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IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.6099 OF 2021

(Arising out of SLP(C)No. 8322 of 2021)

HINDUSTAN PETROLEUM CORPORATION LIMITED Appellant(s)

VERSUS

M/S DALEEL BROTHERS Respondent(s)

O R D E R

Leave granted.

This appeal takes exception to the judgment and order

dated 18.01.2021 passed by the High Court of Karnataka,

Dharwad Bench in M.F.A. No. 102894 of 2017 setting aside

the judgment dated 03.08.2017 passed in Arbitration

No.28/2015 on the file of the Principal District Judge,

Belagavi and the award bearing No.ARB/AVNR/101 dated

30.07.2015 passed by the sole Arbitrator. The High Court

also issued further directions to the appellant to hand

over the physical possession of the petrol pump at

Mulugund to the respondent and restore the dealership of

the petrol pump in his favour.

The appellant issued letter of intent on 01.06.2007

in favour of the respondent appointing him as dealer of

Digitally signed by

NEETU KHAJURIA

Date: 2021.10.04

19:35:10 IST

Reason:

Signature Not Verified

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Retail Outlet at Mulugund village, Gadag Taluk. An

agreement was executed and registered on 07.06.2007 in

favour of the appellant/Corporation to an extent of 2073

sq. metres of converted land on lease for a period of 29

years. Thereafter, the appellant entered into Standard

Dealership Agreement with the respondent in pursuance of

which, the respondent commenced his business activities

therein. The appellant had also allotted adhoc dealership

to the respondent on 09.03.2009 for operation of retail

dealership on temporary basis.

On 10.08.2010, the appellant issued a notice to the

respondent calling upon him to show cause why he had not

achieved the minimum sale target of the lubricant and the

other products at the temporary retail outlet at

Laxmeshwar. We need not dilate on the other factual

matters in this judgment as the same have been

extensively reproduced by the High Court in the impugned

judgment.

Suffice it to observe that because of the lapses

committed by the respondent, the Corporation issued a

notice on 02.04.2012 as to why the Standard Dealership

Agreement executed in respect to Mulugund Petrol Pump

should not be terminated on the ground that invoices were

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prepared in the name of M/s. Daleel Brothers with respect

to temporary retail outlet found having signature of C.S.

Hiranath. The respondent gave reply to that notice on

12.04.2012 disputing the correctness of the allegations

made therein. The appellant eventually proceeded to

initiate action against the respondent and terminated the

dealership agreement.

As dispute arose between the parties, reference was

made to the sole Arbitrator who in turn passed the award

on 30.07.2015 rejecting the claim of the respondent. The

respondent thereafter filed Arbitration Suit No.28/2015

before the Principal District & Session Judge, Belagavi

under Section 34 of the Arbitration and Conciliation Act,

1996, which came to be dismissed on 03.08.2017. Against

which, the respondent filed M.F.A. No.102894/2017(AA)

before the High Court of Karnataka, Dharwad Bench.

The High Court vide impugned judgment has opined that

the appellant had not issued any notice to the respondent

to remedy the breach, as required under Clause 55 of the

Standard Dealership Agreement. The High Court took the

view that having terminated the adhoc dealership of the

respondent for a breach of Clause 45 of the Standard

Dealership Agreement after lapse of more than two years

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could not have terminated the main dealership again for

the same breach of Clause 45 of the Standard Dealership

Agreement. These aspects have been dealt with by the

Arbitrator. According to the Arbitrator, proper procedure

was followed and the respondent was given opportunity

before the termination or cance