Bombay High Court
M/S Mahalaxmi Hp Gas Agency vs Hindustan Petroleum Corporation ... on 5 August, 2021
Bench: K.K. Tated, P. K. Chavan
8-WP-3717-2021.doc
Shailaja
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.3717 OF 2021
M/s. Mahalaxmi HP Gas Agency ]
A registered Partnership Firm ]
Through its Partners ]
1. Savita Suryakant Yadav and another. ] Petitioners
Vs.
Hindustan Petroleum Corporation ]
Limited and another. ] Respondents
.....
Mr. S.S. Patwardhan i/b Mr. Bhooshan R. Mandlik, for Petitioner.
Mr. Pralhad Paranjape a/w Druti Datar, for Respondents No.1 and 2.
.....
CORAM : K.K. TATED &
PRITHVIRAJ K. CHAVAN, JJ.
DATE : 5 th AUGUST, 2021.
P.C.
1. By this Writ Petition, the petitioner has invoked
extraordinary jurisdiction of this Court by challenging the
impugned order dated 9th June, 2021 passed by the respondents by
which dealership agreement dated 25th February, 2020 came to be
terminated. The facts in brief are as follows.
Digitally signed
SHAILAJA by SHAILAJA
SHRIKANT
SHRIKANT HALKUDE
HALKUDE Date: 2021.08.10
19:26:11 +0530
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2. The petitioner is a firm registered under the Indian
Partnership Act, 1932 of which petitioners No.1 and 2 are the
partners. The petitioners came to be appointed as a dealer for
distribution of liquid petroleum gas (for short 'L.P.G'.) at Sangola,
District Solapur. A letter of appointment to that effect was issued
on 7th October, 2014. A registered partnership deed came to be
executed on 18th October, 2014 in the name of M/s. Mahalaxmi
Gas Agency. A duly executed dealership agreement dated 25 th
February, 2015 came into existence for sale of LPG gas cylinders at
Sanglo, District Solapur on the terms and conditions mentioned in
the said agreement. The dealership agreement was initially valid
only for five years. Thereafter, it came to be extended for further
five years. The petitioners contend that due to their stellar
performance, the respondents have extended the agreement for
further five years. The respondents have been rewarded for their
excellent performance several times. The respondents have
therefore continued the dealership with the petitioners for a
further period of five years executing another dealership
agreement dated 25th February, 2020.
3. It is the contention of the petitioners that one Mr. Sunil
Pawar was their employee from the midst of the year 2015. He
earned confidence of the petitioners and was thus given several
responsibilities in the business of the petitioner/firm. The
petitioners increasingly depended upon the said Mr. Pawar so
much so that they contemplated taking the said Mr. Pawar on
board as a partner of the petitioner firm. However, the said Mr.
Pawar was formally not admitted to the partnership of the
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petitioner firm because the respondents have limited their powers
to reconstitute the petitioner firm, without the express written
consent of the respondent-Corporation. In deference to the said
terms in the agreement, the petitioners have not formally admitted
the said Mr. Pawar as a partner of the firm, and for that matter, for
the good of the firm also. However, the petitioners thereafter
discovered that the said Mr. Pawar was completely unreliable and
had misutilized the funds of the firm for his personal gain. This
resulted into litigation between the petitioners on one hand and
the said Mr. Pawar on the other hand. It is contended that there
was thus no question of seeking permission of the respondents to
include the said Mr. Pawar as a partner of the petitioner firm and
to reconstitute the firm by taking him on board.
4. The said Mr. Pawar filed a complaint with the respondents
on 3rd February, 2021. The respondents, therefore, conducted
hearing by giving due opportunity to the petitioners pursuant to a
show cause notice dated 5th March, 2021. The said notice was also
duly replied by the petitioners on 19th March, 2021.
5. By an order dated 20th May, 2021, respondent No.2 ordered
termination of dealership agreement dated 25 th February,, 2020
between the petitioners and the respondents. The said order of
termination was challenged by the petitioners by way of a Writ
Petition (Stamp) No.10912 of 2021 before this Court. The
respondents appeared and filed their affidavit in reply. The
Division Bench of this Court (Coram: R.D. Dhanuka and Madhav
Jamdar, JJ) heard the parties and passed an order, thereby
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remanding the matter to respondent No.2 for fresh hearing and
passing a fresh order without getting influenced by the order dated
20th May, 2021 which was set aside.
6. The petitioners were heard by respondent No.2. Thereafter,
in terms of the directions dated 28 th May, 2021 issued by this Court
in Writ Petition (Stamp) No.10912 of 2021, the petitioners
contend that they had submitted several documents and additional
reply before respondent No.2. However, respondent No.2 passed
the impugned order dated 9th June, 2021.
7. We heard the learned Counsel for the petitioners as well as
the respondents. At the outset, Mr. Patwardhan, learned Counsel
for the petitioners vehemently urged that this Court can invoke it's
writ jurisdiction even though there is an alternate efficacious
remedy available to the petitioners, as in the case at hand, there
has been violation of principles of natural justice, in the sense, that
the petitioners have not been provided with a copy of the
complaint made by Mr. Sunil Pawar. In support of his submission,
Mr. Patwardhan, placed reliance on a judgment in the case of
Whirpool Corporation Vs. Registrar of Trade Marks, Mumbai and
others, (1998) 8 Supreme Court Cases 1.
8. On the other hand, Mr. Paranjape, learned Counsel for the
respondents strongly objected entertaining the petition by filing a
preliminary affidavit in reply on behalf of the respondents
opposing admission of the writ petition and grant of any ad-
interim relief mainly on the premise that arbitration clause is in
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existence and the present dispute requires leading of evidence
since there are disputed questions of facts which cannot be gone
into by a writ Court.
9. Having heard the learned respective Counsel for the parties,
we are of the firm view that this petition needs to be dismissed at
the threshold and in limine for the sole reason that the reliefs
sought in this petition can be granted against the respondents in
view of arbitration clause in dealership agreement entered into
between the parties. Arbitration clause 38 stipulates that all the
disputes arise out of and in connection with the dealership
agreement are to be referred to arbitration. Clause 38 reads thus;
"Dealership Agreement
Arbitration Clause
Any dispute or difference of any nature
whatsoever or regarding any right,
liability, act, omission (on account of
any of the parties hereto arising out of
or in relation to this Agreement other
than those in respect of which the
decision of any person, is by the
Agreement expressed to be final and
binding) shall be referred to the sole
Arbitration of the Chairman and
Managing Director of the Corporation or
of some officer/retired officer of the
Corporation or retired officer of other
Oil PSUs or retired senior Central Govt.
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Officer who may be nominated by the
Chairman and Managing Director. The
dealer will not be entitled to raise any
objection to any such Arbitrator on the
ground that the Arbitrator is or was an
officer and/or share holder of the
Corporation or that he has to deal with
or dealt with the matters to which the
contract relates or that in the course of
his duties as an officer of the
Corporation, he had expressed views on
all or any of the matters in dispute or
difference in the event of the Arbitrator
to whom the matter is originally
referred vacating his office or being
unable to act for any reason the
Chairman and Managing Director has
aforesaid at the time of such 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 it was left by his
predecessor. It is also a term of this
contract that no person other than the
Chairman and Managing Director or a
person nominated by such Chairman
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and Managing Director of the
Corporation as aforesaid shall act as
Arbitrator hereunder. The cost of
arbitration shall be shared equally by
the parties: The Award of the Arbitrator
so appointed shall be the provision of
the arbitration and Conciliation Act,
1996 or any statutory modification of
or re-enactment thereof and the rules
made thereunder and for time being in
force shall apply to the arbitration
proceedings under this clause.
10. Section 8 of the Arbitration and Conciliation Act, 1996
mandates that any judicial authority before whom an action is
brought which is a subject of the arbitration agreement between
the parties shall refer the parties to the arbitration. Section 8 of the
Arbitration and Conciliation Act reads thus;
"8. Power to refer parties to arbitration where
there is an arbitration agreement._[(1) A
judicial authority, before which an action is
brought in a matter which is the subject of an
arbitration agreement shall, if a party to the
arbitration agreement or any person claiming
through or under him, so applies not later
than the date of submitting his first statement
on the substance of the dispute, then,
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notwithstanding any judgment, decree or
order of the Supreme Court or any Court,
refer the parties to arbitration unless it finds
that prima facie no valid arbitration
agreement exists.]
(2)The application referred to in sub-section (1)
shall not be entertained unless it is accompanied
by the original arbitration agreement or a duly
certified copy thereof;
[Provided that where the original arbitration
agreement or a certified copy thereof is not
available with the party applying for reference to
arbitration under sub-section (1), and the said
agreement or certified copy is retained by the other
party to that agreement, then, the party so
applying shall file such application along with a
copy of the arbitration agreement and a petition
praying the Court to call upon the other party to
produce the original arbitration agreement or its
duly certified copy before that Court]
(3) Notwithstanding that an application has been
made under sub-section (1) and that the issue is
pending before the judicial authority, an arbitration
may be commenced or continued and an arbitral
award made".
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11. Mr. Paranjape, learned Counsel for the respondents has,
therefore, rightly placed a useful reliance on an Authority of the
Hon'ble Supreme Court in the case of State of Orissa and others
Vs. Gokulnanda Jena, (2003) 6 Supreme Court Cases 465 .
Paragraph 8 of the said judgment can be quoted for advantage
which reads thus;
"8. However, we must notice that in view
of section 16 read with Sections 12 and 13
of the Act, as interpreted by the Constitution
Bench of this Court in Konkan Rly almost all
disputes which could be presently
contemplated can be raised and agitated
before the arbitrator appointed by the
Designated Judge under Section 11 (6) of
the Act. From the perusal of the said
provisions of the Act, it is clear that there is
hardly any area of dispute which cannot be
decided by the arbitrator appointed by the
Designated Judge. If that be so, since an
alternative efficacious remedy is available
before the arbitrator, a writ court normally
would not entertain a challenge to an order
of the Designated Judge made under
Section 11 (6) of the Act which includes
considering the question of jurisdiction of
the arbitrator himself. Therefore, in our
view even though a writ petition under
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Article 226 of the Constitution is available
to an aggrieved party, ground available for
challenge in such a petition is limited
because of the alternative remedy available
under the Act itself".
12. It is crystal clear that the dispute involved in this petition can
very well be decided by an Arbitrator. That being so, since an
alternate efficacious remedy is available to the petitioners before
the Arbitrator, it would not be proper to entertain challenge to the
impugned order passed by the respondents.
13. The ratio laid down by the Hon'ble Supreme Court in the
case of Whirpool Corporation (supra) is distinguishable in light of
the fact that though a writ Court has a discretion to entertain or
not a writ petition, notwithstanding if an effective and efficacious
remedy is available, the writ Court normally restricts itself in
entertaining any such petition in exercising its jurisdiction in such
petitions. It is well settled that availability of an alternate remedy
in itself does not operate as a bar in case where a writ petition is
filed for enforcement of any fundamental rights or where there is
violation of principles of natural justice or where an order or
proceedings are wholly without jurisdiction or vires of an Act is
challenged. However, in the case at hand, what has been urged by
the learned Counsel for the petitioners is that there is violation of
principles of natural justice, so as to say, copy of the complaint was
not furnished to the petitioners. It is a matter of record that after
disposing the first writ petition, the petitioners were re-heard by
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the respondents after giving full opportunities and examining the
documents, affidavits etc. In our view, there is no violation of
principles of natural justice.
14. In view of the foregoing discussion, we make it clear that we
have not expressed our views on the merits of the case. All the
contentions of the parties are expressly left open to be agitated
before the Arbitrator in view of the agreement inter se.
15. As such, we find that writ petition is liable to be dismissed
for the reasons stated hereinabove. Consequently, the writ petition
is dismissed. However, there shall be no order as to costs.
[PRITHVIRAJ K. CHAVAN, J.] [K. K. TATED, J.]
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