IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH **** CIVIL MISCELLANEOUS APPEAL NO.742 OF 2017 G.Radha Madhavi .. Appellant Vs. M/s Indian Oil Corporation Ltd. and others .. Respondents DATE OF THE JUDGMENT PRONOUNCED: ______ .09.2017 SUBMITTED FOR APPROVAL: THE HON’BLE SRI JUSTICE SANJAY KUMAR AND THE HON’BLE SRI JUSTICE M.S.K.JAISWAL 1. Whether Reporters of Local newspapers may be allowed to see the judgment? Yes/No 2. Whether the copies of judgment may be marked to Law Reporters/Journals Yes/No 3. Whether Their Lordships wish to see the fair copy of the judgment? Yes/No _____________________ SANJAY KUMAR, J ____________________ M.S.K.JAISWAL, J 2 * THE HON’BLE SRI JUSTICE SANJAY KUMAR AND THE HON’BLE SRI JUSTICE M.S.K.JAISWAL + CIVIL MISCELLANEOUS APPEAL NO.742 OF 2017 % DATED _______ SEPTEMBER, 2017 # G.Radha Madhavi .. Appellant Vs. $ M/s Indian Oil Corporation Ltd. and others .. Respondents <Gist: >Head Note: ! Counsel for the Appellant : Sri Kishore Rai ^Counsel for Respondents : Sri Dominic Fernandes ? CASES REFERRED: 1. 2017 (1) ALT 257 (D.B.) 2. (1999) 2 SCC 479 3. (2012) 2 SCC 93 4. (2008) 16 SCC 774 3 THE HON’BLE SRI JUSTICE SANJAY KUMAR AND THE HON’BLE SRI JUSTICE M.S.K.JAISWAL CIVIL MISCELLANEOUS APPEAL NO.742 OF 2017 J U D G M E N T (Per Sri Justice Sanjay Kumar) This civil miscellaneous appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (for brevity, ‘the Act of 1996’), arises out of the order dated 13.07.2017 passed by the learned Principal District Judge, Chittoor, in C.F.R.No.3249 of 2017 in an unnumbered Arbitration Petition filed by the appellant herein. The said arbitration petition was filed under Section 9(ii)(d) of the Act of 1996, seeking a permanent injunction restraining the Indian Oil Corporation Limited, the respondent herein, from interfering in any way with the business operations of the appellant, either by forcibly effecting her eviction or by discontinuing supply of petroleum products, till the disputes between them were resolved finally through the process of arbitration. Therein, the appellant filed C.F.R.No.3249 of 2017, seeking interim relief on the same lines till disposal of the petition. By the order under appeal, the Court below held that the correct provision of law that was applicable was 9(1)(ii)(d) and not Section 9(ii)(d) of the Act of 1996; that the agreement between the parties stood terminated at the end of the agreement period, which expired on 28.03.2004 and therefore, there was no arbitration clause existing and in operation, whereby the appellant could invoke the jurisdiction of the Court under Section 9(1)(ii)(d) of the Act of 1996; that even in terms of the arbitration clause, it was not open to the appellant to nominate a sole Arbitrator thereby conferring jurisdiction 4 on the Principal District Court, Chittoor; and that the Court below had no jurisdiction to entertain the matter. Sri Kishore Rai, learned counsel for the appellant, would contend that the Court below erred in dismissing the main Arbitration O.P. at the stage of considering the petition filed therein for interim relief. He would contend that the Court below was in error in coming to the conclusion that it had no jurisdiction to entertain the Arbitration O.P., as the cause of action arose within its territorial jurisdiction. He would assert that in terms of the law laid down by this Court in M/s.SUSHEE VENTURES PRIVATE LIMITED V/s. RAHUL AGARWAL1, the Court below undoubtedly had jurisdiction to entertain the petition. He would further state that though the initial agreement between the parties was executed as long back as on 27.10.2003, there was no termination of the relationship by the Indian Oil Corporation Limited and therefore, the arbitration clause in the said agreement would continue to exist and operate, notwithstanding the expiry of the period stipulated thereunder. Per contra, Sri Dominic Fernandes, learned counsel for the Indian Oil Corporation Limited, would state that this case has a long and chequered history and that the attempt on the part of the appellant is only to defeat the orders passed by the Supreme Court. He would further submit that it is only if an arbitration clause is in existence and available that the question of the Court below examining whether it had jurisdiction to entertain the matter would arise. He would therefore state that notwithstanding the error, if any, committed by the Court below on that issue, the matter first requires to be examined in the context of the finding of the Court below that 1 2017 (1) ALT 257 (D.B.) 5 no such arbitration clause is available to the appellant as on date. He would place before this Court the judgments rendered by this Court and thereafter, by the Supreme Court which have significance. It appears that a Maintenance and Handling (M & H) Contract in respect of a retail outlet was entered into by IBP Company Limited, the predecessor-in-interest of the Indian Oil Corporation Limited, with the appellant on 27.10.2003. Clause 48 of this agreement categorically stated that the agreement would be for a period of one year, effective from 29.03.2003, subject to renewal by one year at the company’s option at the same rates and on the same terms and conditions. The clause further stated that unless otherwise mentioned or renewed in writing, the agreement stood automatically terminated at the end of the agreement period. It appears that IBP Company Limited had adopted the practice of accepting land from owners for the purpose of establishing retail outlets and M & H Contracts in relation to such outlets were given to contractors who, in most of the cases, were the friends/relations of the land owners. This practice was however done away with when the Government of India introduced new guidelines with regard to allotment of dealerships. The appellant also was one such M & H Contractor who was appointed to run a retail outlet in the land offered by her husband on lease to IBP Company Limited. Aggrieved by the change in policy, the appellant’s husband filed W.P.No.25859 of 2006 before this Court. By common order dated 18.01.2007 rendered in all such like cases, including W.P.No.25858 of 2006, a learned Judge of this Court held that the leases granted were unconditional and appointment of M & H Contractors did not confer absolute rights. The writ petitions were accordingly dismissed. 6 This order was confirmed in appeal by a Division Bench of this Court, in which one of us, SK,J, was a member, vide order dated 09.07.2014 passed in W.A.No.127 of 2008 and batch. Significantly, W.A.No.128 of 2008 in the said batch was filed by none other than the husband of the appellant. The matter was then taken to the Supreme Court in Petition(s) for Special Leave to Appeal (c) Nos.20354-20364 of 2014. The husband of the appellant also figured as a petitioner in this batch before the Supreme Court. By order dated 10.04.2017, the Supreme Court confirmed the order dated 09.07.2014 passed by the Division Bench of this Court, but accepting the plea of the petitioners, the Supreme Court granted time till 30.06.2017 for vacating the premises. The petitioners were required to file undertakings that they would not create any third party rights and would peacefully vacate the premises concerned by 30.06.2017. During the pendency of the writ petitions before the learned single Judge, orders of status quo held the field, by virtue of which the existing M & H Contractors continued to run the outlets in the leased premises. Significantly, only four such M & H Contractors figured as petitioners before the learned single Judge and the other cases were filed only by the land owners. Similar was the case with the appellant, as her husband filed the writ petition and she did not choose to espouse any grievance of her own. This Court therefore finds merit in the submission of Sri Dominic Fernandes, learned counsel, that the present attempt on the part of the appellant is only to get over the commitment given by her husband to the Supreme Court that he would vacate the premises on 30.06.2017. The petition was therefore utterly lacking in bonafides. 7 However, as Sri Kishore Rai, learned counsel, raised the plea that notwithstanding the expiry of the agreement, the arbitration clause therein would continue to survive and operate, we address the said issue. It may be noted at this stage that the Court below was required by law to satisfy itself as to the existence of an arbitration clause before entertaining the petition under Section 9 of the Act of 1996 (See SUNDARAM FINANCE LTD. V/s. NEPC INDIA LTD2). Sri Kishore Rai, learned counsel, relied upon REVA ELECTRIC CAR COMPANY P. LTD. V/s. GREEN MOBIL3, wherein upon an application filed under Section 11 of the Act of 1996, the Supreme Court, while appointing an Arbitrator, observed that notwithstanding the initial period under the MOU expiring by a particular date, the disputes that arose in relation to its termination and the consequences thereof would be clearly covered under the arbitration clause found therein. The Supreme Court further observed that even on termination of the agreement, the arbitration agreement would still survive. Similar was the view taken in EVEREST HOLDING LIMITED V/s. SHYAM KUMAR SHRIVASTAVA4, wherein the Supreme Court observed that once there is a valid arbitration agreement between the parties contained in the joint venture agreement and if any disputes arose between them in relation to the subject matter of the said joint venture agreement, they would have to be adjudicated through the process of arbitration and though the joint venture agreement may have been terminated and cancelled, such disputes would still be amenable to resolution through arbitration. The argument to the 2 (1999) 2 SCC 479 3 (2012) 2 SCC 93 4 (2008) 16 SCC 774 8 contrary that the disputes could not be referred to arbitration as the agreement was not in existence as on that date was therefore held to be devoid of merit. There can be no disputing the fact that an arbitration clause in an agreement would survive even after expiry/termination of such agreement in relation to any disputes that arose in the context of the period of the agreement or even the termination thereof. In the case on hand, however, it is not in dispute that the M & H Contract executed on 27.10.2003 was never renewed. In terms of Clause 48 of the agreement, it stood automatically terminated at the end of the initial agreement period. Continuance of the appellant thereafter was not permissive or with the tacit consent of the Corporation. It was only because of the status quo order secured by her husband in W.P.No.25859 of 2006 that the appellant continued to operate as a M & H Contractor. This state of affairs seems to have continued till the Supreme Court directed the appellant’s husband, amongst others, to vacate the premises by 30.06.2017. That being so, the judgments cited are of no avail to the appellant. The agreement in question did not stand extended automatically by virtue of the status quo order granted by this Court during the pendency of the writ petition. In effect, the agreement, as such, expired in terms of Clause 48 thereof and the continuance of the appellant thereafter was not by virtue of or under the said agreement but under the binding order of this Court. Once the agreement itself ceased to exist so long ago and the relationship between the parties thereafter was attributable to a Court order, the question of the arbitration clause contained in the said agreement surviving till this date does not arise. 9 On the above analysis, this Court finds that on the principal issue as to whether there was an arbitration clause existing as on date, whereby the appellant would have the right to approach the Court below with a petition under Section 9 of the Act of 1996, the Court below rightly held that no such arbitration clause was available to the appellant. The other issue as to whether the Court below had jurisdiction otherwise to entertain the application therefore does not call for a finding on merits. The order under appeal is therefore valid and correct in so far as the issue of existence of the arbitration clause is concerned and we find no grounds to interfere with the same. The appeal is accordingly dismissed. Pending miscellaneous petitions, if any shall also stand dismissed. No order as to costs. ___________________ SANJAY KUMAR,J ___________________ M.S.K.JAISWAL,J 22nd SEPTEMBER, 2017 Note: L.R.Copy to be marked. (B/O) PGS