HnGH Goum OF cHHATnseARH AT aILASPUR M I§¢§prppgm688 of zoos \ M/s Ashirwad Agenny and two othérs a Vs. iniiian Oi! Corporatign Limited and anather Post for Order: H paggz ‘ Sdl- / > Dilip Raosaheb Deshmukhrw Judge i u.os.2oo7 ' 11 HIGH COURT OF GHHATTlsGARH AT BILA$PUR Single Bench : Hon’ble Shri Dilip Raosaheb De5hmukh, J. Misceuaneous Appea! No. 588 of 2035 : 1. Mls Ashirwad Agency, Dealer — {ndian OH Corporation Limited, Post and Place:- Bemetara, Distt. DURG (C.G.) Appetlants 2. Praveen Kumar Lakhotéa, Aged 32 years. S/o' Shri Brij Mohan Lakhotia. 3. Pradgep Kumar Lakhotia, Aged abaut 27 years, Slo Shri Brij Mohan Lakhotia Appellants 2 & 3 Clo M/s Ashirwad Agency, Indian Oil Corporation Limited, Bemetara, Tah. Bemetara, Distt. DURG (C.G.) VersuS Respondents 1. indian Oil Corporation Limited, egistered Office — G-9 Aliyawar Jung Marg. Bandra East Mumbai — 400051, through Genera! Manager, indian Oil Corporation Limited, Madhya Pradesh State Co-ordinatory, Bhopal, MP. 2. Senior Divisionai Manager, indian Oil Corporation Limited, Raipur Divisional Office, Aerodrum Road, RAIPUR {c.G.) MEMO QF APPEAL U/S 37 OF THE ARBITRATION AND CONClLlATlON ACT, 1996 s Present: Shri V.G. Tamaskar, counsel for the appellants. Shri Bhishma Kinger, counsel for the respondents. Q R D E R (Passed on ll PL of May, 2007) Thie appeal i$ directed againet the order dated 31 .032005 passed by 7‘“ Additional District Judge, Fast Track Court, Durg, C.G. in Misc. Arbitration Caee No. 21 of 2004 whereby the application under $ection 34 R of the Arbitration and Canciliation Act, 199$ (heremafter referred as the “Act") far setting asideVthe arbitra! award was dismissed. 2. It is not disguted that the appatlan: Mr‘$. Ashirwad Agenw was the dealer appoihted by lndian Oil Corporation at Bemetara. On 12061999, MS samples drawn from the claimants' retaii outlet failed in R.O.N. test, resulting in suspension of sales and. supplies for 3t) days. On 14.4.2000 u . the amcials of the respondents inspected the retail Outlet of the claimants and observed that density of the products was beyond permissible limits k and hence sales and supplies were suspended. On 15.4.2000 the samples were drawn and forwarded to laberatory test. Though the H.S.D. samples met with specifications, M.$. samples failed in R..0.N. test. After giving a show-cause notice to the appellants, the dealership was terminated on 2.5.2001. . 3. Pursuant to condition No. 69 of the memorandum of agreement between the parties, the dispute between the parties was referred to Sole Arbitrator Mr. M.S.$hinde appointed by the Direetor (Marketing) of the respondents vide letter 24.09.2001. The appellants and the respondent filed its elaim and written statement respectively. 4. lt was contended hy the appellants-claimants that they were neither aware of the ‘Octane' test nor any equipment was supplied to them to test the same. lt was further contended that whatever material was supplied to them, the same was lying in the tank and they had neither mixed any products in the tank nor were they responsible for any adulteratiol//’ ~i-\ / @ It was thus contended that terminatian of dealership vide tetter i dated 2.5.2001, was illegal and arbitrary and prayed for restoration of dealership and also for compensation. r 5. Before the Arbitrator, the respandant took the stand that the appellantalclalmants were habitual adulteratars, which resulted in termination of their dealer'ship. Various incidents of mall-practice and irregularities committed by the appellants/claimanta were also narrated, 0n these premiees, it was contended that since the MS samples drawn from the elaimants' retail outlet had faited in RON. test, the dealership of the claimants was rightly terminated on 2.5.2001. h 6. The learned Arbitrator entered into the reference and framed te following iseues and recorded the findings thereon as shown below: Sr. Issues Answers No. 1. Whether respondent proved that samples Yes. drawn from the retail outlet of the claimant failed in RON test? 2. Whether claimant proved that termination of Yes. their retail outiet dealership is wrong and illegal? 3. Whether the claimant is entitled to tor No&Yes. restoration of their dealership? And if .so, 4. What orders and costs? As per Final order/award whether claimant is entitled for damages? Additional issues: 5. From wlWch storage tank of Bhilai depot, the From tanks product was supplied to the dealer on C & D. “ht/200$? 6. Whether RON‘ test was conducted on No. 11/4/2000 of the product supplied to the dealer from the storage tank? 7. Whether any product was transferred in the Yes above mentioned storage tank of Ehiiai Depot, after 7/3l2000? 7, ‘ Shfi Vikram Tamskar, learned Counsel for the appellants/claimants E submitted at the very outsét that he wauld not press 0n the relief of quashing the award passed by the Arbitrator, as sought by him in the apeeal and Would pray only for a modifrcatien of the award by restoring thedealership of the appellants. lt was contended that the application for setting aside the arbitral award was under sub-clause (2) (a) (iv) of Section 34 of the Act. It was contended that since a clear finding was recorded on issue No.2 that the terminatien of the‘retail outlet dealership was wrqng and illegai as it could not be concluded that the product which was supplied to the claimants was according to the R.O.N. specification, therefene, the claimants could not be blamed for its coneequent failure. It was further contended that once the Arbitrator recorded the finding that the termination of dealershtp of the claimants on 2.5.2001 was iliegal, he was hound to allow the claim for restoration of dealership and compensation. 8. l On the other hand, shri Bhishma Kinger, teamed counsei appearing for the respondents submitted that the claimants were habitual adulterators. Besides, under condition No.58 of the Contract, the o deaiership once terminated could not be restored even though termination was not proper. Reliance was placed on indr'an 0i! Corporation Ltd. vs. Amritsar Gas Service and others (1991) 1 $GG 533 while contending that the dealership having been terminated by the respondent under the Contract, the relief of restoration of dealership could not be awarded. .9. Having heard rival contentions, l have perused the award. The respondents had placed before the Arbitrator various incidences of é? malpractices/irregulamies committed by the appellant$lciaimants as dealer. It is also to be noticed that the appellant5 herein did net me any rebuttal or even a simple denial of the affidavit med by the respondents. that the appenants were habitua! aduiterators. The Arbétrator had, therefore, rightly observed that he had no hesitation in heiding that the ciaimants/appeiiants were habitual adulteratcra. The finding on issue Nag recorded by the Arbitrator cannot, therefore, come to the aid 0f the appellants becauee the respendente were well within their right in terminating the‘ dealership under condition No.58 of the agreement between the parties. The right to terminate the agreement was not only covered by the terms of the contract but was also without prejudice to any of their other rights againet the dealer. Since the respondents had successfully proved that the appellants were habitual adulterators, relief of restoration of dealership could not be granted to the appellants. 1Q. So far as the claim for compensation is concerned, it is to be noticed that the claimants did not either adduce any evidence before the Arbitrator to show the quantum of damages due to termination or pray for any specified quantum of damages. ln this view“of the matter, the Arbitrator was atso justitied in refusing the prayer for compensation made by the appellants/ciaimants. .. ‘11. As a result, this appeal being devoid of any merit fails and is accordingly dismissed. Dilip Raosaheb Deshmukh,. . Judge Sdl- ~i-\ h .o5.2oo7