Madhya Pradesh High Court
M/S Raghunath Singh Thr. vs Bharat Petroleum Corporation Ltd. Thr. on 16 January, 2020
Equivalent citations: AIRONLINE 2020 MP 27
Author: Gurpal Singh Ahluwalia
Bench: Gurpal Singh Ahluwalia
1
THE HIGH COURT OF MADHYA PRADESH
WP No.1051/2020
(M/S RAGHUNATH SINGH THR. Vs BHARAT PETROLEUM CORPORATION LTD. THR.
AND OTHERS )
Gwalior dtd. 16/01/2020
Shri Munna Lal Swarnkar, learned counsel for the
petitioner.
This petition under Article 226 of the Constitution of
India has been filed against the order dated 04/07/2019 and
11/07/2019 issued by respondents. By order dated 04/07/2019,
the Tanker Lorries belonging to the petitioner, which were engaged in the transportation of the oil have been blacklisted on the ground that the petitioner/transporter were found involved in violating Oil Industry Transport Discipline Guidelines.
On 28/09/2016 petitioner as well as the respondents entered into an agreement for hiring of Tank Lorries for movement of petroleum products. It appears that one tank lorry was found to be having some additional alterations and accordingly, the respondents were of the view that the said alteration has been done for pilfering the oil product from the cargo tank of tank lorry. Accordingly, a notice dated 01/06/2019 (Annexure P/6) was issued to the petitioner requiring him to show cause as to why the agreement dated 28/09/2016 should not be terminated.
Thereafter, another show cause notice dated 08/06/2019 2 THE HIGH COURT OF MADHYA PRADESH WP No.1051/2020 (M/S RAGHUNATH SINGH THR. Vs BHARAT PETROLEUM CORPORATION LTD. THR.
AND OTHERS ) was issued. The show cause notice dated 08/06/2019 issued by the respondents were duly replied by the petitioner by his reply dated 15/06/2019. It is submitted that by order dated 04/07/2019 the agreement was suspended and now by order dated 11/07/2019, the same has been terminated. It is submitted by the counsel for the petitioner that since two months notice is required whereas the petitioner was granted only seven days time.
To butterous his contentions, the counsel for the petitioner has relied upon Clause 15 of the agreement. It is further submitted that material alterations were found only in one Tank Lorry, therefore, the termination of the entire agreement is unwarranted. Further as two months notice was not given, therefore, the order of termination is bad.
It is further submitted that thereafter the petitioner has also filed an application of review by sending an application on 10/08/2019. However, the same has not been decided so far.
It is fairly conceded by the counsel for the petitioner that although, there is a provision for arbitration for resolution of disputes but since the order under challenge has been passed dehors the provisions of Clause 15 of the agreement, therefore, 3 THE HIGH COURT OF MADHYA PRADESH WP No.1051/2020 (M/S RAGHUNATH SINGH THR. Vs BHARAT PETROLEUM CORPORATION LTD. THR.
AND OTHERS ) this Court may entertain the writ petition without compelling the petition to avail the remedy of arbitration.
Heard the counsel for the petitioner.
Clause 15 of the agreement reads as under:-
"15. This Agreement would be valid for period of five years from the effective date as given in the LOI/Work Order. However, Company reserves the right to terminate this Agreement by giving two months advance notice without being liable to give any reason or pay any compensation.
Notwithstanding anything to the contrary contained herein above, Company reserves the right to terminate this Agreement forthwith upon or at any time after happening of any of the following:-
a) If the Carrier, its proprietor or any partner is adjudicated insolvent or become bankrupt or goes into liquidation whether voluntary or otherwise
b) If attachment in execution of a decree is passed against the Carrier, its proprietor or any of its partners.
c) If road permits or statutory Licenses / permissions granted to Carrier / it's tank-lorries by transport or any statutory authorities is cancelled or revoked.4
THE HIGH COURT OF MADHYA PRADESH WP No.1051/2020 (M/S RAGHUNATH SINGH THR. Vs BHARAT PETROLEUM CORPORATION LTD. THR.
AND OTHERS )
d) If any of the Information submitted by the Carrier in the tender is found incorrect at any time.
e) Breach of any of the terms or conditions of this Agreement by the Carrier.
f) If the Carrier commits or suffers to be committed any act which in the opinion of the Company whose decision shall be final, is prejudicial to the good name/image of the Company or its' products or its services.
g) If the Carrier causes disruption in transportation of bulk petroleum products. The decision of Company will be final and binding on the Carrier.
h) On the death or retirement of proprietor or any of the partners of the Carrier firm. However, in case, Company does not exercise this option, the Agreement shall continue as between the Company and surviving continuing partners of the Carrier. The legal representatives of the deceased partner or the retiring partner himself shall be liable for the obligation of the carrier incurred up to the date of death or retirement but shall not be entitled to claim from the company any portion of Security Deposit (Bank Guarantee). Company shall account for Security Deposit (Bank Guarantee) to the surviving or continuing 5 THE HIGH COURT OF MADHYA PRADESH WP No.1051/2020 (M/S RAGHUNATH SINGH THR. Vs BHARAT PETROLEUM CORPORATION LTD. THR.
AND OTHERS ) partners. The death of retirement of any partners shall be notified by the Carriers to the Company in writing within 24 hours of such death or retirement
i) if the crew of the carrier commits any unsafe act such as resh driving, accident, non adherence to safety guidelines and not using safety/protective equipments etc. within or outside BPCL premises.
j) If the Carrier, its proprietor or any partners or Tank Lorry crew misbehaves (abuse/threat/assault/manhandless) with the consumers/dealers or with the employee of the BPCL."
Clause 16 of agreement reads as under:-
"16. a) Any dispute or difference of any nature whatsoever, any claim, cross-claim, counter-claim or set off of the Company against the contractor or regarding any right, liability, act, omission or account of any of the parties here to arising out of or in relation to this agreement shall be referred to the Sole Arbitration of the Director (Marketing) of the Company or of some Officer of the Company who may be nominated by the Director (Marketing). The licensee will not be entitled to raise any objection to any such arbitrator on the ground that the arbitrator is an officer of the 6 THE HIGH COURT OF MADHYA PRADESH WP No.1051/2020 (M/S RAGHUNATH SINGH THR. Vs BHARAT PETROLEUM CORPORATION LTD. THR.
AND OTHERS ) Company or that he has dealt with the matters to which the contract relates or that in the course of his duties as an officer of the company, he had expressed view on all or any other matters in dispute or difference. In the event of arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason, the Director (Marketing) as aforesaid at the time of such transfer, vacation of office or inability to act may in the discretion of the Director (Marketing) designate another person to act as arbitration in accordance with the terms of the agreement to the end and intent that the original Arbitrator shall be entitled to continue the arbitration proceedings notwithstanding his transfer or vacation of office as an officer of the Company if the Director (Marketing) does not designate another person to act as arbitrator on such transfer, vacation of office or inability of original arbitrator. Such person shall be entitled to proceed with the reference from the point at which it was left by his predecessor. It is also in term of this contract that no person other than the Director (Marketing) of the company or a person nominated by such Director (Marketing) as aforesaid shall act as arbitrator hereunder.7
THE HIGH COURT OF MADHYA PRADESH WP No.1051/2020 (M/S RAGHUNATH SINGH THR. Vs BHARAT PETROLEUM CORPORATION LTD. THR.
AND OTHERS ) 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 & Conciliation Act, 1996 or any statutory modification or re-enactment thereof and the rules made there under for the time being in force shall apply to the arbitration proceedings under this clause.
b) The arbitrator shall have power to order and direct either of the parties to abide by, observe and perform all such directions as the arbitrator may think fit having regard to the matters in difference i.e. dispute, before him.
The arbitrator shall have all summery powers and may take such evidence oral and/or documentary, as the arbitrator in his absolute discretion thinks fit and shall be entitled to exercise all powers under the Indian Arbitration & Conciliation Act, 1996 including admission of any affidavit as evidence concerning the matter in difference i.e. dispute before him.
c) The parties against whom the arbitration proceedings have been initiated, that is to say, the Respondents in the proceeding, shall be entitled to prefer a cross claim, counter claim or set off before the Arbitrator in respect of any matter in issue arising out of or in relation to the Agreement without seeking a formal 8 THE HIGH COURT OF MADHYA PRADESH WP No.1051/2020 (M/S RAGHUNATH SINGH THR. Vs BHARAT PETROLEUM CORPORATION LTD. THR.
AND OTHERS ) reference of arbitration to the Director (Marketing) for such counter-claim, cross claim, or set off and the Arbitrator shall be entitled to consider and deal with the same as if the matters arising there from has been referred to him originally and deemed to form part of the reference made by the Director (Marketing).
d) The arbitrator shall be at liberty to appoint, if necessary any accountant or engineering or other technical person to assist him, and to act by the opinion so taken.
e) The arbitrator shall have power to make one or more awards whether interim or otherwise in respect of the dispute and difference and in particular will be entitled to make separate awards in respect of claims of cross claims of the parties.
f) The arbitrator shall be entitled to direct any one of the parties to pay the costs to the other party in such manner and to such extent as the arbitrator may in his discretion determine and shall also be entitled to require one or both the parties to deposit funds in such proportion to meet the arbitrators expenses whenever called upon to do so.
g) The parties hereby agree that the courts in the city of Mumbai alone shall have jurisdiction 9 THE HIGH COURT OF MADHYA PRADESH WP No.1051/2020 (M/S RAGHUNATH SINGH THR. Vs BHARAT PETROLEUM CORPORATION LTD. THR.
AND OTHERS ) to entertain any application or other proceedings in respect of anything arising under his agreement and any award or awards made by the Sole Arbitrator hereunder shall be filed (if so required) in the concerned courts in he city of Mumbai only."
From the plain reading of the agreement, it is clear that the agreement can be terminated by giving two months advance notice without being liable to give any reasons or to pay any compensation. However, in the present case, the show cause notice was issued on 01/06/2019 with a specific allegation that one of the tank lorry was found fitted with additional kits, which could have been used for pilfering the oil product from the cargo tank of tank lorry. Thus, there was serious allegation against the petitioner who is un-disputedly the owner of the tank lorry. It is submitted by the counsel for the petitioner that in fact additional kits were installed by his crew without the knowledge of the petitioner.
Whether the additional alterations in the tank lorry were made with the knowledge of the petitioner or not is a question of fact, which cannot be considered by this Court while exercising this petition under Article 226 of the Constitution of 10 THE HIGH COURT OF MADHYA PRADESH WP No.1051/2020 (M/S RAGHUNATH SINGH THR. Vs BHARAT PETROLEUM CORPORATION LTD. THR.
AND OTHERS ) India. The respondents had given a show cause notice dated 01/06/2019 and 08/06/2019, which was duly responded by the petitioner by his reply dated 15/06/2019, then in the considered opinion of this Court, the respondents were not under obligation to wait for the expiry of two months for terminating the contract because the contract has been terminated on the ground that one of the tanker lorry of the petitioner was found in the activity of pilferation of the oil product. So far as, the dispute redressal forum is concerned, the petitioner had signed the agreement knowing fully well that the said agreement prescribes for dispute redressal forum. Having accepted the said forum now the petitioner cannot pray that this Court should bypass the dispute redressal system, which was agreed upon by the petitioner himself.
The counsel for the petitioner has relied upon the order passed by Gujarat High Court in the case of Jay Ambe Transport Vs. Hindustan Petroleum Corporation Limited passed on 06/05/2015 (Special Civil Application No.8354/2015) and submitted that since the blacklisting has got civil and evil consequences, therefore, in case of violation of natural justice, this Court must entertain the petition by 11 THE HIGH COURT OF MADHYA PRADESH WP No.1051/2020 (M/S RAGHUNATH SINGH THR. Vs BHARAT PETROLEUM CORPORATION LTD. THR.
AND OTHERS ) ignoring the availability of the alternative remedy of arbitration.
Considered the submissions made by the counsel for the petitioner. Order passed by the Gujarat High Court in the case of Jay Ambe Transport (supra) reads as under:-
"learned advocate for the petitioner has urged that impugned show cause notice given to the petitioner on 30th October, 2014 does not mention that an order of blacklisting would be passed against the petitioner. If there is sufficient indication in the notice that the petitioner would be blacklisted, then the show cause notice can be deemed to be sufficient for the purpose of the blacklisting but if the show cause notice does not give any indication or mention that order of blacklisting would be passed, then it is in clear violation of natural justice because blacklisting has got civil and evil consequences which goes to affect the reputation and livelihood of the contractor. Therefore, before blacklisting a person, procedure fairness is mandatory."
From the plain reading of this order, it is clear that Gujarat High Court had observed that if there is sufficient indication in the notice that the petitioner would be blacklisted, 12 THE HIGH COURT OF MADHYA PRADESH WP No.1051/2020 (M/S RAGHUNATH SINGH THR. Vs BHARAT PETROLEUM CORPORATION LTD. THR.
AND OTHERS ) then the show cause notice can be deemed to be sufficient for the purposes of blacklisting. If the show cause notices issued to the petitioner on 01/06/2019 and 08/06/2019 are tested in the light of the observations made by the Gujarat High Court in the case of Jay Ambe Transport (supra) then it is clear that in both the show cause notices, it was specifically mentioned as to why the agreement be not terminated. Although, in these show cause notices, it was not mentioned that the respondents may blacklist the fleet of tank lorries belonging to the petitioner but in view of the subsequent final order dated 11/07/2019 by which the agreement of the petitioner has been terminated, this Court is of the considered opinion that the order dated 04/07/2019 has merged in the final order dated 11/07/2019. Since, it was specifically mentioned in the show cause notice dated 01/06/2019 and 08/06/2019 as to why the agreement executed with the petitioner be not terminated, therefore, this Court is of the considered opinion that it cannot be said that there is violation of principle of natural justice.
Under these circumstances, this Court is of the considered opinion that in view of the availability of the alternative and efficacious remedy of alteration as provided in 13 THE HIGH COURT OF MADHYA PRADESH WP No.1051/2020 (M/S RAGHUNATH SINGH THR. Vs BHARAT PETROLEUM CORPORATION LTD. THR.
AND OTHERS ) the Clause 16 in the agreement, no case is made out by the petitioner requiring this Court to entertain this writ petition by ignoring said provision of arbitration.
Accordingly, this petition is disposed of with liberty to the petitioner that if he so desires, then he can avail the arbitration Clause.
Before parting with this order, this Court would like to observe that the observation this order has been made for considering that whether this Court should bypass the efficacious remedy of arbitration or not. Therefore, in case, if the arbitration proceedings take place, then the arbitrator is directed not to get influenced by any of the observation made by this Court in this order.
(G.S.Ahluwalia)
Pj'S/- Judge
PRINCEE
BARAIYA
2020.01.17
16:59:42 -08'00'