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2019 Supreme(Cal) 899
IN THE HIGH COURT OF CALCUTTA
Ashis Kumar Chakraborty, J.
Sajal Kumar Mandal – Appellant
Versus
Indian Oil Corporation Limited and Others – Respondents
Writ Petition No. 22927 of 2018
Decided On : 16-04-2019
Advocate Appeared:
Ashok Banerjee, Adv., Sudipto Panda, Adv., Subrata Ghosh, Adv., M.S. Yadav, Adv.
The main legal point established in the judgment is that when a dispute arises out of or relates to an agreement containing an arbitration clause, the party's remedy lies in filing an appropriate application for appointment of an arbitrator under the Arbitration and Conciliation Act, 1996.
Headnote:
Arbitration Agreement - Termination of Distributorship - Clause 37 (a) - February 27, 2012, February 27, 2017 - The court found that the existence of the arbitration agreement between the parties for the decision of any dispute arising out of or relating to the said agreements is not in dispute. The court held that the petitioner's challenge to the termination of the distributorship agreement by the respondent no.1 is bounded on the ground that he was required by the officers of the respondent no.1 to purchase the 50% of the said plot of land of 14 decimals from Smt. Taralika Shit involves adjudication of disputed question of fact to be tried on evidence. The validity of the termination of the distributorship agreement of the petitioner by the respondent no. 1 oil company also involves the interpretation of Clauses 27 (1) of the Distributorship Agreement. The court concluded that the petitioner's remedy lies in filing an appropriate application under sub-section (6) of Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator.
Fact of the Case:
The petitioner was appointed as the distributor of Liquid Petroleum Gas (LPG) at Panchmura, PS Taldangra, District Bankura in the State of West Bengal. The petitioner challenged the notice terminating his distributorship of LPG issued by the Executive Director, WBSO of the respondent no.1 Oil Company.
Finding of the Court:
The court found that the petitioner's challenge to the termination of the distributorship agreement by the respondent no.1 is bounded on the ground that he was required by the officers of the respondent no.1 to purchase the 50% of the said plot of land of 14 decimals from Smt. Taralika Shit involves adjudication of disputed question of fact to be tried on evidence. The court concluded that the petitioner's remedy lies in filing an appropriate application under sub-section (6) of Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator.
Issues: The main issue was the maintainability of the writ petition in view of the existence of the arbitration agreement contained in the distributorship agreement dated February 27, 2017.
Ratio Decidendi: The court held that the petitioner's challenge to the termination of the distributorship agreement by the respondent no.1 is bounded on the ground that he was required by the officers of the respondent no.1 to purchase the 50% of the said plot of land of 14 decimals from Smt. Taralika Shit involves adjudication of disputed question of fact to be tried on evidence. The court concluded that the petitioner's remedy lies in filing an appropriate application under sub-section (6) of Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator.
Final Decision: The court rejected the Writ Petition, W.P. 22927 (W) of 2018, and held that the party shall be entitled to take recourse to the arbitration agreement.
JUDGMENT :
Ashis Kumar Chakraborty, J.
The petitioner was appointed by the respondent no.1 oil company as the distributor of Liquid Petroleum Gas (in short, "LPG") at Panchmura, PS Taldangra, District Bankura in the State of West Bengal (hereinafter referred to as 'the said area'). In this writ petition the petitioner has challenged the notice dated November 14, 2018 issued by the Executive Director, WBSO of the respondent no.1 Oil Company terminating his distributorship of LPG.
2. The brief facts required to be considered for deciding this writ petition are that on or about November 27, 2010 the respondent no.1 issued a public notice inviting application for selection of the distributor of LPG, under Rajiv Gandhi Gramin Liquid Petroleum Gas Vitrak (RGGLV) for the said area. In response to the said advertisement, the petitioner filed an application for obtaining the distributorship of LPG for the said area and in a draw held on August 23, 2011 he was selected for the said distributorship. According to the petitioner, in the meantime, by a registered deed of purchase no.4561 of 2010 dated November 24, 2010 he purchased a plot of land measuring 14 decimals from Sri Bimal Chandra Nandi and on the said plot of land he intended to set up the godown and the showroom for said LPG distributorship. In the application submitted to the respondent no.1, the petitioner stated that he intends to set up the LPG godown and showroom. The petitioner further claims that in order to set up the godown to store the gas cylinders and to ensure smooth supply of gas cylinders, by virtue of a registered deed dated November 23, 2011 he also purchased another adjoining plot of land ad measuring an area of 4 decimals.
3. On February 27, 2012 an agreement was entered into between the petitioner and the respondent no.1, whereby the latter appointed the former as the distributor of LPG for the said area. The terms and conditions under which the respondent no.1 appointed the petitioner as the LPG distributor for the said area were recorded in the said agreement dated February 27, 2012. Clause 37 (a) of the said agreement dated February 27, 2012 contemplated that all disputes and differences arising under or in relation to the said agreement shall be referred to the sole arbitration of the Director (Marketing) of the respondent no.1 and if, the said Director is unable or unwilling to act of the sole arbitrator the matter shall be referred to the sole arbitration of some other officer of the respondent no.1, who is willing to act as such sole arbitrator.
4. After entering into the said agreement dated February 27,2012 the petitioner started to run his LPG distributorship in the said area in the District of Bankura. According to the petitioner, in the month of March, 2012 he was informed of certain defects in the title of the 14 decimals of land which he had purchased from Shri Bimal Chandra Nandi for setting up the godown of LPG. Thereafter, when the petitioner went to the office of respondent no.1 he was advised to approach the other co-owner of the said plot of land ad measuring 14 decimals. As such, the petitioner caused the other co-owner of the said plot of land, namely Smt. Taralika Shit to transfer her 50% share in the said land, that is, 7 decimals in favour of the petitioner. On September 26, 2016 the petitioner entered into an addendum agreement with the respondent no.1 modifying the said agreement dated February 27, 2012 to the effect that henceforth the said distributorship of the petitioner of LPG shall be treated and known as 'Gramin Vitrak' instead of 'Rajiv Gandhi Gramin LPG Vitrak'. On November 16, 2016 the Senior Area Manager of the respondent no.1, issued a show cause notice to the petitioner alleging that for considering his application by the respondent no.1 for appointment of distributor of the LPG for the said area, the petitioner had relied upon the deed to prove his title in respect of 14 decimals of land upon which he had constructed the go
