Bharat Petroleum Corporation Ltd. @APPELLANT@Hash M/S P.C. Jat & Brothers

The present appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to Arbitration Act) has been filed by the

appellants, laying challenge to the order dated 18.03.2015, passed by learned Additional District & Sessions Judge No.6, Jodhpur (hereinafter referred

to as the ‘court below’) whereby the appellants’ application under Section 34 of the Act, 1996 had been rejected.

The facts in brief leading the appellants to prefer the present appeal under Section 37 of the Act of 1996 are that an agreement was executed

between the appellant â€" Corporation and respondent being agreement No. NR/POL/BULK/20052008/RAJ/SALAWAS dated 27.07.2005 for

transportation of petroleum products through vehicle bearing No.RJ-19-G-5189. The appellant â€" Corporation under apprehension of adulteration by

the respondent got inspection done by SGS Company (an outsource company to whom the inspection work had been assigned by the appellant â€

Corporation). During the checking, it was found that the respondent had adulterated the HSD available at the outlet. The requisite samples were

drawn from the outlet and the same were sent for confirmation to designated laboratory at Jaipur. After receipt of the report and due enquiry, the

Corporation found that the respondent had adulterated the product during its transportation. Such being the situation, the appellant terminated the

transportation contract and blacklisted the respondent.

Being aggrieved with the termination of the contract and blacklisting, the respondent filed an application under Section 11 of the Arbitration Act, 1996,

seeking securing appointment of the Arbitrator for resolution of dispute. Mr. SR Bhansali, retired District and Sessions Judge came to be appointed as

an Arbitrator by this Court, vide its order dated 13.07.2011.

In furtherance of the appointment so made, sole Arbitrator entered into reference and commenced the proceedings by issuing notice to the claimant

and the respondent. After service of the notice, the claimant filed its claim on 28.12.2011, whereas the appellant â€" Corporation appeared before the

Arbitrator on 14.01.2012, and sought an adjournment stating that a review petition has been filed against the order dated 13.07.2011 and the same is

pending consideration before the High Court.

In view of such request, learned Arbitrator adjourned the hearing. Thereafter again, the proceedings were recommenced and a notice was issued by

the sole Arbitrator on 29.09.2012, calling upon appellant to appear on 13.10.2012 and produce copy of an interim order, if passed by the High Court.

On 13.10.2012, Officers of the Corporation appeared and again prayed for adjournment till 25.11.2012 to file reply. However, no interim order was

produced by the appellant. Learned Arbitrator still deferred the hearing for 02.12.2012.

On such date, again the appellant requested for adjournment and the request was acceded to. However, learned Arbitrator decided to draw the ex-

parte proceedings against the Corporation, as neither any reply to the claim was filed nor any order of the High Court on the said review application

was produced.

Despite passing the ex-parte proceedings, the Arbitrator permitted the appellant â€" Corporation to observe the proceedings without taking any active

part therein.

As the appellants had neither filed any reply nor had they filed any document, the Arbitrator had no other option but to pass an award relying upon the

averments and assertions made by the claimant. Finally, an award dated 22.12.2012 came to be passed by the sole Arbitrator, awarding a sum of

Rs.8,63,142/- along with the interest @ 9% per annum from the date it became due till the date of it realization.

The appellant â€" Corporation instead of filing any application for setting aside ex-parte proceedings or resorting to any other appropriate proceedings,

filed an application under Section 34 of the Arbitration and Consideration Act, 1996, seeking setting aside of the award dated 22.12.2012 passed by the

learned Arbitrator. The application filed by the appellant â€" Corporation came to be rejected by the learned court below vide order dated 18.03.2015,

as the appellant had failed to satisfy as to how the award in question falls within parameters of conditions/situations enumerated in Section 34 of the

Act, for which it could be set aside. It would not be out of place to reproduce relevant part of the order passed by the learned court below :-

“bl izdkj mijksDr dkuwuh ,oa rF;kRed ifjizs{; esa e/;LFke dh fu;qfDr gksus dk vkSj e/;LFke }kjk izkFkhZx.k Hkkjr isVªksfy;e dkWjiksjsâ€ku

fyfeVsM dks uksfVl fn;s tkus esa muds }kjk gkftj gksus dk vkSj gkftj gksuk fufoZokn gS vkSj mlds ckn tokc isâ€k djus ls fdlh vleFkZrk ls xzflr gks ;k

ikfjr fd;k x;k vokMZ yksduhfr ds fo:} gks ;k vokMZ fdlh diV] Hkz’Vkpkj ;k vU;Fk izHkkfor fd;k x;k gks ;k e/;LFke }kjk viukbZ xbZ izfdz;k vkSj

e/;LFke }kjk fn;s x;s dkj.k ;qfDr;qDr rdZlaxr u gks] dksbZ lk{; ugha gS vkSj tc rd e/;LFke dk;Zokgh dks e/;LFke ,oa lqyg vf/kfu;e 1996 dh /kkjk 34 dh

Li’V vogsyuk ugha gksrh gS] ogka ikfjr fd;s x;s vokMZ esa dksbZ gLr{ksi dk vk/kkj ugha curk gS vkSj ekStwnk izdj.k esa Hkh mijksDr foospu ls

Li’V gS fd ekuuh; lksy vkchZVªsVj Jh ,l-vkjHkalkyh }kjk ikfjr vokMZ fnukad 22-12-2012 esa gLr{ksi dk dksbZ vk/kkj ugha gS vkSj izkFkhZx.k

}kjk izLrqr izkFkZuk Ik= [kkfjt fd;s tkus ;ksX; gSAâ€​

Mr. Sunil Beniwal, learned counsel for the appellant laying challenge to the impugned order dated 18.03.2015, whereby the Corporation’s

application under Section 34 of the Act has been rejected submitted that the sole Arbitrator has committed an error of law and of procedure in

drawing ex-parte proceedings and the court below has erred in rejecting the Corporation’s application, seeking setting aside of the arbitral award.

He further submitted that the Arbitrator has accepted assertion and version of the claimant as a gospel truth and has not applied his mind, while

passing the award under challenge.

I have considered submissions made by learned counsel for the appellant and perused the material available on record.

A perusal of the record reveals that the sole Arbitrator had drawn ex-parte proceedings on 02.12.2012, which order has not been challenged by the

appellant before any forum or court. Even during the course of arguing the application under Section 34 of the Act, 1996, no argument seem to have

been advanced qua order dated 02.12.2012, vide which ex-parte proceedings were drawn.

After drawing the ex-parte proceedings, the Corporation failed to take up any proceedings for setting aside of such proceedings. On the contrary, the

appellant allowed the proceedings to continue and observed them as silent spectator. Faced with such a situation, the sole Arbitrator had no other

option but to accept the version of the claimant, duly supported by affidavit, which remained un-controverted in absence of any response or evidence

oral or documentary.

The court below after dealing with the contentions raised by the appellant has categorically observed that the appellant â€" Corporation has failed to

show as to how and on what ground the award in question is liable to set aside.

Before this Court also, Mr. Beniwal, learned counsel has miserably failed to satisfy as to how the award is against the established procedure or public

policy.

This Court does not find any illegality or infirmity in the order dated 18.03.2015 passed by the court below. The order passed by the Arbitrator does

not suffer from any inherent or apparent infirmity, for which it can be said to be against the public policy as per the guidelines given by Hon’ble

Supreme Court in case of ONGC vs. Saw Pipes Ltd., reported in AIR 2003 SC 2629.

There is no substance in the appeal. The same is dismissed accordingly.