The amendment to the Arbitration Act mandates that a person with an interest in the outcome of a dispute cannot act as an arbitrator or appoint one, reinforcing procedural impartiality.

JUDGMENT :

SHAMPA SARKAR, J.

1. Affidavit in opposition is taken on record. Insertions in English and Hindi newspapers had been made within the jurisdiction of the respondent. Despite substituted service, none appears. The Court proceeds ex parte.

2. This is an application for appointment of a learned Arbitrator in accordance with clause 38 of the Bharatgas (Liquefied Petroleum Gas) Distributorship (Domestic & Commercial) Agreement dated 13th August, 2012.

3. According to the petitioner, the respondent was appointed as a distributor for carrying on the business of LPG Distributorship under the name and style of M/s. Ganga Bharat Gas Gramin Vitrak, at Chhatgtarpur (Dali/Orkaha/Chengbaha), District Palamau, Jharkhand.

4. Reliance has been placed on the various clauses of the agreement in support of the contention that the distributor was required to comply with and abide by the stipulations under the said clauses. Clause 5 of the agreement provided that the LPG Cylinders with Valves, Caps, Security Nuts, Regulators and any other equipment as determined by the petitioner/Corporation, shall remain the property of the Corporation.

5. It is contended that the Corporation from time to time entrusted the distributor with the use of those equipments in the usual course of business and the distributor was to exercise due care and protection of all the properties so handed over to the distributor, under the Distributorship Agreement.

6. The distributor was also required to provide adequate storage facility under clause 7. Clause 11 of the Agreement, mandated that the distributor was to faithfully and diligently observe and carry out all directions and orders of the Corporation, which were part of the Corporation’s LP Gas Manual. Clause 16 provided that the distributor was to maintain adequate trained and competent staff to do the installation work, connect the appliances to the cylinders, re-fill the cylinders and pressure regulators, etc. The Agreement permitted the Corporation to make periodic visits, inspect the documents, accounts, cause an inventory of the stocks etc. Clause 28(g) of the Agreement permitted the Corporation to terminate the agreement if the distributor committed default in payment to the Corporation in full and Clause 28(a) of the Agreement permitted the Corporation to terminate the agreement in the event the distributor committed any delay, breach or default of the terms and conditions of the agreement.

7. According to the petitioner, the distributor was not operating from May 15, 2025. Numerous complaints were received from the local administration, when the public was facing difficulty. The District Magistrate of the concerned District wrote several letters about the closure of the LPG distributorship.

8. In this background, a show-cause notice was issued on October 9, 2017, asking the distributor to show cause as to why the distributorship should not be terminated. On December 19, 2017, another show-cause notice was issued. By a letter dated January 11, 2018, the respondent answered to the show-cause notice, inter alia, contending that due to a threat situation in the locality, daughter’s marriage and son’s illness, the respondent could not pick up the cylinders on time and deliver them to the customers. An inspection was held in the godown of the respondent by the Assistant Manager, LPG Cells, Hazaribagh, to retrieve the stock and assess the status of the distr