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2016 Supreme(All) 1109

ALLAHABAD HIGH COURT
BEFORE : V.K. SHUKLA AND MAHESH CHANDRA TRIPATHI, JJ.
M/s. SAINIK KRISHAK SEWA KENDRA, MIRZAPUR ....Petitioner
Versus
INDIAN OIL CORPORATION LTD. AND ANOTHER ....Respondents
(Civil Misc. Writ Petition No. 67004 of 2014, decided on 6th September, 2016)

Advocates:
Counsel :
A.C. Pandey for the Petitioner; Mrs. Archana Singh for the Respondents.

Headnote:Contact Act, 1872—Section 201—Agreement—Cancellation—Termination of dealership—Validity—Indian Oil Corporation lost case before Arbitrator and even failed before District Judge—Thereafter applying discretionary power IOC cancelled dealership—Held, such action is arbitrary and unreasonable, cannot be taken. [Paras 20 and 21]

       Result; Petition Allowed.

       

JUDGMENT

Hon’ble V.K. Shukla, J.—M/s. Sainik Krishak Sewa Kendra through its Proprietor Shri Virendra Singh is before this Court assailing the validity of decision dated 22.10.2014 passed by General Manger, Indian Oil Corporation Ltd. refusing to restore the dealership in favour of petitioner in lieu of provisions of Section 14(1)(c) of Specific Relief Act, 1963.

2. Brief background of the case is that petitioner is an Ex-Army personnel and had actively participated in Army Operation in Sri Lanka in Peace Keeping Force in the year 1987 and has sustained serious injuries of bullet in his leg.

3. Indian Oil Corporation has issued an advertisement for commissioning of Krishak Sewa Kendra at Kalwari, District Mirzapur and petitioner has also proceeded to move an application for awarding him dealership of the said retail outlet in defence category. The candidature of petitioner was considered and he was awarded dealership of retail outlet vide a dealership agreement dated 22.3.2006 and the dealership was granted to the petitioner under defence category at Kalwari, District Mirzapur.

4. Petitioner submits that behind his back, inspection of retail outlet was carried out and in the said inspection that has been so carried out, various irregularities were sought to be pointed out and based on the said inspection report, a fact finding letter dated 28.5.2010 was issued to the petitioner, to which he submitted his reply on 28.5.2010 and as reply submitted by petitioner was not satisfactory, a show-cause notice dated 23.8.2010 was issued to the petitioner. Petitioner has submitted a detailed and elaborate reply dated 6.9.2010 and thereafter his agreement in question was cancelled vide order dated 11/21.4.2011. Petitioner, at the said point of time, has preferred Writ Petition No. 30446 of 2011 (M/s. Sainik Krishak Sewa Kendra v. Union of India and others) and then at the said juncture, petitioner was relegated to prefer appeal. Petitioner, thereafter, has preferred appeal before the Appellate Authority and the said appeal was dismissed by the Appellate Authority i.e. Executive Director (Retail Sales) Indian Oil Corporation (Mktg. Division), Indian Oil Bhawan, Mumbai. Against the order of Appellate Authority, petitioner has preferred Writ Petition No. 71050 of 2011 (M/s. Sainik Krishak Sewa Kendra v. Union of India and others) and this Court on 9.12.2011 relegated the petitioner to avail the remedy that is provided under Clause 69 of the Agreement executed between the parties to invoke the Arbitration Clause.

5. In such a situation and in this background, the Arbitrator was appointed by Director (Marketing) of the Corporation vide a letter dated 22.3.2012 and thereafter the Arbitrator took up the matter and ultimately he has proceeded to give award on 27.2.2013 in following terms:

“A. The alleged Inspection report dated 26.5.2010 carried out at the Retail Outlet M/s. Sainik Krishak Sewa Kendra is hereby struck down as been vitiated and mala fide. The consequent actions based on this inspection report are null and void.

B. Respondent Corporation Ltd. is directed to review its decisions which were based on the inspection report dated 26.5.2010.

C. A cost of Rs. 30000/- to be paid by the respondent to Claimant, Sh. Virendra Singh towards Arbitration cost.”

6. Against the award in question, the Indian Oil Corporation Ltd. initiated proceedings under Section 34 of the Arbitration and Conciliation Act, 1996 by filing Misc. Case No. 570 of 2013 and the District Judge, Allahabad on 9.12.2013 proceeded to reject the said objection under Section 34 of the Arbitration and Conciliation Act, 1996 being time barred.

7. The Authorities on the spot, in spite of the fact that Arbitrator had proceeded to give award in favour of petitioner, were not at all restoring back the petrol pump of petitioner and in this background, petitioner had preferred Writ Petition No. 15466 of 2014 (M/s. Sainik Krishak Sewa Kendra v. Director Marketting India Oil Corporation L
























































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