RADHIKA AUTOMOBILES P LTD Vs. MARUTI UDYOG LTD

JUDGEMENT

(1.) The facts of the case are briefly stated as unden:- The petitioner, M/s Radhika Automobiles Limited was a dealer of automobiles manufactured by the respondent No. 1, Maruti Udyog Limited (in short the 'MUL'). The petitioner had been appointed as a dealer by MUL for sale, service and repair of the vehicles manufactured by MUL for Gwalior region and Bareilly in the year 1986. The respondent No. 2 is State Bank of India, a nationalized bank, which extends credit facilities and bank guarantees to the petitioner. The petitioner is a company registered under the Companies Act, 1956 and having its registered office at B-38 Greater Kailash, New Delhi. The petitioner's case is that it had invested crores of rupees in setting up the showrooms and workshop situated at Agra-Bombay Road at Gwalior and Maharajpura as per the specifications made in Maruti Corporate Identity Manual. The petitioner had recruited and trained 70 personnel in its office, show rooms and workshops as per the guidelines issued by the MUL from time to time. The petitioner had raised loans by way of overdraft facilities from the respondent No. 2 and other financial institutions to fulfil its obligations laid down by MUL and. provided bank guarantees in the sum of Rs. 100 lacs as per the performa supplied by MUL towards the sale of all models of Maruti vehicles. The Petitioner contends that it is the policy of the MUL not to grant permission for opening an outlet within a 5 kms radius of an existing outlet. However, the MUL granted a new dealership to M/s Prem Motors at Gwalior adjacent to the petitioner's showroom in spite of the petitioner's protests and contrary to the assurances of the respondent No. 1. The petitioner was continuously discriminated against and suffered huge financial losses. MUL has not released the funds of crores of rupees to the petitioner. Attempts to settle the pending claims have not fructified and the MUL accordingly wrote a letter dated 17th April, 2002 to the SBI, invoking the bank guarantee of Rs. 1 crore furnished by the petitioner. Consequently the SBI issued a notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Ordinance, 2002 for an alleged outstanding sum of Rs. 76,28,805/- to the petitioners as well as the guarantors. The petitioner's contention is that the MUL is fully responsible for the loss to the tune of Rs. 3 crores approximately suffered by it on this account. Even the dealer reserve fund amounting to Rs. 22,84,362 has not been released payable upon the termination of the dealership agreement. The said amounts have not been released to the petitioner in spite of the repeated requests. The petitioner has further averred that it has even ready and willing for resolution of the disputes by way of arbitration under clause 57 of the dealership agreement. In the aforesaid circumstances, the petitioner sent a legal notice dated 26th May, 2003 calling upon the MUL to release all the amounts payable by it to the petitioner with interest @ 24%. However, the MUL failed to release the said amounts to the petitioner. Thus the petitioner's case is that the said dealership was illegally, arbitrarily and unilaterally terminated by the MUL by Notice of Termination dated 9th September, 2002 in terms of Clause 45.2 of the Dealership Agreement dated 25th June, 1996 without disclosing any reasons whatsoever.

(2.) Accordingly the petitioner has approached this Court by filing this petition under Section 9 of the Arbitration and Conciliation Act, 1996(hereinafter referred to as the 'Act') with the following prayers:- "

(3.) As far as the prayers a to c are concerned, the petitioner seeks the return, of money which is disputed by respondent No.1 and cannot there fore be granted as an interim measure under Section 9 of the Act. As far as the prayer (e) qua respondent No. 2, State Bank of India is concerned, it is not even a party to the Dealership Agreement between the petitioner and the respondent No. 1. Prayer (e) obviously cannot be granted as no mandatory orders can be passed directing respondent No. 2 to give a bank guarantee to the petitioner. It is not stated anywhere in the petition as to how the respondent No. 2 Bank is liable to give a bank guarantee of Rs. 20 crores to the petitioner. Consequently since no nexus has been shown in so far as the dealership agreement between the petitioner and the respondent No. 2 is concerned, no cause is made out to proceed against the respondent No. 2. Since none of the five prayers are sustainable, the petition is accordingly dismissed with no order as to costs.