Andhra HC (Pre-Telangana)
K. Harinath vs Hindustan Petroleum Corporation Ltd. ... on 28 March, 2013
Bench: N.V. Ramana, Vilas V. Afzulpurkar
HON'BLE THE ACTING CHIEF JUSTICE SRI N.V. RAMANA AND HON'BLE SRI JUSTICE VILAS V. AFZULPURKAR W.A.No.371 of 2013 28-03-2013 K. Harinath Hindustan Petroleum Corporation Ltd. and another Counsel for the Appellant: Sri P. Kamalakar Counsel for Respondents: Sri B. Mayur Reddy <Gist: >Head Note: ?Cases referred: 1. (1999) 5 SCC 651 2. (1991) 1 SCC 533 3. (2000) 7 SCC 764 JUDGMENT:
(Per Hon'ble Sri Justice Sri Vilas V. Afzulpurkar) Heard Mr. E. Manohar, learned Senior counsel in support of the appeal and Mr. B. Adinarayana Rao, learned Senior counsel appearing for the respondents.
2. The appellant was the writ petitioner in W.P.No.26115 of 2012 which was filed questioning the order of the Chief Regional Manager, Hindustan Petroleum Corporation Limited (HPCL) dated 24-07-2012 whereunder the dealership agreement between the petitioner and the respondents dated 03-07-2009 and distributorship agreement also of even date was terminated forthwith. When the said writ petition was heard by the learned single Judge, learned counsel for the respondents inter alia raised objection as to maintainability of the writ petition in view of the alternative remedy of arbitration available to the writ petitioner. The said issue was adjudicated by the learned single Judge by accepting the contention of the learned counsel for the respondents that in case the writ petitioner invokes the jurisdiction of Arbitrator, the learned Arbitrator can grant all the reliefs including that of restoration of dealership if the termination of dealership is found vitiated. In support of the said contention, learned counsel for the respondents also placed reliance upon the decision of the Supreme Court in OLYMPUS SUPERSTRUCTURES PVT. LTD. v. MEENA VIJAY KHETAN 1. Learned single Judge, therefore, dismissed the writ petition holding inter alia that the relief of restoration of dealership also can be granted by the Arbitrator and giving liberty to the writ petitioner to raise the dispute as to restoration of dealership before the Arbitrator, particularly as the respondent-HPCL has already raised an arbitration dispute with regard to the penalty imposed on the writ petitioner. Aggrieved thereby, the present appeal is filed.
3. Learned Senior counsel appearing for the appellant primarily contends that the finding of the learned single Judge that the Arbitrator would have jurisdiction to restore the dealership to the writ petitioner is opposed to at least two decisions of the Supreme Court in INDIAN OIL COROPORATION LTD. v. AMRITSAR GAS SERVICE 2 and E. VENKATAKRISHNA v. INDIAN OIL CORPORATION 3. He further contends that even if the petitioner is driven to remedy of arbitration, the Arbitrator cannot grant the relief of restoration of dealership though the petitioner is able to demonstrate that the order of termination is vitiated. Learned Senior counsel would, therefore, submit that the impugned order of the learned single Judge dismissing the writ petition solely on the said ground is clearly unwarranted. He also submitted that even the decision in OLYMPUS SUPERSTRUCTURES's case (1 supra) relied upon by the learned single Judge also does not state the proposition that Arbitrator can restore the dealership on being satisfied of illegality of termination. Learned Senior counsel would, therefore, submit that since the basic premise of the impugned order is opposed to the decisions of the Supreme Court cited above and as the learned single Judge has not considered the writ petition on merits, the impugned order is liable to be set aside and the petitioner is entitled to an opportunity of hearing of the writ petition on merits.
4. Learned Senior counsel appearing for the respondents-HPCL fairly states that so far as the legal position with regard to the powers of the Arbitrator are concerned, as held by the decisions in AMRITSAR GAS SERVICES's case (2 supra) and E. VENKATAKRISHNA's case (3 supra), the Arbitrator has no such power of restoring the dealership even if the order of termination is found to be bad. Though the learned Senior counsel does not want to join the issue on that aspect, he further submits that the invocation of jurisdiction of this Court under Article 226 of the Constitution of India is even otherwise unsustainable as several disputed questions arise for consideration which would not be adjudicated by this Court. He points out that the order of termination is based upon several acts and omissions of the writ petitioner/dealer and all the said acts and omissions relate to compliances which involve investigation of facts and while exercising the jurisdiction under Article 226 of the Constitution of India, this Court would not embark upon adjudication of disputed questions of facts.
He, therefore, submits that even otherwise also the writ petition filed by the appellant is not sustainable and as rightly observed by the learned single Judge, appropriate remedy for the petitioner is to invoke the clause relating to arbitration particularly as the arbitration dispute raised by the respondent- HPCL is already pending.
5. We have considered the submissions referred to above. The decision in OLYMPUS SUPERSTRUCTURES's case (1 supra) was a case arising under Specific Relief Act and the question that fell for consideration before the Hon'ble Supreme Court was with reference to the power of the Arbitrator in such case to grant specific performance. The Supreme Court made a reference to the view of Punjab, Bombay and Calcutta High Courts holding that the Arbitrator can grant specific performance of the contract relating to immoveable property under an award and the said view was accepted by the Supreme Court. The said decision, therefore, is not directly applicable to the facts and circumstances of the present case. On the contrary in the decision in AMRITSAR GAS SERVICES's case (2 supra), specific issue relating to LPG dealership agreement arose in the context of the Arbitrator restoring the dealership agreement and the Supreme Court held that:
"This finding read along with the reasons given in the award clearly accepts that the distributorship could be terminated in accordance with the terms of the agreement dated April 1, 1976, which contains the aforesaid clauses 27 and 28. Having said so in the award itself, it is obvious that the arbitrator held the distributorship to be revocable in accordance with clauses 27 and 28 of the agreement. It is in this sense that the award describes the Distributorship Agreement as one for an indefinite period, that is, till terminated in accordance with clauses 27 and 28. The finding in the award being that the Distributorship Agreement was revocable and the same being admittedly for rendering personal service, the relevant provisions of the Specific Relief Act were automatically attracted. Sub-section (1) of Section 14 of the Specific Relief Act specifies the contracts which cannot be specifically enforced, one of which is 'a contract which is in its nature determinable'. In the present case, it is not necessary to refer to the other clauses of sub-section (1) of Section 14, which also may be attracted in the present case since clause (c) clearly applies on the finding read with reasons given in the award itself that the contract by its nature is determinable. This being so granting the relief of restoration of the distributorship even on the finding that the breach was committed by the appellant-Corporation is contrary to the mandate in Section 14(1) of the Specific Relief Act and there is an error of law apparent on the face of the award which is stated to be made according to 'the law governing such cases'. The grant of this relief in the award cannot, therefore, be sustained."
6. Similarly in the decision in E. VENKATAKRISHNA's case (3 supra), it was held by the Supreme Court that:
"6. In our view, the Division Bench was right. All that the arbitrator could do, if he found that the termination of the distributorship was unlawful, as to award damages, as any civil court would have done in a suit.
7. We find it difficult to accept the contention on behalf of the appellant that what was referred to the arbitrator was the issue of restoration of distributorship in the sense that the arbitrator could direct, upon holding that the termination was unlawful, that the distributorship should be restored. We think that the reference itself contemplated consequential damages for wrongful termination. In any event and assuming that there is any error in so reading the reference, it is difficult to hold that the arbitrator was thereby vested with jurisdiction to award restoration.
8. It was contended that the appellant had invoked the arbitration clause only because of the order of the learned Single Judge of the Karnataka High Court on the writ petition that he had filed and that that order contemplated that the arbitrator, acting on the arbitration clause in the agreement, would have the authority to award restoration. In the first place, we do not find any such observation in the judgment of the learned Single Judge. In any even, such observation, even if it were there, would not vest the arbitrator with a jurisdiction that he did not otherwise possess in law."
7. In view of the legal position referred to above, we find it difficult to sustain the order of the learned single Judge dismissing the writ petition on the ground that the petitioner can get the relief of restoration of dealership before the Arbitrator as well. In that view of the matter, the order impugned is liable to be set aside.
8. It is obvious that the writ petition has not been adjudicated on merits and only in the context of alternative remedy it was dismissed. Though Mr. B. Adinarayana Rao, learned Senior counsel, urged that several disputed questions arise for consideration, which may not be gone into in writ petition, we are not inclined to accept the said submission as it would amount to depriving the writ petitioner of adjudication of his case on merits even before the learned single Judge hears and decides the matter on merits. In other words, we feel that it amounts to prejudging the merits of the writ petition in appeal in the absence of any adjudication on merits by the learned single Judge.
9. Therefore, the writ appeal is allowed. The impugned order of the learned single Judge is set aside. The writ petition shall stand restored on the file of this Court and shall be listed for hearing before the learned single Judge having provision as per the Roster. We request the learned single Judge to hear and decide the writ petition on merits at his Lordship's earliest convenience. As a sequel, W.A.M.P.No.913 of 2013 stands closed. No order as to costs.
_________________ N.V. RAMANA, ACJ ________________________ VILAS V. AFZULPURKAR, J Date: 28-03-2013