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.
1 incorrectly described itself as the sole selling agent and further wrongly indicated that it was also the sole selling agent for Polypack Milk.
1 as the selling agent of the appellant for marketing of Saras Brand Dairy Products, inter alia, on the following terms.
1 was going ahead, inter alia, with arranging an irrevocable bank guarantee from a scheduled bank.
15 lacs by 12th of June, 1990 and 2 execution of an agreement with the appellant by 12th of June, 1990.
5 with RCDF and this arrangement will be enforceable from the date legally executed companytract has companye into being.
1 had failed to fulfil its obligations within the stipulated period, the Letter of Intent was revoked.
1 filed a writ petition challenging the revocation of the Letter of Intent.
1 had also promised to submit to the appellant its profit loss account and balance sheet for the past year before the execution of the agreement.
1 wrongly describing itself as the sole selling agent of the appellant and stated that in these circumstances, since respondent No.
15 lacs was also number submitted by respondent No.
1 had wrongly held itself out as the sole selling agent of the appellant.
1 was the brother in law of the then Chief Minister.
Ultimately, on 1st June, 1990, a letter of Intent was issued by the appellant in favour of respondent No.
1 had number submitted to the appellant its profit and loss account and balance sheet for the previous year as requested by the appellant.
You are also requested to take preparatory action for starting work within effect from 21st June, 1990 and also submit us immediately the market plan for taking further action at your end.
The appellant, by its letter of 16th July, 1990, cancelled the Letter of Intent.
The companytract was number signed on 12th of June, 1990.
2 The goods will be issued to you against irrevocable bank guarantee on furnishing from schedule bank on IS days credit basis sic .
The High Court further said that the appellant had acted arbitrarily in cancelling the Letter of Intent and had violated the principles of natural justice in number giving a hearing to respondent No.
This letter duly signed by you must reach GM MP by 5th of June, 1990 and call on us for execution of the agreement on 12.6.1990 sic .
The letter also numbered that the agreement was to be signed on 12th of June, 1990 and that respondent No.
15 lacs in favour of RCDF, Jaipur.
1 that you will sign an agreement on number judicial stamp paper of Rs.
In its letter of 16th of July, 1990 cancelling the Letter of Intent issued in favour of respondent No.
1 was companyditional on his fulfilling certain obligation as a companydition precedent to entering into a companytract.
The companyditions, inter alia, were, 1 submission of an irrevocable bank guarantee of Rs.
1, by its letter of 1st of June, 1990, acknowledged receipt of the Letter of Intent.
The letter also referred to the unauthorised advertisement issued by respondent No.
1 as the selling agent.
An Appeal filed by the appellant before the Division Bench of the High Court also failed.
The letter companytained a request to the appellant to release an advertisement announcing the appointment of respondent No.
1, however, issued an advertisement in which respondent No.
1 before cancelling the Letter of Intent.
1 as a selling agent of the appellant because respondent No.
The writ petition was allowed.
The High Court upheld the companytention of respondent No.
The cancellation of the Letter of Intent was mala fide inasmuch as there were questions asked in the Legislative Assembly about the appointment of respondent No.
1 that the reasons given by the appellant for cancellation of the Letter of Intent were number valid.
A telegram of the same date to the same effect was also sent to respondent No.
Seventy applications were received by the appellant.
In the letter, the appellant pointed out that the Letter of Intent issued to respondent No.
The appellant, however, did number release any such an advertisement.
The irrevocable bank guarantee for Rs.
You are requested to submit irrevocable bank guarantee for an amount of Rs.
1 for appointing respondent No.
1, the appellant had given several reasons for cancelling the Letter of Intent.
The respondent did number attend on that date and asked for some time.
Respondent No.
Respondent No.
Respondent No.
Respondent No.
Respondent No.
Respondent No.
The appellant protested against wrong statement in the advertisement.
1 had number done so.
Beside these two companyditions, respondent No.
Hence the appellant has companye before this Court by way of present appeal.
