The court emphasized the requirement of prior written approval for partnership, the concept of waiver, and the power of the court to set aside an award under Section 34 of the Arbitration and Conciliation Act, 1996.

JUDGMENT

Moushumi Bhattacharya, J. - This is an application under Section 34 of The Arbitration and Conciliation Act, 1996 for setting aside of an Award dated 10th July, 2008 passed by a learned Sole Arbitrator before whom the respondent before this court was the claimant in the arbitration proceedings.

2. The respondent/Indian Oil Corporation Limited (IOCL) filed its Statement of Claim in the arbitration for damages incurred pursuant to termination of the dealership of the petitioner. The dispute between the parties arose out of a Memorandum of Agreement dated 2nd April, 1976 in connection with a dealership of a retail outlet at Howrah on the basis of which the petitioner undertook to run a petrol pump in the name of M/s Kalpana Service Station. The parties entered into a formal contract on 17th June, 1977. The contention of the petitioner is that the respondent intended at all material times that the dealers would induct a financial working partner, if required and the petitioner accordingly inducted one Mr. Saidur Rahman Khan for rendering necessary financial assistance. Mr. Khan subsequently withdrew himself from the affairs of the petrol pump and the petitioner requested the respondent to induct Mr. Khan as a financial partner as per the respondent's Circular of 28th July, 1983. The petitioner's case is that the respondent assured the petitioner that the petitioner would be allowed to run the business with the help of a financial partner on the basis of which the petitioner executed a general Power of Attorney in favour of Mr. Khan. The petitioner's case is that the petitioner continued to run the petrol pump as its sole owner and did not part with the rights of the service station in favour of any third party. According to the petitioner, despite being aware of the arrangement between the petitioner and Mr. Khan, the respondent initiated a Vigilance Inquiry in 1993 followed by a Show-Cause Notice issued on 17th July, 1997 on the petitioner for conducting operations of the petrol pump contrary to the terms of the contract. The petitioner filed an application in the arbitration for examining one Mr. G. C. Roy, an Attorney of the respondent in relation to the Vigilance Report. The case of the petitioner is that although Mr. G. C. Roy admitted to the existence of the Vigilance Report, the said report was not produced by the respondent in the arbitration.

3. The primary contention of Mr. Dhruba Ghosh, learned Senior Counsel appearing for the petitioner, is that the Arbitrator based his findings on the Vigilance Report which was not produced by IOCL and that if produced, the Vigilance Report would show that IOCL/respondent had full knowledge of the manner in which the petrol pump was being run since 1991. Counsel submits that the Award is liable to be set aside as being contrary to public policy and is perverse. Counsel submits that since the respondent was in possession of the Vigilance Report and deliberately chose not to disclose the same, the Arbitrator should have drawn adverse inference against the respondent. It is further submitted that the Award is based on conjecture and surmise by reason of the finding of the Arbitrator being premised on the word "perhaps". Counsel also assails the Award as being devoid of reasons. Counsel submits that it was the respondent's specific case in the Statement of Claim that the petitioner had committed breach of the agreement by entering into partnership with Mr. Khan without obtaining the respondent's approval and that the petitioner had also transferred his shares in the business to Mr. Khan. Counsel submits that the draft Deed of Partnership between the petitioner and Mr. Khan dated 1st November, 1990 has nothing to do with the dealership and further that the respondent was aware of the arrangement between the petitioner and Mr. Khan since 1991.

4. Mr. Swarajit Dey, learned counsel appearing for the respondent seeks to sustain the impugned Award by contending that the petitioner admit