M/s. Goyam Petroleum vs M/s. Reliance Industries Ltd. and Others

L.N. Mittal, J.—By filing this revision petition under Article 227 of the Constitution of India, plaintiff has challenged order dated 12.11.2011 Annexure P-1 passed by learned trial Court thereby allowing application filed by defendants/respondents u/s 8 of the Arbitration and Conciliation Act, 1996 and thereby directing the plaint to be returned to the plaintiff and directing both the parties to appear before the Arbitrator as per clause 60 of the dealership agreement dated 06.012.2005. Facts in this case are not very much in dispute. Plaintiff was appointed as dealer by defendant No. 1 vide dealership agreement dated 06.012.2005 executed between the parties for supply and retail sale of petroleum products. The said agreement stands terminated by the parties by mutual agreement dated 05.09.2008. The plaintiff has filed suit for recovery of security deposit and other amounts pursuant to the dealership agreement.

Defendants alleged in the application that in view of arbitration clauses 60 and 61 in the dealership agreement dated 06.012.2005, the dispute is liable to be referred to Arbitrator. The plaintiff opposed the said application alleging that the dealership agreement dated 06.012.2005 stood terminated and, therefore, the arbitration clause contained in the said agreement, no longer survived.

Learned trial Court vide impugned order Annexure P-1 has allowed the application in above mentioned terms. Feeling aggrieved, plaintiff has filed this revision petition.

I have heard learned counsel for the parties and perused the case file. Counsel for the petitioner contended that since the dealership agreement containing arbitration clause stood terminated, the arbitration clause contained in the said agreement did not survive. The contention cannot be accepted. Arbitration clause contained in the agreement survives even after the termination of the agreement because the arbitration clause is meant for resolving the dispute arising out of the agreement. In this view, I am supported by judgment of Hon''ble Supreme Court in the case of The Branch Manager, Magma Leasing and Finance Limited and Another Vs. Potluri Madhavilata and Another,

In addition to the aforesaid, the plaintiff-petitioner himself has filed suit on the basis of the aforesaid dealership agreement dated 06.012.2005 containing the arbitration clause. Consequently, the petitioner cannot repudiate the arbitration clause contained in the dealership agreement which was admittedly executed by petitioner and respondent No. 1. For the reasons aforesaid, I find no perversity, illegality or jurisdictional error in impugned order of the trial Court so as to call for interference by this Court in exercise of revisional jurisdiction under Article 227 of the Constitution of India. The revision petition is devoid of merit and is accordingly dismissed.