Madhya Pradesh High Court
M/S Thapak Petrol Pump vs Industan Petroleum Corporation Ltd on 19 September, 2014
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Writ Petition No.6112/2014
Writ Petition No.6112/2014
19.09.2014
Shri Manikant Sharma, learned counsel for petitioner.
Shri N.K.Salunke, learned counsel for respondents.
Parties are heard on the preliminary objection raised
by the respondents as to the maintainability of petition
because of availability of the arbitration clause.
Vide dealership agreement dated 12.02.2007 entered
into between the petitioner and the respondent - Hindustan
Petroleum Corporation ltd. the petitioner is carrying on the
business of retail outlet dealership for retail sale of
petroleum products.
On a joint inspection of retail outlet carried out by the
officials of respondent Corporation on 14.12.2013 at 4 PM
density failure was observed in High Speed Diesel (HSD)
sample taken from Midco HSD Dispensing Unit connected
with underground tank. The difference in density found was
31.6 Kg/M3. Nozzle sample of HSD of underground tank
failed in density as per IS specification 1460 : 2005. The test
report of HSD sample was found outside the
reproducibility/permissible limit with depot reference sample
on the parameters of (I) density at 15 degree centigrade
Kg/m3, (ii) Kinematic viscosity at 40 degree centigrade cst,
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Writ Petition No.6112/2014
(iii) Sulfur content mg.kg. All this led to drawing of
proceedings resulting in passing of order dated 2.04.2014
terminating the agreement as per clause 64 with a liberty to
invoke clause No.66 of the Dealership Agreement dated
12.02.2007 for the adjudication of disputes through
Arbitration.
Clause 66 of agreement dated 12.02.2007 stipulates :
"66. Any dispute or difference of any nature
whatsoever 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 the Managing
Director of the corporation or of some officer of
the corporation who may be nominated by the
Managing Director. His dealer will not be entitled
to raise any objection to any such arbitration on
the ground that the Arbitrator is an officer of the
corporation on that he has to deal with the
matters to which the contract relates or that in the
course of his duties as an officer of the
corporation. He had expressed views on all or any
of the matters in dispute or difference. In the
event of the Arbitrator or whom the matter is
originally referred being transferred of vacating
his office or being unable to act for any reason the
Managing Director as aforesaid at the time of such
transfer, vacation of office or inability to act, shall
designate another person to act as Arbitrator in
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Writ Petition No.6112/2014
accordance with the terms of the agreement such
person shall be entitled to proceed with the
reference from the point at which it was left by his
predecessor. It is also a term of this contract that
no person other than the Managing Director or a
person nominated by such Managing Director of
the Corporation as aforesaid shall act as Arbitrator
hereunder. The award of the Arbitrator so
appointed shall be final, conclusive and binding on
all parties to the agreement, subject to the
provisions of the Arbitration Act, 1940 or any
statutory modification of or re-enactment thereof
and the Rules made thereunder and for the time
being in force shall apply to the Arbitration
proceedings under this clause.
..."
Petitioner instead of invoking clause 66 has filed the
present petition contending inter alia that it is his right to
invoke the extraordinary jurisdiction under Article 226 of the
Constitution of India. Reliance is placed on the decision in
E.Venkatakrishna vs. Indian Oil Corporation : (2000) 7 SCC
764; Harbanslal Sahnia vs. Indian Oil Corporation Ltd. : AIR
2003 SC 2120; Sudarshan Motors vs. Hindustan Petroleum
Corp. : (2011) 3 EFR 612; M/s Royale Highway Services vs.
Hindustan Petroleum Corp. : W.P.No.5034/2007; M/s Juneja
& Comp. vs. Hindustan Petroleum Corp. Ltd. & another :
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Writ Petition No.6112/2014
W.P.No.1350/2008, decided on 09.05.2013.
The respondents have relied upon clause 66 of the
Dealership agreement to bring home the submission that
the petition in view of availability of efficacious remedy is
not tenable.
Considered the rival submissions.
It is petitioner's own admission that the retail outlet in
question is by virtue of Dealership agreement dated
12.02.2007. That being so, the petitioner is bound by its
terms.
In Assistant Excise Commissioner vs. Issac Peter :
(1994) 4 SCC 104 it is held :
"26. ... It must be remembered that these
contracts are entered into pursuant to public
auction, floating of tenders or by negotiation.
There is no compulsion on anyone to enter into
these contracts. It is voluntary on both sides.
There can be no question of the State power being
involved in such contracts. ... "
In Delhi Gate Auto Service Station vs. Bharat
Petroleum Corp. Ltd. : (2009) 16 SCC 766 it is held :
"1. The question in these appeals is regarding
the correctness of the judgment of the High Court
dismissing the writ petitions by the appellants
herein. The controversy was regarding dealership
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of two petrol retail outlets. The dealership was
terminated by the respondent - Bharat Petroleum
Corporation Ltd., ('BPCL' for short). That
termination was challenged.
2. The matter was remanded by the High
Court in the first round with an observation that
the BPCL should hear the appellants and consider
the objections. Accordingly, show-cause notice
was issued. That show-cause notice was also
replied to by the appellants by giving various
reasons as to why the termination should not have
been effected. Later on, the BPCL terminated the
dealership. That was challenged by filing writ
petitions. However, as per the terms of the
agreement of dealership, the appellants also
approached the arbitration. Now it is reported that
arbitration is over and the award has gone against
the appellants which award has also been further
challenged.
3. In that view, it will not be possible for us to
entertain this appeal. In fact, the writ petitions
itself could not have been entertained on the
ground that two parallel remedies could not have
been pursued by the appellants at one and the
same time. The writ petition was rightly dismissed.
We do not find any merit in these appeals. They
are dismissed without any order as to costs. This
order should not be viewed as any expression on
the merits of the matters."
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In Kanaiyalal Lalchand Sachdev vs. State of
Maharashtra : (2011) 2 SCC 782 it is held :
"23. In our opinion, therefore, the High Court
rightly dismissed the petition on the ground that
an efficacious remedy was available to the
appellants under Section 17 of the Act. It is well-
settled that ordinarily relief under Articles 226/227
of the Constitution of India is not available if an
efficacious alternative remedy is available to any
aggrieved person. (See Sadhana Lodh vs. National
Insurance Co. Ltd.; Surya Dev Rai vs. Ram Chander
Rai & 6; State Bank of India vs. Allied Chemical
Laboratories.)"
In Union of India vs. Guwahati Carbon Ltd. : (2012) 11
SCC 651 it is held :
"10. In other words, existence of an adequate
alternative remedy is a factor to be considered by
the writ court before exercising its writ jurisdiction
(see Rashid Ahmed vs. Municipal Board, Kairana).
...
15. In our opinion, the assessee ought not to have filed a writ petition before the High Court questioning the correctness or otherwise of the orders passed by the Tribunal. The Excise Law is a complete code in order to seek redress in excise matters and hence may not be appropriate for the writ court to entertain a petition under Article 226 of the Constitution. Therefore, the learned Single 7 Writ Petition No.6112/2014 Judge was justified in observing that since the assessee has a remedy in the form of a right of appeal under the statute, that remedy must be exhausted first. The order passed by the learned Single Judge, in our opinion, ought not to have been interfered with by the Division Bench of the High Court in the appeal filed by the respondent assessee."
In the case at hand having failed to establish the three parameters viz. (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is failure of the principles of natural justice; or (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged, no indulgence is caused as the petitioner has efficacious alternative remedy of invoking Arbitration clause in the agreement.
Consequently, preliminary objection as to the maintainability is upheld. Petition is dismissed with liberty to the petitioner to invoke clause 66 of the Dealership Agreement dated 12.02.2007.
At this stage learned counsel for the petitioner insist upon continuation of interim order dated 26.05.2014 whereby it was ordered that the respondent authorities shall not allot or handover the retail outlet to any other person. 8 Writ Petition No.6112/2014
Since the dealership has been terminated on serious charges found proved, petitioner is not entitled for interim protection, therefore, the plea for continuation of interim order dated 26.05.2014 stand rejected.
In the result, petition is dismissed in terms above. No costs.
(SANJAY YADAV) JUDGE anand