The existence of a dispute under the dealership agreement justifies the appointment of an arbitrator, even without a termination order being issued.

ORDER :

SUDESH BANSAL, J.

1. Heard counsel for both parties and perused the material placed on record.

2. This is an arbitration application, filed by and on behalf of applicant under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter for short "the A&C Act"), seeking appointment of a sole Arbitrator in terms of Clause 68, enumerated in the dealership agreement.

For ready reference, Clause 68 is being reproduced hereunder:-

"68. Any Dispute Or Difference Of Any Nature Whatsoever Or Regarding Any Right, Liability, Act, Omission Or Account Of Any Of The Parties Hereto Arising Out Of Or In Relation To This Agreement Shall Be Referred To The Sole Arbitration Of The Managing Director Of The Corporation Or Of Some Officer Of The Corporation Who May Be Nominated By The Managing Director. The Dealer Will Not Be Entitled To Raise Any Objection To Any Such Arbitrator On The Ground That The Arbitrator Is An Officer Of The Corporation Or That He Has To Deal With The Matters To Which The Contract Relates Or That In The Course Of Outics As An Officer Of The Corporation He Had Expressed Views On All Or Any Of The Matters In Dispute Or Difference. In The Even Of The Arbitration To Who The Matter Is Originally Referred Being Transferred Or Vacating His Office On Being Unable To Act For Any Reason The Managing Director As Aforesaid At The Time Of Such Transfer, Vacation Of Office Or Inability To Act, Shall Designate Another Person To Act As Arbitrator In Accordance With The Terms Of The Agreement Such Person Shall Be Entitled To Proceed With The Reference From The Point At Which Left By His Predecessor. It is Also A Term Of This Contract That No Person Other Than The Managing Director Of The Corporation As Aforesaid Shall Act As Arbitrator Hereunder. The Award Of The Arbitrator So Appointed Shall Be Finall, Conclusive And Binding On All Parties To The Agreement Subject To The Provisions Of The Arbitration Act 1940 Or Any Statutory Modification On Or Reenactment Thereof And The Rules Made Thereunder And For The Time Being In Force Shall Apply To The Arbitration Proceedings Under This Clause."

3. The factual matrix, giving rise to the dispute arisen between parties, is that petitioner has been awarded a dealership agreement dated 30.12.2019 by respondents- Corporation, to run a petrol pump at Sikar Road, Jaipur and on 13.02.2023, an inspection of the outlets of petrol pump was made by the inspecting team and a Panchnama report was prepared. In one of the Dispensing Unit (DU), tampering with the nozzle was noticed, which results into short-supplied of motor sprint, hence the DU was seized and nozzle was sent for testing from a firm GVR TACC. After receiving testing report, respondents found that the inner part of the nozzle, is tampered with and soldered, causing short- supply. Hence, a show-cause notice dated 12.07.2023 was issued by respondents to the following effect, disclosing the factum of testing report:-

"Under the facts and the circumstances stated herein above, you are hereby called upon to show cause within 14 days from the receipt of this notice as to why necessary action as deemed fit cannot be taken against you as per Clauses Nos 15, 16, 17 and 44 read with Clause No 58 (M) of the Dealership agreement dated 30/12/2019.

In case, no reply to the said show cause notice is received from you within the stipulated period as mentioned hereinabove, it shall be construed that you have no explanation or reply to offer in the matter and in which case appropriate action as deemed fit and necessary including termination of the Dealership will be taken against you as per Clauses Nos 15, 16, 17 and 44 read with Clause No 58 (M) of the Dealership, agreement dated 31/12/2019 and relevant policy/guidelines, without any further notice to you."

4. It appears that the legal notice dated 12.07.2023 was replied by and on behalf of petitioner, vide reply notice dated 27.07.2023, denying and disputing the test report and thereafter, a legal notice