Calcutta High Court
Anubhav Ghosh And Anr vs Bharat Petroleum Corporation Ltd on 27 January, 2025
Author: Shampa Sarkar
Bench: Shampa Sarkar
OCD-1
AP-COM/903/2024
IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL DIVISION
ANUBHAV GHOSH AND ANR.
VERSUS
BHARAT PETROLEUM CORPORATION LTD.
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date : 27th January, 2025.
Appearance:
Mr. Chayan Gupta, Adv.
Mr. Sayantan Chatterjee, Adv.
Mr. Anirban Ghosh, Adv.
. . .for the petitioners.
Mr. Sanjib Kr. Mal, Adv.
Mr. Bimalendu Das, Adv.
Ms. Shomrita Das, Adv.
. . .for the respondents.
The Court: Supplementary affidavit is taken on record.
This is an application for appointment of a learned Arbitrator under
Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to
as the Act of 1996). The petitioners’ claim to be the present partners who are
running the partnership firm named and styled as M/s. Ambika Service Station
(hereinafter referred to as the said firm). Bharat Petroleum Corporation Ltd.
(BPCL) had granted a dealership license to the said partnership firm. The
petitioners rely on an agreement dated November 8, 2015 in support of the
contention that they are the existing partners of the said firm. Referring to the
memorandum of agreement between BPCL and the Ambika Service Station
(hereinafter referred to as the service station) dated December 29, 2017, Mr.
2
Gupta submits that the recitals make the licence agreement with BPCL
applicable to the existing partners their heirs, successors and assigns. Thus, on
the strength of the agreement between the erstwhile partners and the petitioners
dated November 8, 2015, the petitioners had not only become partners but also
had a business relation with BPCL. They are also the successors of the erstwhile
partners who had then signed the agreement with BPCL, on behalf of Ambika
Service Station.
Mr. Gupta refers to the arbitration clause being Clause 19.a of the licence
agreement with BPCL. The clause provides that any claim, cross-claim, counter-
claim or set off of the Company against the Licensee or regarding any right,
liability, act, omission or account of any of the parties to the license agreement
and arising out of or in relation to the said agreement, shall be referred to the
sole arbitration of the Director (Marketing) of the company or of some Officer of
the Company, who may be nominated by the Director (Marketing). It is urged
that, considering the wide perspective and the wide ambit of the arbitration
clause, the dispute which is now subsisting between the petitioners and BPCL
should be adjudicated by a sole Arbitrator, upon being nominated by this Court.
Hence this application has been filed.
Mr. Gupta submits that the notice invoking arbitration was duly issued,
enumerating the claims against BPCL. Reference is made to the decision of the
Hon’ble Apex Court in the matter of Cox and Kings Limited versus SAP India
Private Limited and Another reported in (2024) 4 SCC 1, in support of the
contention that, although the petitioner is a non-signatory to the licence
3
agreement, the recital of the licence agreement and the wide ambit of the dispute
resolution clause, and the further fact that the petitioners were running the
business since 2015, would entitle the petitioners to invoke the arbitration
clause. The facts and circumstances since 2015 and the documents relating to
the business would clearly indicate the petitioners’ participation in the business
with BPCL as partners of Ambika Service Station.
The involvement of the petitioner in the day to day running of the business
cannot be ruled out. Moreover, the dispute whether BPCL at all recognizes the
petitioners as partners or was bound by the terms and conditions of the licence
agreement qua the petitioners were arbitrable disputes and thus, this Court
should refer the matter to arbitration for adjudication of all issues.
Mr. Gupta further submits that although a suit for specific performance of
the contract between the petitioners and the erstwhile partners is pending, the
said suit deals with claims against the erstwhile partners and not against BPCL.
The disputes which have arisen with BPCL, are not the subject matters of the
suit. Further submission is that the writ proceeding which was initiated by the
petitioners, was with regard to BPCL not receiving or accepting a cheque issued
by the petitioners. The ‘lis’ before the writ court and in the mandamus appeal
were against distinct and separate from the issues which the petitioners now
raise for adjudication by the sole Arbitrator, to be appointed by the court. The
claims against BPCL are with regard to non-supply of fuel and lubricants and
also for damages. Such allegations against BPCL were not part of the writ
proceeding and thus there would be no impediment on the part of this Court to
4
refer the dispute to arbitration, keeping all points available to the parties open for
adjudication by the learned Arbitrator.
Mr. Mal learned advocate for BPCL raises the question of maintainability.
According to Mr. Mal, the license agreement was not entered into with the
petitioners. BPCL did not recognize the petitioners. There were no dispute with
the petitioners. The question of reference to arbitration did not arise.
This Court has to decide whether the petitioners, who is a non-signatory to
the memorandum of agreement/dispensing pump and selling licence dated
December 29, 2017, can invoke the arbitration clause and approach this Court
for appointment of a Learned Arbitrator in terms of Clause 19.a of the said
agreement. It appears that there was an agreement between the petitioners and
the partners of Ambika Service Station. When the petitioner came to know that
another undated agreement had been signed by the partners with a third party, a
suit was filed for specific performance of the agreement dated November 8, 2015.
The specific contention of the petitioner in the suit was that the partners had
hardly taken any responsibility since the execution of the deed of 2015, but did
not fulfil the terms of the agreement. The petitioners were ready and willing to
perform their remaining obligation of payment of a further sum of Rs.5 lakhs. A
sum of Rs.10 lakhs had already been paid and the partners (defendants) in the
suit, should transfer 100% shareholding and the license granted by BPCL to the
petitioners, upon due compliance of the rules and regulations of BPCL.
From the plaint case it is the evident that the partners did not perform
their part of the obligation although the petitioner was ready and willing to
5
perform their part by paying the remaining amount to the partners. The
agreement between the private parties was that, the entire shareholding of the
partners, including the licence granted by BPCL, would be transferred to the
petitioners. It is apparent that the licence and the 100% shareholding had not
been transferred to the petitioners. Thus, the suit was filed for necessary reliefs.
The first argument of Mr. Gupta that the petitioners are the present
existing partners cannot be accepted by the Court from the averments and the
prayers made in the suit. The next contention of Mr. Gupta that the petitioners
approached the writ court when BPCL did not accept a cheque issued by them, is
also not correct.
The petitioners had approached BPCL by filing a representation dated June
28, 2022, claiming that the partners of Ambika Service Station (dealer) had
leased out the Petrol Pump to one Prasenjit Halder for 10 years by the agreement
dated June 29, 2006. By a subsequent agreement dated November 8, 2015
executed between Munmun Ghosh, Samir Kumar Ghosh, Debasis Kumar Ghosh,
Sandipan Kumar Ghosh on the one hand and the petitioners on the other hand,
the control and management of the retail outlet had been taken over by the
petitioners upon payment of Rs.10 lakhs to Mr. Prasenjit Halder. Further claim
was that DPSL signatories were trying to sell the petrol pump by avoiding the
petitioners and hence BPCL was requested to induct the petitioners as the
licensees. BPCL rejected such request, inter alia, on the ground that there was
no question of accepting the agreement between DPSL signatories and Sisir Paul
and any third party in respect of the retail out let, since such transfer would be
6
completely in violation of BPCL’s policy. The agreements were not binding upon
BPCL in any manner. BPCL had received a request from the petitioners for
reconstitution of the partnership, which was duly replied to, pointing out the
deficiencies in the proposal. A family dispute between the petitioners and the
DPSL signatories in respect of the subject petrol pump, was private in nature and
BPCL was not in a position to resolve to the internal family dispute. Such order
was challenged in WPA 471 of 2023.
The learned Single Judge was of the opinion that the guidelines of BPCL
had a specific procedure for reconstitution of the retail outlet dealership. The
existing partners, together with the intending incoming partners, were required
to complete certain formalities within the ambit of those guidelines. The writ
court did not find any arbitrariness in the refusal on the part of BPCL to
reconstitute the partnership firm and in not recognizing the petitioners as the
incoming partners. It was specifically recorded that the erstwhile partners had
not initiated any process for induction of the petitioners and had not given any
details of the same to BPCL. Under such circumstances, the writ petition was
disposed of without interfering with the rejection of the claim of the petitioners,
but with liberty to the parties to take steps under the policy/guidelines of BPCL.
The petitioners carried the said order in appeal and MAT 633 of 2023 was
filed. The Hon’ble Appeal Court noted that the petitioners’ case that, the
partnership was reconstituted in terms of the agreement and 96% shares of the
firm was allotted in favour of the petitioners. 4% share remained with the
erstwhile partners. Such position continued from 2015 to 2022. That, a cheque
7
issued by the petitioners was not accepted by BPCL, on the ground that they had
refused to recognize the appellants as licensee. The Hon’ble Division Bench held
that it was not in dispute that the agreement for reconstitution of the
firm/licensee was without any prior approval of BPCL. Such position was in
violation of the guidelines notified by BPCL. Therefore, it would be well within
the jurisdiction of BPCL to cancel the licence granted to the erstwhile partners of
Ambika Service Station. However, their Lordships did not travel further, but
recorded that Their Lordships were clear in their minds that the dispute was
essentially private in nature, between the petitioners and the erstwhile partners.
Therefore, in the best interest of the parties, it was left upto the parties to resolve
the dispute and then approach BPCL for the purpose of reconstitution of the
partnership, if consensus was arrived at by the parties. On the other hand, if the
parties were not ad idem and they continued to fight, BPCL could cancel the
licence granted in favour of the erstwhile partners. Considering the public
interest, BPCL was directed to continue to run the outlet operation. BPCL was
directed to open the outlet and operate the same by deploying their own staff, till
the dispute was resolved between the parties.
The writ proceedings and/or proceedings before the Hon’ble Division Bench
clearly indicate that from the first instance, BPCL refused to reconstitute the
partnership firm and refused to recognize the petitioners as the existing partners.
BPCL did not accept that the petitioners were entitled to operate the outlet. By a
reasoned order, the request of the petitioners for reconstitution of the
partnership was denied. The reasoned order was upheld by the learned Single
8
Judge and the Division Bench. The Division Bench also permitted BPCL to cancel
the license if the parties could not resolve the dispute. Recognizing the
petitioners as incoming partners, had to be done by a specific procedure under
the guidelines of BPCL. BPCL had already informed the petitioners that
reconstitution was not possible in the facts of the case. The decision of BPCL has
been upheld by the Writ Court and by the Division Bench. Further, the Division
Bench has recognized that even if there was an agreement between the
petitioners and the erstwhile partners, the same was without prior approval of
BPCL and such agreement was in clear violation of the guidelines of BPCL.
Therefore, the Division Bench held that it would be well within the jurisdiction of
BPCL to cancel the license granted to the erstwhile partners. Under such
circumstances, liberty was granted to the parties to resolve the dispute with the
erstwhile partners and then approach BPCL for further purpose of reconstitution.
Admittedly, the dispute is not resolved. The suit is pending.
The Hon’ble Division Bench directed BPCL to run the outlet by deploying
their own staff. The fact that the petitioners were not recognized as the partners
of Amibka Service Station is a matter of record and the decision of the Hon’ble
Division Bench is clear. Such point cannot be reiterated once again. The same is
barred by the principle of issue estoppel. Thus, the dispute with regard to non-
supply of fuel and lubricants and the claim for damages, are not germane at this
stage. Only if the dispute between the private parties are resolved or the
petitioners are successful in the suit, can they approach BPCL for reconstitution
of the partnership as per the procedure/guidelines. BPCL may then consider
9
such prayer. The direction of the Hon’ble Division Bench is clear. BPCL is
running the retail outlet on the direction of the Division Bench. The petitioner
has raised a dispute with regard such issues, which are covered by the decision
of the Hon’ble Division Bench.
The fact that BPCL did not have any obligation towards the petitioners as
the exiting partners, is available from the decisions of the writ court and the
appeal court. Thus, nothing remains to be decided at this stage by way of
arbitration. There is no cause of action which permit the petitioners to go for
arbitration. The petitioners may take steps at the appropriate stage, if
permissible in law.
The petitioners are non-entities, insofar as, the license agreement with
BPCL is concerned. The fact that BPCL is not bound to recognize them and
supply petrol for operation of the business, has been clearly held by the order of
the Hon’ble Division Bench. No derivative right or interest can be claimed by the
petitioners.
The contention of Mr. Gupta that the petitioners all along were performing
the job as the dealers was not accepted. Rather, it was held that any attempt at
reconstitution was in violation of the guidelines of BPCL. The notice invoking
arbitration clearly lays down the nature of dispute which includes non-
recognition of the petitioners as the partners of Ambika by BPCL and failure of
BPCL to reconstitute as also to supply fuel, so that the petitioners can run the
business. In short, the grievance of the petitioners is that, BPCL did not
recognize the petitioners as the existing partners of Ambika Service Station in
10
spite of the fact that the petitioners had invested money, had been operating the
pump and were possession. These aspects have already been covered by the
Division Bench in the mandamus appeal.
Under such circumstances, this Court is not inclined to refer the dispute to
arbitration as there does not exist any agreement between BPCL and the
petitioners.
The application is dismissed.
However, if the private party parties resolve their disputes and approach
BPCL, the matter can be decided by the BPCL in terms of the order of the Hon’ble
Division Bench.
(SHAMPA SARKAR, J.)
sp/b.pal
[ad_1]
Source link