CLASSIC MOTORS LIMITED Vs. MARUTI UDYOG LIMITED

JUDGEMENT

(1.) In the suit as well as in this application plaintiff hasraised questions of far reaching public importance, concerning the rights of thefranchisor to terminate the franchise/dealership agreement entered into with thefranchisee "without assigning any cause". Beside challenging the legality of anysuch clause or term contained in the standardised form of contract, conferring rightto take such action.

(2.) In order to appreciate the challenge made by the plaintiff to the right ofthe defendant (hereinafter called the frenchiser) regarding terminating ofplaintiff's contract of dealership, we have to first muster facts of this case.

(3.) In 1985, M/s. Maruti Udyog Ltd. (In short MUL) published anadvertisement in various newspapers, inviting application for dealership for thevehicles manufactured by it in various aties of India including Union Territory ofDelhi. The criteria for selection and for the appointment of dealer was; (i) theability of the dealer to provide standard of customer service which is comparableto that available in developed countries; (ii) to maximise the market for Marutiand to project and develop the highest possible image of the company; (iii) Wherenecessary, dealer was required to make suitable arrangements for the sale andservice of vehicles in towns other than their head quarters but included within theirterritorial jurisdiction in a manner acceptable to MUL; (iv) MUL was to provideto the dealer with designs for the show room, layout and equipment andspecifications for the workshop; (v) minimum spare parts stocks to becarried aswell as; (vi) facilities for training of servicing engineers and mechanics.