Pramod Kumar Agarwal Son Of Late ... vs Union Of India
2021 Latest Caselaw 3314 Raj/2

      HIGH COURT OF JUDICATURE FOR RAJASTHAN
                  BENCH AT JAIPUR

              S.B. Arbitration Application No. 63/2020

Pramod Kumar Agarwal Son Of Late Shri R.s Agarwal, Aged
About 58 Years, Proprietor M/s Modern Gas Service (Distributor
Bharatgas),     Having    Its    Registered         Address      At    3,   Malviya
Shopping Centre, Alwar, Rajasthan-301001.
                                                                      ----Petitioner
                                    Versus
1.     Union Of India, Through Secretary, Ministry Of Petroleum
       And Natural Gas, Having Its Office At Shashtri Bhavan,
       New Delhi-110001
2.     Bharat     Petroleum       Corporation         Limited,     Through      The
       Chairman Cum Managing Director, Having Its Registered
       Address At Bharat Bhavan, 4 And 6 Cuurrimbhoy Road,
       Ballard Estate, Mumbai-400001
3.     Director     (Marketing),         Bharat       Petroleum        Corporation
       Limited, Having Its Office At Bharat Bhavan, 4 And 6
       Cuurrimbhoy Road, Ballard Estate, Mumbai-400001
4.     The Territory Manager (Lpg)-Jaipur, Bharat Petroleum
       Corporation Limited, Having Its Territory Office At Sp-Ii,
       Road No. At V.k.i Area, Jaipur, Rajasthan-302013.
5.     The      Assistant       Manager-Sales             (Lpg)-Alwar,      Bharat
       Petroleum Corporation Limited, Having Its Territory Office
       At Sp-Ii, Road No. At V.k.i Area, Jaipur, Rajasthan-
       302013.
                                                                 ----Respondents

For Petitioner(s)         :     Mr. Prakhar Agarwal
For Respondent(s)         :     Mr. Jai Prakash Gupta



                    HON'BLE THE CHIEF JUSTICE

                                     Order

30/07/2021

1. It is stated by Mr. Prakhar Agarwal, learned counsel that he

has filed vakalatnama on behalf of the applicant but in the cause

(2 of 4) [ARBAP-63/2020]

list his name is erroneously shown as counsel for respondent, the

same be necessarily corrected.

Mr. Jai Prakash Gupta has entered appearance for

respondent No.2-BPCL and he has instructions to appear on behalf

of other officers of the corporation.

2. Heard learned counsel for the respective parties.

3. The applicant has moved an application seeking appointment

of an arbitrator under Section 11 of the Arbitration and

Conciliation Act, 1996 (hereinafter to be referred as the 'Act of

1996'), to adjudicate the alleged dispute being arisen between

petitioner and respondent No.2 & others. Therefore, on the prayer

of counsel for the petitioner, name of respondent No.1-Union of

India stands deleted.

4. It appears that dispute has arisen between the parties

pursuant to an agreement entered into by them under Clause 37

of Annexure-1, which reads as under:

"37.(a) Any dispute or difference of any nature whatsoever any claim, cross-claim, counter-claim or set off of the Corporation against the Distributor or regarding any right, liability, act, omission or account of any of the parties hereto arising out of or in relation to this agreement shall be referred to the Sole Arbitration of the Director (Marketing) of the Corporation or of some officer of the Corporation who may be nominated by the Director (Marketing). The distributor will not be entitled to raise any objection to any such arbitrator on the ground that the arbitrator is an Officer of the Corporation or that he has 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 other matters in dispute or difference. In the event of the arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason, the Director (Marketing) as aforesaid at the time of such transfer, vacation of office or inability to act may in the discretion of the Director (Marketing) designate

(3 of 4) [ARBAP-63/2020]

another person to act as arbitrator in accordance with the terms of the agreement to the end and intent that the original arbitrator shall be entitled to continue the arbitration proceedings notwithstanding his transfer or vacation of officer as an Officer of the Corporation if the Director (Marketing) does not designate another person to act as arbitrator on such transfer, vacation of office or inability of original arbitrator. Such persons 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 Director (Marketing) or a person nominated by such Director (Marketing) of the Corporation as aforesaid shall act as arbitrator hereunder. The award of the arbitrator so appointed shall be final conclusive and binding on all parties to the agreement subject to the provision of the Arbitration Act, 1940 or any statutory modification or re-enactment thereof and the rules made thereunder for the time being in force shall apply to the arbitration proceedings under this clause."

5. It is asserted on behalf of the applicant that certain penalty

has been raised by respondent-corporation against which the

applicant is seeking settlement of the said dispute through

arbitration clause 37 of the agreement quoted hereinabove.

6. Mr. Jai Prakash Gupta, learned counsel for the respondents

has filed a reply and raised various contentions therein. It is

contended by Mr. Gupta that the penalty levied in the present case

does not come under the present clause i.e. clause 37 of the

agreement between the parties.

7. Mr. Prakhar Agarwal, learned counsel for the appellant drew

my attention to a judgment rendered by this Court in the case of

M/s Vikram Gas Service Vs. The Director Marketing, BPCL &

Anr., S.B. Arbitration Application No.88/2018 decided on

30.08.2019 wherein Hon'ble Justice Alok Sharma (Retd.) rejected

the contention raised on behalf of the respondent-Corporation by

holding that Revised Marketing Guidelines 2017 are only an

internal mechanism of the working of the distributorship

(4 of 4) [ARBAP-63/2020]

agreement between the parties and they do not override the

arbitration clause nor resort to arbitration under relevant clause of

the agreement. Therefore, the Hon'ble Single Judge proceeded to

hold that the applicant therein had absolute right to invoke the

arbitration clause where disputes under the agreement in issue

obtain- as in the instant case regarding the levy of penalty on it

can be raised.

8. Accordingly, the objection raised in the reply, vis-a-vis the

maintainability of the present application stands settled by the

judgment referred hereinabove. Accordingly, this Court is of the

considered view that an arbitrator is to be appointed to adjudicate

the present dispute.

9. On consent of the parties, this Court directs appointment of

Mr. Harvinder Singh, District Judge (Retd.), 586, Rani Sati Nagar,

Lane No.5, Janpath, Nirman Nagar, Jaipur to act as an Arbitrator

and to decide all issues without prejudice to the rights and

contentions raised in the present application and in the reply. The

arbitration fees shall be in accordance with fourth schedule of the

Act of 1996.

10. The parties are at liberty to raise all such objections before

the Arbitrator.

11. Registry is directed to intimate Mr. Harvinder Singh, District

Judge (Retd.), of his appointment as Arbitrator and parties are at

liberty to call upon an appropriate date for necessary directions.

12. The application is accordingly disposed of.

(INDRAJIT MAHANTY),CJ

BMG/HARSHIT/27

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