2022 Supreme(MP) 443
IN THE HIGH COURT OF MADHYA PRADESH, PRINCIPAL SEAT AT JABALPUR
SHEEL NAGU, PURUSHAINDRA KUMAR KAURAV, JJ.
Indian Oil Corporation Ltd. and others - Appellants
Versus
M/s Tatpar Petroleum Centre - Respondent
Arbitration Appeal No. 80 of 2021
Decided On : 27-01-2022
For the Appellant :Shri Aditya Adhikari, Senior Advocate with Shri Deepak Tiwari.
For the Respondent: Shri R.K. Sanghi.
Headnote:
dispute - dealership termination - Arbitration & Conciliation Act, 1996, Section 9(1)(d) - Section 7 - Section 2 - The court discussed the meaning of 'dispute' and concluded that a dispute arises when one party asserts and the other refutes the assertion, regardless of whether a decision has been made. The court found that a show cause notice issued by the appellant and the respondent's refutation gave rise to a dispute, allowing the respondent to invoke Section 9 of the 1996 Act. The court dismissed the appeal, finding no jurisdictional error in the respondent's application under Section 9(1)(d) of the 1996 Act.
Fact of the Case:
The appellant appealed a decision allowing an application under Section 9(1)(d) of the Arbitration & Conciliation Act, 1996, restraining the appellant from cancelling a dealership. The appellant argued that no dispute had arisen as no decision regarding termination had been made.
Finding of the Court:
The court found that a dispute had arisen between the parties, allowing the respondent to invoke Section 9 of the 1996 Act. The court dismissed the appeal, finding no jurisdictional error in the respondent's application under Section 9(1)(d) of the 1996 Act.
Issues: The main issue was whether a dispute had arisen between the parties to enable the respondent to invoke Section 9 of the 1996 Act.
Ratio Decidendi: The court discussed the meaning of 'dispute' and concluded that a dispute arises when one party asserts and the other refutes the assertion, regardless of whether a decision has been made.
Final Decision: The appeal was dismissed, and no case for interference was found. The court upheld the decision allowing the respondent's application under Section 9(1)(d) of the 1996 Act.
JUDGMENT :
Sheel Nagu, J.
1. This appeal filed under Section 37(1)(b) of the Arbitration & Conciliation Act, 1996 (for brevity "the 1996 Act") by the appellant-Indian Oil Corporation Ltd. assails the order dated 03.09.2021 passed in MJC AV No.73 of 2021 by Commercial Court, Jabalpur allowing an application of the respondent preferred under Section 9(1)(d) of the 1996 Act restraining the IOC from cancelling MS (HD)(B Site) retail outlet dealership.
2. Learned counsel for the rival parties are heard on the question of admission and so also on final disposal.
3. The sole argument of the learned senior counsel for the appellant-IOC is that in the given facts and circumstances where amere show cause notice dated 31.03.2021 for termination of the dealership was issued and a reply was taken from the respondent and personal hearing was afforded to the respondent. But since no decision as regard termination of dealership was reached by the IOC, no cause arose to the respondent to invoke Section 9(1)(d) of the 1996 Act. It is submitted that in the given facts and circumstances since there was no dispute between the parties in the absence of any final decision taken by the IOC, the question of approaching the Court under Section 9 of the 1996 Act was not there.
4. Learned counsel for the appellant further submits that though the expression 'dispute' is not defined in the definition clause contained in Section 2 of the 1996 Act but by its very dictionary meaning and the usage to which it is put in common parlance it is evident as daylight that dispute is not unilateral but arises when one party asserts and the other refutes the assertion and a decision is taken which is not to the liking of one of the party who can then triggered the mechanism under Section 9 of the 1996 Act. It is submitted that unless and until the IOC took a decision regarding termination after taking the reply of the respondents and affording him personal hearing, the respondent has no cause of action in the absence of arising of any dispute to approach the Court under Section 9 of the 1996 Act.
5. Reliance is placed by the learned senior counsel on the provision of Section 7 of the 1996 Act.
6. Per contra, learned counsel for the respondent relying upon the decision of AIR 1952 SC 119 (Ruby General Insurance Co. Ltd. Vs. Pearey Lal Kumar and another), 2007 (3) SCC 686 (M/S. Agri Gold Exims Ltd vs. M/S. Sri Lakshmi Knits & Wovens) and 2021 (2) SCC 1 (Vidya Drolia and others vs. Durga Trading Corporation) contends that the very fact of a show cause notice having been issued to the respondent and the respondent having refuted the same, they have rise to the concept of dispute thereby opening the doors of Section 9 to the respondent to seek the remedies provided therein before commencement of arbitral procedure.
7. The only question before this Court is that in the absence of any termination of the dealership, any dispute had arisen between the rival parties to enable the respondent to invoke Section 9 of the 1996 Act.
8. Surprisingly, the expression 'dispute' is not defined in the 1996 Act though the expression find reference in number of provisions contained in the 1996 Act, and the principal object behind the Act is to resolve dispute between rival parties through different modes including arbitration.
Since the 1996 Act does not define the expression 'dispute', this Court has to fall upon the dictionary meaning of the said expression which is as follows:
Black's Law Dictionary, 5th edition, page 424 defines 'dispute' as under :
"to argue about, to contend ... words; an argument; a debate; a quarrel".
Cambridge Dictionary defines 'dispute' as under :
"a disagreement or argument between two people, groups or countries."
Collins' Dictionary defines 'dispute' as under :
"A dispute is an argument or disagreement between people or groups."
9. From the aforesaid dictionary meaning of expression 'dispute', it is evident as daylight that for a dispute to arise there should exist an assertion/