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2023 DIGILAW 681 (RAJ)

Sukna Automobiles v. General Manager, Indian Oil Corporation Limited

2023-03-17

MANINDRA MOHAN SHRIVASTAVA, REKHA BORANA

body2023
ORDER : 1. Heard. 2. This appeal is directed against order dated 18.02.2021 passed by the Commercial Court by which applicant’s application under Section 34 of the Arbitration and Conciliation Act, 1996 (for short hereinafter referred to as ‘the Act of 1996’) has been rejected finding no case for interference with the award passed in favour of the respondents. 3. Upon receipt of a complaint with regard to short delivery of MS/HSD by the appellant, inspection was carried out by the respondents through its officers and representatives. During the course of the inspection, the inspecting team observed various irregularities including short delivery, integration of an addition electronic chip. Explanation of the appellant was sought and after receipt of the reply, the respondents terminated the dealership agreement. This gave rise to a dispute. On application received for referring the dispute to the Director, Marketing, IOCL as sole arbitrator as provided in Clause 62 of the dealership agreement, the dispute between the parties was referred to the sole arbitrator. The sole arbitrator passed award on 03.05.2013. The claimant’s claim was not found tenable as termination of the dealership agreement was found to be just and valid. However, the claim for the advance deposited for purchase of fuel and previous balance of Rs. 5,10,434.86/- was allowed with interest. 4. Aggrieved by the award, the appellant preferred an application under Section 34 of the Act of 1996 for setting aside the award. Learned Commercial Court, after examining various grounds, reached to a conclusion that no case for interference is made out and therefore, rejected the application vide the impugned order, giving rise to this appeal. 5. The appellant who appeared in person argued that the award passed against him is contrary to the evidence on record. It is also submitted that the findings recorded by the Arbitrator regarding violation of terms and conditions of the dealership agreement are not in conformity to the most basic notions of morality or justice and is against the fundamental policy of the Indian Law. It is the case of the appellant that the appellant could not be held liable for integration of an additional electronic chip in the dispensing unit of the petrol pump and it was only with a view to affect his reputation that mechanic of the company fitted the chip in the dispensing unit. It is the case of the appellant that the appellant could not be held liable for integration of an additional electronic chip in the dispensing unit of the petrol pump and it was only with a view to affect his reputation that mechanic of the company fitted the chip in the dispensing unit. It is also stated that on the date of inspection i.e. 09.02.2012, stock of MS/HSD was found in order and therefore, the finding recorded that less quantity of petrol was being supplied from the dispensing unit is perverse and patently illegal. It is also submitted that though specific reason was assigned as to why certificate of calibration could not be produced, finding has been recorded against the appellant. It is also submitted that the seal of the dispensing unit was found intact and therefore the finding regarding integrating an additional chip from outside in the dispensing unit is patently illegal and perverse. 6. On the other hand, officer of the respondent-Corporation present in person would submit that upon receipt of the complaint, spot inspection was carried out and the decision to terminate the dealership agreement was taken only after proper inspection and after going through material on record relating to irregular use of the petrol pump unit by adding additional chip in the dispensing unit. There is legally admissible evidence on record which has been made basis to arrive at conclusion of facts by the Arbitrator and in that view of the matter the Commercial Court rightly did not interfere with the award. 7. Upon hearing the parties and examining the material on record, particularly, the award as also the order passed by the Commercial Court, we find that the Arbitrator framed as many as three issues which are as under: “Issue No. 1: Whether the Electronic Chip found in the Dispensing Unit is an integral part of the original equipment supplied by the manufacturer? Issue No. 2: Whether in the facts and circumstance of the case the claimant is entitled to the relief claimed for in claim no. 1 and 2 i.e. Rs. 12,40,000/- and Rs. 5,10,434.86 respectively? Issue No. 3: Whether the claimant is entitled to be granted any interest over the amounts claimed for?” 8. Issue No. 2: Whether in the facts and circumstance of the case the claimant is entitled to the relief claimed for in claim no. 1 and 2 i.e. Rs. 12,40,000/- and Rs. 5,10,434.86 respectively? Issue No. 3: Whether the claimant is entitled to be granted any interest over the amounts claimed for?” 8. During the arbitration proceedings, as is reflected from the award various documents including joint inspection report dated 09.02.2012 alongwith the inspection report of Engineer of Gilbarco Veeder-Root were led in evidence. The Arbitrator recorded a finding of fact that an additional electronic cable with chip connected before sensor cable in HSD L&T (GVR) DU (S. No. GQ L&T 9239) is not standard part of dispensing unit and is an additional fitting put in place for short delivery of HSD. In order to sustain that finding, the Arbitrator took into consideration the joint inspection report as also inspection report of Engineer of Gilbarco Veeder-Root. Thus, the findings recorded by the Arbitrator are based on the evidence in the form of inspection report regarding integration of an additional electronic cable with chip in the dispensing unit. 9. Thereafter, the Arbitrator further recorded a finding that as per the terms of the agreement, the dealer is prohibited from tampering from any part of the dispensing unit in any manner. Based on such findings, the Arbitrator arrived at the conclusion that termination of the dealership agreement was just and proper. In view of that finding, the claimant’s claim of Rs. 12,40,000/- has been rejected. 10. The Arbitrator, however, finding that an amount of Rs. 5,10,434.86/- is outstanding with the Corporation is due to be returned, held that claimant is entitled to reimbursement of Rs. 5,10,434.86/- along with simple interest @8% from the date the said amount was deposited with the respondent-Corporation. 11. In view of the above findings of fact, none of the grounds mentioned in Section 34 of the Act of 1996 are made out on the basis of which, interference against the award would be permissible, this appeal being devoid of merits is hereby dismissed. 12. All the pending applications stand disposed of.