Tax Management India.Com

Home Page

Home List
← Previous Next →

1996 (9) TMI 631

C.A. 2679 OF 1992 - Dated:- 17-9-1996 - PUNCHHI, M.M. AND MANOHAR SUJATA V. (J) For The Appellant : Sudhir Gupta, Shahil Rezvi and Aruneshwar Gupta, Advs For The Respondents : H.N. Salve and S.V. Deshpande, Advs. ORDER 1. The appellant, Rajasthan Cooperative Dairy Federation Ltd., issued an advertisement inviting applications for selling agents for its various products for the territories of Rajasthan, Punjab, Haryana, Himachal Pradesh and Delhi, on or about 19th of November, 1988. Seventy applications were received by the appellant. Ultimately, on 1st June, 1990, a letter of Intent was issued by the appellant in favour of respondent No. 1 for appointing respondent No. 1 as the selling agent of the appellant for marketing of Saras Brand Dai .....

X X X X X X X

Full Text of the Document

X X X X X X X

wrongly indicated that it was also the sole selling agent for Polypack Milk. The appellant protested against wrong statement in the advertisement. 3. The contract was not signed on 12th of June, 1990. The respondent did not attend on that date and asked for some time. The irrevocable bank guarantee for ₹ 15 lacs was also not submitted by respondent No. 1. The appellant, by its letter of 16th July, 1990, cancelled the Letter of Intent. In the letter, the appellant pointed out that the Letter of Intent issued to respondent No. 1 was conditional on his fulfilling certain obligation as a condition precedent to entering into a contract. The conditions, inter alia, were, (1) submission of an irrevocable bank guarantee of ₹ 15 lacs by .....

X X X X X X X

Full Text of the Document

X X X X X X X

he Letter of Intent. An Appeal filed by the appellant before the Division Bench of the High Court also failed. Hence the appellant has come before this Court by way of present appeal. 5. In its letter of 16th of July, 1990 cancelling the Letter of Intent issued in favour of respondent No. 1, the appellant had given several reasons for cancelling the Letter of Intent. Respondent No. 1 had not submitted to the appellant its profit and loss account and balance-sheet for the previous year as requested by the appellant. Respondent No. 1 had wrongly held itself out as the sole selling agent of the appellant. These are clearly circumstances which are relevant to the cancellation of the Letter of Intent. Also the Letter of Intent clearly set out th .....

X X X X X X X

Full Text of the Document

X X X X X X X

contract with respondent No. 1 we fail to see how thee extraneous circumstances can make the decision mala fide. 7. The High Court was also not right in importing the doctrine of audi alteram partem in these circumstances. If the conduct of respondent No. 1 was such that it did not inspire any confidence in the appellant, the appellant was entitled to decline entering into any legal relationship with respondent No. 1 as its selling agent. The Letter of Intent merely expressed an intention to enter into a contact. If the conditions stipulated in the Latter of Intent were not fulfilled by respondent No. 1 and if the conduct of respondent No. 1 was otherwise not such as would generate confidence, the appellant was entitled to withdraw the Let .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →