IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH C.W.P. No. 12366 of 2007 Date of Decision: February 22, 2008 M/s Sanjeev Auto Fuels, Dharampur, Mansa and another …Petitioners Versus Indian Oil Corporation Limited and another …Respondents CORAM: HON’BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE T.P.S. MANN Present: Mr. Yogesh Goyal, Advocate, for the petitioners. Mr. Ashish Kapoor, Advocate, for the respondents. M.M. KUMAR, J. This petition filed under Article 226 of the Constitution prays for quashing order dated 13.6.2007 (P-3), passed by the Indian Oil Corporation Limited-respondent No. 1, terminating the retail outlet dealership of the petitioners. A further prayer has been made for directing the respondents to regularise the retail outlet dealership and to resume supply of oil to the petitioners. The petitioners were awarded the dealership for running a petrol pump by the respondents on 30.7.2005 (P-1). Thereafter MS HSD (‘B’ Site) Retail Outlet Dealership Agreement was entered into between the parties. The dealership has been terminated by the C.W.P. No. 12366 of 2007 respondent Corporation after issuing show cause notice dated 3.4.2007, on the ground that there was very low upliftment and sale of HSD by the petitioners and also on account of disregard of respondent Corporation’s rules and directives by not providing the facilities as per letter of intent/letter of appointment. It is admitted position that clause 62 of the agreement entered into between the parties, provides for referring the matter to the arbitration in the event any dispute or difference of any nature concerning any right, liability, act or omission on account of any of the party etc. arises. Having heard learned counsel for the parties, we are of the considered view that once there is arbitration clause then it is mandatory duty of the court to refer the dispute arising between the contracting parties to the Arbitrator. For the aforementioned view we place reliance on a judgment of Hon'ble the Supreme Court in the case of Hindustan Petroleum Corporation Limited v. Pinkcity Midway Petroleums, (2003) 6 SCC 503. After extracting the arbitration clause and various clauses of the dealership agreement dealing with the obligation of the dealer to comply with the provisions of various Acts, Rules and Regulations, Hon'ble the Supreme Court has reached a conclusion that the Corporation was entitled to stop or suspend the supply of its petroleum products to a dealer without prejudice to other remedies contemplated by the dealership agreement. The right of the Corporation to take action against the erring dealer under the terms of the agreement was considered de hors 'the proceedings that may be available to be 2 C.W.P. No. 12366 of 2007 initiated against the erring dealer under the provisions of various other enactment's' to which reference have been made in the clauses of the dealership agreement. When the principles laid down in Pinkcity Midway Petroleums case (supra) are applied to the facts of the present case, then it becomes evident that the matter is squarely covered by the aforementioned judgment. Therefore, we are of the opinion that arbitration clause 62(a) of the agreement would apply to the facts of the present case. In view of the aforementioned discussion we are of the considered view that the petitioners must be relegated to the remedy of arbitration. Accordingly, the petitioners are relegated to the remedy of arbitration. Before parting, we wish to make it clear that any observation made in this order shall not be construed as an expression of opinion on the merit of the controversy between the parties by the Arbitrator who shall proceed in accordance with law independent of any influence of this order. Writ petition stands disposed of in the above terms. (M.M.KUMAR) JUDGE (T.P.S. MANN) February 22, 2008 JUDGE Pkapoor 3