Chaksu, Jaipur Through Its Proprietor Smt. Shashi Gothwal v. The Chief Divisional Retail Sales Manager, Indian Oil

Judgment

1. The Chief Divisional Retail Sales Manager, Indian Oil Corporation Ltd. Jaipur Division Office, 1St Floor, LIC Investment Building, Phase-II, Near Ambedkar Circle, Bhawani Singh Road, Jaipur-302005

2. The Executive Director, Indian Oil Corporation Ltd, Indian Oil Bhawan, Ashok Chowk, Adarsh Nagar, Jaipur- 302004

3. The Director, (Marketing), Indian Oil Corporation Ltd, Indian Oil Bhawan, G-9, Ali Yawar Zang Marg, Bandra (East), Mumbai-400050 ----Respondents For Petitioner(s) : Mr. Devi Dutt Sharma For Respondent(s)

Order 08/05/2025

1. The instant arbitration application under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act of 1996”) has been filed by the applicant for appointment of an arbitrator to resolve the dispute between the parties arising out of the agreement dated 19.04.2011, which contains the arbitration clause reads as under:- "62. Arbitration: (a) Any dispute or difference of any nature whatsoever, any claim, cross claim, counter claim or set-off or regarding any right, liability, act, omission or account [2025:RJ-JP:19554] (2 of 8) [ARBAP-5/2024] of any of the parties hereto arising out of or in relation to this agreement shall be referred to the sole arbitration of the Director (Marketing) of the Corporation who may either himself act as the Arbitrator or nominate some other officer of the Corporation to act as the Arbitrator. The dealer will not be entitled to raise any objection to any such Arbitrator on the ground that the Arbitrator is an officer of the Corporation. (b) In the event of the Arbitrator whom the matter is originally referred being transferred, he shall be entitled to continue the arbitration proceedings notwithstanding his transfer unless Director(Marketing) at the time of such transfer or at any time thereafter, designates another person to act as Arbitrator in his place in accordance with the terms of this agreement. (c) In the event of the arbitrator, to whom the matter is originally referred vacating his office or being unable or refusing to act for any reason, the Director(Marketing) at the time of vacation of office or inability or refusal to act, shall designate another person to act as Arbitrator in accordance with the terms of this agreement. (d) The arbitrator newly nominated by the Director (Marketing) under clause (b) or under clause (c) above, shall be entitled to proceed with the reference from the point at which it was left by his predecessor. (e) It is an express term of this contract that no person other than the Director(Marketing) or a person nominated by such Director (Marketing) or a person nominatee by such director(Marketing) or a person nominated by such director(Marketing) of the Corporation as aforesaid shall act as Arbitrator hereunder. If for any reason, Director (Marketing) is unable or unwilling or refuses or fails to act as [2025:RJ-JP:19554] (3 of 8) [ARBAP-5/2024] Arbitrator or nominate an Arbitrator then the matter shall not be referred to arbitration at all. (f) The award of the arbitrator so appointed shall be final conclusive and binding on all parties to the agreement subject to the provisions of the Arbitration Act, 1940 or any statutory modification or re- enactment thereof and the rules made there under for the time being in force shall apply to the arbitration proceedings under this clause. (g) The award shall be made in writing and published by the arbitrator within two years after entering upon the reference or within such extended time not exceeding one further year as the parties shall be writing agree. The parties hereto shall be deemed to have irrevocably given their consent to the Arbitrator to make and publish the award within the period referred to hereinabove and shall not be entitled to raise any objection or protest thereto under any circumstances whatsoever. (h) The arbitrator shall have power to order and direct either of the parties to abide by, observe and perform all such directions as the arbitrator may think fit having regard to the matters in difference i.e. dispute before him. The arbitrator shall have all summary powers and may take such evidence oral and/or documentary as the arbitrator in his absolute discretion think fit, and shall be entitled to exercise all powers under the Indian Arbitration Act, 1940 including admission of any affidavit as evidence concerning the matter in difference i.e. dispute before him. (i) It is hereby expressly that the powers of the Arbitrator nominated in the matter hereinabove mentioned shall include the power to make interim order/orders, as the circumstances of the case may justify, to point a receiver, commissioner or custodian by whatever name called to take possession of the [2025:RJ-JP:19554] (4 of 8) [ARBAP-5/2024] property in dispute during the pendency of the proceedings and subject to such final order as may be passed by the Arbitrator and shall also have the power to issue such further orders from time to time as he may deem fit, on an application being made to him by any of the parties to the dispute where it is apprehended that the property to which it is apprehended that the property to which it relates is in danger of being wasted, damaged, deteriorated or parted with or rights of other third parties are likely to be created thereon. (j) The parties against whom the arbitration proceedings have been initiated, that is to say, the Respondents in the proceedings shall be entitled to prefer a cross-claim, counter claim or set off before the arbitrator in respect of any matter in issue arising out of or in relation to the agreement without seeking a formal reference of arbitration Director(Marketing) for such counter claim, cross claim or set off and the arbitrator shall be entitled to consider and deal with the same as if the matters arising there from have been referred to him originally and deemed to form part of the reference made by the Director (Marketing). (k) The Arbitrator shall be at liberty to appoint, if necessary, accountant or engineer or other technical person to assist him and to act on the opinion taken from such person. (l) The arbitrator shall have power to make one or more award whether interim or otherwise in respect of the dispute and difference and in particular, will be entitled to make separate awards in respect of claims or cross claims of the parties. (m) The arbitrator shall be entitled to direct anyone of the parties to pay the cost of the other party in such manner and to such extent as the Arbitrator may in his [2025:RJ-JP:19554] (5 of 8) [ARBAP-5/2024] discretion determine and shall also be entitled to required one or both the parties to deposit funds in such proportion to meet the Arbitrator's fees and expenses as and when called upon to do so."

2. Learned counsel for the applicant submits that on earlier occasion also for settlement of dispute arising between the parties, the applicant approached this Court by way of filing S.B. Arbitration Application No.93/2021, but the same was rejected by this Court vide order dated 12.05.2022 and at the relevant time, the Court was of the view that merely because of issuance of show cause notice, it could not be said that a dispute has arisen between the parties so as to refer the same to the Arbitrator and on this technical count alone the said application was rejected.

3. Learned counsel for the applicant submits that subsequent to the above order passed by this Court, the respondents terminated the dealership of the applicant vide order dated 28.06.2023 against which an appeal was preferred before the Appellate Authority, however the same was also rejected vide order dated

03.11.2023. Learned counsel submits that after rejection of the aforesaid appeal, the applicant served a notice to the respondents for referring the matter to the Arbitrator for settlement of dispute between the parties, but when no arbitrator was appointed by the respondents, he has approached this Court by way of filing this writ petition, hence, appropriate orders be passed by way of appointing an independent arbitrator to settle the dispute between the parties.

4. Per contra, learned counsel for the respondents opposes the arguments raised by learned counsel for the applicant and submits that once the dealership of the applicant has been terminated vide [2025:RJ-JP:19554] (6 of 8) [ARBAP-5/2024] order dated 28.06.2023 and appeal against the said order has also been rejected by the Appellate Authority, then under such circumstances, the applicant cannot approach this Court by way of filing an application for appointment of arbitrator for settlement of dispute. Learned counsel submits that the arbitrator has no power to restore the dealership of the petitioner, which has been terminated by the respondents.

5. In support of his submissions, learned counsel for the respondents has placed reliance upon the judgment passed by the Hon’ble Apex Court in the case of Indian Oil Corporation Ltd. Vs. Amritsar Gas Service and Ors. reported in 1991 (1) SCC 533, hence under these circumstances, the arbitration application is liable to be rejected.

6. Heard and considered the submissions made at Bar and perused the material available on the record.

7. Execution of dealership agreement dated 19.04.2011 between the parties is an admitted fact wherein the parties have agreed to settle their dispute by way of arbitration. Perusal of record indicates that the dispute has arisen between the parties which has not been resolved and in the meantime, the dealership of the applicant has been cancelled by the respondents vide order dated 28.06.2023 and appeal against the same has also been rejected. The issue of termination of dealership and the order passed by the Appellate Authority is not under challenge before this Court, but the dispute between the parties revolves around with regard to the claim raised by the applicant, which is required to be adjudicated by way of appointment of an arbitrator. [2025:RJ-JP:19554] (7 of 8) [ARBAP-5/2024]

8. The judgment relied upon by the counsel for the respondents in the case of Amritsar Gas Service (supra) is not applicable in the facts and circumstances of the case.

9. In view of the above, this Court deems it just and proper to appoint Justice Satish Kumar Sharma (Retd.), resident of 1-Rail Nagar East Bhagwan Path, Nirwan Nagar ke Pass, Jaipur (9460866266) as sole Arbitrator in the present matter to adjudicate/resolve the dispute between the parties. 10 The appointment of the Sole Arbitrator is subject of declaration being made under Section 12 of the Act of 1996 with respect to the independence and impartiality and ability to devote sufficient time to complete the arbitration proceedings within the prescribed period.

11. The arbitration fee of the Sole Arbitrator shall be payable in accordance with the provisions contained in the Manual of Procedure of Alternative Dispute Resolution, 2009 as amended by the Manual of Procedure for Alternative Dispute Resolution (Amendment), 2017 vide notification dated 23.03.2017 read with 4th Schedule appended to the Act of 1996 or as determined by the Arbitrator with consensus of parties.

12. The Registry is directed to intimate the Arbitrator-Justice Satish Kumar Sharma (Retd.), resident of 1-Rail Nagar East Bhagwan Path, Nirwan Nagar ke Pass, Jaipur for his approval and declaration in terms of Section 11(8) read with Section 12(1) of the Act of 1996.

13. All issues raised by the parties before the Arbitrator shall be considered in accordance with law. [2025:RJ-JP:19554] (8 of 8) [ARBAP-5/2024]

14. Since as per Section 29A of the Act of 1996, the arbitration proceedings are required to be concluded within the scheduled time as stipulated therein, it is expected from the parties to appear before the Arbitrator on 24.05.2025 or on any other date as informed by the Arbitrator subject to agreement by the parties. Furthermore, the parties shall provide their respective E-mail/ contact number/ mobile number and/or also of their authorized representatives/ Lawyers appearing on their behalf before the Arbitration Tribunal, in order to facilitate the Arbitrator to send information/communication to the parties, whenever required. The information send by the Arbitrator, on such address/ E-mail/ cellphone of the parties or to their authorized representatives/ Lawyers, shall be treated as sufficient communication unless same is not changed.

15. Accordingly, the present misc. application stands disposed of. Karan/197 (ANOOP KUMAR DHAND),J