Telangana High Court
Sri Venkateswara Service Station, vs M/S. Indian Oil Corporation Limited, on 29 November, 2023
Author: Surepalli Nanda
Bench: Surepalli Nanda
1
WP_12345_2011
WP_29128_2012
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IN THE HIGH COURT OF TELANGANA AT HYDERABAD
W.P. No. 12345 of 2011
And
W.P.No.29128 of 2012
W.P. No. 12345 of 2011
Between:
Sri Venkateswara Service Station
... Petitioner
And
M/s India Oil Corporation Limited and another
... Respondents
W.P.No.29128 of 2012
Between:
Sri Venkateswara Service Station
... Petitioner
And
M/s India Oil Corporation Limited and another
... Respondents
JUDGMENT PRONOUNCED ON: 29.11.2023
THE HON'BLE MRS JUSTICE SUREPALLI NANDA
1. Whether Reporters of Local newspapers : yes
may be allowed to see the Judgment?
2. Whether the copies of judgment may be
marked to Law Reporters/Journals? : yes
3. Whether Their Lordships wish to
see the fair copy of the Judgment? : yes
___________________
SUREPALLI NANDA, J
2
WP_12345_2011
WP_29128_2012
SN,JJ
THE HON'BLE MRS JUSTICE SUREPALLI NANDA
W.P. No. 12345 of 2011
And
W.P.No.29128 of 2012
% 29.11.2023
W.P. No. 12345 of 2011
Between:
Sri Venkateswara Service Station
... Petitioner
And
M/s India Oil Corporation Limited and another
... Respondents
W.P.No.29128 of 2012
Between:
Sri Venkateswara Service Station
... Petitioner
And
M/s India Oil Corporation Limited and another
... Respondents
< Gist:
> Head Note:
! Counsel for the Petitioner in
Writ Petition No.12345 of 2011 :Mr T.Praveen Kumar
! Counsel for the Petitioner in
Writ Petition No.29128 of 2012 :Mr Ponnam Ashok Goud
^ Counsel for Respondents
In both writ petitions : Mr Deepak Bhattacharjee
? Cases Referred:
(2021) 6 SCC 771
3
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HON'BLE MRS JUSTICE SUREPALLI NANDA
W.P. No. 12345 of 2011
And
W.P.No.29128 of 2012
COMMON ORDER:
Since the parties in both the Writ Petitions are
one and the same in the two writ petitions i.e.
W.P.No.12345 of 2011 and W.P.No.29128 of 2012, are
disposed off through a common order.
2. Heard the learned counsel Mr. T.Praveen Kumar,
appearing on behalf of the Petitioner in W.P.No.12345
of 2011, Mr Ponnam Ashok Goud, learned counsel
appearing on behalf of the petitioner in W.P.No.29128
of 2012 and learned senior counsel Mr. Deepak
Bhaatacharjee appearing on behalf of the respondents
in W.P.No.12345 of 2011 and W.P.No.29128 of 2012.
3. The prayer sought for by the Petitioner in
W.P.No.12345 of 2011 is as under :
"to issue a Writ of Mandamus, declaring that the
inaction on the part of the respondents in not restoring
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the retail dealership of the petitioners situated at
Kompally and Madhapur, Rangareddy District, in favour
of the petitioner pursuant to the arbitration award Ref.
No.DBD/ARB/SS, dated 19-03-2010 is arbitrary and
violative of Articles 14, 19(1)(g) & 21 of the
Constitution of India and further direct the respondent
corporation to restore the said dealership."
4. The prayer sought for by the Petitioner in
W.P.No.29128 of 2012 is as under :
"to issue a Writ of Mandamus, declaring the
order Ref. No.SDO/RO/2022, dated 21.07.2011
including termination order dated 06.01.2005,
passed by the respondents rejecting to restore
the dealership for the retail outlets of the
petitioner situated at Kompally and Madhapur,
Ranga Reddy District as illegal, arbitrary,
unreasonable and non-application of mind, and
set aside the said orders, and consequently
direct the respondents to restore the dealership
for the retail outlets of the petitioner situated at
Kompally, Ranga Reddy District with HSD facility
and Madhapur, Ranga Reddy District with MS
facility.
PERUSED THE RECORD :
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5. Paras 5, 6 & 7 of the counter affidavit filed on
behalf of Respondents in W.P.No.12345/2011 reads as
under :
5. It is humbly submitted that the petitioner thereafter
invoked the arbitration clause in the dealership
agreement and Sri B.M.Bansal, Director (Marketing)
was appointed as a sole arbitrator by the respondent,
who entered into reference and conducted the
arbitration proceedings under the Arbitration and
Conciliation Act. The sole arbitrator passed an award on
19.03.2010 holding that the termination is bad.
However, the following ration laid down by the Hon'ble
Supreme Court in Amritsar Gas Vs. Indian Oil
Corporation reported in 1999(1) SCC 533 held that the
petitioner will not be entitled for restoration of
dealership but shall be entitled for compensation in
terms of Section 14(1) of the Specific Relief Act 1963.
After the award was passed, the legal advise was
sought and a clear advise was given stating that the
petitioner will be entitled to only claim. compensation
and not restoration of dealership as per the award.
6. It is humbly submitted that the petitioner instead of
seeking compensation, under the due process of law,
addressed a letter on 05.05.2010 to Chairman of the
corporation to revoke the termination. The request was
not accepted but the compensation was calculated by
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the respondent corporation to abide by the award
passed by the sole arbitrator and a sum of
Rs.3,21,370/- was paid under cheque drawn in favour
of the petitioner. Unfortunately, the petitioner returned
the cheque.
7. That, the petitioner did not choose to question the
arbitration award under the provisions of the Arbitration
and Conciliation Act and the award has become final.
The respondent corporation has implemented the award
in its true force and hence the petitioner is not entitled
to seek any relief beyond the scope of the award after
invoking the arbitration clause and after participating in
the arbitration proceedings and after the award is
passed, giving due regards to the question of facts and
law involved in the case.
6) The interim orders of the Court dt. 27.04.2011
passed in W.P.No.12345/2011 which are in force as on
date read as under :
"Sri Deepak Bhattacharjee, learned standing
counsel for Indian Oil Corporation, takes notices
for the respondents and seeks time for filing
counter affidavit.
Post on 20.06.2011
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Meanwhile, the respondents shall not allot
the retail dealership relating to Kompally and
Madhapur retail outlets to third parties."
7. Paras 7, 10 of the counter affidavit filed on behalf
of the Respondents in W.P.No.29128/2012 read as
follows :
"7. That, the petitioner did not choose to question the
arbitration award under the provisions of the Arbitration
and Conciliation Act and the award has become final.
The respondent corporation has implemented the award
in its true force and hence the petitioner is not entitled
to seek any relief beyond the scope of the award after
invoking the arbitration clause and after participating in
the arbitration proceedings and after the award is
passed, giving due regards to the question of facts and
law involved in the case.
10. It is humbly submitted that as per the direction of
the Hon'ble High Court in WP No 12345/2011, the case
of the petitioner was again re- appreciated and the
representation was accordingly disposed of on
21.07.2011. It was made clear that the petitioner did
not choose to question the award under the provisions
of Arbitration and Conciliation Act and the award has
become final. In terms of the award passed by the
arbitrator, the Respondent issued a cheque for
Rs.3,21,370/-. The petitioner was informed that the
request for restoration of dealership is not possible and
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the compensation is the appropriate remedy in terms of
Section 14(1)(c) of the Specific Relief Act. There was
no illegality committed in disposing the representation
on 21.07.2011 by the Corporation. The award has
become final and is binding on both the parties. The
petitioner is not entitled to invoke the extraordinary
jurisdiction of the Hon'ble High Court under Article 226
of the Constitution of India for the relief as prayed for.
8. The Case of the Petitioner in brief as per the
averments made in the Affidavit filed in support of the
present two Writ Petitions, is as under :
a) The Petitioner herein in both the writ petitions
W.P.Nos.12345 of 2011 and W.P.No.29128 of 2012 is
M/s. Venkateswara Service Station, situated at 1-52/A,
Mahdapur, Ranga Reddy District. The Petitioner service
station was reorganized under Dealership Agreement
dated 05.05.1998 whereby the original dealer Mr.
M.Chandraiah, was permitted to induct Petitioner's
daughter Smt. G.Padmavathi as a Partner in the
dealership business. On 17 and 18th April 2004, when
the Petitioner was not present in the retail outlet the
Respondent Corporation Officials who were passing by
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the retail outlet at Madhapur, found a tanker truck
bearing Registration No.AP16T9378, entering the retail
outlet premises. The contention of the said officials was
that the said tanker was decanting some unknown
product into the underground tanks in the said outlet.
But the plea of the Petitioner is that the said tanker
truck came to the Petitioner's retail outlet to fillup fuel
but not for unloading any material into the underground
tank. On a wrong apprehension the retail outlet was
sealed and sales of all the products were suspended. A
show cause notice dated 27.04.2004 was issued by the
Respondent Corporation as to why disciplinary action
should not be taken against the Petitioner. Challenging
the validity of the said show cause notice dated
27.04.2004 Petitioner filed W.P.No.8944 of 2004 before
this Court and the Court by orders dated 01.07.2004
directed the Respondent Corporation to continue to sell
motor spirit at the retail outlet and the Petitioner was
granted 3 weeks time for submission of explanation.
Accordingly the Petitioner had submitted explanation
denying the charges. Without considering the
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explanation of the Petitioner in a proper perspective the
Respondent Corporation had passed orders on
06.01.2005 terminating the dealership of the retail
outlet on the ground that the allegations made against
the Petitioner are established.
b) It is further the case of the Petitioner that the
Respondent Corporation appointed one of the senior
officer Mr. B.M. Bansal, Director (R&D) and Member of
the Board as the Sole Arbitrator to adjudicate the
disputes between the parties and the Sole Arbitrator on
19.03.2010 after hearing all the concerned passed the
Award Ref.No.DBD/ARB/VSS, dt. 19.03.2010 and issue
No.1 on the point "whether the termination letter by the
Respondents to the claimant dealership of HSD facility
located on Corporation owned land at Kompally in
Ranga Reddy District and MS (Petrol) facility located at
Madhapur in Ranga Reddy District is legal and valid, if
so to what extent ? The Arbitrator clearly held on issue
No.1 that the termination by the Respondent of the
claimants dealership of HSD (Diesel) facility located on
Corporation owned land at Kompally in Ranga Reddy
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District and MS (petrol) facility located at Madhapur in
Ranga Reddy District as illegal and invalid and allowed
issue No.1 in favour of the claimant and against the
Respondents. Even on the 2nd issue namely "whether
the claimant is entitled to seek restoration of dealership
agreement dt. 05.05.1998 in respect of HSD facility
located on the Corporation owned land at Kompally in
Ranga Reddy District and MDS facility located at
Madhapur in Ranga Reddy District also the learned
Arbitrator held in favour of the claimant/petitioner and
against the Respondent.
c) It is further the case of the Petitioner that the
Respondents having accepted the said Award and
having not challenged the Award in any forum
surprisingly did not implement the said Award. Taking
into consideration the observation made in the Award of
the Arbitrator dated 19.03.2010 which said owning to
the termination being unwarranted and invalid I leave
the claimant to approach the appropriate authority as
deemed fit for the relief, and in pursuance to the said
directions the Petitioner approached the Respondents
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with representations dated 05.05.2010, 10.7.2010,
06.08.2010, 10.03.2011 seeking restoration of
dealership and when there was no response the
Petitioner approached the Court by filing W.P.No.12345
of 2011 declaring the inaction on the part of the
Respondents in not restoring the retail dealership of the
Petitioners situated at Kompally and Madhapur, Ranga
Reddy District in favour of the Petitioner pursuant to the
Arbitration Award Ref.No.DBD/ARB /VSS, dt.
19.03.2010 as arbitrary and inviolation of Articles 14,
19(1)(g) and 21 of the Constitution of India and to
direct the Respondent to restore the said dealership to
the Petitioner herein. Taking into consideration of the
interim order of the Court dt. 20.06.2011 passed in
W.P.No.12345 of 2011 directing the Respondents to
consider and pass the necessary orders on the
representations dated 05.05.2010, 10.07.2010 and
06.08.2010 of the Petitioner seeking to restore the
dealership of the Petitioner in pursuance of award dated
19.03.2010 within four weeks from the date of receipt
of the order from this Honourable court pending WP
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No.12345 of 2011 on the file of the High Court, the
Respondent Indian Oil Corporation issued the impugned
proceedings dated 21.07.2011 which rejected
Petitioner's request for restoration of dealership
observing that it will not be in public interest to restore
the dealership though the learned Arbitrator held that
the termination is bad in the Award dated 19.03.2010
vide Ref.No.DBD/ ARB/VSS. Challenging the said
impugned order dated 21.07.2011 vide
Ref.No.SDO/RO/2022 including the termination order
dt. 06.01.2005 passed by the Respondent rejecting to
restore the dealership for the retail outlets of the
Petitioner situated at Kompally and Madhapur, Ranga
Reddy District, the Petitioner filed W.P.No.29128 of
2012.
9. The learned counsel Mr. T.S. Praveen Kumar
appearing on behalf of the Petitioner puts forth the
following submissions :
i. The Petitioner is entitled to seek restoration
of dealership agreement dated 05.05.1998 in view of
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the categorical findings in favour of the Petitioner at
paras No.16 & 17 of the Award dated 19.03.2010.
ii. The observations at para 18 do not apply to
the facts of the case.
iii. The Petitioner is entitled for relief since
Petitioner's dealership which is their bread and butter
came to be terminated for an irrelevant and non-
existent cause.
iv. Order is passed in favour of the Petitioner in
C.C.No.84 of 2009 by the Hon'ble XVI Metropolitan
Magistrate Court, Kukatpally, holding that the Petitioner
is not guilty of offences u/s. 420 IPC and Sec.3 & 7 of
E.C. Act and the Petitioner was acquitted u/s. 248(1)
Criminal Procedure Code. This fact was overlooked by
the Respondent Corporation at the time of passing the
order impugned dated 21.07.2011.
v. The retail outlet is the only source of the
Petitioner and Petitioner's children's livelihood and
therefore the dealership should be restored at the
earliest and the money cannot compensate for the loss
incurred by the Petitioner since 06.01.2005 and
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therefore the writ petitions should be allowed as prayed
for.
10. The learned Senior Counsel Mr. Deepak
Bhaatacharjee appearing on behalf of the Respondents
mainly puts forth the following submissions:
i. As per the ratio laid down by the Supreme
Court in Amritsar Gas Vs. Indian Oil Corporation
reported in (1999) 1 SCC 533 the Petitioner is entitled
for compensation in terms of Sec.14(1) of the Specific
Relief Act, 1963 and the Petitioner will not be entitled
for restoration of dealership.
ii. The Petitioner did not choose to question the
Arbitration Award under the Provisions of the
Arbitration & Conciliation Act and the Award has
become final.
iii. The Respondent Corporation has
implemented the Award in its true force and hence
Petitioner is not entitled to seek any relief beyond the
scope of the Award after invoking the Arbitration clause
and after participating in the Arbitration proceedings
and after the Award is passed.
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iv. The Respondent Corporation accepted the
Award of the Arbitrator dt.19.03.2010 and paid a sum of
Rs.3,21,317/- under Cheque drawn in favour of the
Petitioner but however the Petitioner returned the said
cheque.
v) Though the termination was held to be bad
the learned Arbitrator Awarded only compensation and
not restoration of the dealership.
vi) The writ petition is not maintainable after the
Award is passed, since entire cause of action of the writ
petition No.29128/2012 arose out of the realm of the
contract and it was a termination of contract which was
questioned by the Petitioner before the Sole Arbitrator
by invoking Arbitration clause.
vii) The learned senior counsel on the basis of
the aforesaid submissions contended that the writ
petition needs to be dismissed.
DISCUSSION AND CONCLUSION
11. Paras 16, 17, 18 of the Award of the Arbitrator
dated 19.03.2010 read as under :
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"16. Based on my findings in paras 11 to 15 on all the
four alleged irregularities by the Corporation, I am of the
view that under the facts and circumstances of the case
the termination of dealership by the Corporation under
the relevant Clauses of Dealership Agreement was
unwarranted and hold the termination by the respondent
of the claimant's dealership of HSD facility located on
Corporation owned land at Kompally in Ranga Reddy
District as illegal and invalid and allow issue No.1 in
favour of the Claimant and against the respondent.
17. The termination has been held to be invalid by me,
I accordingly, decide issue No.2 in favour of the claimant
and against the respondent.
18. As regards the relief, in a judgment passed by the
Hon'ble Supreme Court of India in the matter of M/s
Amritsar Gas v/s Indian Oil Corporation Limited
(1991(1) SCC 533) wherein it has been held that if a
contract is determinable by its very nature, the only
relief that can be granted is compensation in light of
section 14(1)(c) of the Specific Relief Act, 1963. The
contract has been terminated under clause 56(a)(i) and
(k) of the Agreement.
12. Clause 56(a)(i) and (k) of the Agreement reads as
under :
"56. Notwithstanding anything to the contrary
herein contained, the Corporation shall be at liberty to
terminate this Agreement forthwith upon or at any time
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after the happening of any of the following events,
namely:-
(a) If the Dealer shall commit a breach of any of the
covenants and stipulations contained in the Agreement,
and fall to remedy such breach
(b) Upon
(i) the death or adjudication as insolvent of the Dealer, if
he be an individual.
(k) If the Dealer shall either by himself or by his
servants or Agents commit or suffer to be committed
any act which, in the opinion of the General Manager of
the Corporation for the time being in Madras whose
decision shall be final, is prejudicial to the interest or
good name of the Corporation or its products; the
General Manager shall not be bound to give reasons for
such decision.
13. The learned Arbitrator framed three specific issues
on 06.01.2006 after hearing both the parties which are
extracted hereunder :
i. Whether the termination letter by the
Respondents to the claimant dealership of HSD
facility located on Corporation's owned land at
Kompally in Ranga Reddy District and MS facility
located at Madhapur in Ranga Reddy District is
legal and valid ? If so to what extent ?
ii. Whether the claimant is entitled to seek
restoration of dealership agreement dt.
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05.05.1998 in respect of HSD facility located on
the Corporation owned land at Kompally in Ranga
Reddy District and MS facility located at Madhapur
in Ranga Reddy District ?
iii. What relief ?
14. A bare perusal of the Award dated 19.03.2010
paras 16 and 17 clearly indicate a clear observation in
favour of the Petitioner and a categorical finding of the
learned Arbitrator that the termination of dealership by
the Corporation under the relevant clauses of dealership
agreement was unwarranted and further the learned
Arbitrator held the termination by the Respondent of
the Petitioner's dealership of HSD facility located on
Corporation's own land at Kompally in Ranga Reddy
District and MS facility located at Madhapur in Ranga
Reddy District as illegal and invalid. The learned
Arbitrator not only allowed issue No.1 in favour of the
claimant against the Respondent he also observed at
para 17 that having held the termination to be invalid
he accordingly decided issued No.2 in favour of the
claimant and against the Respondent, but however, did
not grant any relief of restoration of dealership and
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granted compensation, referring to the judgment of the
Apex Court in the matter of M/s. Amritsar Gas Vs.
Indian Oil Corporation Ltd., reported in (1991) 1 SCC
533 wherein it has been held that if a contract is
determinable by its very nature the only relief that can
be granted is compensation in light of Sec.14(1)(c) of
the Specific Relief Act, 1963 and observed that owing to
the termination being unwarranted and invalid, the
Petitioner is at liberty to approach the appropriate
authority as deemed fit for relief. This Court opines
that without there being no violation of any clause of
agreement by the Petitioner and the Petitioner being
exonerated of all the allegations leveled against the
Petitioner only natural outcome has to be restoration of
all benefits which the Petitioner was deprived of
unauthorizedly.
15. In so far as the plea of the Respondents is
concerned that the writ petition is not maintainable for
the prayer of restoration of dealership this Court opines
that the prayer of the Petitioner for restoration of
dealership is available to the Petitioner only by means
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of a writ petition as neither a civil suit is maintainable
nor is this remedy available before an Arbitrator
appointed in terms of the Arbitration clause contained
in the agreement.
16. This Court opines that the Arbitrator could not
grant the relief of restoration of dealership to the
Petitioner though he recorded two clear findings in
favour of the Petitioner and held issue No.1 and 2 also
in favour of the Petitioner and against the Respondent
herein due to the mandate U/s.14(1) of the Specific
Relief Act.
17. In Indian Oil Corporation Ltd., Vs. Amritsar Gas
Service & Others, the judgment reported in (1991) 1
SCC 533 referred to by the Arbitrator in the Award dt.
19.03.2010 the Supreme Court was considering a
dispute between the parties as arising under a
distributorship agreement which permitted either party
to terminate the agreement by 30 days' notice to the
other party without assigning any reason for the
termination. A dispute had arisen between the parties
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on wrongful termination of the agreement. The dispute
was referred to arbitration. The arbitral tribunal in its
award granted restoration of the distributorship as one
of the reliefs to the claimant. This relief granted by the
arbitral Tribunal was challenged by the appellant under
Section 34 asserting the applicability of Section
14(1)(c) of the Specific Relief Act contending that when
the arbitral tribunal having noted that the contract was
determinable, it could not have proceeded to grant a
relief of specific performance of the contract. In such
context, the Supreme Court held that the contract in
question by its nature was determinable, hence
granting the relief of restoration of the distributorship
was contrary to the mandate of Section 14(1)(c) of the
Specific Relief Act. In paragraph 12 it was observed
thus :-
"12.... ... ... The finding in the award being
that the Distributorship Agreement was revokable
and the same being admittedly for rendering
personal service, the relevant provisions of the
Specific Relief Act were automatically attracted.
Sub-section (1) of Section 14 of the Specific Relief
Act specifies the contracts which cannot be
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specifically enforced, one of which is 'a contract
which is in its nature determinable'. In the present
case, it is not necessary to refer to the other
clauses of sub section (1) of Section 14, which
also may be attracted in the present case since
clause (c) clearly applies on the finding read with
reasons given in the award itself that the contract
by its nature is determinable. This being so
granting the relief of restoration of the
distributorship even on the finding that the breach
was committed by the appellant-Corporation is
contrary to the mandate in Section 14(1) of the
Specific Relief Act and there is an error of law
apparent on the face of the award which is stated
to be made according to 'the law governing such
cases.' The grant of this relief in the award cannot,
therefore, be sustained.
CONCLUSION :
18. A bare perusal of the order impugned dt.
21.07.2011, SDO/RO/2022 of the Respondent Indian
Oil Corporation clearly indicates that the same is passed
hastily without application of mind in a very cryptic
manner without reasons except stating that it will not
be in public interest to restore the dealership though
the learned Arbitrator held that the termination is bad
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in the Award passed. This Court is of the firm opinion
that the Respondent Corporation failed to understand
that the Arbitrator had his own limitations in directing
for restoration of dealership with the Petitioner as per
the mandate in Sec.14(1) of the Specific Relief Act,
1963 and left it open to the Petitioner to persue the
remedy available to the Petitioner very clearly
observing and holding the termination of the dealership
of the Petitioner as invalid since the Petitioner had not
violated the relevant clauses of the dealership
agreement.
19. The Apex Court in a judgement dt. 20.04.2021,
reported in (2021) 6 SCC 771 in M/s. Radhakrishan
Industries vs. State of Himachal Pradesh referring to
Whrilpool Corporation vs. Registrar of Trade Marks
(reported in 1998 (8) SCC 1) at para 15 observed as
under :
"The principles of law which emerge are that
(i) The power under Article 226 of the Constitution
to issue writs can be exercised not only for the
enforcement of fundamental rights, but for any
other purpose as well;
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(ii) The High Court has the discretion not to
entertain a writ petition. One of the
restrictions placed on the power of the High
Court is where an effective alternate remedy
is available to the aggrieved person;
(iii) Exceptions to the rule of alternate
remedy arise where (a) the writ petition has
been filed for the enforcement of a
fundamental right protected by Part III of
the Constitution; (b) there has been a
violation of the principles of natural justice;
(c) the order or proceedings are wholly
without jurisdiction; or (d) the vires of a
legislation is challenged;
(iv) An alternate remedy by itself does not
divest the High Court of its powers
under Article 226 of the Constitution in an
appropriate case though ordinarily, a writ
petition should not be entertained when an
efficacious alternate remedy is provided by
law;
(v) When a right is created by a statute,
which itself prescribes the remedy or
procedure for enforcing the right or liability,
resort must be had to that particular
statutory remedy before invoking the
discretionary remedy under Article 226 of
the Constitution. This rule of exhaustion of
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statutory remedies is a rule of policy,
convenience and discretion; and
(vi) In cases where there are disputed
questions of fact, the High Court may decide
to decline jurisdiction in a writ petition.
However, if the High Court is objectively of
the view that the nature of the controversy
requires the exercise of its writ jurisdiction,
such a view would not readily be interfered
with.
20. In the present case this Court opines that (i) and
(iii) (a) (extracted above) are attracted and hence the
present writ petition is maintainable and the plea of
availability of alternative remedy is unsustainable.
21. This Court opines that the Respondent Corporation
rejected the Petitioner's representation vide impugned
order Ref.No.SDO/RO/2020, dt. 21.07.2011 relying on
the same set of earlier allegations which were already
decided as illegal by the Arbitrator with clear findings
in favour of the Petitioner in the Award passed by the
Arbitrator dated 19.03.2010 in particular para 16 and
17 of the said Award, totally ignoring the fact that the
Petitioner had been acquitted in the criminal case
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registered against the Petitioner. This Court also opines
that the order impugned dt. 21.07.2011 passed by the
2nd Respondent herein failed to understand the
limitations of the Arbitrator in granting relief of
restoration of dealership of the Petitioner as per
mandate in Section 14(1) of the Specific Relief Act,
1963 inspite of recording clear findings in favour of the
Petitioner deciding issue No.1 and 2 in favour of the
Petitioner and against the Respondent Corporation very
clearly observing that the termination of the dealership
by the Corporation under the relevant clauses of
Dealership Agreement was unwarranted and further
held the termination itself as invalid.
22. This Court opines that the Respondent Corporation
is a State under Article 12 of the Constitution of India is
an instrumentality of the State and it is required to act
in a fair and a reasonable manner and its acts and
omissions are always liable to be tested on the touch
stone of the tenets referable to Article 14 of
Constitution of India.
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23. The High Court of Allahabad in its judgement dt.
18.05.2023 passed in Modern Service Station Vs. Indian
Oil Corporation Ltd., & Others dealing with an order of
termination of dealership as confirmed by the Appellate
Authority directed the Respondents to restore the retail
outlet dealership of the Petitioner forthwith placing
reliance on another judgment of Allahabad High Court
dated 18.02.2019 passed in Kamal Kant Automobiles &
Others vs. Hindustan Petroleum Corporation Ltd., &
Others and very clearly observed at paras 34, 35 and 36
as under :
Para 34 : In fact for the prayer of restoration of
dealership, the only remedy available to the
petitioners is by means of a writ petition as
neither a civil suit is maintainable nor is this
remedy available before an arbitrator appointed in
terms of the arbitration clause contained in the
agreement.
Para 35 : Thus, this Court is of the view that the
writ petition is maintainable and the arbitration
clause does not provide for an effective and
efficacious remedy to the petitioners for the relief
sought in the petition particularly relating to
restoration of point No.3.
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Para 36 : After holding that the order dated
24.02.2018 is bad in law and liable to be quashed,
the question arises as to whether the petitioner is
entitled to restoration of dealership. There being
no violation of any clause of agreement, no
proceedings having culminated in accordance with
law and after being exonerated of all the
allegations leveled against the petitioner only
natural outcome has to be restoration of all
benefits which the petitioner was deprived of
unauthorisedly.
24. This Court opines that the judgment relied upon
by the learned Counsel appearing on behalf of the
Respondent Corporation in Indian Oil Corporation Ltd.,
& Another vs. T.Natarajan reported in (2018) 9 SCC 235
(paras 10, 13, 18, 29 and 30) has no application to the
facts of the present case because in that case the Apex
Court held that the administrative decision of the IOCL
is based on reasons involving no arbitrariness of any
nature therein which may call for any interference by
the High Court. But in the present case, admittedly the
order impugned dt. 21.07.2011 of the 2nd Respondent
vide SDO/RO/2022, clearly indicates that the
Corporation took into consideration the same
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allegations leveled against the Petitioner which were
held to be invalid in the Award passed by the Arbitrator
dt. 19.03.2010 and it was unilaterally decided that it
will not be in public interest to restore the dealership
though the Arbitrator held that the termination is bad
in the Award passed.
25. In so far as the judgment of the Apex Court
reported in (2022) 4 SCC 463 in Indian Oil Corporation
Ltd., Vs. Sri Ganesh Petroleum Rajguru Nagar (para 41)
relied upon by the learned Counsel appearing on behalf
of the Respondent Corporation is concerned, this Court
opines that the same is not applicable to the facts of
the present case in view of the fact that in the said case
the challenge is with regard to the Award passed by the
Arbitrator itself. In the present case the Petitioner is
not aggrieved by the Award dt. 19.03.2010 passed by
the Arbitrator and the Petitioner very well understands
that the Arbitrator passed the said Award as per the
mandate in Sec.14(1) of the Specific Relief Act, 1963,
as permissible under law and the relief prayed for in
the present writ petition pertains to the decision of the
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Respondent Corporation in rejecting the Petitioner's
representation for restoration of dealership which is an
independent cause of action and the Respondent
Corporation having had the bounden duty to take a
decision based on reasons involving no arbitrariness of
any nature therein but in the present case admittedly
the Respondent Corporation failed to act in a fair and
reasonable manner and in fact acted arbitrarily
effecting Petitioner's right to livelihood on a same set
of allegations which were held to be invalid in the
Award passed by the Arbitrator dt. 19.03.2010.
26. Taking into consideration the above referred facts
and circumstances and the discussion arrived at as
above W.P.No.12345 of 2011 is allowed and the
Respondent Corporation is directed to consider the case
of the Petitioner for restoration of the retail outlets of
the Petitioner situated at Kompally and Madhapur,
Ranga Reddy District and the impugned orders in
W.P.No.29128 of 2012 is allowed as well and the
impugned order SDO/RO/2022, dated 21.07.2011 of
the 2nd Respondent is set aside including termination
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order dt. 06.01.2005 passed by the Respondents and
the Respondent Corporation is directed to reconsider
the representations dated 05.05.2010, 10.07.2010 and
06.08.2010, of the Petitioner seeking restoration of the
retail outlets of the Petitioner situated at Kompally and
Madhapur, Ranga Reddy District, within a period of 3
weeks from the date of receipt of the copy of the order
duly considering the observations made in particular at
para 23 and also the discussion and conclusion as
arrived at as above in the present judgment, in
accordance to law in conformity with the principles of
natural justice by providing an opportunity of personal
hearing to the Petitioner and duly communicate the
decision to the Petitioner. However, there shall be no
order as to costs.
Miscellaneous petitions, if any, pending shall stand
closed.
__________________
SUREPALLI NANDA, J
Dated:29.11.2023
Note: L.R. copy to be marked
b/o
kvrm
