Himachal Pradesh High Court
Veena Gupta vs Indian Oil Corp. Ltd. & Anr on 29 May, 2024
Bench: Tarlok Singh Chauhan, Sushil Kukreja
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA.
Arb. Appeal No. 22 of 2022 .
Reserved on: 21.05.2024
Date of decision: 29.05.2024
Veena Gupta ...Appellant
Versus
Indian Oil Corp. Ltd. & Anr. ...Respondents
Coram
The Hon'ble Mr. Justice Tarlok Singh Chauhan, Judge. The Hon'ble Mr. Justice Sushil Kukreja, Judge.
Whether approved for reporting? No. For the Appellant: Mr. R. K. Bawa, Sr. Advocate with Mr. Nitin Thakur, Advocate.
For the Respondents: Mr. K. D. Sood, Sr. Advocate with Mr. Sanjeev Sood, Advocate, for respondent No. 1.
Mr. Shrawan Dogra, Sr. Advocate with Mr. Ajay Sipahiya and Mr. Tejasvi Dogra, Advocates, for respondent No. 2. Tarlok Singh Chauhan, Judge Aggrieved by the dismissal of the petition under Section 9 of the Arbitration and Conciliation Act, 1996 (for short the 'Act'), the appellant has filed the instant appeal under Section 37 of the Act.
2. The appellant filed an application under Section 9 of the Act, praying therein for the following substantive reliefs:-
"It is, therefore, most respectfully prayed that this petition may kindly be allowed and the respondent no. 1 may be ::: Downloaded on - 29/05/2024 20:31:55 :::CIS 2 directed to supply the petroleum products in the name of partnership concern i.e. M/s Jai Hind Filling Station, .
situated at Village Kumarhada, P.O. Dharampur, Tehsil Kasauli, District Solan (H.P.) consisting of both the partners.
And/or Further respondent no.1 may be restrained from supplying the petroleum products to respondent no.2 in the name of M/s Jai Hind Filling Station on his VAT no. TAN registration no., TIN no., Explosive License, Pollution, NOC/License, Calibration and Stamping License, personnel PAN Card, Bank Account showing him as a sole proprietor. And/or In the alternative a receiver may be appointed to take control of the aforesaid M/s Jai Hind Filling Station to maintain proper and true accounts or respondent no.1 may be directed to take control and possession of the aforesaid M/s Jai Hind Filling Station, Situate at Village Kumarhada, P.O. Dharampur, Tehsil Kasauli, District Solan (H.P.), in the interest of justice."
3. It was vide Letter of Intent dated 16.01.2002, I.B.P. Co. Ltd., which subsequently merged with and was taken over by respondent No.1/Indian Oil Corporation Limited (hereinafter, 'IOCL') allotted a filling station in favour of respondent No.2.
Respondent No.2 decided to set up a petrol pump/filling station in partnership with the petitioner, with equal investment.
4. After aforesaid partnership, land was purchased to set up the petrol pump. Portion of land measuring 02-12 Bigha was purchased in the name of respondent No.2. Parcel of land ::: Downloaded on - 29/05/2024 20:31:55 :::CIS 3 measuring 01-11 Bigha was purchased in the name of the petitioner and the land so purchased by the petitioner and .
respondent No.2 comprised in Khasra Nos. 58 and 59 situate in Mauja Kumarhda was leased out to I.B.P. Co. Ltd. for an initial period of 15 years as per policy and guidelines of I.B.P. Co. Ltd.
5. The I.B.P. Co. Ltd. established its petrol pump on the aforesaid land by installing machinery and structure etc., and
6.
r to further appointed respondent No.2 as its authorized dealer on commission basis.
As per policy of the oil company, no reconstitution was permitted for the initial five years as such, retail outlet/petrol pump was to remain in the name of the allottee i.e. respondent No.2.
7. In the aforesaid background, petrol pump was set up and business was carried out in the name of M/s Jai Hind Filling Station. Petrol Pump became functional in the year 2006, vide Dealership Agreement dated 26.04.2013.
8. In the year 2012, after completion of five years, process to induct the petitioner as dealer of respondent No.1/IOCL was initiated. After completion of necessary codal formalities, Partnership Deed dated 25.4.2013 duly registered with Sub Registrar, Solan was executed inter se petitioner and ::: Downloaded on - 29/05/2024 20:31:55 :::CIS 4 respondent No.2 with respect to functioning of the petrol pump and to avoid any future disputes (Annexure P-1).
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9. As per terms and conditions of Partnership Deed, assets and liabilities of the firm were brought forward on their book value as per balance sheet on the date of execution of the Partnership Deed and assets and liabilities of erstwhile firm were taken over by the new firm i.e. partnership firm. As per Partnership Deed, petitioner is partner to the extent of 49% alongwith respondent No.2, who is partner to the extent of 51% in M/s Jai Hind Filling Station.
10. Partnership firm as detailed herein above, is also registered with Registrar of Firms. Aforesaid partnership firm thereafter executed a Dealership Agreement dated 26.4.2013 (Annexure P-2) with IOCL to run the retail outlet as working partners.
11. On execution of Dealership Agreement with the petitioner, respondent No.2 became authorized dealer of IOCL.
Though, as per Clauses 7 and 21 of Partnership Deed, there was paramount condition that both the partners will keep themselves personally and actively engaged in the running and functioning of the retail outlet/petrol pump but it appears that some disputes cropped up inter se them on account of maintaining the accounts.
::: Downloaded on - 29/05/2024 20:31:55 :::CIS 512. The respondent No.2 filed a Civil Suit No. 49/1 of 2014, titled Mohinder Nath v. Veena Gupta for declaration and .
permanent prohibitory injunction in the court of learned Civil Judge (Senior Division), Kasauli, however, the said suit was subsequently withdrawn by respondent No.2 by filing an application under Order XXIII, rule (3)(a)(b) CPC.
13. Since, the dispute had arisen inter se petitioner and respondent No.2, petitioner filed a petition under Section 11 of the Act, before this Court for appointment of an arbitrator invoking arbitration clause of Partnership Deed.
14. A learned Single Judge of this Court vide order dated 31.10.2014 passed in Arb. Case No. 59 of 2014 appointed Mr. G.D. Verma, learned Senior Advocate as an arbitrator to adjudicate the dispute inter se petitioner and respondent No.2, as per Partnership Deed.
15. The respondent No.2 also filed CWP No. 5417 of 2014 in this Court, praying therein for issuance of direction to respondent No. 1 to continue making supply of petroleum products in the name of retail outlet set up in the year 2005 by the said respondent on NH 22 at Dharampur on Shimla-Kalka Road, which was allotted to the said respondent on 16.1.2002. Alongwith aforesaid writ petition, respondent No.2 also filed an application seeking therein interim directions.
::: Downloaded on - 29/05/2024 20:31:55 :::CIS 616. The Court vide order dated 04.08.2014 directed that the supplies be made in the name of respondent No.2 in his .
individual name. However, subsequently, writ court having taken note of the pleadings adduced on record by the parties to lis, especially IOCL, as well as material documents such as Partnership Deed and Dealership Agreement, dismissed the writ petition vide order dated 29.11.2021.
17. In the aforesaid judgment, learned Single Judge of this Court specifically held that petitioner (respondent No.2 herein) cannot be permitted to run the petrol pump claiming that he is the sole proprietor thereof, especially in view of the fact that the status of the petrol pump is also subject matter of the arbitration proceedings. Till date challenge has not been laid to the aforesaid judgment passed by this Court as such, the same has attained finality.
18. After dismissal of the writ petition filed by respondent No.2, as detailed herein above, the petitioner vide letter dated 16.12.2021 and email dated 21.12.2021, addressed to respondent No.1 regarding the decision/judgment dated 29.11.2021 passed by this Court and requested for the supply petroleum products in the name of partnership firm consisting of both the partners and further to stop supply of petroleum products in the name of respondent No.2 alone.
::: Downloaded on - 29/05/2024 20:31:55 :::CIS 719. The respondent No.1/IOCL did not accede to the said request and rather gave an evasive reply dated 4.1.2022. The .
petitioner then served it a legal notice dated 22.3.2022, which was not replied to, as such, petitioner before resorting to arbitration proceedings in terms of Clause 62 of the Dealership Agreement, filed petition under Section 9 of the Act, praying therein for the reliefs, as have been reproduced herein above.
20. For completion of facts, it is necessary to note that prior to filing of the petition ((Arbitration Case No. 55 of 2022), the petitioner had filed an application under Section 9 of the Act before the learned District Judge, Solan seeking an interim relief qua the dispute inter se petitioner and respondent No.2 with regard to Partnership Deed, which was dismissed by learned Additional District Judge-I, Solan.
21. Thereafter an appeal under Section 39 of the Act i.e. Arb. Appeal No. 7 of 2014, was preferred by the petitioner, wherein respondent No. 1 was not made a party. However, this Court vide order dated 26.11.2014, (Annexure R-1/2), having taken note of the fact that respondent No.2 is running petrol pump in question, directed him to maintain the records and produce the same before the court, duly verified by a Chartered Accountant after every three months. Aforesaid order was never ::: Downloaded on - 29/05/2024 20:31:55 :::CIS 8 laid challenge in the superior court of law, as such, same has attained finality.
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22. Adverting to the merits of this case, it needs to be noticed that the learned Single Judge while deciding the application formulated the following question:-
'Whether present petition under S.9 of the Arbitration and Conciliation Act is maintainable on account of the fact that the dispute now sought to be raised by the petitioner in terms of Clause 62(a) of the Dealership Agreement already stands referred to learned Arbitrator appointed by this Court vide order dated 31.10.2014 and the parties have already subjected themselves to the jurisdiction of learned arbitrator by filing claims and counter- claims?"
23. Noticeably, the learned Single Judge proceeded on the premise that the dispute as now sought to be raised by the petitioner in terms of Clause 62(a) of the Dealership Agreement, in fact, already stands referred to the learned Arbitrator appointed by this Court vide its order dated 31.10.2014.
However, drawing of such inference/conclusion appears to be contrary to the record as wold be evident from the further discussion.
24. It needs to be noticed that as regards the petitioner and respondent No. 2, there was a "Partnership Deed" dated 25.04.2013 entered between the two (hereinafter referred to as ::: Downloaded on - 29/05/2024 20:31:55 :::CIS 9 the "Partnership Agreement"), wherein Clause 17 reads as under:-
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"17. That dispute, if any, between the partners interest, shall first be settled by the Arbitration in accordance with the Arbitration and Conciliation Act, 1996 then in force."
25. There was another agreement entered between the petitioner and both the respondents i.e. Tripartite Agreement, vide which the dispute, if any, between the parties to the agreement was to be referred to the sole arbitration of Director (Marketing), as would be evident from Clause-62(a) of the Dealership Agreement, reads as under:-
"62(a) Any dispute or difference of any nature whosoever, any claim, cross-claim, counter claim or set-off or regarding any right, liability, act, omission or account of any of the parties hereto arising out of or in relation to this agreement shall be referred to the sole arbitration of Director (Marketing)of Corporation who may either himself act as the Arbitrator or nominate some other officer of the Corporation to act as the Arbitrator. The Dealer will not be entitled to raise any objection to any such Arbitrator on the ground that the Arbitrator or an officer of the Corporation. "
26. There is no dispute that the petitioner filed an Arbitration Case No. 54 of 2014 and it shall be apt to reproduce the application in its entirety, which reads as under:-
::: Downloaded on - 29/05/2024 20:31:55 :::CIS 10"IN THE HON'BLE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA.
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Arbitration C. _____of 2014 Smt. Veena Gupta wife of Sh. Ashok Gupta resident of Sabathu road Dharampur, Tehsil Kasauli, Solan District Solan H.P Partner of M/S Jai Hind Filling Station, Village Kumarhada, N.H.22, Post office Dharampur, Distt. Solan H.P. Petitioner Versus
1.Sh. Mohinder Nath Sofat son of Late Sh. Bam Krishan z/o near Radha swami Ground, Village Anji, P.O. Barog, Tehsil and District Solan H.P
2. Indian Oil Corporation Limited through its Senior Divisional Retail Sales Manager, Shimla Divisional office S.D.A Complex Block -21 Kasaumpti, Shimla.
Respondents Application under section 11 (6) of the Arbitration and Conciliation Act for appointment of an arbitrator for adjudication of disputes relating to the partnership business, which is being carried out under name and style of M/S Jai Hind filling Station since the respondent no.1 is not allowing the petitioner to run the said business smoothly by not opting to open the bank account in the name of said Partnership firm and not getting the Tin Number, Sales Tax Number in the name of partnership Firm.
MAY IT PLEASE YOUR LORDSHIP
1. That the petitioner is a partner of m/s jai hind filing station to the tune 49%. share as, such she is dealer of the indian oil corporation ltd. and likewise the respondent no. 1 is also a partner of m/s jai hind filling station to the tune ::: Downloaded on - 29/05/2024 20:31:55 :::CIS 11 of 51% share as such he is also dealer of the indian oil corporation Ltd. The deed of partnership which is duly .
registered with the Sub- registrar Solan (H.P.) and further registered with Registrar of Firms H.P. The copy of the said Partnership Deed is annexed with this petition as Annexure P-1.
2. That as per clause 17 of the partnership deed which read as under:-
"That dispute, if any, between the partners interest, shall first be settle by the Arbitration in accordance with the Arbitration and Conciliation Act, 1996 then in force."
Since the dispute arose between the partners for the business of M/s Jai Hind Filling Station as the Respondent No.1 is not allowing the petitioner to run the said business smoothly by not opting to open the bank account in the name of said Parthership firm and not getting the Tin Number, Sales Tax Number in the name of partnership Firm and further the Respondent No. 1 is not transferring the assets of the partnership firm as per the partnership deed and which fact finds corroboration from the fact that the Respondent no.1 had filled a civil suit in the court of Ld. Civil Judge Senior Division, Kasauli titled as "Mohinder Nath Sofat versus Veena Gupta" for Declaration, permanent prohibitory injunction and Mandatory injunction under the Specific Relief Act, wherein the Petitioner has filed an Application under section 8 of Arbitration and Conciliation Act, 1996 for appointment of named Arbitrator. Later on, the said suit was withdrawn by the Respondent no.1 on 28- 06-2014 on the ground the Respondent no. 2 is necessary party to the suit while taking the liberty of the court to file a fresh suit on account of same cause of action. The copy of the Suit so filled by the Respondent no.1 is annexed with ::: Downloaded on - 29/05/2024 20:31:55 :::CIS 12 this petition as Annexure P-2, the copy of the application filled by the petitioner under section 8 of the Arbitration .
and conciliation Act, 1996 as Annexure P-3 and copy of the order passed by the Ld. Civil Judge Senior Division, Kasauli is annexed as Annexure P-4 for the kind perusal of this Honble Court. It is not out of place to mention here that the petitioner has also moved an application under section 9 of the Arbitration and conciliation Act, 1996 before the Id. District Judge, Solan for being the principal Civil Court and the said application of the petitioner for granting the interim measures was dismissed by the court of Ld. Additional District Judge, Solan to whom the said application was assigned for disposal vide order dated 19- 07-2014. The copy of the application so moved by the petitioner and copy of the order so passed by the Ld. Additional District Judge, Solan is annexed with this petition as Annexure P-5 and P-6.
3. That the petitioner has also filed an appeal against the order passed by the Ld. Additional District Judge, Solan which is now pending adjudication in this Hon'ble Court.
The copy of the Appeal so filled by the petitioner is also annexed with this petition as Annexure P-7.
4. That the Respondent No.1 has also filed a Civil writ Petition, bearing CWP No. 5417 of 2014 against the petitioner and Respondent no 2 which is also pending adjudication before this Hon'ble Court for 08-09-2014. The copy of the same is annexed with this petition as Annexure P-8.
5.That all the aforesaid facts show that a dispute has arisen between the partners of M/s Jai Hind Filing Station with respect to its business, regarding assets etc. as detailed in previous part of this Petition and as per the Partnership deed the same can only first be resolved by arbitration proceedings.
::: Downloaded on - 29/05/2024 20:31:55 :::CIS 136. That after entering into partnership deed the petitioner, Respondent No.1 and Respondent No. 2 had also entered .
into a Tripartite Dealership Agreement vide which the dispute if any between the parties to the agreement shall be referred to the sole arbitration of Director Marketing and in the present case the dispute is inter se between the partners as well as the Respondent no.2 because the respondent No. 2 have illegally and in connivance with Respondent no.1 has supplied the petroleum products to the respondent no. 1 as sole Proprietor that too after coming into force of the partnership deed and Dealership Agreement as such the present dispute arisen between the partners and the Respondent no.2 is liable to be referred to the Arbitration of the Director Marketing of the Indian Oil Corporation Ltd. and even if this Hon'ble Court comes to the conclusion that the dispute is inter se between the partners then some independent person may be appointed as arbitrator to settle, adjudicate the dispute between the petitioner and Respondent no.1. The copy of the Dealership agreement is annexed with this petition as Annexure P-9.
7. That it is not out of place to mention here that before entering into the present partnership deed there was oral partnership between the petitioner and the Respondent No.1 which fact finding corroboration in the present partnership deed, also.
8. That the petitioner vide her notice dated 21-07-2014 and corrigendum dated 26-07-2014 requested the respondent No.1 to concur with the appointment of sole arbitrator i.e. Director Marketing of Indian Oil corporation Ltd., Mumbai within 30 days from the receipt of said notice but, the respondent No.1 has failed to do the needful and even not replied to the notice and hence the present petition. The copy of the notice and copy of the corrigendum is annexed with this petition as Annexure P-10 and-P-11.
::: Downloaded on - 29/05/2024 20:31:55 :::CIS 149. The names and addresses of the parties to dispute are detailed hereunder:-
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CLAIMANT Smt. Veena Gupta wife of Sh. Ashok Gupta resident of Sabatha road Dharampur, Tehsil Kasauli, Solan District Solan H.P Partner of M/S Jai Hind Filling Station, Village Kumarhads, N.H.22, Post office Dharampur, Distt. Solan H.P. RESPONDENTS
1.Sh. Mohinder Nath Sofat son of Late Sh. Ram Krishan r/o near Radha swami Ground, Village Anji, P.O. Barog, Tehsil and District Solan H.P
2. Indian Oil Corporation Limited through its Senior Divisional Retail Sales Manager, Shimla Divisional office S.D.A Complex Block -21 Kasaumpti, Shimla.
10. That disputes have thus arisen between the parties relating to the following:-
a) Partnership Business.
b) Rendering of accounts of partnership firm.
c) With regard to running of partnership business after coming into force of the partnership deed as Sole proprietor by the Respondent no.1.
d) Regarding Tin number, sales Tax number.
e) with respect to opening of bank account which shall be managed by both the partners in any Nationalized Bank except State Bank of Patiala, Dharampur Branch.
11. In the arbitration proceedings the claimant claims relief as detailed in para no. 9 of the petition and in the present application the Petitioner/claimant is requesting for the appointment of an arbitrator and reference of disputes to him.
::: Downloaded on - 29/05/2024 20:31:55 :::CIS 1512. That the claimant has satisfied the condition under sub section 6(c) of Section 11 of the Arbitration and Conciliation .
Act 1996, before making this request and necessary affidavit to that effect is filled with this request.
It is, therefore respectfully submitted that this application may kindly be allowed and an independent and impartial person may kindly be appointed as arbitrator to adjudicate upon the disputes which have arisen between the parties. Date:01.09.2014 Sd/-
Petitioner
through
r (Rajeev Sood) Advocates
Verification
I, Veena Gupta, wife of Sh. Ashok gupta, resident of Sabathu road Dharampur, Tehsil Kasauli, Solan, District Solan, H.P. Partner of M/s Jai Hind Filling Station, village Kumarhada, H.H. 22, Post Office Dharampur, Distt. Solan, H.P., do hereby verify that the contents of para 1 to 8 of the accompanying application are true and correct to my personal knowledge and belief.
Verified at Shimla on this 1st day of September, 2014 Sd/-
Petitioner"
27. This application came up for consideration before the learned Single Judge of this Court, who on 31.10.2014, passed the following order:-
"This petition has been filed under sub-section (6) of section 11 of the Arbitration and Conciliation Act, 1996 for appointment of arbitrator in terms of arbitration clause 17 ::: Downloaded on - 29/05/2024 20:31:55 :::CIS 16 of partnership deed dated 25.4.2013 executed between the parties. Petitioner sent a communication to the .
respondent on 21.7.2014 informing him about the dispute.
No Arbitrator has been appointed as per clause 17 of the partnership deed dated 25.4.2013. The dispute has arisen between the parties.
2. Accordingly, I am satisfied that all the requirements of the Arbitration and Conciliation Act, 1996 have been fulfilled by the petitioner and the Sole Arbitrator is required to be appointed to resolve all the disputes which have arisen between the parties.
3. Accordingly, Mr. G.D. Verma, Senior Advocate, is appointed as Arbitrator and Mr. Neeraj Sharma, Deputy Advocate General and Mr. Lokender Thakur, Advocate will assist the Arbitrator. The Arbitrator is requested to enter into reference within a period of two weeks from the date of receipt of the copy of the order. Thereafter, the petitioner is directed to file claim petition within a period of three weeks. Reply be filed by the respondent within a further period of three weeks. The pleadings, including, rejoinder and counter-claim, shall also be completed by the parties within a period of eight weeks after entering into reference by the Arbitrator. It shall be open to the Arbitrator to determine his own procedure with the consent of the parties. It shall also be open to the Arbitrator to fix his fee alongwith the fee of Mr. Neeraj Sharma, Deputy Advocate General and Mr. Lokender Thakur, Advocate. The award shall be made strictly as per the provisions of the Arbitration and Conciliation Act, 1996 within six months. Needless to add that the Arbitrator shall pass a speaking order. Mr. G.D. Verma, Senior Advocate, Arbitrator and Mr. Neeraj Sharma, Deputy Advocate General and Mr. Lokender Thakur, Advocate about the ::: Downloaded on - 29/05/2024 20:31:55 :::CIS 17 passing of the order by sending a copy of this order to them.
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4. In view of this, the petition stands disposed of. Pending application, if any, also stands disposed of. No costs."
28. It would be clearly evident from the aforesaid order that even though in the application filed by the petitioner there was a reference to Clause 62(a) of the "Tripartite Dealership Agreement" and also an averment of there being a dispute, which was liable to be referred to the Director (Marketing), but then the order passed by the learned Court on 31.10.2014 clearly states that the arbitrator was being appointed under Clause 17 of the Partnership Deed, dated 25.04.2013 and not under Clause 62(a) of the Tripartite Dealership Agreement.
Rather there is no reference whatsoever to the Tripartite Dealership Agreement, let alone any clause thereof, more particularly, Clause 62(a).
29. In such circumstances, the question as formulated by the learned Single Judge did not arise at all for consideration as admittedly no arbitrator had been appointed by the Court vide its order dated 31.10.2014 in terms of Clause 62(a) of the Dealership Agreement.
30. However, learned counsel for respondent No. 2 would vehemently argue that the Court should not mechanically interpret the aforesaid decision dated 31.10.2014 without ::: Downloaded on - 29/05/2024 20:31:55 :::CIS 18 discussing as to how the factual situation of the decision on which the reliance is placed. He would argue that observations of .
the Court are not to be read as Euclid's theorems nor as a provision of the statute.
31. However, there appears to be fallacy in the aforesaid submissions for the simple reason that once the orders of the Court are unambiguous, explicit, clear and admitting only one interpretation and one conclusion, this Court cannot invoke the principle of purposive interpretation or "casus omissus" that too as if it is interpreting a statute.
32. There can be no quarrel with the legal proposition canvassed by the learned counsel for respondent No. 1 that the judgments are not to be read as Euclid's theorems nor as provisions of the statute, as this has been authoritatively decided by three Judges Bench of the Hon'ble Supreme Court in Haryana Finaicial Corporation & Anr. vs. Jagdamba Oil Mills & Anr.
(2002) 3 SCC 496, the relevant observations whereof read as under:-
"19. Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are not to be read as Euclid's theorems nor as provisions of the statute. These observations must be read in the context in which they appear. Judgments of courts are not to be construed as statutes. To interpret words, phrases and provisions of a ::: Downloaded on - 29/05/2024 20:31:55 :::CIS 19 statute, it may become necessary for judges to embark into lengthy discussions but the discussion is meant to .
explain and not to define. Judges interpret statues, they do not interpret judgments. They interpret words of statutes, their words are not to be interpreted as statutes. In London Graving Dock Co. Ltd. v. Horton (1951 AC 737 at P.
761), Lord Mac Dermot observed: (All ER p. 14C-D) "The matter cannot, of course, be settled merely by treating the ipsissima verba of Willes, J. as though they were part of an Act of Parliament and applying the rules of interpretation appropriate thereto. This is not to detract from the great weight to be given to the language actually used by that most distinguished judge."
20. In Home Office v. Dorset Yacht Co. (1970 (2) All ER
294) Lord Reid said, (at All ER p. 297g-h) "Lord Atkin's speech..is not to be treated as if it was a statute definition.
It will require qualification in new circumstances." Megarry, J. in (1971) 1 WLR 1062 observed: "One must not, of course, construe even a reserved judgment of even Russell L.J. as if it were an Act of Parliament." And, in Herrington v. British Railways Board, (1972) 2 WLR 537 Lord Morris said: (All ER p. 761c) "There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judicial utterances made in the setting of the facts of a particular case."
21. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions ::: Downloaded on - 29/05/2024 20:31:55 :::CIS 20 in two cases. Disposal of cases by blindly placing reliance on a decision is not proper."
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33. The principles canvassed by the learned Counsel for respondent No. 2 do not apply to the instant case for the simple reasons that in the application filed by the petitioner for appointment of Arbitrator, there was a clear reference to Clause 17 of the Partnership Agreement and Clause 62(a) of the Tripartite Dealership Agreement. Indisputably, there was also a reference to there being dispute under both the Clauses.
34. Yet again there is no dispute that even respondent No. 1-IOC, who admittedly is only party to the Dealership Agreement and not to the Partnership Agreement was also impleaded as party-respondent but nonetheless the Court vide its order dated 04.08.2022, decided the case solely on the basis of Clause 17 of the Partnership Agreement dated 25.04.2013, without even referring or making a mention of the Tripartite Dealership Agreement. Once that be so, obviously the plea of the petitioner for referring the dispute to the arbitrator under Clause 62(a) is deemed to be rejected.
35. Apart from the above, it also needs to be noticed that in case there had been appointment of the arbitrator under Clause 62(a) of the tripartite Dealership Agreement, as contended by the learned counsel for respondent No. 2, then the matter was required to be referred to the sole arbitration of ::: Downloaded on - 29/05/2024 20:31:55 :::CIS 21 "Director (Marketing)" of the Corporation, who was the named arbitrator and would not have been straightway referred to Sh.
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G. D. Verma, Sr. Advocate, as Arbitrator and Sh. Neeraj Sharma and Sh. Lokender Thakur, Advocates, to assist the arbitrator, that too, without recording any reason, as to how and why the named arbitrator despite being named, was not being appointed as the arbitrator.
36. It needs to be noticed that the order passed by the learned Single Judge thereby appointing Shri G. D. Verma, Sr. Advocate, as Arbitrator was passed on 31.10.2014 i.e. before the amendment and insertion of sub-section 5 in Section 12 of the Arbitration Act and, therefore, the Director (Marketing) of the Corporation simply because he was an employee of respondent No. 1 would not be ineligible for being appointed as an Arbitrator.
37. The law as it stood on the said date i.e. prior to the aforesaid amendment, clearly provided that once the parties had agreed to the terms of the arbitration contained in the Arbitration Agreement, they cannot now be permitted or turn around to contend that someone else has to be appointed as Arbitrator, thus, they have to go by the Arbitration Agreement.
38. Once the parties have agreed upon a named arbitrator, the parties cannot resile therefrom, as repeatedly held by the Hon'ble Supreme Court, prior to the aforesaid ::: Downloaded on - 29/05/2024 20:31:55 :::CIS 22 amendments, in the cases of Union of India and Another vs. M. P. Gupta (2004) 10 SCC 504, You One Engineering & .
Construction Co. Ltd. and Anr. vs. National Highways Authority of India (NHAI) (2006) 4 SCC 372, National Highway Authority of India and Anr. vs. Bumihiway DDB Ltd. (JV) and Ors. (2006) 10 SCC 763, Northern Railway Administration, Ministry of Railway, New Delhi vs. Patel Engineering Company Ltd. (2008) 10 SCC 240 and Indian Oil Corporation Ltd. & Ors. vs. Raja Transport Private Ltd.
(2009) 8 SCC 520.
39. We need not to quote the relevant observations in all the aforesaid judgments, as it shall suffice to reproduce the relevant observations in Indian Oil Corporation's case (supra), wherein the Hon'ble Supreme Court has clearly laid down that if arbitration agreement provides for arbitration by named arbitrator, the Courts normally give effect to the provisions of the arbitration agreement. However, when there is material to create a reasonable apprehension that the person mentioned in the arbitration agreement as the arbitrator is not likely to act independently or impartially, or if the named arbitrator is not available, then the Chief Justice or his designate may, after recording reasons for not following the agreed procedure of referring the dispute to the named arbitrator, ::: Downloaded on - 29/05/2024 20:31:55 :::CIS 23 appoint an independent arbitrator in accordance with Section 11(8) of the Act. In other words, referring the disputes to the .
named arbitrator shall be the rule. The Chief Justice or his designate will have to merely reiterate the arbitration agreement by referring the parties to the named arbitrator or named Arbitral Tribunal. Ignoring the named Arbitrator/Arbitral Tribunal and nominating an independent arbitrator shall be the exception to the rule, to be resorted for valid reasons.
40. It shall be apt to reproduce the relevant observations as contained in para 45, which read thus:-
45. If the arbitration agreement provides for arbitration by a named Arbitrator, the courts should normally give effect to the provisions of the arbitration agreement. But as clarified by Northern Railway Administration, where there is material to create a reasonable apprehension that the person mentioned in the arbitration agreement as the Arbitrator is not likely to act independently or impartially, or if the named person is not available, then the Chief Justice or his designate may, after recording reasons for not following the agreed procedure of referring the dispute to the named arbitrator, appoint an independent Arbitrator in accordance with section 11(8) of the Act. In other words, referring the disputes to the named arbitrator shall be the rule. The Chief Justice or his designate will have to merely reiterate the arbitration agreement by referring the parties to the named arbitrator or named Arbitral Tribunal. Ignoring the named Arbitrator/Arbitral Tribunal and nominating an ::: Downloaded on - 29/05/2024 20:31:55 :::CIS 24 independent arbitrator shall be the exception to the rule, to be resorted for valid reasons."
.
41. As already noticed above, the respondent No. 1 is not a party to the proceedings pending before the learned Arbitrator. The counsel for respondent No. 2 would, however, vehemently contend that since it was the petition filed by petitioner No. 1, who was Dominus litis of the petition, it was for him to array the necessary party or else face the consequences.
42. We find no merit in such contention for the simple reason that it is not a case where the petitioner alone has approached the arbitrator by filing a claim petition but it is also respondent No. 2 who has filed a counter claim in those proceedings where he himself is a dominus litis and has not impleaded respondent No. 1 as a party.
43. In this background, the contentions of respondent No. 1 regarding the Partnership Agreement being an "Umbrella Agreement" as accepted by the learned Single Judge is also not sustainable. The concept of Umbrella Agreement could have been invoked only if all the parties before this Court are also parties before the learned Arbitrator.
44. In such circumstances, reserving liberty to the petitioner for making a prayer for interim relief before the Arbitrator under Section 17 of the Act is clearly not sustainable given the fact that such directions have been sought primarily ::: Downloaded on - 29/05/2024 20:31:55 :::CIS 25 only against respondent No. 1, which is not a party before the learned Arbitrator.
.
45. Lastly and more importantly, it needs to be noticed that the Court while passing an order in Arbitration Case No. 54 of 2014 had not formulated any particular point for reference but had referred the entire dispute between the petitioner and respondent No. 2 for arbitration. However, the learned Arbitrator on the pleadings of the parties framed the following issues:-
"1. Whether the claimant and respondents are partners in business concern M/s Jai Hind Filling Station. If so, since when and in what effect? OPC
2. If issue No.1 is decided in affirmative, what is the contribution towards the partnership concern, M/s Jai Hind Filling Station Assets by the claimant and respondent? OPP
3. Whether the respondent is the Sole proprietor of M/s Jai Hind Filling Station, if so, to what effect? OPR
4. Whether writing dated 25.4.2013 and another writing which has been placed on record by the claimant on 14.3.2016 has been executed by the respondent, if so, to what effect? OPC
5. Whether Partnership concern M/s Jai Hind Filling Station stand determined as per notice dated 17.7.2014 issued by the respondent, if so, to what effect? OPR
6. Whether the claimant is entitled for claim raised in the Claim Petition or any other part thereof. If so, to what extent? OPC ::: Downloaded on - 29/05/2024 20:31:55 :::CIS 26
7. Whether the claimant is entitled to be declared as absolute owner of land measuring 2116 square meters in .
Khasra Numbers 58, 59 situated in Mauja Kumharda, as per writing dated 25.4.2013, if so what effect? OPC
8. Whether claimant failed to pay a sum of Rs. 2.45 Lakcs to business concern M/s Jai Hind Filling Station as claimed by respondent, if so, to what effect? OPR
46. It would be noticed that the issues are only inter se the petitioner and respondent No. 2 for the obvious reason that they alone who were party before the learned Arbitrator, whereas respondent No. 1, as already observed above, is not at all a party.
47. It is more than settled that the learned Arbitrator cannot travel beyond the reference and in absence of any particular reference, he cannot travel beyond the issues framed and this proposition would equally apply even while either of the parties before the learned Arbitrator seek any interim order or relief.
48. As already observed above, the application filed by the appellant under Section 9 is primarily directed against respondent No. 1 wherein a direction has been sought to supply petroleum products in the name of partnership firm with a further an alternative prayer that respondent No. 1 be restrained from supplying the petroleum products to respondent No. 2.
::: Downloaded on - 29/05/2024 20:31:55 :::CIS 27Lastly, an alternative prayer has also been made for appointment of receiver. Obviously, none of these such claims .
can be considered much less decided by the learned Arbitrator particularly when he has been appointed under Clause 17 of the Partnership Act and not under Clause 62(a) of the Tripartite Dealership Agreement.
49. In the given facts and circumstances, we are clearly of the view that the order dated 04.08.2022 (Annexure P-1) is not sustainable in the eyes of law and the same is accordingly set aside.
50. Since, the application was decided on the premise that the dispute had been referred to under Section 62(a) of the Partnership Agreement and not under Clause 17 of the Partnership Agreement, the learned Single Judge would now consider the application under Section 9 of the Act on its merits and pass an appropriate order accordingly.
51. The appeal stands disposed of accordingly, so also pending applications, if any.
The parties to appear before the learned Single Judge on 11.06.2024.
(Tarlok Singh Chauhan)
Judge
(Sushil Kukreja)
29 th
May, 2024 Judge
(sanjeev)
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