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2011 Supreme(Cal) 1322
HIGH COURT OF CALCUTTA
K.J. SENGUPTA, SYAMAL KANTI CHAKRABARTI, JJ.
Kajal Kumar Bhowmick - Appellant
Versus
Indian Oil Corporation Ltd. - Respondent
C.A.N. No. 373 of 2011 F.M.A.T. No. 1589 of 2010
Decided on : Sep 22,2011
P.K. Das, Reyaz Hossain, Parmer Hossain, Vineeta Meharia, Amit Kumar, Swati Chowdhury, Barsa Saha, Piyush Meharia
The scope of Section 9 of the Arbitration and Conciliation Act, 1996 is wide enough to allow for the grant of interim measures at different stages of the arbitration proceedings, including before the commencement of the proceedings. While considering an application for interim relief under Section 9 of the Act, the Court should not go into the merits of the case.
Headnote:
ARBITRATION - Interim measures - Maintainability - Appointment of Arbitrator - Scope of Section 9 of the Arbitration and Conciliation Act, 1996 - Principles for grant of interim relief - Balance of convenience - Specific Relief Act, 1963 - Applicability.
Fact of the Case:
Appellant, a petroleum pump dealer, challenged the termination of his dealership by the respondent on the ground of conviction in a criminal case. The appellant filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 (the Act) seeking interim relief to restrain the respondent from giving effect to the termination order. The Trial Court refused to grant the injunction and held that the application under Section 9 was not maintainable.
Finding of the Court:
The High Court held that the Trial Court erred in holding that the application under Section 9 of the Act was not maintainable. The Court held that the scope of Section 9 is wide enough to allow for the grant of interim measures at different stages of the arbitration proceedings, including before the commencement of the proceedings. The Court also held that the Trial Court erred in going into the merits of the case while considering the application for interim relief.
Issues: 1. Whether an application under Section 9 of the Act is maintainable before the commencement of arbitration proceedings? 2. Whether the Trial Court erred in going into the merits of the case while considering the application for interim relief?
Ratio Decidendi: 1. The scope of Section 9 of the Act is wide enough to allow for the grant of interim measures at different stages of the arbitration proceedings, including before the commencement of the proceedings. 2. While considering an application for interim relief under Section 9 of the Act, the Court should not go into the merits of the case. The Court should only consider whether the applicant has made out a prima facie case, whether the balance of convenience is in favor of granting the relief, and whether the applicant will suffer irreparable injury if the relief is not granted.
Final Decision: The High Court allowed the appeal and directed the respondent to restore the supply of petroleum products to the appellant's outlet till the learned Arbitrator takes a decision or the Supreme Court decides the matter, whichever is earlier.
SENGUPTA, J.
1. BY this appeal the appellant has impugned the judgment and order dated 11th November, 2010 passed by the then 2nd Bench of the City Civil Court at Calcutta in Miscellaneous Case No. 1208 of 2010. BY the judgment and order the prayer for injunction restraining the respondent from giving effect to the order of termination of dealership was refused. The fact leading to filing the aforesaid Miscellaneous Application in the learned Court below and then preferring appeal is set out briefly as hereunder:-
The appellant herein contends that his father obtained the Petroleum Pump Dealership of the respondent and as such the said business was set up under the name and style of M/s. Bhowmik Service Station at a place in the District of Nadia. However, after death of his father by subsequent agreement dated 10th May, 1978, the appellant retained the said dealership of the respondent No. 1 under the same business name. The agreement was signed by the appellant as a sole proprietor of the said business on one hand and the appropriate officials of the respondent on the other. Pursuant thereto until the time hereinafter mentioned there has been no problem on either side as the appellant without any disturbance whatsoever carried on business of dealership. On 14th July, 1997 by a letter the respondent suspended the dealership of the appellant by reason of being convicted by the learned Sessions Judge, Nadia in Sessions Case No. 7 of 1996 and Trial Case No. 10 of 1997 under Section 302/102B of I.P.C.
2. THEREAFTER, an appeal being preferred to the Hon'ble High Court and on being released on bail by the First Appellate Court the appellant made a representation to the respondent for revoking the said order of suspension of dealership. Allowing such representation the respondent withdrew this order of suspension and restored the supply to his retail outlet on and from 5th September, 1997. There had been uninterrupted supply of petroleum product to the said outlet of the appellant till a show-cause notice was issued on 22nd March, 2010. In between 5th September, 1997 and 22nd March, 2010, the appeal against the conviction and sentence of the appellant was dismissed by this Hon'ble Court in its Criminal Appellate Jurisdiction by judgment and order dated 14th May, 2008. Thereafter, the appellant approached the Hon'ble Supreme Court against the said judgment and order of this Court by filing a Criminal Appeal being No. 122 of 2008. In the said appeal the appellant herein duly applied for granting bail, which was granted by the Hon'ble Supreme Court by order dated 4th August, 2008. The factum of disposal of the appeal by the Division Bench of this High Court in Criminal Appellate Jurisdiction and also preferring appeal before the Supreme Court therefrom, and granting of bail was duly communicated to the respondent. On 22nd March, 2010 the respondent issued a show-cause notice for termination of the dealership on two grounds namely committing breach of the conditions under Clause 47(ii) of the said agreement and also on the ground of conviction in the said criminal case under clause 58(d) of the said dealership agreement. It appears from the records that the said show-cause notice was challenged in the writ jurisdiction by the appellant however, the same was not pressed by obtaining order of withdrawal. On 6th June, 2010 the appellant sought for personal hearing which was granted by the respondent on 21 st June, 2010. On 12th August 2010, the petitioner herein moved an application under Section 9 of the Arbitration and Conciliation Act, 1996 before the learned 3rd Bench, City Civil Court being Misc. Case No. 1208 of 2010. On the same date the learned Judge passed an ad interim order of injunction restraining the respondent herein from terminating his dealership till 10th September, 2010. The respondent against the aforesaid ex parte order of injunction preferred appeal in this Hon'ble Court on 10th September, 2010 and on that date
