2006 Supreme(Del) 1831
High Court Of Delhi
T. S. THAKUR, S. L. BHAYANA
SURINDER PAL SINGH - Appellant
Versus
HPCL - Respondents
RFA 186 Of 2001
Decided On : 10/10/2006
Subject
Arbitration Law - Termination of Arbitration Proceedings
Act Referred
CONSTITUTION OF INDIA : Art.227
Headnote
Sections 8, 14 & 32 - Pendency of arbitration proceedings - Plea of termination of mandate of arbitrator - Dispute in this regard has to be resolved by the Court under section 14(2) - Assumption about termination of mandate and filing civil suit is not proper – Petition in this regard under article 227 of Constitution is not the proper remedy.
AMIT BANSAL, C.S.Parashar
T. S. THAKUR, J.
( 1 ) SINCE parties to all these cases are common and the questions that arise for consideration are inter-related, the same were heard together and shall stand disposed of by this common judgment.
( 2 ) THE plaintiff-appellant in RFA No. 186/2001, was appointed a dealer by the respondent-Hindustan Petroleum Corporation Ltd. ("hpcl" for short), who happens to be the appellant in cross-appeal No. 283/2001. An agreement dated 15th December, 1981 governed the relationship between the parties. On 29th November, 1999, HPCL appears to have conducted an inspection at the petrol pump of the plaintiff and taken samples for conduct of certain tests. A show cause notice soon thereafter was issued to the plaintiff on 30th december, 1999, alleging that the samples did not meet the required specification. The plaintiff tried to clarify his stand, which failed to impress the HPCL, resulting in the suspension of supply of oil to the petrol pump.
( 3 ) AGGRIEVED by the said order, the plaintiff invoked the arbitration Clause, appearing in the Dealership Agreement. In response to the request made by him, the Chairman and Managing Director of the HPCL, appointed sh. S. P. Chaudhary, General Manager (North Zone) as the sole arbitrator in the case, who entered upon the reference on 29th May, 2000. The arbitration proceedings appear to have commenced in August, 2000 and were adjourned from time to time. Since the proceedings could not be completed within a period of 10 months, as required under the arbitration clause, the plaintiff appears to have intimated to the arbitrator that the same could not be continued beyond the said period. An application filed by the plaintiff under section 9 of the arbitration and Conciliation Act, 1996 (for short "the Act") before the District judge, Saharanpur, was subsequently dismissed as infructuous.
( 4 ) THE plaintiff then filed suit No. 472/2001 in which he challenged the collection of samples by HPCL on several grounds. He assailed even the laboratory tests reports and sought a declaration regarding the invalidity of the process of collection of samples, the test reports, the suspension order that followed and eventually the cancellation of the license, all of which were, according to the plaintiff, void ab initio. He also prayed for a permanent injunction restraining the defendant from taking any further action, pursuant to the tests reports or from dis-continuing the supply of oil to the petrol pump of the plaintiff.
( 5 ) THE defendants appeared before the trial court and moved two applications one of which sought rejection of the plaint. In the objections filed by the company to that application, it was pointed out that the Dealership agreement, dated 15th December, 1981 had already been terminated by HPCL in terms of letter dated 6th April, 2001 and the termination communicated to the plaintiff rendering the suit infructuous. It was also urged that since both the parties had already agreed to refer all the disputes to arbitration which was in progress before the sole arbitrator, the plaintiff was not entitled to withdraw from the arbitration proceedings or shift the forum for determination of the questions raised by him. The defendant argued that so long as the proceedings before the Arbitrator were not terminated, there was no legal justification for the plaintiff to maintain a separate suit in regard to the very same subject matter.
( 6 ) IN the second application, the defendant invoked section 8 of the Act on the ground that all the issues that were raised in the suit were directly and substantially the same as fell for consideration of the Arbitrator and since the arbitration proceedings were pending, the suit was not maintainable.
( 7 ) IN response to a court notice, the Arbitrator filed a reply, inter alia, stating that he is seized of the disputes arising out of the dealership agreement, suspension of supply as also notices issued to the plaintiff. He was not, however, aware