The main legal point established in the judgment is that marketing guidelines cannot override or supersede delegated statutory provisions, and the scope of interference with an Arbitrator's award is very limited.

JAGMOHAN BANSAL, J.

1. The appellant- Hindustan Petroleum Corporation Ltd. Through instant appeal is seeking setting aside of order dated 10.10.2017 passed by Additional District Judge, Chandigarh whereby objection petition filed under Section 34 of Arbitration and Conciliation Act, 1996 (for short 'Arbitration Act') against award dated 29.08.2013 (Annexure A-1) has been dismissed.

2. The brief facts which are necessary for the adjudication of the present appeal are that the appellant is public sector undertaking and engaged in the business of manufacture and supply of petro products. The appellant, across the country, is selling its oil products through its authorized dealers/retail outlets. The appellant allotted retail outlet at Moonak, District Sangrur, pursuant to an advertisement, to M/s Hari Ram Piara Lal i.e. respondent No.1. A dealership agreement dated 22.09.1987 was executed between appellant and respondent. The respondent reconstituted its entity in 2004 and accordingly agreement was executed between appellant and re-constituted firm.

3. The appellant has entered into an agreement with M/s SGS India Private Limited (for short 'SGS') whereby SGS has been authorized to conduct marker test with respect to oil sold by retail outlets of the appellant. On 11.07.2007, an official of SGS namely Mandeep Singh, to conduct inspection/test came at retail outlet of the respondent. Mandeep Singh conducted marker test and found adulteration. On the basis of report of marker test followed by another test at the premises of the appellant, a show cause notice dated 21.09.2007 came to be issued to respondent whereby respondent was called upon to show as to why dealership agreement should not be terminated. The respondent filed reply to aforesaid show cause notice. The appellant did not find reply of the respondent satisfactory and accordingly, dealership agreement came to be terminated vide order dated 30.04.2008.

4. The respondent invoked arbitration clause against the termination order. By order dated 25.05.2012 passed in Civil Appeal No.2253-2255 of 2010, Supreme Court appointed Justice R.V. Raveendran (Retd.) sole arbitrator to decide the dispute between the appellant and respondent.

5. The Arbitrator vide award dated 29.08.2013 decided the dispute. The Arbitrator formed an opinion that Mandeep Singh an employee of SGS could not conduct inspection in the absence of an official of HPCL appointed under Clause 7 of Motor Spirit and High Speed Diesel (Regulation of Supply and Distribution and Prevention of Malpractices) order, 2005 (for short 2005 order'). The Arbitrator on the basis of evidence led by both sides concluded that official of SGS had conducted inspection and drawn samples in the absence of sales officer of appellant-Corporation, thus, sample was drawn by an unauthorized person. The test report of a sample, drawn by an unauthorized person cannot be relied upon. The Arbitrator further concluded that Marketing Discipline Guidelines, 2005 being merely guidelines issued by the Ministry cannot override or supersede or prevail over Clause 7 of 2005 Order which is a delegated legislation having statutory flavour. The conclusion drawn by Arbitrator reads as:

“54. In view of the above, the claims and counter-claims are decided and disposed of by this award, in the following manner:-

(A) The termination of dealership of claimant, by respondent is declared to be illegal and invalid.

(B) The claimant is not entitled to restoration of dealership, but only entitled for damages of Rs.45,000/- for wrongful termination equivalent to loss of earning for three months.

(C) The claimant is entitled to Rs. 50,000/- as damages for injury to goodwill.

(D) The claim of arrears of rent, made by the claimant, is held to be inarbitrable, without prejudice to the right of the lessors of the premises to claim any rent due or other relief in accordance with law.

(E) The counter claim of respondent is allowed in part and the claimant is directed not to enter upon