Calcutta High Court (Appellete Side)
Shyamlal Hembram vs Bharat Petroleum Corporation Ltd on 29 July, 2015
Author: Subrata Talukdar
Bench: Subrata Talukdar
1
In the High Court at Calcutta
Constitutional Writ Jurisdiction
Appellate Side
29 .07.2015
P.A. to the
Hon'ble Justice
S. Talukdar
WP 31253 (W) of 2014
with
CAN 1110 of 2015
Shyamlal Hembram
Vs.
Bharat Petroleum Corporation Ltd.
Mr. Sanjib Mal,
Mr. Bimalendu Das
Ms. Shomrita Das
........ for the applicants in CAN 1110 of 2015
Mr. Debabrata Saha Roy,
Mr. Pingal Bhattacharyya
.........for the opposite party/petitioner
Sri Mal, Ld. Counsel appears for the respondents-
BPCL in the writ petition and in support of the application being CAN 1110 of 2015.
Sri Debabrata Saha Roy, Ld. Counsel appears for the writ petitioner and for the respondents in CAN 1110 of 2015.
The matter appears under the heading 'Applications' today and Sri Mal concentrates his submissions on CAN 1110 of 2015. Ld. Counsel for BPCL submits that the disputes between the parties is covered by the Arbitration Clause entered by and between the respondents-BPCL through its authorized signatory with the writ petitioner for grant of a retail 2 outlet dealership under the Scheduled Caste/Scheduled Tribe category.
The fundamental point canvassed by Sri Mal at the hearing is that in view of Clause 19 of the retail outlet dealership agreement dated 27th July, 2010 the dispute sought to be raised in the writ petition is subject to arbitration. Ld. Counsel, Sri Mal further submits by taking this Court to the prayers in the writ petition that the same pertains to granting the petitioner permission to induct a partner in the retail outlet allotted to him or, alternatively to grant the petitioner a Company Owned Company Operated (for short COCO) pump at Gopalpur, Hooghly instead of the present allotment at Chinpai, Birbhum District.
Sri Mal argues that both reliefs as claimed in the writ petition can be the subject matter of arbitration between the parties in view of the Arbitration Clause (supra). Therefore, the writ petition is eligible to be dismissed as not maintainable. Next, taking this Court to page 59 of the writ petition Sri Mal submits that it has been, inter alia, intimated to the writ petitioner that his request for reconstitution of the ownership of the allotted retail outlet at Chinpai, Birbhum by inducting a partner can only be considered after sales have commenced from the said outlet.
With further reference to page 59 of the writ petition, Sri Mal argues that it has been also intimated to 3 the writ petitioner that an amount of Rs. 9, 60, 086/- is outstanding towards the EMIs (equated monthly instalments) of the corpus fund loan Rs. 14, 32, 092/- given by BPCL in terms of the Corpus Fund Agreement entered by and between the parties dated 27th July, 2010. The petitioner was further intimated that in the event of non-operation of the retail outlet at Chinpai, such act shall be considered to be in contravention of Clauses 10(b), 13 (v) and 13 (vi) of the Dispensing Pump and Selling License Agreement (for short DPSL Agreement).
Thereafter taking this Court to the separate clauses of the DPSL Agreement as recorded above, Sri Mal points out that each of the respective clauses by which the parties have covenanted to promote the sale of the products of BPCL, to maintain supplies and to make payment of outstanding are all covered under the Arbitration Agreement at Clause 19(1) (supra).
Sri Mal also submits that under the Corpus Fund Agreement entered into by and between the writ petitioner and BPCL under the SC/ST category of allotment at Chinpai, BPCL had to incur heavy investment. The petitioner was also accommodated with liquidity to start operations. Since 2011 the writ petitioner is not operating the retail outlet at Chinpai. As on date a sum of Rs. 14 lakhs is due and payable. 4
In support of his submissions Sri Mal relies upon Sections 5, 8 and 2(e) of the Arbitration and Conciliation Act, 1996 (for short the 1996 Act).
Referring to Section 5, Sri Mal submits that in respect of any matter governed under Part 1 of the 1996 Act, any Judicial Authority is barred from intervention except when provided under Part 1. Section 8 of the 1996 Act makes it incumbent upon a Judicial Authority to refer a dispute pending before it and covered by an Arbitration Agreement to arbitration.
Section 2(e) defines a Court having principal civil and original jurisdiction. Sri Mal, Ld. Counsel also relies upon the following decisions:-
2007 (14) SCC 680 (at paras14, 18 and 22) in the matter of Empire Jute Company Limited & Ors. vs. Jute Corporation of India Limited & Anr.;
2008 (8) SCC 172 in the matter of Pimpri Chinchwad Municipal Corporation & Ors. vs. Gayatri Construction Company & Anr. (at para__);
1997 (2) CHN 1 in the matter of Engineers India Limited & Anr. vs. D. Wren International Limited & Ors.; and An unreported Decision in WP 9660(W) of 2013 with CAN 5506 of 2013 in the matter of Om Prakash Agarwala vs. Union of India & Ors.
On the strength of all the above noted decisions Sri Mal argues that it is a judicial norm to hold that a 5 writ petition is ordinarily not maintainable if an Arbitration Clause exists. In the event the disputes between the parties is found to be covered under the Arbitration Agreement, the Court should not ordinarily exercise its power of judicial review. Sri Mal further points out since disputed facts are involved in the present case remedy by way of a writ petition is not appropriate and the parties be referred to arbitration.
Per contra, Sri Debabrata Saha Roy, Ld. Counsel for the writ petitioner places before this Court the order dated 13th January, 2015 and submits that when the writ petition was admitted no issue of maintainability was taken on behalf of the respondents-BPCL. Such will appear from the contents of the order dated 13th January, 2015 admitting the writ petition.
The writ petition has been pending since 2014 and the present application being CAN 1110 of 2015 has been affirmed as late as on 2nd February, 2015, that is more than one year after the writ petition was admitted on 13th January, 2015. Therefore, Sri Saha Roy argues that CAN 1110 of 2015 is not maintainable.
Secondly, Sri Saha Roy submits that the writ petitioner was selected as early as on 5th December, 2001 for grant of a retail outlet under the ST categories of the Corpus Fund Scheme at Singur, District- Hooghly. Under the Corpus Fund Agreement in respect of SC and 6 ST category the oil company-BPCL is committed to develop the retail outlet by investing its own resources.
Taking this Court to page 28 of the writ petition Sri Saha Roy argues that by the memo dated 12th December, 2006 the oil companies, including the present respondents-BPCL, evolved a procedure for handing over temporary COCOs to the pending Letter of Intent (for short LOI) holders on dealership basis. Therefore, Sri Saha Roy points out that the respondents-BPCL evolved a purported policy for allotting retail outlets to pending LOI holders including the writ petitioner after a delay of five years.
Further taking this Court to the purported policy for allotment dated 12th December, 2006 (supra), Sri Saha Roy submits that the allotment was directed to take place in three phases. The three phases run as follows:-
"Phase I : COCO at a location will be offered to the pending LOI holders of the same location without involving change in class of market.
Phase II : Balance COCOs, in the District will be offered to the balance pending LOI holders from the same District, within the same class of market. Phase III : Balance COCOs, in the State will be offered to the balance pending LOI holders from the same State, within the same class of market."
Therefore, Sri Saha Roy points out that a locational preference was given to the pending LOI holders.
Thereafter taking this Court to page 32 of the writ petition, Sri Saha Roy points out that by memo dated 7 29th July, 2009 the writ petitioner was instructed to intimate his choice of preference out of a list of complete retail outlets ready for allotment. The list was purportedly enclosed with the said communication. However, at page 33 of the writ petition it will appear that the only outlet for which the consent of the petitioner was sought for allocation was at Chinpai, Birbhum. It is also the case made out by Ld. Counsel, Sri Saha Roy that the consent sought by the letter dated 29th July, 2009 was after a delay of eight years of the LOI granted to the writ petitioner in 2001 and three years after the purported policy circulated in 2006.
Further, according to Sri Saha Roy the communication dated 29th July, 2009 offering only one location at Chinpai, Birbhum is in violation of the allotment procedure vide the circular dated 12th December, 2006. Sri Saha Roy submits that the writ petitioner was the seniormost LOI holder in the District of Hooghly and by a letter dated 28th August, 2009 had pointed out that a retail outlet located at Gopalpur, Hooghly under the category of ST could have been offered to him in view of the phasewise allotment procedure contemplated under the circular dated 12th December, 2006. However, since the writ petitioner was economically hard pressed, he indicated to the respondents-BPCL that he is for the present accepting 8 Chinpai without forsaking his claim to Gopalpur, Hooghly.
Sri Saha Roy, Ld. Counsel therefore submits that the writ petitioner has been made to run from pillar to post to obtain a suitable retail outlet and, avers on oath that the retail outlet at Chinpai, Birbhum which was operated by him for some time is not economically feasible. Therefore, the writ petitioner has sought permission to run the same by inducting a partner.
Ld. Counsel also argues that by the communication dated 10th September, 2014 it is not denied by the respondents-BPCL that the writ petitioner is not eligible to claim reconstitution. However, the writ petitioner has only been called upon to start sales first.
Further, according to Ld. Counsel, Sri Saha Roy the petitioner is eligible to induct a partner within five years from the issuance of LOI as would appear from the notification dated 21st June, 2013. However, it is the stand of the oil company that reconstitution can only be permitted from the date of commissioning of the retail outlet.
In support of his submissions Sri Saha Roy relies upon the judgment In Re: Whirlpool Corporation reported in 1998 (8) SCC 1 (at paras 14 and 15); 2003 (2) SCC 107 in the matter of Harbanslal Sahnia vs. Indian Oil Corporation Ltd. (at para 7) to make the 9 point that in appropriate cases the plea of alternative remedy is not a bar.
After hearing the parties and considering the materials on record this Court finds that the writ petitioner, although being a valid holder of a LOI and being the claimant in the District of Hooghly is entitled to point out the lapses in the rule book allegedly committed by the respondent-BPCL in not following its purported policy of distribution dated 17th December, 2006.
In the further opinion of this Court the writ petitioner is also entitled to reply from the respondent- BPCL on the delay in allotment of a retail outlet without giving him a list of choices within the preferred district in spite of the seniority of his LOI allotment, thereby giving rise to the complaint of arbitrary treatment.
This Court is also persuaded to hold that the writ petitioner' claim to reasonable consideration of his prayer for reconstitution of the management of the retail outlet to a partnership can be examined in the present writ proceeding having regard to the particular facts and circumstances of the case.
Therefore, in the light of the lapses in the rule book by the respondents-BPCL as alleged by the writ petitioner, his complaint of infringement of his fundamental rights to do business and earn a livelihood can be examined by the Writ Court following the dicta of 10 the Hon'ble Apex Court In Re: Harbanslal Sahnia (supra).
To the mind of this Court whether or not a particular cause of action in any writ petition deserves to be referred to arbitration will depend on the facts of each case.
CAN 1110 of 2015 is accordingly dismissed. Interim order already granted will continue until further orders.
Let the writ petition appear under the heading "Hearing" of the year 2014 in the monthly Combined List of September, 2015.
Parties will be entitled to exchange affidavits, if advised, by the next date of hearing.
Urgent certified photocopies of this judgment, if applied for, be given to the learned advocates for the parties upon compliance of all formalities.
(Subrata Talukdar, J.)