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2015 DIGILAW 768 (CAL)

Prapti Distributor Pvt. Ltd. v. Panasonic India Pvt. Ltd.

2015-09-14

SOUMEN SEN

body2015
Order This is an application under Section 8 of the Arbitration and Conciliation Act. The plaintiff has filed a suit praying inter alia for a declaration that the plaintiff has an interest in the property of the defendant being the subject matter of the agency, namely, the exclusive distributorship agreement dated 3rd April, 2012 entered into by and between the plaintiff and the defendant. The plaintiff says that by a letter dated 3rd April, 2012 the defendant appointed the plaintiff as Panasonic distributor for the entire basket of Air conditions Refrigerator Division products for North Bengal and Sikkim with effect from that day. It was stated that the territory that will be under the plaintiff is Malda, North Dinajpur, South Dinajpur, Coochbihar, Jalpaiguri, Darjeeling and Sikkim State. It was further stated in the letter of appointment that the plaintiff would be the only official distributor for the aforementioned territory. By an e-mail dated 25th July, 2013 the appointment of the plaintiff was terminated by the defendant. It is the grievance of the plaintiff that huge stocks of Panasonic products are lying with the plaintiff which the plaintiff had lifted from the defendant against payment of price and if the defendant flooded the market and in particular the territory that was under the plaintiff with its products directly or through other dealers, the plaintiff would not be able to sell the Panasonic products lying with it. The stock that is lying with the plaintiff is reflected in annexure-‘U’ to the petition. The plaintiff contends relying on Section 202 and 204 of the Contract Act, 1872, that since the plaintiff has an interest in the property forming the subject matter of agency, the agency could not have been, in the absence of an expressed contract, terminated to the prejudice of such interest. Hence, the plaintiff contends that either the defendant should take back from the plaintiff the stock of Panasonic products lying with the plaintiff or the defendant should be restricted from marketing its products either by itself or through other dealers in the territory in which the plaintiff operated. The plaintiff is presently enjoying an interim order passed on 29th November, 2013 in terms of prayer (d) of the notice of motion but restricted to the products mentioned in annexure ‘U’ of the petition. The plaintiff is presently enjoying an interim order passed on 29th November, 2013 in terms of prayer (d) of the notice of motion but restricted to the products mentioned in annexure ‘U’ of the petition. Prayer (d) of the notice of motion is set out below:- “An order of injunction, until the disposal of the present suit, restraining the respondent by itself or by its members, employees, staff, servants, agents or nominees from supplying any product/good/merchandise similar to the products supplied by it to your petitioner to any distributor or dealer or person in the said area (Malda, North and South Dinajpur, Coochbihar, Jalpaiguri, Darjeeling and the entire State of Sikkim) till all the products/goods/merchandise received by your petitioner from the respondent or purchased by your petitioner from the respondent has been sold to third party consumers in the market/said area (Malda, North and South Dinajpur, Coochbihar, Jalpaiguri, Darjeeling and the entire State of Sikkim)”. The defendant is the applicant. The defendant says that the plaintiff was appointed as a Panasonic distributor for entire basket of Air conditions Refrigerator Division products for North Bengal and Sikkim with effect from 03.04.2012. The territory that shall be under Prapti Distributor Pvt. Ltd. is Malda, North Dinajpur, South Dinajpur, Coochbihar, Jalpaiguri, Darjeeling and Sikkim State. This was followed by execution of a distributorship agreement. The said distributorship agreement contains the following arbitration Clause at page 75 which is set out below:- “6(i). I hereby agree that all disputes differences that may arise between the parties shall be settled by Arbitration in accordance with Arbitration and Conciliation Act, 1996 and by a sole arbitrator to be appointed by Panasonic India Pvt. Ltd. The venue of arbitration shall be New Delhi, India.” It is submitted that by reason of the said arbitration Clause the jurisdiction of the Civil Court is ousted and the dispute is required to be referred to the arbitration in terms of the said arbitration Clause. The learned Counsel appearing on behalf of the applicant/petitioner submits that the distributorship agreement was entered into following compliance of all formalities and submission of required documents. In fact the plaintiff by a letter dated 20th March, 2012 expressed his intention and desire to do the distribution of entire products of the brand for Darjeeling District, Coochbehar and entire Sikkim. The plaintiff approached the defendant and submitted the required documents. In fact the plaintiff by a letter dated 20th March, 2012 expressed his intention and desire to do the distribution of entire products of the brand for Darjeeling District, Coochbehar and entire Sikkim. The plaintiff approached the defendant and submitted the required documents. The defendant by a letter dated 3rd April, 2012 confirmed that the plaintiff would act as an official distributor for aforementioned territory for the entire basket of Air conditions Refrigerator and thereafter the said distributorship agreement was executed. In the affidavit in opposition it is submitted that the distributorship application form annexed to the petition has no relevance and/or connection with the agreement and that the plaintiff was not appointed pursuant to the aforesaid Distributorship Application Form. The said distributor application form relates to set of products different from the products to which the said agreement relates and also for a territory different from what was part of the confirming letter of appointment dated 3rd April, 2012. Mr. Samrent Sen, the learned Senior Counsel appearing on behalf of the defendant submitted that the subject matter of the suit relates to products not covered under the distributorship agreement and also for a territory different from what was part of the letter confirming appointment dated 3rd April, 2012. The plaintiff has pleaded an oral agreement to show that the products and the territory covered in respect of the said products are different from the products and the areas covered under the distributorship agreement. However, there is no cogent evidence before this Court to arrive at such a finding. On the contrary, it appears that the dispute is arising out of a distributorship agreement and there is no other agreement between the parties. There is nothing on record to show that the parties have entered into any other agreement apart from the agreement annexed to the petition. If the foundation of the suit is an oral agreement, there has to be materials which are convincible to sustain a claim that the dispute canvassed in the suit are not forming the subject matter of the arbitration proceeding. Moreover, as the arbitrator is a creature of an agreement and cannot travel beyond the agreement. If the defendant is able to demonstrate before the Arbitrator that the disputes are not coming within the purview of the arbitration agreement, the Arbitrator may decide the said issue as to jurisdiction at an appropriate stage. Moreover, as the arbitrator is a creature of an agreement and cannot travel beyond the agreement. If the defendant is able to demonstrate before the Arbitrator that the disputes are not coming within the purview of the arbitration agreement, the Arbitrator may decide the said issue as to jurisdiction at an appropriate stage. Under such circumstances the hearing of the suit is permanently stayed. This application being GA No.712 of 2015, accordingly, stands disposed of. However, there shall be no order as to costs. Urgent certified website copies of this order, if applied for, be urgently supplied to the parties subject to compliance with all requisite formalities.