SHAKTI LPG LTD Vs. KERALA STATE CONSUMER FEDERATION

JUDGEMENT

(1.) The appellant-petitioner-plaintiff filed the appeal against the decree and order dated 6.3.2002 passed in I.A.No. 1283 of 2001 in O.S.No. 257 of 2001 in dismissing the petition filed by the appellant-petitioner under Order 39 Rule 1 r/w Section 151 C.P.C praying to grant temporary injunction against the 1st respondent herein from encashing the bank guarantee furnished by the appellant-petitioner.

(2.) The brief facts leading to the filing of the appeal are as follows: The appellant-plaintiff filed O.S.No. 257 of 2001 on the file of the III Additional Chief Judge, City Civil Court, Hyderabad against the respondents-defendants praying to declare the agreement dated 27.2.1998 and the supplemental agreement dated 15.5.1998 as unconscionable, null and void and being unilateral, not binding on the plaintiff and the 1st defendant is not entitled to encash the demand drafts issued by defendants 2 and 3 for Rs. 6.66 crores and consequently for mandatory injunction directing the 1st defendant to return the demand drafts to the bank and for damages and for other allied reliefs.

(3.) The plaintiff contended that the 1st defendant called tenders for the supply of LPG cylinders in the Kerala state and the plaintiff Company was one of the bidders to the tenders called for. In pursuance of the discussions held, the plaintiff Company constrained to supply LPG in cylinders on par with the rate charged by the Government Companies, which is about Rs. 120/- per cylinder, less than the actual price charged by the plaintiff Company in the general market. The plaintiff Company represented by its Chairman signed on number of papers including the agreement dated 27.2.1998 and the supplemental agreement dated 15.5.1998. The 1st defendant promised to offer business of One lakh connections in nine districts of Kerala. As per the terms of the agreement, there would be one time payment for each consumer to the plaintiff Company in a sum of Rs. 5,750/- which is non refundable, for which the Company had to supply one Regulator, two cylinders to each consumer and supply the refill at subsidized rates. For each new connection, the defendant was entitled to a sum of Rs. 250/- towards commission and Rs. 10/- for each refill of 12Kgs. The 1st defendant, as a distributor, procured 22,000 consumers on different dates and they paid the amount at Rs. 5,750/- each. The 1st defendant in a fiduciary capacity collected the amounts from the customers. The terms and conditions of the agreement dated 27.2.1998 and 15.5.1998 are unilateral and advantageous only to the 1st defendant. The 1st defendant had no stakes involved in any manner whatsoever. The clauses 6 and 7 incorporated in the agreement were due to fraud played by the 1st defendant inducing the plaintiff Company that he would provide one lakh connections to it. The 1st defendant with malafide intention began to distribute LPG in the name of Neethi gas and addresseda letter dated 28.2.2000 to the bankers, who are defendants 2 and 3, invoking bank guarantee without any right, contrary to the conditions and the plaintiff Company had instituted a suit in O.S.No. 953 of 2000. The 1st defendant with malafide intention and to make unlawful and illegal gains invoked the bank guarantee.