PATEL NAGAR GENERAL STORES Vs. HINDUSTAN PETROLEUM

JUDGEMENT

(1.) This is a petition under section 30 and 33 of the Arbitration Act, 1940, for setting aside the award rendered by the sole arbitrator Shri Ravinder Dhir dated July 21, 1993. The petitioner was carrying on the business of supplying liquified petroleum gas (for short 'L.P.G.')to consumers. This business was being conducted by the petitioner pursuant to an agreement dated August 1, 1986 between the respondent Hindustan Petroleum Corporation Limited and the erstwhile proprietor of the petitioner. On April 30, 1991 a show cause notice was issued to the petitioner by the respondent wherein it was pointed out that the officers of the respondent discovered on inspection a number of mulpractices being indulged in by the petitioner in a regular and systematic manner including issue of extra cylinders over and above the double bottle connections to 119 consumers and misuse of 27 vouchers of the Transfer Voucher Book. The notice called upon the petitioner to show cause within Fifteen days from the receipt thereof as to why appropriate action should not be taken against it for violating the terms and conditions of the dealership agreement dated August 1, 1986 with particular reference to Clauses II, 23(a), 27(a), (h), (i) and (n) thereof. In response to the show-cause notice, the petitioner by its letter dated May 15, 1991, while rendering its explanation, inter alia stated that it was taking immediate corrective action in regard' to the irregularities and expressed its regret for the same. it was further averred that the irregularities had occurred as a result of inadequate maintenance of record/date, lack of managerial control, and destruction of documents in a Fire incident, etc. The respondent apparently not being satisfied with the reply of the petitioner terminated the above said dealership agreement dated August 1, 1986 under clauses 23(a) and (b), 27(h), (i) and (n) thereof by its letter dated June 20, 1991. The petitioner was also directed to immediately hand over to the respondent or any person nominated by it the entire stock of L.P.G. Filled/empty cylinders/equipments and regulators that had been made available and entrusted to the petitioner during the currency of the agreement. The termination letter further stated that as per clause 31(c) of the dealership agreement dated August 1, 1986, the petitioner was liable to account for all the L.P.G. Filled/empty cylinders/equipments and regulators and all deposits and other amounts payable in respect thereof to the Corporation. The petitioner was also required to pay to the Corporation the amounts due and payable by it.

(2.) The petitioner feeling aggrieved by the termination letter Filed a suit, being Suit No. 1849/91, for permanent injunction. The respondent in that suit Filed an application under section 34 of the Arbitration Act praying inter alia that since there was an arbitration agreement between the parties the suit was liable to be stayed.

(3.) In view of the stand taken by the respondent the petitioner withdrew the suit on August 27, 1992 and requested the respondent to appoint an arbitrator in terms of clause 37 of the agreement dated August 1, 1986. Thereupon, on September 22, 1992 the Chairman of the respondent appointed its General Manager, Shri Ravinder Dhir as the sole arbitrator in the matter. The arbitrator rendered and published his award on July 21, 1993. The operative part of the award reads as under:-