IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY SEVENTH DAY OF AUGUST TWO THOUSAND AND NINE PRESENT THE HON'BLE SMT. JUSTICE T. MEENA KUMARI A N D THE HON'BLE SRI JUSTICE G.V. SEETHAPATHY CMA.NO. 9 1 7 OF 2009. Between : M/s. Shiva Service Station, Market Road, Cheriyal, Warangal district – 506 223 Represented by its Proprietor: Mr. Bashetti Buchiramulu … Appellant Versus The Hindustan Petroleum Corporation Limited, (A Government of India Enterprise) Registered Office at: 17, Jamshedji Tata Road,] Mumbai – 20, Represented by its Chairman & Managing Director & 3-others. ..... Respondent Counsel for the Appellant : Sri GODEY SATISH (10,483) Counsel for the Respondents 1 to 3: GP for Petroleum & ONGC Counsel for the Respondent No.4 : THE HON'BLE SMT. JUSTICE T. MEENA KUMARI A N D THE HON'BLE SRI JUSTICE G.V. SEETHAPATHY C.M.A.No. 9 1 7 OF 2009 J U D G M E N T: (Per the Hon’ble Smt. Justice T. Meenakumari) This Civil Miscellaneous Appeal is directed against the order and decretal order dated 06-8-2009 passed in I.A.No. 1889 of 2009 in O.P.No. 283 of 2007 by the learned Chairman Motor Accidents Claims Tribunal-cum-I-Additional Chief Judge, City Civil Court, Secunderabad, dismissing the petition filed by the appellant-petitioner under section 9 (R) of the Arbitration and Conciliation Act, 1966 read with Section 151 of the Code of Civil Procedure seeking to injuct the Respondents 1 to 4, their men, agents, representatives etc., from creating any third party interest in respect of the area admeasuring 1461 sq.yards together with building and structures thereon in survey Nos. 1003/Land 1003/J of Cheriyal town, Warangal district. 2. For the sake of convenience, the parties to this appeal would hereinafter be referred to as they are arrayed before the court below. 3. The averments made in the affidavit filed in support of the petition are as follows: It is stated that the Respondent No.1 is a public sector oil marketing company under the direct control of the Union of India, Ministry of Petroleum, Oil and Natural Gas Commission. It is stated that the petitioner is the owner and possessor of the land in survey Nos. 1003/1 and 1003/J, admeasuring 1461 sq.yards together with building and structures thereon, situated on the main road of Cheriyal town in Warangal district. It is stated that the respondents approached the petitioner seeking to lease out the said land to run a Petroleum Retail Outlet on payment of meager amounts towards rent. It is stated that the petitioner refused to lease out the land and structures to the respondents on the ground that the offer made by them is not sufficient, as the rents for similar area in the vicinity are much higher. Further the respondents promised the petitioner to lease out the subject matter of the outlet and in turn they will appoint the petitioner as petrol/diesel dealer for their company in the said outlet. Respondents also exhibited huge profits from out of running of such an outlet. Therefore, the petitioner agreed to lease out the said land and super structures to the respondents after developing the area as per their norms and specifications and spent huge amounts on it. Accordingly, the lease deed dated 02-3-2005 was entered into between the petitioner and the respondent No.1 and the lease is for a period of 30 years i.e., till 2035. Further the respondent No.2 also entered into dealership agreement with the petitioner to carry on business for a period of ten years. While things stood thus, the officials of the respondent Nos.1 to 3 have inspected the outlet and carried the samples for testing. Basing on the sample tests the agreement was terminated without following due procedure contemplated under the guidelines. Therefore, the petitioner is constrained to challenge the said action before the Arbitrator, who is respondent No.4. Though the petitioner raised several grounds challenging the termination of dealership agreement, without considering the facts and circumstances of the case, the respondent No.4 passed order confirming the termination order passed by the respondent No.2. Therefore, the petitioner is constrained to file OP.No. 283 of 2007 before the I-Additional Chief Judge, City Civil Court, Secunderabad challenging the termination order dated 21-4-2006 passed by the respondent No.2 and consequential award passed by the respondent No.4 on 02-8-2008 as arbitrary and illegal. It is stated that the petitioner also sought for declaration that it is entitled to run the outlet in terms of dealership agreement dated 16-3-2005. It is stated that the petitioner filed IA.No.3448 of 2007 before the said court to stay all further proceedings and the said application was dismissed mainly on the ground that unless detailed enquiry is conducted in the main O.P., it cannot be decided at the time of interlocutory stage. It is stated that the respondent No.1 issued retail outlet appointment notice seeking to appoint dealers in the State of Andhra Pradesh. The said notice was published in “Eenadu” Telugu daily, Warangal edition. The subject matter of the outlet in the above OP is figured at serial No.40 of the said notice. It is stated that when the subject matter of the retail outlet is in dispute in the above O.P. and is pending adjudication, without crystallizing the rights of the parties to the O.P., the Corporation cannot create third party rights by way of appointing regular dealers. It is stated that after seeing the publication immediately the petitioner approached the respondent No.2 requesting it not to create any third party interest on the ground that if the petitioner succeeds in the above O.P., it is difficult for him to retain the outlet. But the respondents failed to notice the same. It is stated that on 27-5-2009 the petitioner approached the Electricity Department requesting them not to transfer the electricity connection and sanction the new one in view of the pendency of the litigation. On 17-7-2009 the petitioner issued a legal notice to the contractor not to proceed with further work at the site owned by the petitioner. Therefore, to avoid the multiplicity of litigation, the petitioner filed the present O.P. and sought for injunction against the respondents. 4. In the counter-affidavit filed by the respondents 1 to 3, it is averred that the petition filed by the petitioner is not maintainable either in law or on facts, as the termination order dated 21-4-2006 is as per law and the Award dated 02-8-2007 is as per the provisions of substantive law and as per the terms of the contract and the court while passing the orders in I.A.No. 2448 of 2008, dated 31-5-2008, the court clearly stated that the respondent-corporation has strictly followed the procedure in conducting tests of the samples as contemplated under the Marketing Discipline Guidelines, 2005. Thus, the respondent-corporation has prima facie established that the procedure adopted by it in conducting the tests is perfectly correct and the action taken by the corporation against the petitioner is in accordance with the procedure contemplated under the Marketing Discipline Guidelines and as per the terms of the dealership agreement dated 16-3-2005. Therefore, the petitioner is not entitled for any relief in the present application and further the orders passed earlier have become final. It is averred that Hindustan Petroleum Corporation Limited is a Government of India Enterprise under the direct control of Ministry of Petroleum, Oil and Natural Gas and denied the action taken by the respondents against the petitioner is discriminatory and the respondents neither violated any provisions of the Petroleum Act nor the rules made thereunder. It is further averred that as per the policy of the company, advertisement was released in news papers for appointment of dealers for MS/HSD retail outlets at various locations and Cherial in Warangal district was one of such locations advertised for dealer selection under open category. After following due procedure, the petitioner was selected and denied the allegation that subject land was taken on lease by HPCL at meager rent. Respondents denied the allegation that the petitioner spent huge amounts and further stated that basing on the selection process as per the rules laid down the petitioner was allotted with a dealership. Thereafter, lease deed was registered on 02-3-2005. Respondents admitted that the dealership agreement dated 16-3-2005 was executed by the petitioner and as per clause 26 of the dealership agreement, the Corporation has a right to terminate the dealership agreement forthwith if the dealer shall commit a breach of any of the covenants and stipulations contained in the agreement and if the dealer contaminate or tamper with the quality of any of the products, supplied by the Corporation etc. Respondent denied the allegation that the dealership agreement was terminated without following due procedure contemplated under the guidelines. Hence, prayed to dismiss the petition with costs and no injunction can be granted against the respondents restraining them from creating any third party interest in respect of the area admeasuring 1461 sq.yards together with building structures and further the Corporation is strictly adhering to the terms of the lease agreement dated 02-3-2005 and further averred that the petitioner has no prima facie case and therefore prayed to dismiss the petition with costs. 5. On the basis of rival contentions of the parties, the learned Judge framed the following point for consideration: Whether the petitioner is entitled for grant of interim injunction as prayed for ? 6. On perusing the record and after hearing both sides, the learned Judge negatived the relief sought for by the petitioner on the ground that the civil supplies licence of the petitioner was cancelled by the appropriate authority, consequently the dispute was referred to an arbitrator and after hearing both sides the arbitrator upheld the termination of dealership of the petitioner by passing an award. Challenging the same, the petitioner filed O.P. seeking to set aside the award passed by the arbitrator and the learned Judge further held that the dealership agreement dated 16-3-2005 was already terminated by the respondent No.2 and the said order was challenged by the petitioner and also the award passed by the arbitrator. While dismissing the Interlocutory application, the learned Judge having taken into consideration the order passed in I.A.No.3448 of 2007 herein it was observed that the respondent corporation has prima facie established that the procedure adopted by it in conducting the tests is perfectly correct and the action taken by the corporation against the petitioner is in accordance with the procedure contemplated under the Marketing Discipline Guidelines and as per the terms of the dealer agreement and the said observation and the order was not challenged by the petitioner, which became final and accordingly the learned Judge dismissed the interlocutory application. 7. Aggrieved by the same, the petitioner filed the present Civil Miscellaneous Appeal. 8. The main grievance of the appellant is that the appellant is not seeking enforcement of contract but at the same time it is seeking to protect the property from falling into the hands of third parties and therefore sought injunction against the respondents from permanently inducting third parties into possession of the outlet. It is also contended that I.A.No. 3448 of 2007 was dismissed holding that prima facie the appellant established that it has followed the procedure is not correct in view of the fact that the said I.A. was dismissed on the maintainability and such finding cannot be given credence, more so, it is the owner of the property and the said outlet was leased out to the appellant and that the respondents have not followed the prescribed procedure contemplated under the Marketing Discipline Guidelines while terminating the agreement. The learned counsel further contended that the main OP was filed challenging the termination order dated 21-4-2006 passed by the respondents and also the consequential award passed by the fourth respondent dated 02-8-2008 and during pendency of the said O.P., if third party rights are created, the appellant will be put to grave and irreparable loss. The appellant has satisfied the ingredients of section 9 of Arbitration and Conciliation Act, 1996 and as such, it is entitled for injunction and the balance of convenience lies in its favour in view of the fact that it has developed the land and made it fit for running of an outlet. 9. Per Contra, the contention of the respondents is that the appeal is not maintainable and the petitioner is not entitled for the relief sought for on the ground that the termination order dated 21-4- 2006 is as per law and the Award dated 02-8-2007 is as per the provisions of substantive law and also as per the terms of the contract and the court below while passing the orders in I.A.No. 2448 of 2008, dated 31-5-2008, the court below clearly observed that the respondent-corporation has strictly followed the procedure in conducting tests of the samples as contemplated under the Marketing Discipline Guidelines, 2005. Thus, the respondent-corporation has prima facie established that the procedure adopted by it in conducting the tests is perfectly correct and the action taken by the corporation against the petitioner is in accordance with the procedure contemplated under the Marketing Discipline Guidelines and as per the terms of the dealership agreement dated 16-3-2005. Therefore, the petitioner is not entitled for the relief as prayed for and prayed to dismiss the appeal. 10. Having heard the counsel on either side and under the above circumstances, we are not inclined to interfere with the impugned order. Thus, the impugned order does not call for any interference of this court and accordingly we confirm the same. At this stage, both the counsel have agreed to direct the court below to dispose of the arbitration OP.No.283 of 2007 pending on the file of the Court of I-Additional Chief Judge, City Civil Court, Secunderabad. 11. In view of the submission made by the counsel on either side, we deem it appropriate to direct the I-Additional Chief Judge, City Civil Court, Secunderabad, to dispose of the arbitration OP.No. 283 of 2007 pending on its file after affording reasonable opportunity to both sides to putforth their submission, on merits and in accordance with law, uninfluenced by the dismissal of this appeal, positively within a period of six months from the date of receipt of a copy of this order. 12. With the above direction, the Civil Miscellaneous Appeal is dismissed. However, in the circumstances, there shall be no order as to costs. 13. As a sequel to the disposal of the main appeal, CMA.MP.Nos. 1610 and 1611 of 2009, which are filed to injunct the respondents 1 to 3, their men, agents, representatives etc., from creating third party interest in respect of the area admeasuring 1461 sq.yards together with building and structures thereon in survey Nos. 1003/1 and 1003/J of Cherial town, Warangal District and also to suspend the order and decree dated 06-8-2009 made in I.A.No. 1889 of 2009 in Arbitration OP.No.2893 of 2007 on the file of the Court of I- Additional Chief Judge, City Civil Court, Secunderabad, are dismissed as infructuous. _____________________________ JUSTICE T. MEENA KUMARI _____________________________ JUSTICE G.V. SEETHAPATHY 27-08-2009. Ismail = (IsL) THE HON'BLE SMT. JUSTICE T. MEENA KUMARI A N D THE HON'BLE SRI JUSTICE G.V. SEETHAPATHY CMA.No. 9 1 7 OF 2008 (Judgment of the Division Bench delivered by the Hon’ble Smt. Justice T. Meenakumari) COMPUTER No. 4 3 27-08-2009. I s L