Calcutta High Court
Tandra Das And Ors vs Indian Oil Corporation Limited And Ors on 30 June, 2025
Author: Shampa Sarkar
Bench: Shampa Sarkar
ORDER OCD-13
IN THE HIGH COURT AT CALCUTTA
COMMERCIAL DIVISION
ORIGINAL SIDE
AP-COM/372/2025
TANDRA DAS AND ORS.
VS
INDIAN OIL CORPORATION LIMITED AND ORS.
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 30th June 2025.
Appearance:-
Mr. Dibyayan Banerji, Advocate
Mr. Abhrajit Roy Chowdhury, Advocate
Mr. Shreyash Singh, Advocate
... for petitioners.
Mr. Amit Kumar Nag, Advocate
Ms. Ranjabati Ray, Advocate
... for respondents.
1. This is an application for appointment of an arbitrator for adjudication of
the disputes which arose out of an agreement dated January 24, 2018,
entered into between Indian Oil Corporation Limited and the petitioners.
The said agreement was captioned as “INDANE (LIQUEFIED PETROLEUM
GAS) DISTRIBUTORSHIP (DOMESTIC & COMMERCIAL) AGREEMENT”.
2. According to the petitioners, as the grant of distributorship to the
petitioners was at the behest of the respondents. The petitioners invested
in the business, upon signing of the said agreement and had also executed
works pursuant to the work orders issued. The cancellation of the Letter
of Intent by the court and further drawal of lots as per the court’s
direction, entitled the petitioners to claim damages and refund of security
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deposit etc. from the respondents. The petitioners contend that Indian Oil
Corporation Limited, with its eyes open, had granted distributorship to the
petitioners. All the documents which were required had been submitted
to the respondents. On being satisfied, the respondents had executed the
agreement. Thus, if the distributorship was cancelled by court’s order, on
a challenge by an unsuccessful candidate, the petitioners are entitled to
be compensated. The courts found that the award of distributorship to
the petitioners was erroneous and contrary to the rules.
3. Learned advocate for the respondents submits that the claim is barred by
limitation. A learned Single Judge set aside the Letter of Intent on April
30, 2018. The Division Bench of the High Court had also upheld the order
by an order dated in June 25, 2018. The said order was challenged before
the Hon’ble Apex Court and the SLP was dismissed on September 26,
2018. Thereafter, the petitioners remained silent and in the year 2025,
invoked the arbitration clause.
4. Having perused the documents, it appears that one Rajib Lochan Das filed
a writ petition in 2016 challenging the letter of intent. The writ petition
was allowed by a judgment dated April 30, 2018. The Division Bench
upheld the order by a judgment dated June 25, 2018. The order was
challenged before the Hon’ble Supreme Court and the SLP was dismissed
in September 26, 2018. Thereafter, the respondents conducted the drawal
of lots and Rajib Lochan Das was the successful distributor. Such drawal
of lots was again challenged by the petitioners in a writ petition. The said
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writ petition was dismissed on August 6, 2019 and an appeal was
preferred. The appeal was dismissed on September 28, 2022. Thereafter,
the petitioners invoked the arbitration clause by a notice dated February
19, 2025, for settlement of its claims by arbitration. .
5. In my prima facie view, the dispute cannot be said to be ex facie barred.
The Division Bench of the Hon’ble High Court upheld the selection of Rajib
Lochan Das in the second drawal of lots, by order dated September 28,
2022. The petitioners were pursuing litigation after litigation before the
High Court and the Apex Court. Whether Section 14 of the Limitation Act
would be applicable in this case, is a matter which will have to be decided
by the learned arbitrator. Whether the claim is time barred, should not be
decided by the referral court. The contention of the respondents that
nothing was due and payable to the petitioners as the grant of
distributorship was void ab-initio, is also a matter to be decided by the
learned arbitrator. Thus, the issues of arbitrability of the dispute,
limitation, admissibility of the claim etc. are left open to be decided by the
learned arbitrator. The referral court is only required to see whether there
is existence of an arbitration clause.
6. The parties had agreed to be bound by a binding arbitration agreement.
Clause 37(a) of the said agreement provides for settlement of disputes by
the sole arbitrator and the Director (Marketing) of the Corporation will act
as the arbitrator. If the Director (Marketing) is unwilling or unable to act
as the sole arbitrator, the matter shall be referred to an officer of the
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Corporation, by the said Director. The jurisdiction of courts at Kolkata
and Durgapur have been agreed upon. In my opinion, the arbitration
clause has become unworkable and the mechanism has failed as neither
can the Director (Marketing) nor his nominee act as an arbitrator, in view
of the settled principle of law that, unilateral appointment will be contrary
to the provisions of Section 12(5) of Arbitration and Conciliation Act, 1996.
Thus, this Court holds that the petitioners have rightly approached this
Court. All issues raised by the respondent shall be raised before the
learned arbitrator. This Court has not entered into the merits of the
disputes involved.
7. The application is thus disposed of by appointing Ms. Noelle Banerjee,
learned Advocate, Bar Library Club, as the arbitrator, to arbitrate upon
the disputes between the parties. This appointment is subject to
compliance of Section 12 of the Arbitration and Conciliation Act, 1996.
The learned Arbitrator shall fix her remuneration as per the Schedule of
the Arbitration and Conciliation Act, 1996.
(SHAMPA SARKAR, J.)
S. Kumar / R.D. Barua