Rajasthan High Court - Jodhpur
B.P.C.L & Ors vs M/S P.C. Jat & Brothers on 11 April, 2018
Author: Dinesh Mehta
Bench: Dinesh Mehta
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Civil Misc. Appeal No. 1138 / 2015
1. Bharat Petroleum Corporation Ltd. through its Chairman, Bharat
Bhawan 4 & 6 Currimbhoy Road, Ballard Estate, Post Box No.688,
Mumbai.
2. Head (Retail)- North, Bharat Petroleum Corporation Ltd., Regional
Office, A-5 & 6, Secotr - 1, Noida.
3. Manager (Ops.) 1/C, Bharat Petroleum Corporation Ltd., Salawas,
Jodhpur.
----Appellant
Versus
M/S P.C. Jat & Brothers, R/o House No. 15, Nahar Singh Colony,
Bhati Chouraha, Ratanada Jodhpur through its Proprietor, Chandra
Mohan S/o Premaram.
----Respondent
_____________________________________________________
For Appellant(s) : Mr. Sunil Beniwal
_____________________________________________________
JUSTICE DINESH MEHTA
Order
11/04/2018
The present appeal under Section 37 of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to Arbitration Act) has
been filed by the appellants, laying challenge to the order dated
18.03.2015, passed by learned Additional District & Sessions
Judge No.6, Jodhpur (hereinafter referred to as the 'court below')
whereby the appellants' application under Section 34 of the Act,
1996 had been rejected.
The facts in brief leading the appellants to prefer the present
appeal under Section 37 of the Act of 1996 are that an agreement
was executed between the appellant - Corporation and
respondent being agreement No. NR/POL/BULK/2005-
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2008/RAJ/SALAWAS dated 27.07.2005 for transportation of
petroleum products through vehicle bearing No.RJ-19-G-5189.
The appellant - Corporation under apprehension of adulteration by
the respondent got inspection done by SGS Company (an
outsource company to whom the inspection work had been
assigned by the appellant - Corporation). During the checking, it
was found that the respondent had adulterated the HSD available
at the outlet. The requisite samples were drawn from the outlet
and the same were sent for confirmation to designated laboratory
at Jaipur. After receipt of the report and due enquiry, the
Corporation found that the respondent had adulterated the
product during its transportation. Such being the situation, the
appellant terminated the transportation contract and blacklisted
the respondent.
Being aggrieved with the termination of the contract and
blacklisting, the respondent filed an application under Section 11
of the Arbitration Act, 1996, seeking securing appointment of the
Arbitrator for resolution of dispute. Mr. SR Bhansali, retired District
and Sessions Judge came to be appointed as an Arbitrator by this
Court, vide its order dated 13.07.2011.
In furtherance of the appointment so made, sole Arbitrator
entered into reference and commenced the proceedings by issuing
notice to the claimant and the respondent. After service of the
notice, the claimant filed its claim on 28.12.2011, whereas the
appellant - Corporation appeared before the Arbitrator on
14.01.2012, and sought an adjournment stating that a review
petition has been filed against the order dated 13.07.2011 and the
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same is pending consideration before the High Court.
In view of such request, learned Arbitrator adjourned the
hearing. Thereafter again, the proceedings were recommenced
and a notice was issued by the sole Arbitrator on 29.09.2012,
calling upon appellant to appear on 13.10.2012 and produce copy
of an interim order, if passed by the High Court.
On 13.10.2012, Officers of the Corporation appeared and
again prayed for adjournment till 25.11.2012 to file reply.
However, no interim order was produced by the appellant. Learned
Arbitrator still deferred the hearing for 02.12.2012.
On such date, again the appellant requested for adjournment
and the request was acceded to. However, learned Arbitrator
decided to draw the ex-parte proceedings against the Corporation,
as neither any reply to the claim was filed nor any order of the
High Court on the said review application was produced.
Despite passing the ex-parte proceedings, the Arbitrator
permitted the appellant - Corporation to observe the proceedings
without taking any active part therein.
As the appellants had neither filed any reply nor had they
filed any document, the Arbitrator had no other option but to pass
an award relying upon the averments and assertions made by the
claimant. Finally, an award dated 22.12.2012 came to be passed
by the sole Arbitrator, awarding a sum of Rs.8,63,142/- along with
the interest @ 9% per annum from the date it became due till the
date of it realization.
The appellant - Corporation instead of filing any application
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for setting aside ex-parte proceedings or resorting to any other
appropriate proceedings, filed an application under Section 34 of
the Arbitration and Consideration Act, 1996, seeking setting aside
of the award dated 22.12.2012 passed by the learned Arbitrator.
The application filed by the appellant - Corporation came to be
rejected by the learned court below vide order dated 18.03.2015,
as the appellant had failed to satisfy as to how the award in
question falls within parameters of conditions/situations
enumerated in Section 34 of the Act, for which it could be set
aside. It would not be out of place to reproduce relevant part of
the order passed by the learned court below :-
"bl izdkj mijksDr dkuwuh ,oa rF;kRed ifjizs{; esa e/;LFke dh
fu;qfDr gksus dk vkSj e/;LFke }kjk izkFkhZx.k Hkkjr isVªksfy;e
dkWjiksjs"ku fyfeVsM dks uksfVl fn;s tkus esa muds }kjk gkftj gksus
dk vkSj gkftj gksuk fufoZokn gS vkSj mlds ckn tokc is"k djus ls
fdlh vleFkZrk ls xzflr gks ;k ikfjr fd;k x;k vokMZ yksduhfr ds
fo:} gks ;k vokMZ fdlh diV] Hkz'Vkpkj ;k vU;Fk izHkkfor fd;k
x;k gks ;k e/;LFke }kjk viukbZ xbZ izfdz;k vkSj e/;LFke }kjk fn;s
x;s dkj.k ;qfDr;qDr rdZlaxr u gks] dksbZ lk{; ugha gS vkSj tc rd
e/;LFke dk;Zokgh dks e/;LFke ,oa lqyg vf/kfu;e 1996 dh /kkjk
34 dh Li'V vogsyuk ugha gksrh gS] ogka ikfjr fd;s x;s vokMZ esa
dksbZ gLr{ksi dk vk/kkj ugha curk gS vkSj ekStwnk izdj.k esa Hkh
mijksDr foospu ls Li'V gS fd ekuuh; lksy vkchZVªsVj Jh ,l-vkj-
Hkalkyh }kjk ikfjr vokMZ fnukad 22-12-2012 esa gLr{ksi dk dksbZ
vk/kkj ugha gS vkSj izkFkhZx.k }kjk izLrqr izkFkZuk Ik= [kkfjt fd;s
tkus ;ksX; gSA"
Mr. Sunil Beniwal, learned counsel for the appellant laying
challenge to the impugned order dated 18.03.2015, whereby the
Corporation's application under Section 34 of the Act has been
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rejected submitted that the sole Arbitrator has committed an error
of law and of procedure in drawing ex-parte proceedings and the
court below has erred in rejecting the Corporation's application,
seeking setting aside of the arbitral award.
He further submitted that the Arbitrator has accepted
assertion and version of the claimant as a gospel truth and has
not applied his mind, while passing the award under challenge.
I have considered submissions made by learned counsel for
the appellant and perused the material available on record.
A perusal of the record reveals that the sole Arbitrator had
drawn ex-parte proceedings on 02.12.2012, which order has not
been challenged by the appellant before any forum or court. Even
during the course of arguing the application under Section 34 of
the Act, 1996, no argument seem to have been advanced qua
order dated 02.12.2012, vide which ex-parte proceedings were
drawn.
After drawing the ex-parte proceedings, the Corporation
failed to take up any proceedings for setting aside of such
proceedings. On the contrary, the appellant allowed the
proceedings to continue and observed them as silent spectator.
Faced with such a situation, the sole Arbitrator had no other
option but to accept the version of the claimant, duly supported by
affidavit, which remained un-controverted in absence of any
response or evidence oral or documentary.
The court below after dealing with the contentions raised by
the appellant has categorically observed that the appellant -
Corporation has failed to show as to how and on what ground the
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award in question is liable to set aside.
Before this Court also, Mr. Beniwal, learned counsel has
miserably failed to satisfy as to how the award is against the
established procedure or public policy.
This Court does not find any illegality or infirmity in the order
dated 18.03.2015 passed by the court below. The order passed by
the Arbitrator does not suffer from any inherent or apparent
infirmity, for which it can be said to be against the public policy as
per the guidelines given by Hon'ble Supreme Court in case of
ONGC vs. Saw Pipes Ltd., reported in AIR 2003 SC 2629.
There is no substance in the appeal. The same is dismissed
accordingly.
(DINESH MEHTA), J.
Himanshu/- 44