Himachal Pradesh High Court
Veena Gupta vs Oil & Natural Gas Corporation Ltd. ... on 4 August, 2022
Author: Sandeep Sharma
Bench: Sandeep Sharma
REPORTABLE
IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA
ON THE 4TH DAY OF AUGUST, 2022
BEFORE
.
HON'BLE MR. JUSTICE SANDEEP SHARMA
ARBITRATION CASE NO. 55 OF 2022
Between:-
VEENA GUPTA,
AGED ABOUT 65 YEARS,
W/IFE OF SH. ASHOK GUPTA,
PARTNER OF M/S JAI HIND FILLING STATION,
RESIDENT OF VILLAGE DHAR KI BER,
POST OFFICE DHARAMPUR,
TEHSIL KASAULI, DISTRICT SOLAN, H.P.
PETITIONER
(BY MR. B.C. NEGI, SENIOR ADVOCATE WITH
MR. UDIT SHOURYA KAUSHIK, ADVOCATE)
AND
1. INDIAN OIL CORPORATION LIMITED
THROUGH ITS
SENIOR DIVISIONAL RETAIL SALES MANAGER
SHIMLA DIVISIONAL OFFICE,
SDA COMPLEX, BLOCK-21,
KASUMPTI, SHIMLA-9.
2. SH. MOHINDER NATH
S/O LATE SH. RAM KRISHAN,
PARTNER M/S JAI HIND FILLING STATION,
DHARAMPUR, TEHSIL KASAULI,
SOLAN (HP)
R/O VILLAGE ANJI NEAR RADHASWAMI GROUND,
TEHSIL AND DISTRICT SOLAN (HP.)
RESPONDENTS
(MR. K.D. SOOD, SENIOR ADVOCATE
WITH MR. HET RAM THAKUR, ADVOCATE
FOR R-1)
(MR. SHRAWAN DOGRA, SENIOR ADVOCATE WITH
MR AJAY SIPAHIYA, ADVOCATE
FOR R-2)
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2
1
This petition coming on for orders this day, the court passed the following:
O R D E R
.
By way of instant petition filed under S. 9 of the Arbitration and Conciliation Act, 1996, petitioner has prayed for following main reliefs:
"It is, therefore, most respectfully prayed that this petition may kindly be allowed and the respondent no. 1 may be 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."
2. For having a bird's eye view of the matter, relevant facts necessary for the adjudication of the case are as under.
3. Vide Letter of Intent dated 16.1.2002, 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 ::: Downloaded on - 10/08/2022 20:00:54 :::CIS 3 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. 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 measuring 01-11 Bigha was purchased in the name of the petitioner. 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.. On the said land, I.B.P. Co. Ltd. established its petrol pump by installing machinery and structure etc., and 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. 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 15.11.2006. 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 respondent No.2 with respect to functioning of the petrol pump and to avoid any future disputes (Annexure P-1). As per terms and conditions of Partnership Deed, assets and liabilities of the firm were brought forward on their book value as per ::: Downloaded on - 10/08/2022 20:00:54 :::CIS 4 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.
4. 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. On execution of Dealership Agreement with the petitioner, respondent No.2 became authorized dealer of IOCL. Though, as per Clause 21 of Partnership Deed and Clause 7 of Partnership Deed, it is 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 dispute cropped up inter se them on account of maintaining the accounts.
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. Since the dispute had arisen inter se petitioner and respondent No.2, petitioner filed a petition under S.11 of the Act, before this Court for appointment of an arbitrator invoking arbitration clause of Partnership Deed. 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 ::: Downloaded on - 10/08/2022 20:00:54 :::CIS 5 dispute inter se petitioner and respondent No.2, as per Partnership Deed.
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. Vide order dated 4.8.2014, this Court 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. 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. Aforesaid judgment passed by this Court has not been laid challenge till date as such, same has attained finality.
5. After dismissal of the writ petition having been filed by respondent No.2, as detailed herein above, petitioner vide letter dated 16.12.2021 and email dated 21.12.2021, addressed to respondent No.1 with regard to decision /judgment dated 29.11.2021 passed by this Court, requested to make supply of petroleum products in the name of partnership firm consisting of both the partners and further to stop supply of petroleum ::: Downloaded on - 10/08/2022 20:00:54 :::CIS 6 products in the name of respondent No.2 alone. But since the needful never came to be done at the behest of respondent No.1/IOCL, rather it gave an evasive reply dated 4.1.2022, petitioner served it with 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 instant petition under S.9 of the Act, praying therein for the reliefs, as have been reproduced herein above.
6. It has been categorically stated in para-2 of the petition that the petitioner shall approach court of competent jurisdiction within a period of three months from the date of moving this petition, for appointment of an arbitrator for adjudicating the dispute inter se petitioner and respondents.
Three months' time as proposed to be taken by the petitioner for filing arbitration petition is yet to expire.
7. I have heard Learned Counsel appearing for the parties and gone through the record of the case.
8. Before ascertaining the correctness and genuineness of the rival contentions of learned Counsel appearing for the parties, it is pertinent to take note that prior to filing of the petition at hand, petitioner had filed an application under S.9 of the Act before 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. Thereafter an appeal under S.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 ::: Downloaded on - 10/08/2022 20:00:54 :::CIS 7 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 laid challenge to in the superior court of law, as .
such, same has attained finality.
9. Having gone through the records and heard learned counsel for the parties, facts as discussed herein above are not in dispute. The question which needs to be determined in the instant proceedings at the first instance is, '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?"
10. Mr. B.C. Negi, learned senior Counsel duly assisted by Mr. Udit Shourya Kaushik, Advocate, while fairly admitting factum with regard to appointment of Arbitrator on the request of the petitioner, submitted that arbitration proceedings pending before learned arbitrator appointed by this Court have arisen out of Partnership Deed dated 25.4.2013 and therein dispute is with regard to partnership inter se petitioner and the respondent No.2 in business concern, M/s Jai Hind Filling Station, whereas, present dispute is with regard to supply of petroleum products by IOCL in the name of respondent No.2 instead of dealership firm, which is in the name of petitioner and respondent No.2. Mr. Negi, while ::: Downloaded on - 10/08/2022 20:00:54 :::CIS 8 inviting attention of this Court to Dealership Agreement dated 26.4.2013 (Annexure P-2) submitted that a tripartite agreement was entered inter se the petitioner, respondent No.2 and the IOC, whereby IOCL is /was under
obligation to supply petroleum products to M/s Jai Hind Filling Station, .
which is a dealership firm. Mr. Negi argued that as per Clause 62(a) of the aforesaid Dealership Agreement, any dispute or difference of any nature whosoever, any claim, cross-claim, counter claim or set-off or regarding any right, liability, act, omission on 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. He submitted that since request having been made by the petitioner to IOCL to supply the petroleum products in the name of the dealership firm, after dismissal of the writ petition having been filed by respondent No.2 has not been considered, petitioner is contemplating to invoke arbitration clause of the Dealership Agreement dated 26.4.2013. He argued that the arbitration clause for appointment of an arbitrator is to be invoked within a period of three months from the date of filing the present petition, which is yet to expire and as such, instant petition filed under S.9 of the Act, praying therein for interim reliefs as referred to above, is maintainable and deserves to be allowed in the facts and circumstances of the case. Mr. Negi further argued that since there is no dispute that the petitioner alongwith respondent No.2 is a dealer of petrol pump namely M/s Jai Hind Filling Station, Dharampur and this Court vide judgment dated 29.11.2021 passed in CWP No. 5417 of 2014 having been filed by respondent No.2 has already rejected prayer made on behalf of respondent No.2 to direct ::: Downloaded on - 10/08/2022 20:00:54 :::CIS 9 the IOCL to supply petroleum products in the name of respondent No.2, respondent No.1/IOCL is otherwise under obligation to supply petrol and petroleum products in the name of dealership firm, which comprises of petitioner and respondent No.2 and not in the individual name of .
respondent No.2 who is only a partner in the firm i.e. M/s Jai Hind Filling Station. Lastly, Mr. Negi, while inviting attention of this Court to the prayer made in the instant petition submitted that since considerable time is likely to be consumed in adjudication of the dispute, arisen inter se parties, with respect to dealership, this court while exercising power under S. 9 of the Act is required to restrain respondent No.1 from supplying petroleum products to respondent No.2 in the name of M/s Jai Hind Filling Station showing him as a sole proprietor, rather the petroleum products are required to be supplied in the name of partnership firm consisting of both the partners i.e. petitioner and respondent No..2. He submitted that till the time, arbitrator is appointed in terms of Clause 62(a) of Dealership Agreement dated 26.4.2013, this court may either direct respondent No.1 to make supply of petroleum products in the name of partnership concern M/s Jai Hind Filling Station consisting of both the partners or may appoint a Receiver to take control of aforesaid M/s Jai Hind Filling Station to maintain true accounts.
11. While refuting aforesaid submissions made on behalf of the petitioner, Mr. Shrawan Dogra, learned Senior Advocate duly assisted by Mr. Ajay Sipahiya, Advocate vehemently argued that the present petition is not maintainable and as such, same deserves to be dismissed at the threshold. Learned senior counsel further argued that since the dispute ::: Downloaded on - 10/08/2022 20:00:54 :::CIS 10 arisen inter se petitioner and respondent No. 2 is with regard to partnership of M/s Jai Hind Filling Station and, in those proceedings, learned Arbitrator has already framed issues with regard to sole proprietorship, as is being claimed by respondent No.2 vis-à-vis .
partnership as is being claimed by the petitioner, instant petition filed under S. 9 of the Act is not maintainable. Interim relief as has been sought in the instant petition can only be granted by learned Arbitrator under S.17 of the Arbitration and Conciliation Act, if approached by the petitioner. Mr. Dogra, learned senior counsel representing respondent No.2 further argued that otherwise also, present petition is not maintainable in view of the fact that prior to filing of the petition at hand, petitioner also approached learned District Judge Solan by filing petition under S. 9 of the Act, seeking therein similar reliefs as have been claimed in the instant petition but same stands rejected vide order dated 19.7.2014 passed by learned Additional District judge-I Solan (Annexure R2-12). While fairly admitting the factum with regard to Dealership Agreement dated 26.4.2013 entered inter se petitioner and respondent No.2, Mr. Dogra stated that Clause 62(a) of the Dealership Agreement, which is sought to be invoked by the petitioner for raising fresh dispute, cannot be invoked by the petitioner against respondent No.2 because in terms of Clause 62(a) of the Dealership Agreement, dispute if any inter se dealer and IOCL can be referred for arbitration, whereas in the present case, dispute sought to be adjudicated is inter se petitioner and respondent No.2.
::: Downloaded on - 10/08/2022 20:00:54 :::CIS 1112. Before ascertaining correctness and genuineness of the rival submissions of learned counsel for the parties, it would be apt to take note of S.9 of the Arbitration and Conciliation Act, which is reproduced herein below:
.
"9. Interim measures, etc. by Court.--A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a court--
(i) for the appointment of a guardian for a
minor or a person of unsound mind for the purposes
of arbitral proceedings; or
(ii) for an interim measure of protection in
respect of any of the following matters, namely:--
(a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;
(b) securing the amount in dispute in the arbitration;
r (c) the detention, preservation or inspection of any property or thing which is the subject-
matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;
(d) interim injunction or the appointment of a receiver;
(e) such other interim measure of protection as may appear to the court to be just and convenient, and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it."
13. Bare perusal of aforesaid provision suggests that a party, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, can pray for interim measure of protection in respect of any of the matters as detailed ::: Downloaded on - 10/08/2022 20:00:54 :::CIS 12 in S.9(i) and 9(ii)(a) to (e), reproduced herein above. Bare perusal of S.9 suggests that the said provision relates to interim relief. It entitles a party to seek interim relief at three stages (1) before commencement of arbitral proceedings, (2) during the course of arbitral proceedings and (3) after .
conclusion of arbitration proceedings. A considerable time may elapse in invoking the arbitration clause and during this time if an urgent relief is sought by a party and there is hardly any time to wait, S.9 provides that before arbitral proceedings, an individual is also entitled to move the court, meaning thereby entire purpose of S.9 is to provide relief to the parties, when arbitral tribunal is not in existence. Though arbitration is supposed to be undertaken by learned Arbitrator but rights of parties should not be frustrated, hence, for the period when arbitral tribunal may not be in existence, parties may approach court for interim relief. Similarly at any time after arbitral award and before its enforcement as per S. 36, one has a right to go to the court. After passing of award, arbitral tribunal becomes functus officio however, before its enforcement, right after passing award and before, concerned parties are required to wait for 90 days for setting aside award but due to some urgency, one may require urgent relief and in that case, such party may approach the Court under S.9. Sub-sections (i) and (ii) of S. 9 were added by 2015 amendment providing bar for approaching court after arbitral proceeding have started.
Function of arbitral tribunal ends once it renders award and period of existence of arbitral tribunal is from the time of its constitution till the time it has passed an award. S. 9(3) of Arbitration and Conciliation Act incorporated after 2015 amendment provides that if there is Arbitral ::: Downloaded on - 10/08/2022 20:00:54 :::CIS 13 Tribunal in existence, one cannot approach court under S. 9. Through 2015 Amendment Act power of court to grant interim relief after constitution of arbitral tribunal has been curtailed. S 9(3) of Act states that an application under S. 9(1) shall not be entertained by court unless .
remedy under Section 17 is inefficacious. Hon'ble Apex Court in a number of cases observed that word 'entertained' mentioned under S.9 means consideration of issues raised by applicant. Hon'ble Apex Court held that a court entertains a matter when it takes up issues for consideration and may continue till pronouncement of judgment. Section 9(3) would not be applicable once S. 9(1) has been invoked.
14. Prior to 2015 amendment Act, even when arbitral tribunal was in existence, there was no bar for making an application under S. 9. Prior to 2015 amendment power of a court under S. 9 was much wider than power of arbitral tribunal under S.17. Post 2015 amendment, this provision has been rectified in the Act to a large extent. Now when an arbitral tribunal is constituted, court would refrain from entertaining application under S.9 of the Act and leave it to the arbitral tribunal to decide the issue under S. 17, which fact becomes apparently clear from the reading of newly added S. 9(2) and (3) in the amendment Act, 2015..
15. At this junction, it would be apt to take note of para 6 of application (page 245) "6. 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 interse between the ::: Downloaded on - 10/08/2022 20:00:54 :::CIS 14 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 interse 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."
16. If the averments contained in para 6 are read in their entirety, petitioner specifically submitted before this Court while making prayer for appointment of an arbitrator that though as per tripartite Dealership Agreement, dispute inter se parties is required to be referred to sole arbitration of Director (Marketing), but if this court comes to the conclusion that dispute is inter se partners, some independent person may be appointed as arbitrator to adjudicate the dispute inter se petitioner and respondent No.1. In this para, petitioner claimed that respondent No.1 has supplied petroleum products to respondent No.2 and as such, present dispute between partners and respondent No.1 is liable to be referred to Director (Marketing), Indian Oil Corporation Limited. But if this court comes to conclusion that dispute is inter se partners, some independent person may be appointed as an arbitrator to adjudicate the dispute.
::: Downloaded on - 10/08/2022 20:00:54 :::CIS 1517. Having taken note of the aforesaid submission made by learned counsel for the petitioner in Arb. Case No. 59 of 2014, this court vide order dated 31.10.2014 passed in the aforesaid case, appointed Mr. G.D. Verma, learned Senior Advocate as an arbitrator, who further as per .
direction of this Court entered upon reference and on the basis of pleadings of parties, framed 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
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 ::: Downloaded on - 10/08/2022 20:00:54 :::CIS 16
9. Whether the claimant applied for licence from Labour Department by misusing the Partnership Deed? OPR
10. Whether after the execution of Partnership Deed, the partnership firm remained in abeyance and was never .
acted upon? OPR"
18. Careful perusal of the issues framed by learned Arbitrator reveals that at first instance, issue with regard to partnership of M/s Jai Hind Filling Station is required to be decided by learned Arbitrator. Another important issue which is to be decided by learned Arbitrator is whether Jai Hind Filling Station is sole proprietorship concern of respondent No.2.
Since very question with regard to partnership inter se petitioner and respondent No.2 in M/s Jai Hind Filling Station and termination of partnership concern as per notice dated 17.7.2014, is pending adjudication before learned Arbitrator, it is not understood, how dispute, if any with regard to claim of the petitioner that he is dealer alongwith respondent No.2 in M/s Jai Hind Filling Station can be considered and decided in the present proceedings. Though, if the order passed on 31.10.2014 by this Court appointing the arbitrator, is perused, it suggests that the petitioner sought appointment of arbitrator in terms of Clause 17 of the partnership deed dated 25.4.2013 but if annexure R-2/14, application filed by petitioner is read in its entirety, especially para 6, it specifically talks about Tripartite Dealership Agreement vide which dispute, if any is to be referred to sole arbitration of Director (Marketing).
In the aforesaid application, petitioner has stated specifically that in the present case, dispute is inter se her and respondent No.1 as respondent ::: Downloaded on - 10/08/2022 20:00:54 :::CIS 17 No.1 has supplied petroleum products to respondent No.2 as sole proprietor illegally that too after coming into force Dealership Agreement and Partnership Deed and as such, matter is required to be referred to Director (Marketing), Indian Oil Corporation Limited but this court may .
appoint an independent arbitrator to adjudicate the dispute. In this background, this court on 31.10.2014 appointed Mr. G.D. Verma, learned Senior Advocate, as an arbitrator who has already commenced the proceedings.
19. Since the arbitration proceedings have already commenced with the framing of issues on the basis of pleadings adduced on record by respective parties, present application under S. 9 of the Act is not maintainable. Though learned senior counsel for the petitioner placed heavy reliance upon Clause 62(a) of Dealership Agreement, Annexure P-
2 but perusal of the same nowhere makes the petitioner entitled to invoke arbitration proceedings.
20. Clause 62(a) of 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. "::: Downloaded on - 10/08/2022 20:00:54 :::CIS 18
21. In terms of aforesaid clause, dispute or difference of any nature, inter se parties arising out of or in relation thereto shall be referred to the sole arbitration of Director (Marketing)of Indian Oil Corporation Limited who may act himself as an arbitrator or nominate an officer of the .
Corporation to act as arbitrator. However, last lines are very relevant, wherein specific words 'Dealer' has been used. It has been stated in the said clause that dealer shall not be entitled to raise any objection on such ground that arbitrator is an officer of the Corporation. In terms of Dealership Agreement both, petitioner and respondent No.2 being partners of Jai Hind Filling Station are termed as 'dealers'. (Annexure R-
2/5). Dealership Agreement clearly reveals that the Indian Oil Corporation Limited is one party whereas respondent No.2 Mohinder Nath Sofat and Veena Gupta partners of Jai Hind Filling Station Dharampur are the second party, meaning thereby though it is a Tripartite Dealership Agreement but it is an agreement inter se IOCL and dealership which comprises of petitioner and respondent No.2. Hence to invoke arbitration clause in terms of S. 62(a) of Dealership Agreement, dispute must be inter se dealership firm and the IOCL but definitely not inter se partners in dealership firm and IOCL or inter se partners of the dealership firm.
22. Here, in the instant case, dispute has arisen petitioner and respondent No.2 on question of their being partners of M/s Jai Hind Filling Station which is pending adjudication before arbitrator appointed by this Court. Now, dispute sought to be raised by invoking clause 62(a) of Dealership Agreement by the petitioner is that IOCL cannot supply the petroleum products in the name of respondent No.2 rather, same are ::: Downloaded on - 10/08/2022 20:00:54 :::CIS 19 required to be supplied in the name of partnership concern, which as per respondent No.2 stands determined in terms of notice dated 17.7.2014, which issue is already pending before learned Arbitrator appointed by this Court.
.
23. It is not in dispute that at the first instance, LoI with regard to establishment of petrol pump of IBP Company, which was subsequently taken over by IOCL, was issued in favour of respondent No.2, who allegedly after six years of establishment of retail outlet entered into Partnership Deed with the petitioner but as has been taken note here in above, on account of certain dispute, respondent No.2 first filed a civil suit but the same was withdrawn and similarly, the petitioner approached this Court by way of petition under S. 11(6) of the Act, for appointment of arbitrator to adjudicate dispute inter se parties arising out of Partnership Deed.
24. Though prima facie this court is of the view that in terms of Clause 62(a) of Dealership Agreement, petitioner claiming himself to be one of partners of Jai Hind Filling Station cannot invoke jurisdiction of this Court to adjudicate the dispute regarding supply of petroleum products directly in the name of respondent no.2 of dealership concerned, but even otherwise such dispute cannot be decided till the time, dispute with regard to partnership or determination thereof is decided by learned Arbitrator appointed by this Court
25. Earlier petition filed under S. 9 of Act, by petitioner before learned Additional District Judge-I, Solan, came to be dismissed vide order dated 19.7.2014 (Annexure R-2/12) on the ground of pecuniary jurisdiction.
::: Downloaded on - 10/08/2022 20:00:54 :::CIS 20Before learned court below petitioner claimed that she spent huge amount of Rs. 34.00 Lakh towards partnership assets, but to attract jurisdiction of court, she assessed the proportionate value of the partnership assets falling to her share at Rs. 30,00,000/-, whereas, as per respondent .
therein, market value of assets was Rs.5.00 Crore. Learned court below after having taken note of the fact that petitioner is not assertive of invoking the jurisdiction of a particular court having pecuniary jurisdiction, dismissed the petition. Learned Additional District Judge-II, Solan also noticed that power to appoint receiver is discretionary power and receiver cannot be appointed unless the party prima facie proves that he/she has excellent chance of succeeding. Though the petitioner laid challenge to aforesaid order by way of Arb. Appeal No. 7 of 2014 (Annexure R-2/16) but this court having taken note of the fact that respondent No.2 is running the petrol pump directed respondent No.2 to maintain the records and produce the same before the court, duly verified by a Chartered Accountant after every three months. It is not in dispute that pursuant to said order, respondent No.2 is not only maintaining records but reports of Chartered accountant after three months are being furnished.
26. No doubt, CWP No. 5417 of 2014 having been filed by respondent No.2 seeking direction to respondent No.1 to continue making supply of petroleum products in its name has been dismissed on 29.11.2021, but that does no mean that issue with regard to partnership inter se petitioner and respondent No.2 stands decided, rather, the same is to be decided by learned Arbitrator in the proceedings pending before him.
::: Downloaded on - 10/08/2022 20:00:54 :::CIS 2127. Similarly, there is no direction in the judgment dated 29.11.2021, passed by this Court in CWP No. 5417 of 2014 to respondent No.1 to not supply petroleum products in the name of respondent No.2 rather, this court having taken note of pendency of dispute before learned Arbitrator, .
made following observations para 17 and 18 (page 89 and 90) "17. Now coming to reliefs No. 1 and 2 prayed for by the petitioner. If one peruses the reply, which has been filed to the writ petition by Indian Oil Corporation, i.e. respondent No. 1, a perusal thereof clearly demonstrates that it stands mentioned therein that said respondent is supplying petrol and petroleum products to the petrol pump in issue. De hors this fact, whether or not the Petrol Pump in issue is to be continued the supply of the petrol and petroleum products is a matter intra the petitioner, respondent No. 2 and respondent No. 1-Corporation, subject to the agreements entered into between them and as the entire issue is pending before the learned Arbitrator, therefore, these two reliefs can also not be gone into by this Court in the peculiar facts of the case for the reason that in the garb of these two reliefs, the petitioner 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. Therefore, on these counts also, this writ petition is held to be not maintainable.
18. In fact, in the peculiar facts of this case, which, as has been argued by learned Senior Counsel appearing for respondent No. 2, involves seriously disputed questions of law, this Court in exercise of its writ jurisdiction cannot venture into and adjudicate the issues which the petitioner wants this Court to do. This is well left to either a Civil Court to do the needful where the parties can lead evidence in support of their respective contentions or the learned Arbitrator who, as mentioned hereinabove, is already seized of the entire matter. Accordingly, this writ petition is held to be not maintainable ::: Downloaded on - 10/08/2022 20:00:54 :::CIS 22 and is thus dismissed. Interim order, if any, stands vacated. Pending miscellaneous application(s), if any, also stand disposed of accordingly."
28. In the aforesaid judgment, writ court has held that whether or not .
the Petrol Pump in issue is to be continued the supply of the petrol and petroleum products is a matter intra the petitioner, respondent No. 2 and respondent No. 1-Corporation, subject to the agreements entered into between them and as the entire issue is pending before the learned Arbitrator, therefore, these two reliefs can also not be gone into by this Court in the peculiar facts of the case for the reason that in the garb of these two reliefs, the petitioner 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. Though writ petition filed by respondent No.2 was not held maintainable but at no point of time, direction ever came to be issued by writ court to respondent No.1 not to supply the petroleum products to respondent No.2, rather writ court stated categorically that same is to be guided by agreements inter se parties and this issue is pending before learned Arbitrator.
29. Respondent No.1 in its short reply has stated categorically that retail outlet M/s Jai Hind Filling Station Kumarhatti is high selling one with sales more than 400 KL situate on Chandigarh Shimla Highway at Dharampur and any action resulting in closure of retail outlet shall be detrimental to image of corporation and shall cause loss of sale to corporation and to public. After disposal of Arbitration Case No. 59 of 2014, petitioner filed Arb. Appeal No. 7 of 2014, wherein this court after ::: Downloaded on - 10/08/2022 20:00:54 :::CIS 23 finding that retail outlet was being run by respondent No.2 directed respondent No.2 to maintain record and get it duly verified from a Chartered Accountant. Aforesaid order was passed 7 years back and till date, no complaint ever came to be made by petitioner that records are .
not being maintained by respondent No.2 in terms of order dated 26.11.2014 in Arb. Appeal No. 7 of 2014. Since, the petitioner did not make any application for modification of order nor pointed out discrepancy if any on the part of respondent No.2 in maintaining record coupled with the fact that the dispute inter se parties is already pending adjudication before learned Arbitrator, there appears to be no justification for this Court to intervene at this stage, to grant interim relief, while exercising power under S.9 of the Act.
30. In such like situation, party can approach arbitral tribunal under application under S. 17 of the Act, praying therein for interim measures.
However, order if any on S. 9 would only operate during operation of arbitral tribunal and its being functional.
31. In this regard reliance is placed upon judgment of High Court of Delhi in Hero Wind Energy Private Ltd. V. Inox Renewables Limited and Another, reported in 2020 SCC Online Del 720 (para 27 to 32) "27. Per Section 7 of the Arbitration Act, "arbitration agreement" means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. The identical arbitration clause in all the agreements between the parties to the present proceedings, as set out hereinabove, provides for "any dispute, controversy, disagreement or disputed claim arising out of, in connection with or under this Agreement or the breach, termination, interpretation or invalidity thereof or in relation to any matter contained in or relating to this Agreement raised by any Party" to be "referred to arbitration". The parties thus agreed to submit to arbitration, all ::: Downloaded on - 10/08/2022 20:00:54 :::CIS 24 disputes which may arise. Supreme Court, in Dolphin Drilling Ltd. Vs. Oil & Natural Gas Corporation Ltd. (2010) 3 SCC 267 held that the words "all disputes" in arbitration clause can only mean "all disputes that may be in existence when the arbitration clause is invoked and one of the parties to the agreement gives the arbitration notice to the other"; it cannot be held that once the arbitration clause is invoked, the remedy of arbitration is no longer .
available in regard to other disputes that might arise in future. We may add, that depending on nature of the agreement or obligations to be performed thereunder, it is not necessary that all disputes between parties arise at one point of time. This Court in National Highways Authority of India Vs. ITD Cementation India Ltd. 197 (2013) DLT 650 held that in large scale projects, it is not unheard that different facets of the project constitute subject matter of separate references and in the context of large scale works contracts, there cannot be any rigid application of the principles of Order II Rule 2 of the CPC unless it is demonstrated that prejudice has been caused to either party as a result of such non-adherence. We may further add that even if commencement of arbitration with respect to disputes which have arisen, can await culmination of full performance of the agreement, to commence arbitration at one time only, also with respect to other dispute which may arise, the claim earliest arising may by then become barred by time. Order II Rule 2 of the CPC also envisages successive causes of action.
28. Section 11(2) of the Act grants freedom to the parties to agree on a procedure for appointing the arbitrator. The arbitration clause in all the agreements provides for "An arbitration tribunal to be formed...... which shall consist of 3 (three) arbitrators. Each party shall have the right to appoint 1 (one) arbitrator each. The appointed arbitrators shall appoint the 3rd (third) neutral arbitrator who will preside over the arbitration tribunal." Hero and Inox, under the freedom conferred on them vide Section 11(2) of the Act, agreed on a procedure of appointing the arbitrators, with Hero on the one hand and Inox Group of Companies on the other hand appointing one arbitrator each and the two appointed arbitrators appointing the third arbitrator.
29. Section 21 of the Act provides that unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent. There is no agreement to the contrary in the arbitration clause in the present case. It is on record that Hero, vide communication dated 28th February, 2018 invoked arbitration, of disputes which had then arisen between the parties and pursuant whereto the Arbitral Tribunal was constituted.
30. The use in Section 21 of the Act, while defining the date of "commencement of arbitral proceedings", of the words "arbitral proceedings in respect of a particular dispute", is clearly indicative of the Act envisaging a separate Arbitral Tribunal with respect to ::: Downloaded on - 10/08/2022 20:00:54 :::CIS 25 successive disputes which may arise between the same parties out of the same agreement or set of agreements. All these provisions show that there can be multiple claims and multiple references at multiple stages. This Court in Messrs Krishna Construction Company Vs. Engineer Member, D.D.A. 2005 (122) DLT 54, relying upon Purser & Co. Vs. Jackson (1977) Q.B. 166 held that in arbitration proceeding, it is the terms of reference of the arbitration .
which determine the issue which the Arbitrator has to decide;
accordingly, if a particular issue is included in the terms of reference, parties would be estopped by the doctrine of res judicata from raising that issue in subsequent arbitration proceedings even though the Arbitrator had made no award in relation to that issue.
The senior counsels for the appellant are also correct in contending that this becomes further evident from Section 29A read with Section 23 of the Arbitration Act prescribing a period of six months, from the date the Arbitrator or all the Arbitrators have received notice of appointment, for completion of pleadings and period of 12 months therefrom for making the arbitral award.
31. That brings us to Section 9 of the Act. Sub-Section (1) thereof entitles a party to apply to Court for interim measures "before or during arbitral proceedings......" The reference to arbitral proceedings, as aforesaid, has to be to the arbitral proceedings for adjudication of a "particular dispute". The particular dispute which has now arisen between Hero and Inox is of right of Hero to use shared infrastructure and which dispute has arisen, as aforesaid, after termination of the O&M Agreement and failure to mutually agree on O&M charges for shared services. The arbitral proceedings with respect thereto will commence on the date when request for this dispute to be referred to arbitration is made by either party on other. There is no request by either of the parties to the other for arbitration of the disputes which have arisen from termination by Hero of the O&M Agreement and failure of the parties to arrive at a mutually acceptable rate payable by Hero for O&M charges for shared infrastructure for shared services. So the arbitral proceedings with respect to this dispute have not commenced.
32. In our opinion, the words 'Arbitral Tribunal' in Section 9(3) of the Act have to take colour from all the said provisions and thus have to be interpreted as Arbitral Tribunal constituted to adjudicate the disputes which have arisen and been referred to arbitration and with respect whereto Arbitrators have been appointed and notified of their appointment. Much prior to the incorporation of Sub-Section (3) in Section 9, Supreme Court in Firm Ashok Traders Vs. Gurumukh Das Saluja (2004) 3 SCC 155 held, that under the 1996 Arbitration Act, unlike the predecessor Act of 1940, the Arbitral Tribunal is empowered by Section 17 of the Act to make orders amounting to interim measures; the need for Section 9 of the Act, inspite of Section 17 having been enacted, is that Section 17 of the Act would operate only during the existence of the Arbitral Tribunal and its being functional; during that period, the power ::: Downloaded on - 10/08/2022 20:00:54 :::CIS 26 conferred on the Arbitral Tribunal under Section 17 of the Act and the power conferred on the Court under Section 9 of the Court may overlap to some extent but so far as the period pre and post the arbitral proceedings is concerned, the party requiring an interim measure shall have to approach only the Court. Seen in this light, the Arbitral Tribunal constituted with reference to the disputes which had earlier arisen, even though from the same agreement, .
cannot be the Arbitral Tribunal within the meaning of Section 9(3) of the Act even if were to be of the same composition. Section 9(3) of the Act does away with the jurisdiction of the Court with respect to interim measures also, once the Arbitral Tribunal is constituted. However, if a separate Arbitral Tribunal even if of same composition is to be constituted for disputes arising out of successive causes of action, Arbitral Tribunal constituted for adjudication of disputes arisen from a earlier cause of action cannot be the Arbitral Tribunal constituted for the disputes arising from a subsequent cause of action and qua which interim measures are sought."
32. Bare perusal of law taken into consideration reveals that all disputes that may be in existence when the arbitration clause is invoked and one of the parties to the agreement gives the arbitration notice to the other"; it cannot be held that once the arbitration clause is invoked, the remedy of arbitration is no longer available in regard to other disputes that might arise in future.
33. Since in the case at hand, dispute if any in terms of Dealership Agreement was already in existence at the time of filing of the application by petitioner for appointment of an Arbitrator in terms of Clause 17 of the Partnership Deed and such fact was duly mentioned in the application by the petitioner as has been take note herein above, it is not open for the petitioner to claim at this stage that since independent dispute has arisen on account of refusal on the part of respondent No.1 to not make supply of petroleum products in the name of dealership firm M/s Jai Hind Filling Station, it is entitled to invoke separate arbitration proceedings under Clause 62(a) of the Dealership Agreement, dated 26.4.2013, especially ::: Downloaded on - 10/08/2022 20:00:54 :::CIS 27 when Tripartite Dealership Agreement dated 26.4.2013 was also made basis alongwith Partnership Deed dated 25.4.2013 by the petitioner while seeking appointment of an Arbitrator in terms of Clause 17 of the Partnership Deed, which prayer of hers was duly accepted and learned .
Arbitrator was appointed.
34. Consequently, in view of detailed discussion made herein above and law taken note of, this court finds no merit in the present petition and the same is dismissed. Interim directions dated 23.6.2022 and 15.7.2022 are vacated. Liberty is reserved to the petitioner to make prayer for interim relief by way of filing application under S. 17 of the Act before learned Arbitrator, who would consider the same in accordance with law, within a period of two weeks, from the date of its filing.
(Sandeep Sharma) Judge August 4, 2022 (Vikrant) ::: Downloaded on - 10/08/2022 20:00:54 :::CIS