Adarsh Gas Service Basti and Anr. , Throu Its Proprietor v. Bharat Petroleum Corporation Ltd.
2021-09-21
JASPREET SINGH
body2021
DigiLaw.ai
JUDGMENT : 1. The two instant appeals have been filed against the common judgment & order dated 01.01.2013 passed by the District Judge, Lucknow in Regular Suit No.81 of 2012 and 82 of 2012 which was contested between the same parties. 2. The appellant herein was the distributor of the respondent-corporation. The said Distributorship Agreement was entered between the parties on 11.01.1983 containing an arbitration clause. Certain disputes had occurred between the parties and consequently the appellant invoked the arbitration clause. 3. The claim of the appellant before the sole Arbitrator was rejected and the counter claim of the respondent-corporation was allowed. Being aggrieved against the aforesaid award dated 08.02.2012, the appellant preferred a petition under Section 34 of the Arbitration and Conciliation Act, 1996 before the District Judge, Lucknow which was registered as R.S. No. 82 of 2012. The appellants also moved a petition under Section 9 of the Arbitration and Conciliation Act, 1996 registered as Regular Suit No. 81 of 2012. Thus both petitions under Section 34 of the Arbitration and Conciliation Act, 1996 being Case No. 82 of 2012 and petition under Section 97 of the Arbitration and Conciliation Act, 1996 being No. 81 of 2012 respectively were decided by a common judgment dated 01.01.2013 and both the petitions were dismissed. 4. The appellant being aggrieved have preferred First Appeal No. 51 of 2013 under Section 37 of the Arbitration and Conciliation Act, 1996 challenging the order dated 01.01.2013 passed in Regular Suit No. 82 of 2012 whereby the objections under Section 34 of the Arbitration and Conciliation Act, 1996 were dismissed and First Appeal No. 50 of 2013 has been preferred against the order dated 01.01.2013 in Regular Suit No. 82 of 2012 whereby the application under Section 9 of the Arbitration and Conciliation Act, 1996 was dismissed. 5. It is in this view of the matter as both the appeals involve similar question in between the same parties arising out of a common judgment dated 01.01.2013, hence, have been heard together and are being decided by this common judgment. 6. In order to put the controversy in a perspective, brief facts giving rise to the above appeals are being noticed hereinafter:- 7.
6. In order to put the controversy in a perspective, brief facts giving rise to the above appeals are being noticed hereinafter:- 7. The respondent Corporation i.e. Bharat Petroleum Corporation Limited (hereinafter referred to as “BPCL/Corporation”) appointed the appellant as its distributor under the Scheduled Caste Category for distribution of Liquid Petroleum Gas (hereinafter referred to as “LPG”) by means of Distributorship Agreement dated 11.01.1983. 8. The said agreement was initially for a period of 10 years which was renewed every five years at the discretion of the BPCL. The record reveals that right from inception of the distributorship in the year 1983, the appellant has been operating the same, however, some time in the month of January, 2008, certain disputes occurred. 9. The genesis of the dispute was that the Corporation attached 19008 consumers of another Gas Agency with the Gas Agency of the appellant. The appellant was equipped to handle only 16500 consumers of its own, Since, there were certain complaints against a different Gas Agency whose 19008 consumers were also attached with the Gas Agency of the appellant, this put a lot of constraint on the appellant in operating its Gas Agency with efficiency. 10. Since the appellant was experiencing difficulties in managing the large number of consumers attached with the agency of the appellant, hence, it decided to forgo its distributorship and it wrote a letter dated 12.01.2009 expressing its intention to close the distributorship. Certain correspondence was exchanged between the appellant and the respondent-corporation and thereafter respondent-corporation conveyed its approval of closure of the distributorship of the appellant w.e.f. 11.02.2009. However, the appellant on 09.02.2009 made a request to the respondent informing the Corporation that the appellant was revoking its decision to forgo its distributorship, but this request was turned down by the respondent-corporation and this led to the termination of the distributorship of the appellant. 11. Being aggrieved against the aforesaid decision of turning down the request of the appellant to withdraw its decision of foregoing its distributorship, the appellant invoked the arbitration clause. In terms of the agreement Sri P.S. Bhargava was appointed as the sole Arbitrator before whom the appellant filed its statement of claim while the Corporation filed its counter claim.
11. Being aggrieved against the aforesaid decision of turning down the request of the appellant to withdraw its decision of foregoing its distributorship, the appellant invoked the arbitration clause. In terms of the agreement Sri P.S. Bhargava was appointed as the sole Arbitrator before whom the appellant filed its statement of claim while the Corporation filed its counter claim. The parties contested the proceedings before the Sole Arbitrator who by means of its award dated 08.02.2012 rejected the claim of the appellant and allowed the counter claim of the respondent to the tune of Rs.13,86,241/- after adjusting a sum of Rs.5.26,507/- which was an amount lying to the credit with the respondent-corporation and thus the said amount of Rs.13,86,241/-, was directed to be paid with interest at the rate of 12 % interest per annum from the date of the award till its actual payment by the appellant to the Corporation. 12.As far as the counter claim is concerned, the amount under it has been settled between the parties, hence, there is no dispute in relation thereto, however, the only dispute which was escalated by the appellant was in respect of the dismissal of the claim of the appellant before the sole Arbitrator. 13. While preferring the petition under Section 34 of the Arbitration and Conciliation Act, 1996 before the District Judge, Lucknow against the award dated 08.02.2012, which was registered as R.S. No. 82 of 2012, the appellant also filed a petition under Section 9 of the the Arbitration and Conciliation Act, 1996 seeking for an interim measure restraining the respondent-corporation from allotting the LPG Distributorship for the city of Basti under the Scheduled Caste Category to any other person or entity during the pendency of the proceedings and this petition under Section 9 was registered as R.S. No. 81 of 2012 before the District Judge, Lucknow. 14. As noted above, both the aforesaid petitions were dismissed by a judgment of the District Judge, Lucknow dated 01.01.2013 against which the two instant appeals have been preferred. 15. Heard Sri Akhilesh Kalra, along with Sri Siddharth Singh, learned counsel for the appellant whereas Sri M.E. Khan, learned counsel has argued on behalf of the respondent-corporation, in both the appeals. 16. The learned counsel for the appellant has primarily based his arguments on the premise that the appellant had moved an application resigning from the distributorship.
15. Heard Sri Akhilesh Kalra, along with Sri Siddharth Singh, learned counsel for the appellant whereas Sri M.E. Khan, learned counsel has argued on behalf of the respondent-corporation, in both the appeals. 16. The learned counsel for the appellant has primarily based his arguments on the premise that the appellant had moved an application resigning from the distributorship. It has been vehemently urged that the letter of resignation could not be treated as a letter of termination which has different connotations and has to be treated in different manner and this distinction has neither been appreciated by the Sole Arbitrator nor by the District Judge, Lucknow. 17. Elaborating his submissions, it has been pointed out from the records that in so far as the Distributorship Agreement is concerned, there is no dispute. However, the dispute emanates from the fact that the appellant initially on 24.11.2008 had sent a SMS to the Territory Manager of the respondent-corporation informing him that the appellants had decided to close the distributorship permanently. The SMS also indicated, that the decision is also being conveyed through post and the Corporation was informed that it should make alternative arrangements as per the agreement clause. This was followed by a letter dated 12.01.2009 addressed to the Territory Manager of the respondent-corporation, referring to the above mentioned SMS and further reiterating that the appellant was formally informing that it intended to permanently close the distributorship and the appellant may be divested of the obligations under the Distributorship Agreement as soon as possible. 18. Thereafter in the said letter, it was stated that the Corporation may accept the resignation of the appellant from the Gas Agency Distributorship. The aforesaid letter of the appellant was received in the office on 12.01.2009 and immediately on 13.06.2009, the Corporation replied and informed the appellant that in terms of Clause 28 of the Distributorship Agreement, it was open for either of the parties to the agreement to terminate the same on giving 30 days' notice to other party. The Corporation informed the appellant that it may in terms of the said Clause 28 of the Distributorship Agreement continue to operate till 11.02.2009 and in the meantime the Corporation shall make alternative arrangements, so that the consumers of the Corporation shall continue to get the supplies in the interregnum, uninterruptedly.
The Corporation informed the appellant that it may in terms of the said Clause 28 of the Distributorship Agreement continue to operate till 11.02.2009 and in the meantime the Corporation shall make alternative arrangements, so that the consumers of the Corporation shall continue to get the supplies in the interregnum, uninterruptedly. The said letter also stated that the Corporation was in the process of processing the resignation and would revert back soon. 19. It is further urged that since the resignation of the appellant was under process and before the decision of the Corporation could be communicated to the appellant, another letter dated 09.02.2009 was issued by the appellant addressed to the Territory Manager of the respondent-corporation stating that the appellant apart from the aforesaid distributorship agency did not have any other source of income and therefore considering and taking a compassionate view of the matter, the appellant may be permitted to withdraw its decision of closing the distributorship and he may be permitted to continue as before. 20. It is urged by learned counsel for the appellant that instead of taking a view on the aforesaid letter, the respondent-corporation by means of letter dated 11.02.2009 informed that in pursuance of the letter dated 12.01.2009, the Corporation had made alternative arrangements and now suddenly the appellant has made a request to withdraw its decision to close the distributorship agreement which at this late stage cannot be accepted, hence, the request of the appellant was turned down. By the same letter it was also required of the appellants to hand over all the cylinders, Regulators, books and registers maintained in the distributorship agreement to the concerned personnel. 21. It has further been urged that initially the appellants preferred Writ Petition bearing No. 15313 (MB) of 2009 wherein as an interim measure, the operation of the order dated 11.02.2009 passed by the Corporation was stayed and the Corporation was directed to resume the supply to the appellant, however, subsequently, by means of order dated 12.05.2009, the aforesaid writ petition No. 15313 (MB) of 2009 was dismissed on the ground that the Distributorship Agreement contained an arbitration clause and the parties were relegated to the said Forum. The appellant though assailed the said order of dismissal of the writ petition before the Apex Court, however, the aforesaid SLP met the same fate.
The appellant though assailed the said order of dismissal of the writ petition before the Apex Court, however, the aforesaid SLP met the same fate. Thereafter the appellant submitted itself to the jurisdiction of the sole Arbitrator. 22. In the meantime, it is submitted, that the respondent had also issued a notice of recovery for a sum of Rs.13, 86,241/- after adjusting the sum which was lying with the respondent-corporation to the credit of the appellant, but this aspect has been settled between the parties and it stands closed. 23. The crux of the submission of the learned counsel for the appellant is that from the entire correspondence a fact which is evident is that the appellant never intended to serve a letter terminating the agreement in terms of Clause 28 which is the only clause which confers a right on either of the parties to terminate the Distributorship Agreement. It has been emphasized that the correspondence exchanged between the parties clearly indicated that the appellant was intending to resign. The termination and resignation are two separate facets and it could not be interchanged. The termination can be in terms of Clause 28 whereas the resignation is merely one sided/unilateral decision and that is to be treated and processed separately. 24. It has also been urged that after the proceedings were decided by the Arbitrator so also by the District Judge, Lucknow but during the pendency of the aforesaid appeals, the appellant has moved an application under Order 41 Rule 27 C.P.C. to bring on record the copy of the Marketing Discipline Guidelines (hereinafter referred to as ‘MDG’) and drawing the attention to the said document, it is submitted that the said MDG is universally applicable to all Oil Corporations. In the said MDG there is a termination procedure which provides that the termination can occurr (i) either upon violation of the terms of the LPG Distributorship Agreement under the MDG ; (ii) resignation by the distributor ; (iii) death of a partner of proprietary. 25.
In the said MDG there is a termination procedure which provides that the termination can occurr (i) either upon violation of the terms of the LPG Distributorship Agreement under the MDG ; (ii) resignation by the distributor ; (iii) death of a partner of proprietary. 25. It has further been urged that in so far as the manner in which the resignation is to be processed and treated, it is provided under Clause 4.3.2 and more particularly Clause 4.3.4 which states that the approving authority for an issue of resignation, as per Limits of Manual of Authority (hereinafter referred to as “LAM”), for SC/ST Distributorship is on the Director Marketing whereas in the instant case, the letter turning down the request of the appellant to withdrawn its resignation has been issued by the Territory Manager of the respondent Corporation, hence, the said order is wholly without jurisdiction as has been issued by the Authority which had no authority at all. It is a a clear case of overstepping of jurisdiction so conferred, consequently, the order is per-se bad in law and could not be given effect to. Accordingly the Arbitrator has failed to take note of the aforesaid aspect and the decision dated 01.01.2013 passed on the petition. filed under Section 34 also stands vitiated, hence, the appeal deserves to be allowed after setting aside the impugned order of the District Judge as well as he award passed by the Arbitrator dated 08.02.2012 in so far as it rejected the claim of the appellant. 26. Sri M.E. Khan, learned counsel for the respondent-corporation has refuted the aforesaid submissions and has drawn the attention of the Court stating that, in so far as, the distributorship agreement is concerned, there is a Clause 28 which provides for the termination procedure. It has been submitted that right from the correspondence initiated at the behest of the appellant which started with the SMS dated 24.11.2008 followed by a letter dated 12.01.2009, it clearly indicated the intention of the appellant that it wanted to close the distributorship.
It has been submitted that right from the correspondence initiated at the behest of the appellant which started with the SMS dated 24.11.2008 followed by a letter dated 12.01.2009, it clearly indicated the intention of the appellant that it wanted to close the distributorship. It has also been urged that once the decision was taken by the appellant; the respondent corporation merely accepted the same and reminded the appellant of the obligation conferred on the appellant, in terms of Clause 28 that it would continue to act and provide the services for 30 days and in the meantime the Corporation would make alternate arrangements and also settle the accounts. 27. Thus, the moment the said communication was made by the respondent-corporation vide its letter dated 13.01.2009 and duly conveyed to the appellant, the process of termination stood completed and as per the agreed procedure the appellant was merely working for the 30 days period as envisaged in the agreement and there was no question of permitting the appellant to withdraw its decision on 11.02.2009. 28. The respondent-corporation had conveyed its acceptance subject to Clause 28 of the Agreement and this decision at the behest of the appellant after 13.01.2009 was irrevocable. Accordingly, just two days prior to end of the 30 days period, the appellant sent a letter dated 11.02.2009, which in the aforesaid circumstances was turned down and it could not be accepted, as the decision had already been taken. 29. It is further urged that it is incorrect to state that termination and resignation are two separate facets. It has been urged by the counsel for the Corporation that the termination procedure has been contemplated and incorporated in the contract of the distributorship which was initially for a period of 10 years and thereafter was renewed every five years. It has been submitted that the said distributorship agreement was last renewed w.e.f. 23.02.2004 for a period of 5 years which expired on 22.02.2009 and thereafter no agreement was ever renewed or extended. 30. It is thus submitted that in any case, the term of the agreement in question expired on 22.02.2009 whereas in terms of the correspondence exchanged between the parties, the distributorship agreement finally came to an end on 1.02.2009.
30. It is thus submitted that in any case, the term of the agreement in question expired on 22.02.2009 whereas in terms of the correspondence exchanged between the parties, the distributorship agreement finally came to an end on 1.02.2009. In the aforesaid circumstances, the agreement was terminable in nature and such agreement in terms of Section 14 of the Specific Relief Act, 1963 cannot be specifically enforced. It has also been urged that the appellants have not filed any claim for damages rather by seeking a stay against the letter dated 11.02.2009 in effect the appellant was seeking enforcement of the distributorship agreement which had expired and it was not permissible in law to infuse life in a dead agreement. 31. The learned counsel for the respondent corporation further submits that even the reliance placed by the appellant on the MDG is misplaced for the reason that the said document was never brought on record before either the Arbitrator or the District Judge. The same has been brought on record for the first time in appeal and that too the said document does not actually relate to the instant Oil Corporation i.e. BPCL rather the same is in respect of the Hindustan Petroleum. 32. The learned counsel for the respondent corporation has submitted that the MDG cannot override the Distributorship Agreement, coupled with the fact that the aforesaid guidelines are to be read in context with Annexure No. 1 which relates to the established major irregularity. The punishment as proposed for the first time offence, second time and third time. It takes note of the such offences and moreover, the said guidelines brought on record do not relate to the respondent-corporation but to Hindustan Petroleum Ltd. 33. The learned counsel for the respondent-corporation in support of his submissions has relied upon the decision of the Apex Court in Indian Oil Corporation Ltd. Vs. Amritsar Gas Service and others reported in 1991 (1) SCC 533 , Bharat Petroleum Corporation Ltd. Vs. M/s Khaybar Transport Pvt. Ltd., a decision of a coordinate Bench of this Court reported in AIR 2011 Allahabad 131. 34.
Amritsar Gas Service and others reported in 1991 (1) SCC 533 , Bharat Petroleum Corporation Ltd. Vs. M/s Khaybar Transport Pvt. Ltd., a decision of a coordinate Bench of this Court reported in AIR 2011 Allahabad 131. 34. It is lastly submitted that neither there is any error apparent of the face of record nor there is any illegality in the award or the decision rendered by the District Judge and it is now well settled that where the Arbitrator has taken a view which is based on the material on record, it is not open for the Court to act as an Appellate Authority and substitute its own finding and for the said reason neither the award nor the decision of the District Judge under Section 34 of the Act of 1996 can be interfered with and for the aforesaid reasons the other appeal arising out of dismissal of the application under Section 9 also cannot be allowed, hence, both the appeals are liable to be dismissed. 35. The Court has considered the rival submissions and has perused the material available on record. Apparently, the thrust of the submission of the learned counsel for the appellant is that resignation and termination is to be treated separately. The other limb of the submission is that the resignation relating to the SC/ST Distributorship is to be processed and only handled by the Director Marketing as per the MDG and since in the instant case, it has been done by the Territory Manager of the respondent-corporation thus, the order is bad in the eyes of law. 36. From the perusal of the record, it would indicate that the Arbitrator while dealing with the aforesaid issue has dealt with the same while dealing with issue no. (a) to (e) and after noticing the relevant contents and the material available before it including the Clause 28 of the Agreement, it recorded a finding that the Distributorship Agreement in Clause 28 gave a right to either of the parties to terminate the agreement without assigning any reason. The only provision is that such notice to terminate the agreement would continue for a period of 30 days to enable the parties to make alternate arrangements. 37.
The only provision is that such notice to terminate the agreement would continue for a period of 30 days to enable the parties to make alternate arrangements. 37. The Arbitrator noticing the fact that the appellant had sent the SMS dated 24.11.2008 clearly expressing its intention to close the distributorship permanently followed by a formal letter dated 12.01.2009 clearly stating that in terms of Clause 28, the appellant was required to continue for a period of 30 days. In the meantime necessary arrangements would be made, thus, it was not open for the appellant to withdraw the alleged resignation merely two days before the 30 days period was to end. The said view has been accepted by the District Judge while dismissing the petition under Section 34 of the Act of 1996. 38. Apparently, what this Court finds is that Clause 28 of the Distributorship Agreement is very clear and it vests discretion on both the parties to terminate the agreement subject to the conditions that the agreement would continue for a period of 30 days after serving the notice of termination. In the instant case, both in the SMS as well as the letter dated 12.01.2009, the appellant has clearly expressed its intention to close the distributorship permanently. Merely by using the word resignation, it would not indicate that the appellant intended to resign which was conditional and subject to the acceptance of the Corporation as there is no material on record that the appellant had made such conditional offer to resign/terminate in his SMS and letter dated 12.01.2009. 39. It will be relevant to notice the meaning of the word resignation as well as termination as mentioned in Black’s Law Dictionary (Ninth Edition) and is being reproduced hereinafter. "terminate, vb. 1. To put an end to; to bring to an end. 2. To end; to conclude. termination, n. (15c) 1. The act of ending something; EXTINGUISHMENT < termination of the partnership by winding up its affairs>. termination of conditional contract. The act of putting an end to all unperformed portions of a conditional contract. [Cases: Contracts--249]. termination of employment. The complete severance of an employer-employee relationship. [Cases: Labor and Employment< 40 (2), 825.] 2. The end of something in time or existence; conclusion or discontinuance< the insurance policy's termination left the doctor without liability coverage>.- terminate, vb.-terminable, adj." .............*****.............***** Resignation, n. (14c) 1.
[Cases: Contracts--249]. termination of employment. The complete severance of an employer-employee relationship. [Cases: Labor and Employment< 40 (2), 825.] 2. The end of something in time or existence; conclusion or discontinuance< the insurance policy's termination left the doctor without liability coverage>.- terminate, vb.-terminable, adj." .............*****.............***** Resignation, n. (14c) 1. The act or an instance of surrendering or relinquishing an office, right, or claim. [Cases: Officers and Public Employees --62.] 2. A Formal notification of relinquishing an office or position. 3. Hist. The surrender to the lord of the vassal's interest in land.- resign,vb. 40. So also the word termination and resignation have been defined in the Law Lexicon By P. Ramanatha Aiyar's is also being reproduced hereinafter : "Termination. Termination puts an end to a contract without putting an end to whatever rights and liabilities have already accrued. Compare with rescission. (Hire-purchase). There is no distinction between termination of services in accordance with contract and termination in accordance with the service rules. A person employed on temporary basis whose services can be dispensed with one month's notice would not attract Article 311. If the Civil Servant fails to make use of the opportunities provided to him and does not exhibit his ability, the termination of services in accordance with service rules does not amount to dismissal or removal from service under Article 311 of the constitution. [Hartwell Prescott Singh v. U.P. Government, AIR 1957 SC 886 ] The voluntary 'resignation' from the service by the principal of the college does not amount to 'termination' of service.[Dayanand Arya Kanya Degree College v. Director of Higher Education, (1998) 4 SCC 104 , para 3; AIR 1998 SC 991 ] [U.P. State Universities Act (10 of 1973), S. 35 (3). The expression 'termination' contained in the oder of delegation is used in the limited sense of simple contractual termination and not termination by way of removal or dismissal as penalty or punishment for misconduct. Devaraj Urs v. The General Manager, Mysore State Road Transport Corporation, Bangalore, AIR 1971 Mys 99, 106". Resignation. A resignation of an office, to be complete, implies the consent of the incumbent. "Resignation" implies that the person resigning has been elected into the office he resigns. One cannot resign that which he is not entitled to, and which he has no right to occupy. Only the acceptance of a resignation makes an office vacant and the resignation.
Resignation. A resignation of an office, to be complete, implies the consent of the incumbent. "Resignation" implies that the person resigning has been elected into the office he resigns. One cannot resign that which he is not entitled to, and which he has no right to occupy. Only the acceptance of a resignation makes an office vacant and the resignation. This applies to the case of an Honorary Magistrate also. AIR 1924 Mad 395. 41. The striking similarity in the meaning as noticed above would indicate that both resignation and termination are expressions used to convey the giving up of any office or privilege, however, the connotations is clear that it is generally associated with an occurrence where a person holding an office resigns or intends to terminate or give up an office of privilege. 42. Be that as it may, the fact remains that the distributorship agreement entered between the parties, initially, was for a period of 10 years commencing in the year 1983 and thereafter it was renewed for a period of 5 years at a time. Admittedly, the last renewal took place in the month of February, 2004 which came to an end on 22.02.009. 43. From the plain reading of the agreement entered between the parties which vested the rights on either of the party to terminate the contract in terms of Clause 28. Such powers in terms of Clause 28 and as referred to in the agreement, is determinable. 44. Any agreement which is determinable in nature in terms of Section 14 of the Specific Relief Act, cannot be specifically enforced. For the ease of the reference, Section 14 of the Specific Relief Act, 1963 reads as under:- "14. Contracts not specifically enforceable.—The following contracts cannot be specifically enforced, namely:— (a) where a party to the contract has obtained substituted performance of contract in accordance with the provisions of section 20; (b) a contract, the performance of which involves the performance of a continuous duty which the court cannot supervise; (c) a contract which is so dependent on the personal qualifications of the parties that the court cannot enforce specific performance of its material terms; and (d) a contract which is in its nature determinable." 45.
The Apex Court in the case of Amritsar Gas Service (Supra) had the occasion to consider the provisions of Section 14 of the Specific Relief Act and the nature of the contract whether it was determinable or not and after considering the same in paragraphs 12, 14 and 15 of the said report, it held that the distributorship agreement being revocable, admittedly would automatically attract Section 14 of the Specific Relief Act and this being so no relief of granting the restoration of the distributorship can be granted. It further held that even if at all there is any breach which may have been committed by the Corporation even then it could not be done. The relevant portion of the said report is being reproduced hereinafter for ready reference : "...12. The arbitrator recorded finding on Issue No. 1 that termination of distributorship by the appellant-Corporation was not validly made under clause 27. Thereafter, he proceeded to record the finding on Issue No. 2 relating to grant of relief and held that the plaintiff-respondent 1 was entitled to compensation flowing from the breach of contract till the breach was remedied by restoration of distributorship. Restoration of distributorship was granted in view of the peculiar facts of the case on the basis of which it was treated to be an exceptional case for the reasons given. The reasons given state that the Distributorship Agreement was for an indefinite period till terminated in accordance with the terms of the agreement and, therefore, the plaintiff-respondent 1 was entitled to continuance of the distributorship till it was terminated in accordance with the agreed terms. The award further says as under: “This award will, however, not fetter the right of the defendant Corporation to terminate the distributorship of the plaintiff in accordance with the terms of the agreement dated April 1, 1976, if and when an occasion arises.” This finding read along with the reasons given in the award clearly accepts that the distributorship could be terminated in accordance with the terms of the agreement dated April 1, 1976, which contains the aforesaid clauses 27 and 28. Having said so in the award itself, it is obvious that the arbitrator held the distributorship to be revokable in accordance with clauses 27 and 28 of the agreement.
Having said so in the award itself, it is obvious that the arbitrator held the distributorship to be revokable in accordance with clauses 27 and 28 of the agreement. It is in this sense that the award describes the Distributorship Agreement as one for an indefinite period, that is, till terminated in accordance with clauses 27 and 28. The finding in the award being that the Distributorship Agreement was revokable and the same being admittedly for rendering personal service, the relevant provisions of the Specific Relief Act were automatically attracted. Sub-section (1) of Section 14 of the Specific Relief Act specifies the contracts which cannot be specifically enforced, one of which is ‘a contract which is in its nature determinable’. In the present case, it is not necessary to refer to the other clauses of sub-section (1) of Section 14, which also may be attracted in the present case since clause (c) clearly applies on the finding read with reasons given in the award itself that the contract by its nature is determinable. This being so granting the relief of restoration of the distributorship even on the finding that the breach was committed by the appellant-Corporation is contrary to the mandate in Section 14(1) of the Specific Relief Act and there is an error of law apparent on the face of the award which is stated to be made according to ‘the law governing such cases’. The grant of this relief in the award cannot, therefore, be sustained. 14. The question now is of the relief which could be granted by the arbitrator on its finding that termination of the distributorship was not validly made under clause 27 of the agreement. No doubt, the notice of termination of distributorship dated March 11, 1983 specified the several acts of the distributor on which the termination was based and there were complaints to that effect made against the distributor which had the effect of prejudicing the reputation of the appellant-Corporation; and such acts would permit exercise of the right of termination of distributorship under clause 27. However, the arbitrator having held that clause 27 was not available to the appellant-Corporation, the question of grant of relief on that finding has to proceed on that basis.
However, the arbitrator having held that clause 27 was not available to the appellant-Corporation, the question of grant of relief on that finding has to proceed on that basis. In such a situation, the agreement being revokable by either party in accordance with clause 28 by giving 30 days' notice, the only relief which could be granted was the award of compensation for the period of notice, that is, 30 days. The plaintiff-respondent 1 is, therefore, entitled to compensation being the loss of earnings for the notice period of 30 days instead of restoration of the distributorship. The award has, therefore, to be modified accordingly. The compensation for 30 days notice period from March 11, 1983 is to be calculated on the basis of earnings during that period disclosed from the records of the Indian Oil Corporation Ltd. 15. The appellant's grievance regarding non-consideration of its counter-claim for the reason given in the award does appear to have some merit. In view of the fact that reference to arbitrator was made by this Court in an appeal arising out of refusal to stay the suit under Section 34 of the Arbitration Act and the reference was made of all disputes between the parties in the suit, the occasion to make a counter-claim in the written statement could arise only after the order of reference. The pleadings of the parties were filed before the arbitrator, and the reference covered all disputes between the parties in the suit. Accordingly, the counter-claim could not be made at any earlier stage. Refusal to consider the counter-claim for the only reason given in the award does, therefore, disclose an error of law apparent on the face of the award. However, in the present case, the counter-claim not being pressed at this stage by learned counsel for the appellant, it is unnecessary to examine this matter any further." 46. Similarly, this Court in the case of M/s Khaybar Transport Pvt. Ltd. (Supra), after noticing the dictum of Amritsar Gas Service (Supra), in paragraph 19 of the report held as under:- ".....19. The above provision in effect provides that a contract which is terminable in any event at the option of the parties cannot be enforced through a Court. It is not disputed that the agreement in question dated 15.12.2005 under its terms and conditions is revokable.
The above provision in effect provides that a contract which is terminable in any event at the option of the parties cannot be enforced through a Court. It is not disputed that the agreement in question dated 15.12.2005 under its terms and conditions is revokable. Moreover, the said contract was in the nature of a licence which is always revokable as licencee has no right or any interest and the license is simply a permission and the person granting the permission has every right to revoke the permission so granted. Therefore, in such cases of revokation of permission the only remedy available is to sue for damges and not for the enforcement of the licence or the contract." 47. The learned counsel for the appellant could not dispute the fact that the agreement was terminable in nature. He also could not dispute the fact that the agreement which was last renewed in the year 2004 died its natural death in the year 2009. The question thus is whether what cannot be done directly can it be done indirectly? 48. Apparently, the answer to the aforesaid issue is in the negative. The record indicates that both SMS as well as the letter dated 12.01.2009 clearly conveyed the intention of the appellant to bring to an end the distributorship agreement permanently which is nothing but a facet of termination. In terms of the agreement, the termination mode is provided in Clause 28. The respondent-corporation acting upon the letter of the appellant dated 12.01.2009 immediately conveyed its decision on 13.01.2009. 49. This letter clearly established the fact that the respondent-corporation had accepted the resignation/termination of the appellant, however, it reminded the appellant of his obligations in terms of the agreement to continue for a period of 30 days. Thus, the request made by the appellant and accepted by the respondent-corporation and conveyed vide letter dated 13.01.2009 was irrevocable. 50. Even otherwise since the agreement stood terminated by efflux of time in February, 2009, hence, the relief claimed by the appellant to seek a stay on the letter dated 09.02.2009 whereby the respondent-corporation had turned down the request of the appellant to re-consider it decision of termination is nothing but an indirect attempt to enforce the agreement which is determinable in nature and is hit by Section 14 (1) of the Specific Relief Act. 51.
51. It will also be relevant to notice that in light of what has been discussed above, even if at all the MDG is noticed, it would be found that taking the same on record shall not serve any purpose, hence, neither there has been any explanation as to why the aforesaid MDG was not brought before the Arbitrator or before the District Judge and this Court is of the opinion that it does not require the said document to give an effective judgment as the view taken by the two Authorities i.e. the Arbitrator and the District Judge and their reasoning cannot be faulted, hence, the application under Order 41 Rule 27 C.P.C. shall stand dismissed. 52. Suffice to submit that in light of the aforesaid detailed discussions, the prayer of the appellant seeking interim measure under Section 9 is also not tenable since the interim measure cannot be of such a nature which amounts to granting of final relief which in the facts of the case cannot be given and rather has been refused. The said appeal bearing No. 50 of 2013 having been filed against the dismissal of the petition under Section 9 for the reasons mentioned above suffers from no error to persuade this Court to interfere. 53. At this stage, it will also be relevant to notice the decision of the Apex Court in the case of MMTC Ltd. Vs. Vedanta Ltd. reported in 2019 (4) SCC 163 wherein the scope of Section 37 as well as Section 34 of the Arbitration and Conciliation Act, 1996 has been considered and the relevant portion reads as under:- ".......11. As far as Section 34 is concerned, the position is well-settled by now that the Court does not sit in appeal over the arbitral award and may interfere on merits on the limited ground provided under Section 34(2)(b)(ii) i.e. if the award is against the public policy of India. As per the legal position clarified through decisions of this Court prior to the amendments to the 1996 Act in 2015, a violation of Indian public policy, in turn, includes a violation of the fundamental policy of Indian law, a violation of the interest of India, conflict with justice or morality, and the existence of patent illegality in the arbitral award.
Additionally, the concept of the “fundamental policy of Indian law” would cover compliance with statutes and judicial precedents, adopting a judicial approach, compliance with the principles of natural justice, and Wednesbury [Associated Provincial Picture Houses v. Wednesbury Corpn., (1948) 1 KB 223 (CA)] reasonableness. Furthermore, “patent illegality” itself has been held to mean contravention of the substantive law of India, contravention of the 1996 Act, and contravention of the terms of the contract. 12. It is only if one of these conditions is met that the Court may interfere with an arbitral award in terms of Section 34(2)(b)(ii), but such interference does not entail a review of the merits of the dispute, and is limited to situations where the findings of the arbitrator are arbitrary, capricious or perverse, or when the conscience of the Court is shocked, or when the illegality is not trivial but goes to the root of the matter. An arbitral award may not be interfered with if the view taken by the arbitrator is a possible view based on facts. (See Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204. Also see ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705 ; Hindustan Zinc Ltd. v. Friends Coal Carbonisation, (2006) 4 SCC 445 ; and McDermott International Inc. v. Burn Standard Co. Ltd. (2006) 11 SCC 181 ) 13. It is relevant to note that after the 2015 Amendment to Section 34, the above position stands somewhat modified. Pursuant to the insertion of Explanation 1 to Section 34(2), the scope of contravention of Indian public policy has been modified to the extent that it now means fraud or corruption in the making of the award, violation of Section 75 or Section 81 of the Act, contravention of the fundamental policy of Indian law, and conflict with the most basic notions of justice or morality. Additionally, sub-section (2-A) has been inserted in Section 34, which provides that in case of domestic arbitrations, violation of Indian public policy also includes patent illegality appearing on the face of the award. The proviso to the same states that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence. 14.
The proviso to the same states that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence. 14. As far as interference with an order made under Section 34, as per Section 37, is concerned, it cannot be disputed that such interference under Section 37 cannot travel beyond the restrictions laid down under Section 34. In other words, the court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the court under Section 34 has not exceeded the scope of the provision. Thus, it is evident that in case an arbitral award has been confirmed by the court under Section 34 and by the court in an appeal under Section 37, this Court must be extremely cautious and slow to disturb such concurrent findings. 54. Thus, in view of the aforesaid detailed discussions, this Court is of the view that there is no error apparent committed by the Arbitrator or the District Judge nor the view taken by two is such that may be considered to be perverse, accordingly, this Court finds that there is no merit in both the appeals, consequently, both the appeals are dismissed. In the facts and circumstances, there shall be no order as to costs.