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Judgment
Bhaskar Bhattacharya, J.—This mandamus-appeal is at the instance of an unsuccessful writ-petitioner and is directed against the order dated 9th June, 2006 passed by a learned Single Judge by which His Lordship refused to entertain the Writ-application on the ground of existence of an efficacious alternative remedy by way of arbitration agreement between the parties. The writ-petitioner, a partnership firm, being represented by one of its partners has alleged that it is a dealer of diesel and petrol under the Hindustan Petroleum Corporation Limited, the respondent herein, and that it had passed an order suspending the sale and supply of petrol and diesel and thereafter, issued a notice to show-cause why the agreement of dealership between the parties should not be terminated on the ground of tampering of the metering units and totaliser units. The writ-petitioner, in the past filed another writ-application before this Court challenging such notice to show-cause. A learned Single Judge of this Court by order dated 8th February, 2006 directed the appellant to submit its reply to the show-cause notice dated 4th February, 2006 with further direction upon the Hindustan Petroleum Corporation Limited to take appropriate decision.
Subsequently, the respondent authority by the order dated 11th February, 2006 terminated the dealership-agreement between the parties on the aforesaid ground and the appellant was directed to hand over the belongings of the respondent Corporation including the premises to the concerned Sales Officer of the Corporation.
Being dissatisfied with the aforesaid order dated 11th February, 2006 passed by the Chief Regional Manager (Retail) Hindustan Petroleum Corporation Limited (hereinafter referred to as the respondent) the appellant moved a further writ-application before the learned Single Judge and by the order impugned herein, His Lordship has dismissed the said writ-application on the ground that the appellant had efficacious alternative remedy by way of arbitration as provided in the agreement between the parties. His Lordship, however, made it clear that the findings on merit recorded in the body of the order impugned were made for the purpose of disposal of the said writ-application and should not prejudice any of the parties, either before the arbitrator or before any competent Court.
Being dissatisfied, the writ-petitioner has come up with the present mandamus-appeal.
Mr. Mitra, the learned senior advocate appearing on behalf of the appellant has at the very outset contended before us that the learned Single Judge refused to exercise jurisdiction vested in His Lordship by not entertaining the writ-application on the ground of existence of alternative remedy by totally overlooking the fact that the existence of an alternative remedy is not an absolute bar in entertaining a writ-application.
According to Mr. Mitra, in this case, the order of termination was passed by violating the principles of natural justice, inasmuch as, proper opportunity of defending the allegation against the petitioner was not given. According to Mr. Mitra, in such a situation, the Writ Court should entertain the writ-application and set aside the order by directing the respondent authority to give appropriate opportunity of hearing to the writ-petitioner for the purpose of defending the allegations. According to Mr. Mitra, in this case, although, the Regional Manager of the respondent relied upon the statements of three Inspectors of the respondent who allegedly detected the tampering of the seal on a surprise-visit, their statements were not given to his client and as such, the appellant could not effectively deal with the said allegation. Mr. Mitra further contends that even in the show-cause notice there was no reference of those statements of the concerned Officers.
According to Mr. Mitra, his client having executed a lease-deed at a nominal rent in favour of the respondent in respect of the land over which the petrol-pump is being run, for the purpose of grabbing the property, the dealership-agreement has been improperly terminated on the basis of false acquisition of tampering of the seal of the meter. According to Mr. Mitra, in order to terminate the dealership on the ground of tampering of seal, the respondent should wait till the decision is taken by the appropriate authority under the standards of Weights and Measures Act, 1976 and the standards of Weights and Measures (Enforcement) Act, 1985. Mr. Mitra further points out that in this case, although, a serious allegation has been made of tampering of the seal, the respondent authority did not even lodge complaint before the appropriate authority under the aforesaid Statutes for taking penal action against the appellant and such fact itself indicates that the allegation was a false one.
Mr. Mitra lastly contends that there being a clause of arbitration in the agreement between the parties in case of any dispute arising out of the agreement and his client having disputed the allegation of tampering of the seal, it was the duty of the respondent authority to refer the matter to arbitration and before taking recourse to arbitration, the respondent authority could not terminate the agreement by way of a so-called enquiry through a Subordinate Officer of the respondent. Mr. Mitra, thus, prays for setting aside the order impugned and for restoration of the dealership.
Mr. Chakraborty, the learned senior counsel appearing on behalf of the respondent authority has, however, opposed the aforesaid contentions of Mr. Mitra and has pointed out that the statements of the three Inspectors were very much supplied to the learned counsel who represented the appellant before the enquiry as would appear from page 113 of the application for stay. Mr. Chakraborty further submits that in the case before us, his client is entitled to terminate the agreement without taking recourse to the arbitration clause in view of Clause 55(K) of the agreement. He, therefore, contends that there was no mistake in terminating the agreement when the seal of totaliser was found to be broken. According to Mr. Chakraborty, for the purpose of terminating the agreement on the aforesaid serious allegation, the respondent was not required to wait till penal measure is taken by the appropriate authority under the aforesaid Statutes.
In reply to the aforesaid submission of Mr. Chakraborty. Mr. Mitra contends that in the notice of show-cause it was never stated that the respondent authority was going to take action under Clause 55(K) whereas the allegation was of tampering of the seal and as such, the said order of termination now cannot be described as one taken under Clause 55(K) and thus, was itself illegal.
After hearing the learned counsel for the parties and after going through the materials on record we find that in the agreement between the parties, there is a provision of arbitration mentioned in the Clause 66 of the agreement by which any dispute or difference of any nature whatsoever or regarding any right, liability, act, omission or account of any of the parties arising out of or in relation to the agreement should be referred to the sole arbitration of the Managing Director of the Corporation or of some Officers who may be nominated by the Managing Director.
However, according to Clause 55 of the said agreement, notwithstanding anything contrary contained in the said agreement, the Corporation would be at liberty to terminate the agreement forthwith upon or any time after happening any of the instances mentioned therein and sub-clause (K) is quoted below:
If the dealer shall either by himself or by his servants or agents commit or suffer to be committed any act which, in the opinion of the chief/senior Regional Manager of the corporation for the time being in whose decision shall be final, is prejudicial to the interest or good name of the corporation or its products the chief/senior Regional Manager shall not be bound to give reason for such decision.
Therefore the first question that falls for determination in this mandamus-appeal is whether the respondent authority was entitled to terminate the agreement on the ground of tampering of seal by taking aid of sub-clause (K) mentioned above.
It is true that in the notice to show-cause there is no reference of Clause 55(K). All that has been alleged is that the Meter Unit and Totalizer of ULP dispensing units bearing serial number mentioned therein and the Meter Unit and the Totalizer Unit of IISD dispensing Units given to the appellant were found to be tampered. At this stage, it may not be out of place to mention here that more than twenty-four hours after the imposition of the order of suspension of sale on the ground of tampering of seal by the respondent, an F.I.R. was lodged by the appellant before the local police station complaining that the Inspectors of the respondent themselves had broken the seal. However, subsequently, when the show-cause notice was given to the appellant on the ground of tampering of seal, such plea of tampering he seal by the Inspectors themselves was never taken in answer to the show-cause; on the other hand, it was maintained that there was no tampering of seal.
From the aforesaid fact, we find substance in the contention of Mr. Chakraborty that the allegation made before the police station against the Officers of the respondent was a concocted one and such fact itself indicates that the defence taken in the answer to the show-cause that the seal was intact and not tampered with, was contrary to the F.I.R. lodged before the police and thus, the plea of the appellant that the seal was not broken taken by way of defence in the enquiry proceedings should be prima facie held to be a false one when the appellant itself alleged before the police that the seal was broken by the Inspector of the respondents.
In our view, if the seal of the totaliser is tampered by the appellant, the dealer, such act on the part of the dealer must be held to be prejudicial to the interest and good name of the respondent Corporation and the said act definitely comes within Clause 55(K) and thus, there was no necessity of sending the matter to arbitration at the instance of the Corporation.
It is rightly pointed out by the learned Single Judge that the parties having agreed to refer all the disputes to arbitrator, this type of a disputed question of fact cannot be effectively disposed of in a writ-application and the aggrieved party should approach before the arbitrator. We also about the same view.
In this case, by invoking Clause 55(K), the agreement has been terminated. If the appellant is of the view that such decision is wrong or that the Regional Manager could not terminate the agreement, in view of the agreement between the parties, it should raise such dispute before the arbitrator and the learned Single Judge rightly refused to entertain such disputes.
We also do not find any substance in the contention of Mr. Mitra that for the purpose of termination of the agreement on the ground of tampering of the seal, the respondent should wait till the decision of the competent authority invested with the power of investigation under the statutes mentioned above. In the aforesaid statutes penal provisions have been prescribed for tampering of seal and such act is an offence against the society and as such penalty is provided for committing such offence; but such offence having been also committed against the respondent by its agent resulting in loss of reputation of the respondent, it has independent right to make separate enquiry and is not bound by the result of the criminal investigation at the instance of the authority mentioned in the statute as the alleged offence is committed in course of employment of the appellant as the agent of the respondent and the standard of proof in the criminal proceedings is much higher than the one prevailing in due course of departmental proceedings. (See: Hindustan Petroleum Corporation Ltd. vs. M/s. Pink City Midway Petroleum, reported in AIR 2003 SC 2281 at paragraph 22)
Mr. Saptangshu Basu, the learned advocate appearing on behalf of the other'' partner of the appellant tried to convince us, that no notice having been given upon his client, even if the order of termination is upheld, the same should not prejudicially affect his client''s right to have a fresh agreement with the authority.
In our opinion, Mr. Basu''s client not having challenged the order of termination has no locus standi to make any submission before us; he being a party to the agreement is entitled to take recourse to arbitration in accordance with law. We, therefore, find no reason to interfere with the order passed by the learned Single Judge.
Mr. Mitra further submitted that huge amount of petrol and diesel purchased by his client, is lying in the underground tank and the same should be returned to his client even if the agreement is terminated. We, however, find that under the existing law. the appellant has no right to sell those petrol or diesel after the termination of the agreement and in such a situation, we direct the respondent authority to get those products tested by the National Test House, Alipore and if those are found to be uncontaminated, they will be entitled to remove those products and pay the price of those petroleum products to the appellant immediately after removing those on receiving the favourable test-report. If those are found to be contaminated, the parties will be at liberty to approach before the arbitrator over the said disputes.
We now propose to deal with the decisions cited by Mr. Mitra.
In the case of State Bank of India and others Vs. D.C. Aggarwal and another, it was held that non-supply of adverse materials to the delinquent officer vitiated the enquiry proceedings and the order of termination of service on the basis of such enquiry should be set aside. By relying upon the said decision, Mr. Mitra tried to impress upon us that non-supply of the statements of the three Inspectors who found the alleged tampering vitiated the enquiry on the face of it and thus, notwithstanding the existence of the arbitration-clause, this is a fit case of entertaining the writ application. We have already pointed out here those statements were very much supplied to the learned advocate of the appellant as would appear from page 113 of the application for stay filed before us and thus, the said decision cannot be of any help to the appellant and Mr. Mitra''s contention is also contrary to the materials on record and factually incorrect.
In the case of Harbanslal Sahnia and Another Vs. Indian Oil Corpn. Ltd. and Others, , the Supreme Court reiterated the well-settled principle that the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion and in an appropriate case, in spite of existence of an alternative remedy, the High Court can exercise its writ jurisdiction in at least three contingencies: (a) where the writ petitioner seeks enforcement of any fundamental right; (b) where there is failure of the principles of natural justice; or (c) where the order or proceedings is wholly without jurisdiction or the vires of a Statute is challenged. In the said case, the Officers of the Oil Corporation visited the retail outlet of the dealer of their Petroleum products on December 15, 1999 and long thereafter, on January 24, 2000 served a show-cause notice requiring the appellant to explain why the density-record of the SK Oil was not maintained on a day-to-day basis, as on the date of inspection, the density-record was maintained only up to December 9, 1999 and secondly, why the appellant did not co-operate with the Officers of the respondent who had come to inspect the retail outlet and rather used unparliamentary language and displayed discourteous behaviour. On February 2, 2000 the appellant sent a reply and the matter rested at that place for the time being. Subsequently, on February 11, 2000, a sample of SK Oil was taken and the same was sent to the laboratory of the respondent at Kanpur where the sample was received on March 13, 2000 and subjected to laboratory test on March 18, 2000. The only infirmity found, in the sample was that the automatic viscosity at 40� should have been found within the range of 1.8-5.0 but was found to he 1.758. On March 22, 2000. the appellant was served with a show-cause notice requiring them to explain why the sample-drawn from their outlet did not satisfy and match the standard specification. The appellant sent reply raising a few objections and the correctness of the test-report was also disputed. Subsequently, the respondent terminated the leadership-agreement. What was mainly taken as the ground of termination was the failure in the sample-test. Such order of termination was challenged by the appellant by filing a writ-application. The High Court refused to entertain the same on the ground of existence of alternative remedy by way of arbitration. Before the Apex Court, it was contended that in view of existence of two government orders prescribing the guidelines of taking sample and conducting of test, the report of the sample-test in the said case was ex facie illegal. Those government orders stated inter alia that the strength and the frictions of the petroleum products change after ten days and, therefore, a time-limit of ten days was fixed for testing of such products. It was also emphasised in the orders that in the interest of natural justice; the inspecting officer should test the sample for quality and density at the retail outlet itself in the presence of the dealer with necessary equipment. By referring to those the government orders, the Supreme Court pointed out that the test conducted by the Oil Company violated the above norms, first, by not conducting the tests in the outlet itself and secondly, after more than ten days from the collection of samples. In such a situation, the Supreme Court held that the existence of arbitration agreement did not stand in the way of High Court in entertaining the writ-application when there was apparent violation of law in conducting the tests which was the sole ground of termination of licence. In our opinion, in the case before us, no such violation of the norms having been detected requiring no investigation of any factual aspect, the said decision cannot help the appellant.
In the case of Indian Oil Corporation Ltd. Vs. Amritsar Gas Service and Others, the question was whether the award passed by the arbitrator restoring dealership on a finding that the oil company violated the contract by issuing termination notice was proper. In that case, the Supreme Court was of the opinion that the contract in the said case being determinable in nature, Section 14(1) of the Specific Relief Act was attracted and no award for restoration of dealership could be passed and accordingly, "damages" was the appropriate remedy. By relying upon the said decision, Mr. Mitra tried to convince us that his client cannot get the remedy of restoration before the arbitrator and thus, the present proceedings are the appropriate remedy. In our opinion, in the case before us, the agreement between the parties being not determinable in nature unlike the case of Amritsar Gas Service (supra), the apprehension of Mr. Mitra is baseless. Even in the said case, the Supreme Court at paragraph 11 of the judgement, took note of various decisions of that Court and observed that the question of public law based on Article 14 of the Constitution of India did not arise for decision in that case and the matter should be strictly decided in the realm of private law rights governed by the general law relating to contact. The aforesaid decision, thus, does not help the appellant in any way. The decisions cited by Mr. Mitra are, therefore, of no avail to his client.
The appeal is, thus, dismissed with the aforesaid observation. We make it clear that our findings on merit should be treated as prima facie findings for the purpose of disposal of this appeal and those will not be binding upon the arbitrator or the Court in future proceedings. In the facts and circumstances, there will be. however, no order as to costs.
Prabuddha Sankar Banerjee, J.
I agree.