the terms of the
Agreement. Such person shall be entitled to proceed with the reference from the point at which it was left by his predecessor. It is also a term of
this Agreement that no person other than the Head of the Region or a person nominated by him/her shall act as sole arbitrator hereunder. The
award of the arbitrator so appointed shall be final, conclusive and binding on all parties to the Agreement, subject to the provisions of the
Arbitration & Conciliation Act, 1996 and the Rules made there under or any statutory modification or re-enactment thereof and for the time being
in force.
provides for appointment of Arbitrator of his choice by Director (Marketing) of the second respondent/Corporation, and the award passed by him
becomes final.
In view of the clause for arbitration, which is available in the contract, it is not possible for this Court to accept the contention of the learned
Counsel for the petitioner that the petitioner''s term of contract should be directed to be extended for the reason that already interim order has been
granted while notice of motion was ordered in this case, by which the petitioner continues to render services.
Under these circumstances, the writ petition stands disposed of with a direction to the Director (Marketing) of the second
respondent/Corporation to take necessary steps to appoint an Arbitrator as per Clause 51 of the Contract. Such appointment of Arbitrator shall
be completed by the Director (Marketing) within three weeks from the date of receipt of a copy of this order. On such appointment of Arbitrator,
as submitted by the learned Counsel appearing for the petitioner, the petitioner would co-operate fully with the arbitration and the Arbitrator shall
complete the proceedings, after giving opportunity to the parties, including the third respondent herein, and pass the award, expeditiously, in any
event within a period of eight weeks therefrom.
Mr. S.Doraisamy, learned Counsel for the petitioner would submit that the petitioner has invested huge amount for the purpose of rendering his
services as per the terms of the contract and he has to remove various materials belonging to him from the place of contract. Since it is admitted
that by virtue of interim order the petitioner is continuing the contract and he requires some time for the purpose of removal of various materials,
subject to the condition, as submitted by the learned Counsel for the petitioner, that the petitioner shall remove all materials belonging to him, which
are in the place of contract, the petitioner is permitted to remove the said materials within three weeks from the date of receipt of a copy of this
order and during the said period of three weeks, the respondents shall not interfere. It is made clear that within the said period of three weeks, the
petitioner shall hand over the key to the second respondent.
In the result, this writ petition is disposed of. No costs. Consequently, M.P.Nos. 1 and 2 of 2007 and 1 of 2008 are closed.