JUDGMENT
C.L .Chaudhry, J.
(1) By this petition under Section 20 of the Arbitration Act the petitioners seek direction to respondent No. 1 for filing the arbitration agreement and for reference of the disputes in terms of the arbitration clause The petition proceeds on the allegations that petitioner No. 1 Messrs Competent Motors is a registered partnership firm of which Shri Narender Anand petitioner No. 2, is a registers partner. Petitioner No. 2 has filed the present petition on behalf of petitioner No.1 as its partner. Respondent No I is Maruti Udyog Ltd. and Shri Raj Chopra is respondent No. 2 in this suit. It is alleged that petitioner No. 2 and respondent No. 2 have been carrying on business under the name and style of Competent Builders by virtue of partnership deed dated 20/02/1978. A dealership agreement dated 1/09/1983 was entered into between respondent No. 1 Maruti UdyogLtd. on the one side and the petitioners and respondent No. 2 on the otherside’ by which the petitioner No. 1 was appointed a dealer of respondent No.’ I for the Union Territory of Delhi. Originally, petitioner No. 1 had only one show-room at Competent House, Connaught Place, New Delhi but with effect from 8/12/1985 another showroom was opened by petitioner No. 1 at 5, Bhikaji Cama Place, R.K. Puram, New Delhi (hereinafter called new show-room), by spending huge amount, and since the inception of the new show-room, the petitioners have been operating from both theplaces. It is further claimed that the new show-room was inaugurated by Shri R.C. Bhargava, Managing Director of respondent No. 1 in the presence of number of others including officers of respondent No. 1 It is stated in the petition that on 17/01/1987, a letter was received by respondent No. 2for and on behalf of petitioner No. 1 and from respondent No. l.wberinitwas mentioned that a separate seniority list of customers was being drawn for each of the show-rooms and therefore inters seniority of customers was not being adhered to and the petitioner No. 1 was advised to discontinue the collection of payments at the new show-room with immediate effect. This letter was followed by another letter dated 22/01/1987. Respondent No. 2 intimated the receipt of the said letter to the petitioner No. 2 by letter dated 29/01/1987. It is further stated that immediately on receipt of letter, petitioner No. 2 on 30.1.1987 replied to the Regional Manager of respondent No. 1 that the new showroom was commissioned on 8.12.1985with the approval of respondent No. 1 and inauguration was performed by the Managing Director of Marauti Udyog Ltd with a view to provide Convenient service to the customers of South Delhi. The collection of payments made there is with the aim of service to the customers. Discontinuance of collection of payment on the new showroom would cause inconvenience to the customers of South Delhi. It was further pointed out that the Competent Motors were strictly adhering to the seniority of date of pay-ment supply of vehicles to the customers and a sum of Rs. 2.5crores was deposited on 22.1.1987. The petition further proceeds that certain disputes had arisen between the partners of M/S Competent Motors, i.e. between petitioner No. 2 and respondent No. 2, which resulted in the modification of the supplementary agreement of partnership dated 19.7,83 by a supple-minted modification dated 30.9.86 with effect from 1.10.1986.
(2) It is further stated that the letters dated 17.1.87 and 22.1.87 were got issued by respondent No. 2 from respondent No. 1 in order to bar petitioner No. 2. The action of respondent No. 1 is nullified in calling upon the Competent Motors to stop the collection of payments at the new show-room. Respondent No. 1 in terms of the agreement has no right to direct the petitioner to discontinue the collection on the second showroom. The entire action of respondent No. 1 and respondent No. 2 in issuing letters of17.1.87 and 22.1-87 are illegal, without jurisdiction and contrary to the terms of agreement and they can be restrained from enforcing the letters dated 17thJanuary, 87 and 22nd January, 1987. The p petitioner claims that the disputes have arisen between the petitioner and respondent, which are to the followingeffect. Tt is further stated that these disputes may be referred in terms of the arbitration clause contained in the agreement between the petitioner and respondent No. 1.
(A)As to whether the respondents have any right, title or interest to direct the petitioner No. 1 to discontinue collection of pay-ment at Bhikaji Cama Place showroom;
(B)Direct the petitioners to release an advertisement in local newspapers informing customers with regard to the discontinuation of collection of payment at Bhikaji Cama Place show-room;
(C)As to whether the Respondent No. 1 is not estopped from giving such directions ‘in view of the inauguration of showroom in Bhikaji Cama Place, by their own Managing Director Shri R.C. Bhargava.
It is further claimed that no complaint has ever been received by respondent No. that the seniority list is not being maintained properly. Along with this petition, the petitioners have filed an application under Section 41 read with Schedule 11, being Ia 697/87 which I propose to decide by this order.
(3) It is stated in the application that the second showroom was commissioned on 8.12.85 with the approval of respondent No. 1 with a view to provide convenient service to the customers of south Delhi. Therefore,discontinuance of collection of payments at the new showroom would cause inconvenience to the customers of the South Delhi. The respondents have no right to give any direction as contained in the letter till such disputes are decided by the Arbitrator in terms of the arbitration clause. By this application, the petitioner seeks the following relief :- “ITis, therefore, prayed that the pending disposal of the aforesaid petition under Section 20 of the Arbitration Act, operation of the letters No. Mul : RM(N) : 280 dated 17.1.1987 and No. MUL:RM(N) : 280 dated 22.1.87, be stayed and respondent No. 1 be restrained from giving advertisement to enforce the letters referred to above.”
(4) The respondents are contesting the claim of the petitioner. They have filed the written statement as well as reply to the application. The case of the respondent is that the petition has been filed by Competent Motors at 5,Bhikaji Cama Place, who were never appointed dealers by respondent No. 1.Dealership agreement was entered into by the respondent company with Competent Motors at 101, Competent House, F-14, Middle Circle Connaught Place, New Delhi. Petitioner No I is thus not competent to file the present petition as it has no locus standi to file the sar.ie. It is further stated that the frame of the petition is not maintainable as one of the partners of Competent Motors has filed this petition on behall’ of the firm and a single partner cannot seek reference to arbitration. The petition discloses no cause of action and it is misconceived. It is further stated that a dealership is nota right which is perpetual in nature and it continues only as long as the manufacturer wishes the dealer to continue. No injunction can be sought by a dealer against the principal. On merits, it is stated that as per Clause 12 of the agreement, it was agreed that the dealer would operate with facilities having been provided at 101, Competent House, F-14, Middle Circle,Connaught Place, New Delhi and the operation of the dealership would only be from that place and that a showroom would also be there. Reliance is also placed on clause 6(a) of the agreement wherein it is provided that the dealer is bound to promote, develop and maintain sales and service of parts and the dealer has thus to follow the Sales Policies of the Respondent Company with a view to achieving the purpose for which the dealership has been granted.It further states that M/s Competent Motors wanted to open a second show-room and the same was inaugurated by the Managing Director of the respondent company and the respondent company agreed to the new show-room being opened but did not permit Competent Motors to do all the functions of dealership from the new showroom. It is further stated that the partners of Competent Motors without the knowledge and consent of respondent No 1 entered into the agreement to divide the business of partnership and this violates clauses 5,12 and 30 between the petitioner and respondent company. It is further stated that the petitioner has not brought out the material fact that the respondent company was compelled to discontinue collection of payment because it failed to ensure release of vehicles to customers based on combined list of seniority on the date payment by the other showroom which led to the delivery of vehicles in breach of the seniority of the date of payments. It was further denied that the petitioner was authorised by the respondent company to operate from both the places i.e. Connaught Place and the new showroom. The case of the respondent company is that the new show-room was only for the purpose of display of vehicles of the respondent company. It is further stated that despite various demands made by the respondent for adhering to the seniority based on the dates of payment,the petitioner has ignored the same. This breach of dealership agreement was committed due to the fact that the two partners, inter se, did not maintain the combined list of seniority because of their bifurcation of business. They maintained two separate lists of seniority without the written permission of the respondent company and thus violated the sales policy and principles of the dealership agreement. It is further stated that the complaints were received in the office of the respondent company that the seniority list was not being maintained properly which compelled the respondent company to take action as it did take. It is claimed that the respondent company has every right to direct the dealer to discontinue collection at the new show-room and also have the authority and right and to direct release of the advertisement in the local newspaper informing the general public and prospective customers with regard to discontinuation of the collection of payment at the new showroom. It is denied that any dispute has arisen between the Competent Motors Middle Circle Connaught Place and the respondent company which can be referred for arbitration.
(5) I have heard the learned counsel for the parties and gone through the record of the case. The contention of the respondent company that the petition is not maintainable on behalf of the Competent Motors through petitioner No. 2, prima facie, is not tenable. M/s Competent Motors is comprised of two partners. It is the case of petitioner No. 2 that respondent No. 2, the other partner of petitioner No 1 is colluding with respondent No 1for ulterior purposes. This is not the case where there are a number of partners and the decision of the majority partners is to prevail. Both the partner are holding equal shares. In my opinion, one of the partners cannot defeater destory the claim of other partners. Prima facie, I am of the opinion that the petition can be maintained by petitioner No. 2 in order to challenge the actions of respondent No. 1.
(6) The other contention of the counsel for respondent No 1 that there has been bifurcation of the assets and liabilities of the firm between petitioner No. 2 and respondent No. 2 and this arrangement violates Clause 5 of the Dealership Agreement, is also untenable. The respondent company has not taken the objection on the basis of violation of Clause 5 against petitionerNo. 1. This is not the subject matter of this petition. The petitioners are challenging and assailing the legality and validity of two letters dated 17.1.87and 22.1.1987 by which the respondent company directed them to comply with certain directions mentioned therein.
(7) The main contention of the respondent company is that the company is empowered to give any direction to the dealer for making arrangements for sale and service of products at such locations and in such numbers as the company may from time to time require. In this connection, reliance is placed on Clause 12 of the Dealership Agreement, which reads as under :- “THE dealer shall make arrangements for sale and servicing or products at such locations and in such numbers as the company may from time to time require. These arrangements may be in the nature of branches or sub-dealers established on such terms and conditions as the company approve in writing, prior to the setting up of such arrangements.”
(8) It is contended on behalf of the company that by letter dated 1 4/10/1986, petitioner No 1 was informed that delivery of vehicle was being made in an indiscriminate manner totally violating the instructions and seniority of payment. The petitioner was reminded by letter dated 2 1/10/1986, wherein again complaint was made that certain Vehicles had been allocated by petitioner No 1 to customers who paid much later than the customers who actually deserved those vehicles. This was followed by letter dated 17/01/1987 staling that terms of letter dated 14th and 2 1/10/1986 had not been complied with and the customers were being subjected to enormous inconvenience and harassment and one of the main causes was the simultaneous collection from the customers at Connaught Place and the new showroom. Petitioner No 1 was advised that consolidated list of payments collected at Connaught Place and the new showroom be prepared indicating model-wise and color wise seniority of date of payment and the same be submitted within three days. Then by letter dated 2 2/01/1987, the petitioner was advised to discontinue collection of payment at the new showroom and release the advertisement in the localnewspaper. According io the respondent company, the directions were issued as the petitioners were not maintaining a combined list of seniority of payment. The case of the petitioner is that there has been no violation of any seniority of date of payment and vehicles were delivered strictly inaccordance with the seniority of date of payment. The new showroom was opened with the approval of respondent No 1 for collection of payment and since its inception payments were being received at the new showroom anda separate Code No. 0801-2 was supplied by respondent No. 1. In the reply on behalf of petitioner No 1 dated 30.1.87, it was stated that the new showroom was commissioned on 8/12/1985 with the approval of respondent No 1 and, therefore, discontinuation of collection of payment atthe new showroom would cause inconvenience to the customers of South Delhi.It was further explained that there had been some deviation from the normal vehicle allocation policy but that was due to customers request during the month of December, 1986 that they would take delivery of 1987 model and hence customers who made payment late got the delivery of vehicles earlier.In sum and substance, the petitioner’s case is that there has been no violation at all. Respondent No 1 has admitted that the respondent company did not object to the new showroom being opened but the case of the respondent company is that they did not permit the petitioners to have all the functions of dealership from the premises and the new showroom was only for the purpose of display of vehicles of the respondent. These are serious disputes which need determination. In these proceedings, I am not competent to decide the disputes. However, prima facie I am of the view that the directions given by the respondent company in the letter dated 17/01/1987and 22/01/1987 were not justified. The new showroom was opened on 9th December, 198 5 and it appears that since then payments were being received at the new showroom. No specific complaint was brought to the notice of the petitioner regarding violation of seniority of date of payment.I do not subscribe to the plea raised by respondent No 1 that the new showroom was permitted to be opened only for the delivery perpose. The petitioner would not have spent such a huge amount for the opening of the new showroom simply for delivery of vehicles. It was also contended by respondent No 1 that the petitioner could have only one showroom. I have perused the agreement but I do not find any such condition by which the dealer was obliged to have only one showroom for collection of payments.The petitioners have been contesting the allegations of respondent No 1regarding voilation of seniority of date of payments. Under clause 12 of the Dealership Agreement respondent No 1 is empowered to impart instructions to the dealer for making arrangements for sale and service of products on such locations and such manner as the company may from time to timerequire. This does not mean that they can ask the dealer to wind up one of the places of business and confine the business to only one place. Such instructions are contrary to the promotion and development of the business.Clause 12 envisages such instructions which are necessary and essential topromote, develop and maintain the business. Under this clause the dealer can be asked to open more showrooms but not the vice versa. Prima facie,I am of the view that the instructions given by respondent No 1 directing the petitioner to discontinue collection of payments at the new showroom are not covered under clause 12 of the Dealership Agreement. The new showrooms in existence since 8/12/1985 and the payments are received at the new showroom. Discontinuation of collection at the new showroom may cause irreparable injury to the petitioner. Balance of convenience is also infamous of the petitioner, and maintaining status quo. In the result, the application is allowed and the injunction granted on 4/02/1987 is confirmed till the disposal of this petition. This is, however, subject to the condition that petitioner No 1 will follow the strict order of seniority of date of payment for supply of cars.