Case: Indian Oil Corporation Ltd. and Ors Vs. T. Natarajan

by the observations of the Single Judge at best gave liberty to the Respondent to file a representation for re-consideration of his case for restoration of his dealership by the IOC but not beyond it. Indeed, according to learned Counsel, if the award had been in favour of the Respondent, then in such case, there was no need for the Arbitrator and Single Judge to give liberty to the Respondent to apply for re-consideration of his case. 27. In the third place, learned Counsel urged that once the IOC considered the case of the Respondent and found no case to grant him any relief much less the benefit of restoration of his dealership, the issue attained finality between the parties. 28. It was his submission that the Division Bench, in this circumstance, in its writ jurisdiction had no power to sit as an Appellate Court over the decision of the IOC and direct restoration of the Respondents dealership. 29. It is mainly these three submissions, the learned senior Counsel elaborated his submissions by referring to various documents on record. 30. In reply, Mr. Mohan Parasaran, learned senior Counsel, supported the impugned order and contended that the impugned order does not call for any interference and, therefore, the appeal deserves dismissal. 31. Having heard the learned Counsel for the parties and on perusal of the record of the case, we find force in the submissions urged by the learned senior Counsel for the Appellant. 32. The short question, which arises for consideration in this appeal, is whether the Division Bench was right in reversing the decision of the Single Judge (writ court). In other words, the question, which arises for consideration is whether the Division Bench was right in setting aside the letter dated 13.03.2013 of IOC which terminated the Respondents dealership and was, therefore, justified in issuing a mandamus against the IOC to restore the dealership of the Respondent herein and resume supply of fuel to his fuel station. 33. In our considered opinion, the Division Bench was not justified in doing so and this we say for the following reasons. 34. Coming first to the question as to what is the proper interpretation of the award dated 14.10.2011 and the order of the Single Judge which upheld the award and what it actually decide, in our opinion, a plain reading of these orders indicates that the Arbitrator, in clear terms, held against the Respondent that he committed breaches of the dealership agreement and as a result of this categorical finding, the Arbitrator, in substance, upheld the letter of termination of dealership calling for stern action against the Respondent. Indeed, once the breaches were held made out, the only consequence that ensued from such finding was to uphold the letter of termination of dealership agreement. Since arbitration Clause 69 (c) empowers the Arbitrator to pass any order in the arbitration proceedings, the Arbitrator and so also the Single Judge while upholding the award considered it proper to grant liberty to the Respondent to file a representation to the IOC for re-consideration of his case for restoration of his dealership. Such liberty could never be construed to mean that the Arbitrator had either set aside the letter of termination of the Respondents dealership or directed to restore the supply of fuel to the Respondent. 35. The Respondent, pursuant to the liberty granted, filed his representation to the IOC but the IOC, in their discretion, rejected the same with reasons. 36. In our opinion, reconsideration of the Respondents case as to whether his dealership should be restored or not was an independent cause of action between the parties and the same arose after the award was passed and upheld by the Single Judge. It has, therefore, nothing to do with the award and nor it could be linked with the arbitration proceedings. 37. In our opinion, it was solely within the discretion of the IOC-they being the principal to decide as to whether the Respondents dealership should be restored or not and, if so, on what grounds. The IOC considered the case of the Respondent and after taking into account all the facts and circumstances appearing in the Respondents working, came to a conclusion that it was not possible for them to restore his dealership. It was accordingly informed to the Respondent vide letter dated 13.03.2013. 38. In our opinion, the writ Court (Single Judge) was, therefore, justified in dismissing the Respondents writ petition and upholding the rejection on the ground that the High Court cannot interfere in the administrative decision of IOC and nor it can substitute its decision by acting as an Appellate Court over such decision in exercise of writ jurisdiction. It is more so when such decision is based on reasons involving no arbitrariness of any nature therein which may call for any interference by the High Court. 39. The Division Bench, in our opinion, committed an error in interpreting the award. The Division Bench proceeded on entirely wrong assumption that since the award was in Respondents favour, the IOC had to simply issue a consequential order in compliance thereof directing the IOC to revive the Respondents dealership and restore the supply of fuel to the Respondent. As held supra, this approach of the Division Bench was erroneous and is, therefore, legally unsustainable. 40. In the light of what is discussed above, we are of the considered view that the reasoning and conclusion arrived at by the Single Judge is just and proper, whereas the reasoning and conclusion arrived at by the Division Bench is not proper and hence deserves to be set aside. 41. Learned senior Counsel for the Respondent then argued that the IOC has issued certain circulars providing therein as to how the cases of terminated dealership of any dealer is to be re-considered. This submission, in our opinion, has no merit and we do not consider it proper to go into this aspect of the case in the light of what is held above.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]31. Having heard the learned Counsel for the parties and on perusal of the record of the case, we find force in the submissions urged by the learned senior Counsel for the Appellant.33. In our considered opinion, the Division Bench was not justified in doing so and this we say for the following reasons.34. Coming first to the question as to what is the proper interpretation of the award dated 14.10.2011 and the order of the Single Judge which upheld the award and what it actually decide, in our opinion, a plain reading of these orders indicates that the Arbitrator, in clear terms, held against the Respondent that he committed breaches of the dealership agreement and as a result of this categorical finding, the Arbitrator, in substance, upheld the letter of termination of dealership calling for stern action against the Respondent. Indeed, once the breaches were held made out, the only consequence that ensued from such finding was to uphold the letter of termination of dealership agreement. Since arbitration Clause 69 (c) empowers the Arbitrator to pass any order in the arbitration proceedings, the Arbitrator and so also the Single Judge while upholding the award considered it proper to grant liberty to the Respondent to file a representation to the IOC for re-consideration of his case for restoration of his dealership. Such liberty could never be construed to mean that the Arbitrator had either set aside the letter of termination of the Respondents dealership or directed to restore the supply of fuel to the Respondent.35. The Respondent, pursuant to the liberty granted, filed his representation to the IOC but the IOC, in their discretion, rejected the same with reasons.36. In our opinion, reconsideration of the Respondents case as to whether his dealership should be restored or not was an independent cause of action between the parties and the same arose after the award was passed and upheld by the Single Judge. It has, therefore, nothing to do with the award and nor it could be linked with the arbitration proceedings.37. In our opinion, it was solely within the discretion of the IOC-they being the principal to decide as to whether the Respondents dealership should be restored or not and, if so, on what grounds. The IOC considered the case of the Respondent and after taking into account all the facts and circumstances appearing in the Respondents working, came to a conclusion that it was not possible for them to restore his dealership. It was accordingly informed to the Respondent vide letter dated 13.03.2013.38. In our opinion, the writ Court (Single Judge) was, therefore, justified in dismissing the Respondents writ petition and upholding the rejection on the ground that the High Court cannot interfere in the administrative decision of IOC and nor it can substitute its decision by acting as an Appellate Court over such decision in exercise of writ jurisdiction. It is more so when such decision is based on reasons involving no arbitrariness of any nature therein which may call for any interference by the High Court.39. The Division Bench, in our opinion, committed an error in interpreting the award. The Division Bench proceeded on entirely wrong assumption that since the award was in Respondents favour, the IOC had to simply issue a consequential order in compliance thereof directing the IOC to revive the Respondents dealership and restore the supply of fuel to the Respondent. As held supra, this approach of the Division Bench was erroneous and is, therefore, legally unsustainable.40. In the light of what is discussed above, we are of the considered view that the reasoning and conclusion arrived at by the Single Judge is just and proper, whereas the reasoning and conclusion arrived at by the Division Bench is not proper and hence deserves to be set aside.This submission, in our opinion, has no merit and we do not consider it proper to go into this aspect of the case in the light of what is held above.