LexINDIAN OIL CORPORATION LTD. versus NILOFER SIDDIQUI & ORS.
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A B [2015] 13 S.C.R. 1196 INDIAN OIL CORPORATION LTD. v. NILOFER SIDDIQUI & ORS. (Civil Appeal No. 7266 of 2009) DECEMBER 01, 2015 [V. GOPALA GOWDAAND AMITAVA ROY, JJ.] Contract - Distribution of gas agency by appellant- C Corporation - To respondent Nos. 2 and 3 jointly - As per condition No. 2 of the 'Letter of allotment' the appointment was to be subject to the, conditions contained in 'standard agreement', which was to be provided later-As per condition No. 8 of Jetter of allotment, Corporation was at liberty to D terminate the distributorship without assigning any reason - Copy of 'Standard agreement' never supplied to the respondents - Respondent No .. 2 transferred his share in favour of his wife (respondent No. 1) - Termination of the distributorship by the Corporation on the ground of breach of E terms and conditions of 'Standard agreement' - Respondent No. 1 filed title suit seeking declaration that the termination was illegal, arbitrary and unjustified - Suit dismissed by trial court - First appellate court upheld the order of trial court - In second appeal, the High Court setting aside the judgments F of courts below held the termination of distributorship as illegal, arbitrary and unjustified and directed for restoration of distributorship - On appeal, held: As per s. 7 of Contract Act acceptance must be absolute - The Standard agreement since not supplied to al/ottees, cannot be said to be G concluded contract - It was legally not binding upon the allottees as the same was never executed between the allottees and the Corporation - Therefore, question of violation of terms and conditions thereof does not arise - H The Corporation being Government of India undertaking, is 1196 INDIAN OIL CORPORATION LTD. v. NILOFER SIDDIQUI 1197 bound to act fairly and reasonably- Its conduct is subject to A the scrutiny on the touchstone of Art. 14 of the Constitution- Condition No. 8 of allotment letter providing for unilateral termination without assigning any reason is liable to be read down in the light of Art. 14- Direction to Corporation to restore the distributorship- In the facts of the case, cost of Rs. 1 lakh B to be paid to respondent Nos. 1 and 2- Contract Act, 1872- s. 7 - Constitution of India, 1950 - Art. 14 - Public Distribution. Specific Relief Act, 1963- s.14(1 )(c)-App/icability of- C Termination of distributorship of gas agency - The court holding the termination as illegal restored the distributorship- Distributorship whether restorable in view of provisions u/s. 14(1)(c)- Held: Provision u/s.14(1)(c) not applicable to the facts of the case because neither the contract was D revocable nor had become void for any reason. Dismissing the appeal, the Court HELD: 1.1 Respondent Nos. 2 and 3 got the E partnership firm registered as per the terms and conditions of letter of allotment and at least twice requested the appellant-Corporation to send the Company's standard agreement for signature, but the Corporation failed to send it to them. Hence, it can be F inferred from the pleadings and evidence on record that the Company's standard agreement was never executed by them. Both the respondent Nos. 2 and 3 started their business without the said standard agreement being signed by both of them. The partnership business G continued to be regulated by the terms and conditions of the letter of allotment issued by the Corporation. · Hence, the claim of the Corporation that both the respondent Nos. 2 and 3 were aware of the said standard agreement is unsusceptible in law. There is nothing on H 1198 SUPREME COURT REPORTS [2015) 13 S.C.R. A record to show that both the respondent Nos. 2 and 3 had any knowledge or had ever agreed to the terms of the said standard agreement. The agreement which is not executed by the parties cannot be legally made enforceable against them. Therefore, the High Court has B rightly held that the standard agreement cannot be said to be legally binding upon respondent Nos. 2 and 3, as the same has never been executed between the allottes and the Corporation. [Para 27] (1214-C-F] C Her Highness Maharani Shanti Devi P Gaikwad v. Savjibhai Haribhai Patel & Ors. (2001) 5 SCC 101 : 2001 (2) SCR 590 - referred to. 1.2 Section 7 of the Contract Act, 1872, specifically o provides that acceptance must be absolute. Since the standard agreement was never supplied to both respondent Nos. 2 and 3 and the said standard
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