G.S. Kulkarni, J.

1. This appeal under Section 37 of the Arbitration and Conciliation Act,1996 (for short 'the Act') arises from the judgment and order dated 16 January 2017 of the learned Single Judge whereby the appellant's petition under Section 34 of the Act assailing the award of the learned sole Arbitrator stands dismissed.

2. The issue which arises for consideration in this appeal is as to whether the counter claim as raised by the respondent could be allowed by the learned arbitrator, and whether the learned Single Judge was justified in affirming such arbitral award?

3. Facts: The appellant was appointed by the respondent as a distributor/dealer of gas cylinders in the year 1989. An agreement was entered between the parties which was renewed every five years. The dispute between the parties has arisen under the last dealership agreement dated 17 August 2004 titled as “HP GAS (Liquefied Petroleum Gas) Dealership (Domestic & Commercial) Agreement" (for short “the dealership agreement”). By this agreement, the appellant was appointed as a dealer of the respondent on Principal to Principal basis for the sale of respondent's liquefied petroleum gas (LPG) cylinders, for household consumers and commercial consumers like hotels, canteens, hospitals etc., but not for any industrial use nor for any industrial consumer, in the territory or distribution area at Vashi, Navi Mumbai, on terms and conditions as contained therein.

4. During the subsistence of the dealership agreement, a show cause notice dated 25 January 2006 was issued by the respondent to the appellant interalia alleging violation of clause 12 and 24A of the dealership agreement. The show cause notice alleged that during a refill audit, it was found that there was positive variations of 46 numbers of 14.2 kg. cylinders and negative variations of 28 number of 5 kg. cylinders when an inspection was undertaken. It was alleged that in maintaining the record of some customers, it was revealed that two consumers did not exist on the address as recorded, however cylinders were supplied to these consumers from September, 2005 to December, 2005. This was disputed by the appellant by her reply dated 3 February 2006 and according to her, an explanation was offered in regard to the said two consumers whose names were referred in the show cause notice. The appellant also recorded that the accounts were not settled as also reconciliation of cylinders was not undertaken, defective cylinders reimbursement was also not considered, the damage to the showroom for the purpose of art gallery and the repair expenditure account was also not settled and not a rupee was paid by the respondent in this regard. The appellant also complained that she was issued show cause notices and warning letters since one year, the cause of which was unknown.

5. The respondent however issued a suspension letter dated 3 June 2008 to the appellant. Consequent to the suspension of the appellant's dealership, the petitioner had approached this Court challenging the suspension order dated 4 September 2008. The dispute was referred for arbitration to be conducted by a retired employee of the respondent as per the arbitration clause namely clause 38 of the dealership agreement. It is the appellant's case that though the dispute was referred to arbitration, the respondent had nonetheless issued a letter dated 13 September 2008 terminating the dealership agreement. The respondent terminated the agency of the appellant alleging breaches of clauses 5, 6, 10, 11, 12, 24(a), 28B(a), 28B(g), 28B(h), 28B(i), 28B(k) of the dealership agreement. The termination letter further recorded that under clause 32(c) of the dealership agreement, the appellant shall pay an amount of Rs.19,94,174.68, the full details of which were not specified in the order except for certain amounts as specified in clause 7 which included an amount of Rs.2,24,510.68 as a penalty for various irregularities stated to be committed by the appellant.