IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE THE CHIEF JUSTICE MR.HRISHIKESH ROY & THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN FRIDAY, THE 07TH DAY OF DECEMBER 2018 / 16TH AGRAHAYANA, 1940 [CASE NUMBER] AGAINST THE JUDGMENT IN [CASE NUMBER] of HIGH COURT OF KERALA DATED 23-02-2017 APPELLANT/IST RESPONDENT: INDIAN OIL CORPORATION LTD. REPRESENTED BY ITS GENERAL MANAGER, PANAMPILLY AVENUE, PANAMPILLY NAGAR P O, KOCHI-682 036. BY [ENTITY] SRI.JOSON [ENTITY] SRI.K.JOHN MATHAI [ENTITY] SRI.P.GOPINATH RESPONDENTS/PETITIONER & RESPONDENT: 1 [ENTITY] AGED 45 YEARS, W/[ENTITY], KTRA 125, [ENTITY], T.C.3/334(1), [ENTITY], [ENTITY], [ENTITY], THIRUVANANTHAPURAM-695 583. 2 [ENTITY], REPRESENTED BY THE SECRETARY, MINISTRY OF PETROLEUM & NATURAL GAS, NEW DELHI-110 001. R1 BY ADV.SRI. [ENTITY] R2 BY [ENTITY], CGC THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 07.12.2018, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: [CASE NUMBER] 2 JUDGMENT
[ENTITY], C.J.
Heard Sri.[ENTITY], the learned counsel appearing for the appellant. Also heard Sri.[ENTITY], the learned counsel appearing for the respondent No.1/writ petitioner.
2. The appellant before us was the respondent No.1 in the [CASE NUMBER]. That case was filed by one [ENTITY], with whom the Indian Oil Corporation Limited (IOCL) had executed a LPG distributorship agreement on 31.7.2000 (Ext.P2). When the distributorship was terminated on 2.11.2009 (Ext.P17), the same was challenged by the aggrieved party ([ENTITY]).
3. The learned Judge however had observed that the writ petitioner has an alternate remedy under Clause 37(a) of the Ext.P2 agreement entered between the parties, when the distributorship was granted to the petitioner. The said Clause 37(a) persuaded the Court to conclude that the aggrieved party can seek relief by invoking the arbitration clause. The learned Judge however went on to record that the relief of restoration of the LPG distributor can also be granted, by the arbitrator. It is this part of the judgment that is challenged, in the present proceeding.
4. The learned counsel Sri.[ENTITY] would refer to [SECTION] of the [ACT] to contend that certain contracts which require performance of a continuous duty, cannot specifically be enforced by the Court. In support, he refers to the judgment in [PRECEDENT] where the Supreme Court was considering a similar direction issued by the arbitrator, when the termination of LPG distributorship under the appellant company was the subject matter of the arbitration proceedings. In that context, the Supreme Court declared that the award of compensation can be the only relief that could have been granted to the aggrieved distributor but restoration of distributorship would be beyond the power of the arbitrator.
5. For the respondent/writ petitioner, the learned counsel Sri.[ENTITY] submits that in pursuant to the impugned judgment, the LPG distributor did not invoke the arbitration clause or opted for the route of arbitration, to secure any relief against the Ext.P17 order. He concedes that the time limit for invocation of the arbitration clause, has already expired.
6. While the respondent/writ petitioner has failed to take advantage of the opportunity made available to her by the impugned judgment, it is necessary for us to correct the obvious error noticed in the impugned judgment. The learned Judge had observed incorrectly that the arbitrator has the power to restore the distributorship of the writ petitioner. Such a conclusion in the face of the ratio in [PRECEDENT] (supra), cannot bear legal scrutiny.
7. In the above context, we may also benefit by referring to [PRECEDENT], where the Supreme Court in paragraph 5 had referred to a judgment rendered by the Madras High Court and observed that the Division Bench had rendered the correct decision in the matter. For the sake of understanding, paragraphs 5 and 6 of this judgment is extracted hereinbelow for quick reference:
5. The award was challenged by the respondent in proceedings under [SECTION] of the [ACT] taken before a learned Single Judge of the Madras High Court. The learned Single Judge rejected the challenge. The respondent preferred an appeal and the Division Bench, in the judgment and order that is impugned be fore us, upheld the challenge. It said:
"There is considerable force in the contention of the appellant that what is arbitrable under Clause 37 is only the dispute or difference in relation to the agreement. The question of restoration of distributorship would not arise under the agreement. Therefore, we have no hesitation in holding that the Arbitrator was in error and in fact had no jurisdiction to direct restoration of distributorship to the 1st respondent."
6. In our view, the Division Bench was right. All that the Arbitrator could do, if he found that the termination of the distributorship was unlawful, was to award damages, as any civil court would have done in a suit. "
8. The above discussion makes it clear that the power of the arbitrator was incorrectly stated in the impugned judgment. Therefore, bearing in mind the ratio of the cited pronouncements of the Supreme Court, we dispose of the Writ Appeal by interfering with the impugned judgment dated 23.2.2017 in the [CASE NUMBER] to the limited extent of declaring that the arbitrator even with a valid jurisdiction, could not have ordered for restoration of the LPG distributorship of the litigant. With this declaration, the Writ Appeal stands allowed.
[ENTITY], Chief Justice Sd/-
[ENTITY], Judge /true copy/ P.A. to Judge vpv