Allahabad High Court
Sri Hari Indane Gramin Viterak Thru. ... vs U.O.I. Thru. Secy, Ministry Of ... on 8 July, 2020
Bench: Pankaj Kumar Jaiswal, Dinesh Kumar Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH AFR Court No. - 1 Case :- MISC. BENCH No. - 10235 of 2020 Petitioner :- Sri Hari Indane Gramin Viterak Thru. Alok Dwivedi & Others Respondent :- U.O.I. Thru. Secy, Ministry Of Petroleum & Natural Gas & Ors Counsel for Petitioner :- Hemant Kumar Mishra,Arti Ganguly Counsel for Respondent :- A.S.G.,Ratnesh Chandra AND Case :- MISC. BENCH No. - 10240 of 2020 Petitioner :- M/S Gaurav Indane Gramin Viterak Thru. Gaurav Chaturvedi&Anr Respondent :- U.O.I. Thru. Secy, Ministry Of Petroleum & Natural Gas & Ors Counsel for Petitioner :- Hemant Kumar Mishra,Arti Ganguly Counsel for Respondent :- A.S.G.,Manish Jauhari Hon'ble Pankaj Kumar Jaiswal,J.
Hon'ble Dinesh Kumar Singh,J.
Heard Sri Hemant Kumar Mishra, learned Counsel for the petitioners, Sri Ratnesh Jauhari and Sri Manish Jauhari, Advocates appearing for the respondent-Corporation and learned Assistant Solicitor General for the respondent no.1.
As common question of law and fact is involved in the aforesaid writ petitions, both the writ petitions have been clubbed together and are being decided by a common judgment.
In Writ Petition No. 10235 (MB) of 2020; Sri Hari Indane Gramin Vitrak and others versus Union of India and others, petitioners, who are the authorized rural distributors of the LPG of the Indian Oil Corporation, have filed the instant writ petition under Article 226 of the Constitution of India praying for quashment of the order dated 26.03.2019 (Annexure-1) and the notices dated 17.6.2020 whereby it was directed to recover the equipment's, deposit Rs. 13,63,428 towards cost of hotplate, Rubber tube, Installation charges, DGCC book cost and other subsidy inter-alia on the ground that the same is in violation of the Article 19(1)(g) of the Constitution of India and further the guidelines issued by the IOC have not been followed.
Brief facts of the case are that petitioner no.1 of writ petition no. 10235 (MB) of 2020 was appointed as authorized distributor of LPG Gas Agency in the name and style of M/s Hari Indance Gramin Vitrak at location Girsi, Tehsil & District Kanpur Nagar on 16.10.2013. Similarly, other petitioners, namely, petitioner no.2 to 6 of the aforesaid writ petitions were also appointed authorized distributors of LPG Gas Agency for different locations in between 2005 to 2016 after signing of the agreement between the petitioners and the Indian Oil Corporation.
Similarly, Petitioners of Writ Petition No. 10240(MB) of 2020; M/s Gaurav Indane Gramin Vitrak and another versus Union of India and others have challenged the notices dated 17.6.2020 and sought for a direction to the opposite parties not to proceed and implement the impugned notices dated 17.6.2020. M/s Gaurav Indane Gramin Viterak (petitioner no.1) of said Writ Petition No. 10240 (MB) of 2020 was appointed as distributor of LPG Gas Agency for location Kuthond, district Jalaun on 12.7.2014 whereas M/s Mihauliya Indane Gram Vitrak was appointed as distributor of LPG Gas Agency on 31.3.2012 after execution of the agreements with the Indian Oil Corporation.
As per the Scheme & FAQ's, LPG connection was required to be released to only one adult female member of the family as per SECC-2011. For connections under the scheme, applications were required to be submitted by the applicants to the distributor. After receiving the same, distributor was required to physically verify the house of the applicant for not having any LPG connection by the applicant or her family members as per SECC-2011. After being satisfied that no other connection is available in the name of the applicant or her family members, the distributor was required to upload the Aadhar of all adult family members and in case of non-availability of the Aadhar of any member an undertaking was required to be taken by the distributor from the applicant. After the KYC ( Know Your Customer) is uploaded the de-duplication was required to be carried out by Indian Oil Corporation.
It came to the knowledge of the Corporation that multiple connections have been released by the petitioners without following the due procedure. Further, it was noticed that in the SECC-2011, no names were given and the petitioners have neither uploaded the details of Aadhar nor complete informations were given while uploading the data. As per FAQ-9, the distributors were required to physically verify the house of the applicant for not having LPG connection before uploading the applicants detail on IOC portal,which the petitioners have not done. Therefore, a letter dated 29.1.2020 was issued by the Corporation to which reply was submitted by the petitioners.
Under the Ujjwala Scheme, LPG distributors have to follow the procedure as prescribed before releasing LPG connection. However, petitioners without verifying the premises of the applicants uploaded the incorrect and incomplete information for releasing LPG connections and thus they have misused the public money.
The competent authority of the Indian Oil Corporation after considering the reply filed by the petitioners, considered their cases separately and after verifying the records terminated the connections and directed for recovery of equipment'sas well as cost of hotplate, Rubber tube, Installation charges, DGCC book cost and other Subsidy. As stated above,petitioners of Writ Petition no. 10240(MB) Of 2020 have assailed the notices dated 17.6.2020 whereby it is alleged that liability has been fixed upon the petitioners.
Learned Counsel for the petitioners has submitted that earlier Sri Hari Indane Viterak through its proprietor and other petitioners have jointly filed Writ Petition No. 9904 of 2019 (MB) wherein they have challenged the show cause notice and a co-ordinate bench of this Court while disposing of the writ petition vide order dated 9.4.2019 (Annexure No.2) passed a detailed order. In pursuance of the aforesaid order, an inquiry was conducted by the IOC and thereafter again a show cause notice was issued.
Sri Manish Jauhari and Sri Ratnesh Chandra, Counsels for the IOC in the aforesaid writ petitions have raised a preliminary objection regarding maintainability of the writ petition on the ground that as per terms and conditions of the agreement executed between the petitioners and the Indian Oil Corporation, there exists an arbitration clause (Clause-37) and if there arises any dispute between the parties, then the same is to be decided by the named Arbitrator as per terms of the agreement. He has further submitted that if the petitioners want any interim protection, then it is always open to them to make an application for grant of interim protection before the named Arbitrator as per provisions of Section-9 of the Arbitration and Conciliation Act,1996. Therefore, the instant writ petitions are not maintainable and are liable to be dismissed on the ground of availability of the alternative remedy.
On the other hand, Sri H.K.Misra, Counsel for the petitioner has submitted that the present writ petitions are very much maintainable in view of the provisions of Clause-6 and 10 of the Pradhan Mantri Ujjwala Yojna Scheme for release of free connection and the same cannot be dismissed on the ground of alternative remedy.
Now, we would like to deal the objections raised by the respondents Counsel regarding non-exhaustion of alternative remedy by the petitioners. In this context, it would be useful to refer some of the decisions rendered by the Apex Court on this issue.
In Mafatlal Industries Ltd. v. Union of India; (1997) 5 SCC 536, it has been observed by the Apex Court that:
"So far as the jurisdiction of the High Court under Article 226 or for that matter, the jurisdiction of this Court under Article 32 is concerned, it is obvious that the provisions of the Act cannot bar and curtail these remedies. It is, however, equally obvious that while exercising the power under Article 226/Article 32, the Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise their jurisdiction consistent with the provisions of the enactment."
In United Bank of India Vs. Satyawati Tondon and others; (2010)8 SCC 110 the Apex Court while dealing with the issue whether the alternative statutory remedy available under the Act can be by-passed and jurisdiction under Article 226 of the Constitution could be invoked, observed in paragraph 55 as under:-
" 55. It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and the SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with great caution, care and circumspection."
Similarly, the Hon'ble Supreme Court in the case of Nivedita Sharma v. Cellular Operators Assn. of India, (2011) 14 SCC 337 considered the question of alternative remedy/exhaustion of remedies and has held that Articles 226/227 are not available if an efficacious alternative remedy is available to aggrieved person. The relevant paragraphs of the aforesaid judgment reads as under:-
"We have considered the respective arguments/ submissions. There cannot be any dispute that the power of the High Courts to issue directions, orders or writs including writs in the nature of habeas corpus, certiorari, mandamus, quo warranto and prohibition under Article 226 of the Constitution is a basic feature of the Constitution and cannot be curtailed by parliamentary legislation L. Chandra Kumar v. Union of India; (1997) 3 SCC 261. However, it is one thing to say that in exercise of the power vested in it under Article 226 of the Constitution, the High Court can entertain a writ petition against any order passed by or action taken by the State and/or its agency / instrumentality or any public authority or order passed by a quasi-judicial body/authority, and it is an altogether different thing to say that each and every petition filed under Article 226 of the Constitution must be entertained by the High Court as a matter of course ignoring the fact that the aggrieved person has an effective alternative remedy. Rather, it is settled law that when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation.[emphasis supplied] As far as contractual matters are concerned, it is not in dispute that the contract between the parties is a contract in the realm of private law. It is governed by the provisions of the contract Act or may be, also by certain provisions of the sale of Goods Act. Any dispute relating to interpretation of the terms and conditions of such a contract cannot be agitated, and could not have been agitated,in a writ petition. That is a matter either for arbitration as provided by the contract or before the Civil court as the case may be.
In the present cases, petitioners have entered into a contract with the Indian Oil Corporation and clause-37 of the said Agreement provides that all questions, disputes and difference arising under or in relation to this Agreement shall be referred to the sole arbitrator. Clause-37 of the Agreement reads as under:-
"37 (a) All questions, disputes and differences arising under or in relation to this Agreement shall be referred to the sole arbitration of the Director (Marketing) of the Corporation. If such Director (Marketing) is unable or unwilling to act as the sole arbitrator, the matter shall be referred to the sole arbitration or some other officer of the Corporation by such Director (Marketing) in his place, who is willing to act as such sole arbitrator. It is known to the parties herein that the Arbitrator appointed hereunder is an employee of the Corporation and may be Shareholder of the Corporation. The arbitrator to whom the matter is originally referred, whether the Director (Marketing) or Officer as the case may be, on his being transferred or vacating his office or being unable to act, for any reason, the Director (Marketing) shall designate any another person to act as arbitrator in accordance with the terms of the Agreement and such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. It is also the term of this Agreement that no person other than the Director (Marketing) or the person designated by the Director (Marketing) as aforesaid shall act as arbitrator. The award of the Arbitrator so appointed shall be final, conclusive and binding on all the parties to the Agreement and provisions of the Arbitration & Conciliation Act, 1996 or any statutory modification 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.
(b) The parties here by agree that the courts in the city of Lucknow alone shall have jurisdiction to entertain any application or any award/ s made by the sole Arbitrator or other proceedings in respect of anything arising under this Agreement."
The contract in question contains a clause providing inter-a1ia for settlement of disputes by reference to arbitration [Clause-37 of the Contract]. The Arbitrator can decide both questions of fact as well as questions of law. When the contract itself provides for a mode of settlement of disputes arising from the contract, there is no reason why the parties should not follow and adopt that remedy and invoke the extra-ordinary jurisdiction of the High Court under Article 226.
The said Article was not meant to supplant the existing remedies at law but only to supplement them in certain well-recognised situations. As pointed out above, the prayer for issuance of a writ of mandamus is wholly misconceived in this case since the petitioners are not seeking to enforce any statutory right of theirs nor was it seeking to enforce any statutory obligation cast upon the respondents.
During the course of arguments, learned Counsel for the petitioners has argued that the Arbitration and Conciliation Act, 1996 was amended with effect from 23.10.2015 and hence the provisions of amended Act would apply in the present case. It was submitted that by virtue of the provisions of Section 12(5) read with Schedule VII to the Arbitration and Conciliation Act, 1996, the Director (Marketing) was statutorily made ineligible to be appointed as an arbitrator since he was serving with the Corporation. It was contended that as per provisions of the Amendment Act, 2015, all employees present or past are statutorily made ineligible for appointment as arbitrators.
The learned counsel further submitted that when the Director (Marketing) himself being ineligible to be appointed as an arbitrator under Section 12(5) read with Schedule VII of the Arbitration and Conciliation Act, he cannot nominate any of the persons to be arbitrator. In other words the submission of the learned Counsel for the petitioners is "that which cannot be done directly, may not be done indirectly.".To support the above contention, petitioners have relied upon the decision rendered by the Apex Court in the case of Voestaline Schienen Gmbh. versus Delhi Metro Rail Corporation Limited (2017) 4 SCC 665 and TRF Limited versus Energo Engineering Projects Limited (2017) 8 SCC 377 In Delhi Metro Rail Corporation ( supra), the Hon'ble Apex Court held as under:-
"The amended provision puts an embargo on a person to act as an arbitrator, who is the employee of the party to the dispute. It also deprives a person to act as an arbitrator if he had been the consultant or the advisor or had any past or present business relationship with DMRC...."
Per Contra, learned Counsels for the respondents have argued that appointment of the arbitrator is governed as per terms and conditions of the agreement where applicability of Section 12(5) of the Arbitration and Conciliation Act has been waived off. They have relied upon the Apex Court's decision rendered in the case of Union of India versus Parmar Constrction Company (2019) SCC online SC 442 and Union of India versu Pradeep Vinod Construction Company (2019) SCC Online SC 1467 and submitted that when the agreement specifically provides for appointment of arbitrator to resolve the dispute as per clause-37 of the agreement, the assertion of the petitioners is misconceived.
In the case of Central Organisation For Railway Electrification versus M/s ECI-SPIC-SMO-MCML (JV) decided on 17th December, 2019 the Apex Court after the considering the decision rendered in Parmar Construction Company and Pradeep Vinod Construction Company's case held as under:-
"22.Applying ratio of the Parmar Construction Company, in Pradeep Vinod Construction Company (2019) SCC Online SC 1467, the Supreme Court held that the appointment of arbitrator should be in terms of the agreement and the High Court was not right in appointing an independent arbitrator ignoring Clause 64 of the General Conditions of Contract. As held in Parmar Construction Company and Pradeep Vinod Construction Company, the High Court was not justified in appointing an independent arbitrator without resorting to the procedure for appointment of the arbitrators which has procedure for appointment of the arbitrators which has been prescribed under the General Conditions of Contract."
Thus in view of the law laid down in the case of Central Organisation For Railway Electrification versus M/s ECI-SPIC-SMO-MCML (JV) reported in (2019) SCC Online SC 442, petitioners have to take recourse as per provisions of clause-37 of the agreement and a writ under Article 226 of the Constitution is not the remedy. Here, it may be clarified that all the petitioners except petitioner no. 3 and petitioner no.4 of Writ Petition No. 10235 of 2002 (MB) had entered into an agreement with the Indian Oil Corporation much prior to the amendment in Arbitration and Conciliation Act, 1996 on 23.10.2015.
Here, petitioners have rushed directly to this Court and have by-passed the alternative remedy of invoking Arbitration Clause-37 of the agreement executed between the parties.
In view of the above, we, without entering into the merits of the case are inclined to dismiss the writ petitions on the ground of availability of alternative remedy.
It shall be open to the petitioners, if they so chooses, to either raise a dispute and ask for reference of the dispute to arbitration as provided in the contract or to approach the Civil Court for grant of interim relief under the provisions of Arbitration and Conciliation Act, 1996, as the case may be.
With the above observations, both the writ petitions are dismissed.
(Dinesh Kumar Singh, J.) ( Pankaj Kumar Jaiswal,J.) Order Date :- 8.7.2020 MH/-