Allahabad High Court
Indian Oil Corporation Ltd vs M/S J. Lal Filling Station And Another on 29 January, 2021
Equivalent citations: AIRONLINE 2021 ALL 157
Author: Prakash Padia
Bench: Prakash Padia
HIGH COURT OF JUDICATURE AT ALLAHABAD A.F.R. Court No. - 10 Case :- MATTERS UNDER ARTICLE 227 No. - 339 of 2021 Petitioner :- Indian Oil Corporation Ltd Respondent :- M/S J. Lal Filling Station And Another Counsel for Petitioner :- Rakesh Kumar Hon'ble Prakash Padia,J.
1. Heard Sri Rakesh Kumar, learned counsel for the petitioner and Sri H.P. Dube, Advocate and Sri Vipul Dube, Advocate have put their appearance on behalf of respondents.
2. The petitioner has filed the present petition under Article 227 of the Constitution of India with the following prayers:-
"(a) To direct the Civil Judge (Senior Division) Agra to decide the application NO.37Ga filed by the petitioner-Corporation under Section 8 of the Arbitration & Conciliation Act, 1996, forthwith;
(b) to set a side the order dated 10.7.2018 passed by the Civil Judge, (Senior Division) Agra;
(c) issue any other suitable, order or direction which this Hon'ble Court may deem fit and proper in the circumstances of the case;
(d) award costs in favour of the applicant throughout."
3. Facts in brief as contained in the writ petition are that the petitioner-Indian Oil Corporation had appointed various retail outlet dealers for sale of petroleum products. After selection of respondent No.1 as a dealer, an agreement was executed between the petitioner-corporation and Sri Satish Kumar Arora, the proprietor of the retail outlet/respondent No.2 on 25.02.2005 for retail sale of petroleum products. An inspection of the retail outlet of the plaintiffs/respondents was carried out on 17.5.2017 in the presence of Sri Satish Kumar Arora, the proprietor of the retail outlet/respondent No.2, by a team nominated by the District Magistrate, Agra consisting of members namely B.K. Shukla, DSO Agra, Sri Mayank Kumar SO (Retail Sales) IOCL, Agra-I, Sri A.K.Mishra, ARO Agra, Sri Rohit Yadav, ACM-IV, Agra, Sri Rajvir Singh, Police Inspector Agra and Sri Sanjay Singh, Police Inspector, Agra, Sri Rajesh Singh, Inspector,W&M, Agra, Sri Shailendra Singh, Inspector W.&M, Agra, Sri Avdesh Singh, Service Engineer M/s Midco Ltd. and Sri A.K. Mahawar Senior Foreman, IOCL Agra. During the inspection of the retail outlet of the plaintiffs/respondents, it was found that the pulsar of 1 nozzle of Motor Spirit (petrol), bearing Sl. No.03GC0228GVR was suspected to be tampered as there was some extra soldering in the pulsar and based on the aforesaid inspection report, a fact finding letter dated 30.5.2017 was issued to the respondent No.1 asking him to submit his reply. At the time of inspection, the pulsar card was seized and sent by the petitioner-corporation to the Original Equipment Manufacturer (OEM), i.e., M/s MIDCO for testing at their lab as per the Marketing Disciplinary Guidelines. Thereafter a report was submitted by the Midco on 28.2.20218 mentioning therein that (1) One of the pulser signal cable is found connected to IS PIN through additional cable.
(2) PPFL cable is found disconnected from the pulsar PCB.
4. After perusal of the same, the competent authority namely Deputy General Manager (Retail Sales), Agra Division Agra. issued a show cause notice to the respondents on 25.05.2018.
5. It is argued by Sri Rakesh Kumar, learned counsel for the petitioner that on issuance of show cause notice, an original suit was preferred by the petitioner being Original Suit No.716 of 2018 with the following reliefs:-
"The plaintiffs, therefore, prays for judgement and decree for declaration as under:-
A. That a decree of declaration be passed against the defendant to declare the show cause notice dated 30.05.2017 and 25.05.2018 9sent on 04.07.2018) is null and void and not binding upon the plaintiffs consequential relief of permanent prohibitory injunction be passed to restrain the defendant, its officers and employees from interfering in supplying of the petrol/diesel and other lubricants products of all kinds to the plaintiffs retail outlet by suspending or terminating the retail outlet and dealership stopping their supplies on the basis of the report dated 17.5.2017 and show cause notices dated 30.05.2017 and 25.5.2018 (sent on 4.7.2018) in any manner whatsoever.
B. That the defendant to pay cost of the suit.
C. That such other or further relief as the nature of the case admits of be also granted to the plaintiffs."
6. Along with suit, an application for grant of interim injunction was also filed on 10.07.2018 seeking following relief:
"For the reasons given in the accompanying affidavit, it is respectfully prayed that the Hon'ble Court may be pleased to restrain the defendant, its officers and employees from interfering in supplying of the petrol/diesel and other lubricant products of all kinds to the plaintiffs retail outlet by suspending or terminating the retail outlet and dealership stopping their supplies on the basis of the report dated 17.05.2017 and show causes notices dated 30.05.2017 and 25.05.2018 (sent on 04.07.2018) in any manner whatsoever till the disposal of this suit"
7. The trial Court on 10.07.2018 following order was passed on the injunction application:-
"10-7-2010 oknh }kjk izkFkZuk i= 8x e; 'kiFki= 9x izLrqr dj dFku fd;k x;k gS fd izfroknhx.k o mlds vf/kdkfj;kas o deZpkfj;ksa dks vLFkk;h fu"ks/kkKk O;kns'k ds ek/;e ls fu"ksf/kr fd;k tk;s fd os okn ds vfUre fuLrkj.k rd oknh dks isVªksy@Mhty ,oa vU; mlls lacaf/kr mRiknksa dh vkiwfrZ esa dksbZ ck/kk mRiUu u djsaA lquk rFkk i=koyh dk voyksdu fd;kA oknhx.k us vius dFku ds leFkZu eas 'kiFki= 9x ds layXud yhtMhM fnukWd 1-10-2003 dh izfr fujh{k.k fVIi.kh fnukWd 17-5-2017 dh izfr] uksfVl fnukWd 30-5-2017 dh izfr o oknh dks i= fnukWd 7-6-2017] lR;kiu izek.k i=] iathdj.k izek.k i= vkfn dh izfr ,oa lwph 11x ls ewy uksfVl fnukWd 25-5-2018 dkxt la0 12x@1 rk 12x@4 fyQkQk uksfVl fnukWd 25-5-2018 dh izfr dkxt la0 13x uksfVl fnukWd 30-5-2018 dh izfr dkxt la0 14x tokc fnukWd 17-6-2017 dh izfr dkxt la0 15x@1 o i= fnukWd 9-7-2018 dh izfr dkxt la0 16x izLrqr fd;s x;s gSaA lquk rFkk i=koyh dk voyksdu fd;kA okn ds rF;ksa ,oa ifjfLFkfr;ksa ds izdk'k esa ;fn bl Lrj ij oknhx.k ds i{k eas ,d i{kh; vLFkk;h fu"ks/kkKk O;kns'k ikfjr ugh fd;k x;k rks oknh okn dk mn~ns'; foQy gksus rd viw.kZuh; {kfr gksus dh lEHkkouk gSA vr% izfroknh dks ,di{kh; fu"ks/kkKk O;kns'k ds ek/;e ls fu"ksf/kr fd;k tkrk gS fd og Lo;a vFkok vius lg;ksfx;ksa ds ek/;e ls oknh ds vkmVysV dks fuyfEcr ;k lekIr dj oknh dks vkiwfrZ gksus okys isVªksy@Mhty ,oa mlls lacaf/kr vU; mRiknksa dh vkiwfrZ dks vfxze fu;r frfFk rd ckf/kr u djsaA i=koyh izkFkZuk i= 8x ds fuLrkj.k gsrq fnukWd 27-7-2018 dks is'k gksA oknhx.k vkns'k 39 fu;e 3 dk vuqikyu vfoyEc djsaA g0v0 flfoy tt ¼fl0fM0½ vkxjkA"
8. It is argued that on the same day, i.e., 10.07.2018, when the suit was preferred, an ex parte injunction was granted in favour of the plaintiffs-respondents by the Civil Judge (Junior Division), Agra, restraining the petitioner-defendant from suspending or terminateing the retail outlet and further directions were given to not to stop sales and supplies of the petroleum products till the next date fixed. It is argued that an application under Sction 8 of the Arbitration & Conciliation Act, 1996 was filed by the petitioner-Corporation on 19.9.2019. It is argued that large numbers of dates were fixed in the matter but no orders were passed on the same by the court below. It is argued that the reliefs soubht by the plaintiffs-respondents are clearly barred by sub-section (1) of Section 14 of the Specfic Relief Act. The counsel for the petitioner relied upon a judgement in support of his submission, reported in (1991) 1 SCC 533 (Indian Oil Corporation Ltd. Vs. Amritsar Gas Service & others).It is argued that in view of the aforesaid, the suit filed by the plaintiffs-respondents itself was not maintainable.
9. It is further argued that once an application under Section 8 of the Arbitration & Conciliation has been filed, the Civil Court has no jurisdiction to continue with the suit in support of his submission. He relied upon thejudgment of Hon'ble Supreme Curt, reported in 2003 (6) SCC 503 (Hindustan Petroleum Corporation Ltd. Vs. Pinkcity Midway Petroleum).
10. On the other hand, it is argued by Sri H.P. Dube, learned counsel for the respondents that no action whatsoever has been taken by the petitioner-defendant for more than one year by moving any application for vacation of such interim injunction or for dismissal of the suit as provided under Order VII Rule 11 CPC. It is further argued that the order passed by the Civil Court dated 10.7.2018 us an appealable Order XXXXIII Rule 1(r). Thus the petition under Argicle 227 of the Constitution of India is not maintainable.
11. Heard learned counsel for the parties and perused the record.
12. It appears from perusal of the record that in spite of the aforesaid ex-parte injunction order, no action was taken by the petitioner-corporation to move any application in the court below for vacation of the aforesaid order and for the first time after more than one year, an application was filed as provided under Section 8 of the Arbitration and Conciliation Act, 1996 read with Section 151 CPC with the prayer to refer the matter to the Director Marketing of Indian Oil Corporation for arbitration.
13. It is clear from perusal of the record that only a show cause notice was issued to the respondents by the Petitioner-Defendant asking them to submit their reply to the aforesaid notice which was issued on the basis of the inspection carried out and report submitted by OEM on 28.02.2018. It further appears that certain irregularity was found during the inspection and only thereafter, the show cause notice was issued to the respondent-plaintiff. The only remedy which was available to the plaintiff respondent to file a reply to the show cause notice but in place of submitting reply, suit in question has been filed by the plaintiff-respondent and on the same day, i.e, on 10.07.2018, ex-parte interim injunction was granted by the trial Court. It further reveals from perusal of the order dated 10.07.2018 by which interim injunction was granted that none of the ingredients as required by law namely prima facie case, balance of convenience and irreparable loss have been seen by the trial court while granting interim injunction. It further reveals from perusal of the record that an application for appointment of arbitration was filed on 11.9.2019 but till date no decision has been taken on the same. Section 36 of the Specific Reliefs Act, 1963 provides for preventive relief. Section 37 of the Specific Reliefs Act, 1963 provides that temporary injunction in a suit shall be regulated by the Code of Civil Procedure. The grant of relief in a suit for specific performance is itself a discretionary remedy. It is settled law that for the grant of interim injunction, plaintiff has to establish a strong prima facie case on the basis of undisputed facts. The conduct of the plaintiffs-respondents will also be very relevant consideration for the purpose of injunction. At this stage for the grant of interim injunction, the discretion has to be exercised judiciously and not arbitrarily.
14. The cardinal principles for grant of temporary injunction were settled by the Apex Court in the case of Dalpat Kumar vs. Prahlad Singh, (1992) 1 SCC 719. The relevant paragraph is quoted below:-
"5...Satisfaction that there is a prima facie case by itself is not sufficient to grant injunction. The Court further has to satisfy that noninterference by the Court would result in "irreparable injury" to the party seeking relief and that there is no other remedy available to the party except one to grant injunction and he needs protection from the consequences of apprehended injury or dispossession. Irreparable injury, however, does not mean that there must be no physical possibility of repairing the injury, but means only that the injury must be a material one, namely one that cannot be adequately compensated by way of damages. The third condition also is that "the balance of convenience" must be in favour of granting injunction. The Court while granting or refusing to grant injunction should exercise sound judicial discretion to find the amount of substantial mischief or injury which is likely to be caused to the parties, if the injunction is refused and compare it with that which is likely to be caused to the other side if the injunction is granted. If on weighing competing possibilities or probabilities of likelihood of injury and if the Court considers that pending the suit, the subject matter should be maintained in status quo, an injunction would be issued. Thus the Court has to exercise its sound judicial discretion in granting or refusing the relief of ad interim injunction pending the suit."
15. In the case of M.P. Mathur vs. DTC, (2006) 13 SCC 706, following observations were made by the Apex Court which is quoted below:-
"14. The present suit is based on equity...In the present case, the plaintiffs have sought a remedy which is discretionary. They have instituted the suit under Section 34 of the 1963 Act. The discretion which the court has to exercise is a judicial discretion. That discretion has to be exercised on well settled principles. Therefore, the court has to consider--the nature of obligation in respect of which performance is sought, circumstances under which the decision came to be made, the conduct of the parties and the effect of the court granting the decree. In such cases, the court has to look at the contract. The court has to ascertain whether there exists an element of mutuality in the contract. If there is absence of mutuality the court will not exercise discretion in favour of the plaintiffs. Even if, want of mutuality is regarded as discretionary and not as an absolute bar to specific performance, the court has to consider the entire conduct of the parties in relation to the subject matter and in case of any disqualifying circumstances the court will not grant the relief prayed for (Snell's Equity, 31st Edn., p. 366)...."
16. In the case of Wander Ltd. and another vs. Antox India P. Ltd., 1990 Suppl. SCC 727 prescribes a rule of prudence only. Much will depend on the facts of a case. In the case of Gujarat Bottling Co. Ltd. vs. Coca Cola Co., reported in (1995) 5 SCC 545, following observations were made :
"47....Under Order 39 of the Code of Civil Procedure, jurisdiction of the Court to interfere with an order of interlocutory or temporary injunction is purely equitable and, therefore, the Court, on being approached, will, apart from other considerations, also look to the conduct of the party invoking the jurisdiction of the Court, and may refuse to interfere unless his conduct was free from blame. Since the relief is wholly equitable in nature, the party invoking the jurisdiction of the Court has to show that he himself was not at fault and that he himself was not responsible for bringing about the state of things complained of and that he was not unfair or inequitable in his dealings with the party against whom he was seeking relief. His conduct should be fair and honest...."
17. It is settled law that where arbitration clause exists, the court is a mandatory duty to report the dispute arising between the contracting parties to the arbitrator in the case of Hindustan Petroleum Corporation Ltd. Vs. Pinkcity Midway Petroleums (2003) 6 SCC 503. Following observations have been made by the Apex Court in paragraph 14 of the aforesaid judgement which is reproduced below:-
"Therefore, in cases where there is an arbitration clause in the agreement, it is obligatory for the Court to refer the parties to arbitration in terms of their arbitration agreement and nothing remains to be decided in the original action after such an application is made except to refer the dispute to an arbitrator. Therefore, it is clear that if, as contended by a party in an agreement between the parties before the Civil Court, there is a clause for arbitration, it is mandatory for the Civil Court to refer the dispute to an arbitrator."
18. In this view of the matter, the interim injunction granted by the court below in favour of the plaintiffs-respondents is per se illegal and in complete violation of the law laid down by the Apex Court from time to time.
19. Insofar as the arguments advanced by Sri H.P. Dube, learned counsel for the respondents that against interim injunction granted in favour of the plaintiffs-respondents, an alternative remedy is available to the petitioner to file an appeal as provided under Order 41 Rule 1(r) of CPC is concerned, the principles relating to the scope and applicability of Article 227 of the Constitution of India in great detail by a Division Bench of this Court in the case of Ram Roop and others Vs. Bishwa Nath and others reported in AIR 1958 Allahabad 456 which are reproduced below:-
1. The superintendence referred to in Article 227 of the Constitution includes judcial superintendence.
2. The power conferred by the Article is wide but not unlimited. The exercise of the power is discretionary and relief under the Article cannot be claimed as a matter of right. The principles regulating the exercise of the power are generally speaking the same as the principles on which writs can be issued under Article 226 but in a sense the power under Article 227 is wider as the High Court can sometimes issue directions in the exercise of that power which it could not do under Article 226.
3. The power under the Article can be exercised even in those cases in which no appeal or revision lies in the High Court.
4. The power should not ordinarily be exercised if any other remedy is available to the aggrieved party even though the pursuing of that remedy may involve some inconvenience or delay.
5.The power should not be used to correct mere errors of fact or law. Error of law may include a wrong decision on a question of jurisdiction.
6. The power is to be used sparingly only in appropriate cases in which the conscience of the Court is pricked and it feels that immediate interference is called for as it is necessary to keep the Subordinate Courts or Tribunals within their bound or to prevent some outrageous miscarriage of justice and grave results would follow if the power is not exercised. Whether a particular case is of this kind or not will depend on its own facts and circumstances. Such cases cannot obviously be exhaustively catalogued."
20. The Apex Court in the case of Shalini Shyam Sethi and others Vs. Rajendra Shanker Patel (2010) 8 SCC 329 has considered the entire history and scope of Article 227 in detail and after considering the various decisions of various High Courts as well as Supreme Court has formulated principles for exercise of jurisdiction under Article 227 of the Constitution of India in para 49 of the which is under:-
"49. On an analysis of the aforesaid decisions of this Court, the following principles on the exercise of High Court's jurisdiction under Article 227 of the Constitution may be formulated:
(a) A petition under Article 226 of the Constitution is different from a petition under Article 227. The mode of exercise of power by High Court under these two Articles is also different.
(b) In any event, a petition under Article 227 cannot be called a writ petition. The history of the conferment of writ jurisdiction on High Courts is substantially different from the history of conferment of the power of Superintendence on the High Courts under Article 227 and have been discussed above.
(c) High Courts cannot, on the drop of a hat, in exercise of its power of superintendence under Article 227 of the Constitution, interfere with the orders of tribunals or Courts inferior to it. Nor can it, in exercise of this power, act as a Court of appeal over the orders of Court or tribunal subordinate to it. In cases where an alternative statutory mode of redressal has been provided, that would also operate as a restrain on the exercise of this power by the High Court.
(d) The parameters of interference by High Courts in exercise of its power of superintendence have been repeatedly laid down by this Court. In this regard the High Court must be guided by the principles laid down by the Constitution Bench of this Court in Waryam Singh Vs. Amarnath (AIR 1954 SC 215) and the principles in Waryam Singh (supra) have been repeatedly followed by subsequent Constitution Benches and various other decisions of this Court.
(e) According to the ratio in Waryam Singh (supra), followed in subsequent cases, the High Court in exercise of its jurisdiction of superintendence can interfere in order only to keep the tribunals and Courts subordinate to it, ''within the bounds of their authority'.
(f) In order to ensure that law is followed by such tribunals and Courts by exercising jurisdiction which is vested in them and by not declining to exercise the jurisdiction which is vested in them.
(g) Apart from the situations pointed in (e) and (f), High Court can interfere in exercise of its power of superintendence when there has been a patent perversity in the orders of tribunals and Courts subordinate to it or where there has been a gross and manifest failure of justice or the basic principles of natural justice have been flouted.
(h) In exercise of its power of superintendence High Court cannot interfere to correct mere errors of law or fact or just because another view than the one taken by the tribunals or Courts subordinate to it, is a possible view. In other words the jurisdiction has to be very sparingly exercised.
(i) High Court's power of superintendence under Article 227 cannot be curtailed by any statute. It has been declared a part of thebasic structure of the Constitution by the Constitution Bench of this Court in the case of L. Chandra Kumar vs. Union of India & others, reported in (1997) 3 SCC 261 and therefore abridgement by a Constitutional amendment is also very doubtful.
(j) It may be true that a statutory amendment of a rather cognate provision, like Section 115 of the Civil Procedure Code by the Civil Procedure Code (Amendment) Act, 1999 does not and cannot cut down the ambit of High Court's power under Article 227. At the same time, it must be remembered that such statutory amendment does not correspondingly expand the High Court's jurisdiction of superintendence under Article 227.
(k) The power is discretionary and has to be exercised on equitable principle. In an appropriate case, the power can be exercised suo motu.
(l) On a proper appreciation of the wide and unfettered power of the High Court under Article 227, it transpires that the main object of this Article is to keep strict administrative and judicial control by the High Court on the administration of justice within its territory.
(m) The object of superintendence, both administrative and judicial, is to maintain efficiency, smooth and orderly functioning of the entire machinery of justice in such a way as it does not bring it into any disrepute. The power of interference under this Article is to be kept to the minimum to ensure that the wheel of justice does not come to a halt and the fountain of justice remains pure and unpolluted in order to maintain public confidence in the functioning of the tribunals and Courts subordinate to High Court.
(n) This reserve and exceptional power of judicial intervention is not to be exercised just for grant of relief in individual cases but should be directed for promotion of public confidence in the administration of justice in the larger public interest whereas Article 226 is meant for protection of individual grievance. Therefore, the power under Article 227 may be unfettered but its exercise is subject to high degree of judicial discipline pointed out above.
(o) An improper and a frequent exercise of this power will be counter-productive and will divest this extraordinary power of its strength and vitality."
21. Applying the principles, as laid down by the Apex Court in the case of Shalini Shyam (supra), the Court is of the opinion that it is a fit case, where the court shold exercise its jurisdiction under Article 227 of the Constitution of India, despite there being alternative remedy is available for the reasons (1) the order dated 10.7.2018 granting interim injunction is illegal, against the settled principles of law and perverse (2) the suit filed by the plaintiffs-respondents is barred under Section 14(1) of the Specfic Relief Act, (3) Once an application is filed under Section 8 of the Arbitration and Conciliation Act, the court has no jurisdiction to continue with the suit, as held in case of Hindustan Petroleum Corporation (supra) and (4) to ensure that wheel of justice does not come to a halt and foundation of justice remains pure and unpolluted in orderto maintain public confidence in functioning of the court.
22. In view of the aforesaid, the injunction order dated 07.2.2018 as extended from time to time is set aside being wholly illegal and contrary to the settled principles for grant of temporary injunction.
23. At this point, Sri H.P. Dube, learned counsel for the respondents submits that his client will withdraw the suit filed by them by moving an appropriate application before the Court below within a period of one week from today. He further prayed that a direction be issued to the petitioner to allow time to file reply to the show cause notice dated 25.5.2018.
24. In view of the undertaking and submission of Sri H.P. Dube, learned counsel for the respondents, the Civil Judge (Senior Division) Agra is directed to pass appropriate order on the withdrawal application of the plaintiffs-respondents within one week from the date of filing of withdrawal application of the plaintiffs-respondents, who undertakes to file it within one week. The plaintiffs-respondents are further directed to file reply to the show cause notice dated 25.5.2018, within one month from today. If the reply to show-cause notice is file within stipulated period, the petitioner-Corporation will pass appropriate orders on the same in accordance with law within further period of one month, after providing opportunity of hearing to the plaintiffs-respondents.
25. With the aforesaid direction, the petition is allowed.
Order Date :- 29.1.2021 saqlain