Akshaya Kumar Rath, J.@mdash1. The instant petition under Article 227 of the Constitution of India is to laciniate the order dated 4.11.2008 passed by the learned Civil Judge (Jr. Division), Bhubaneswar in C.S. No. 262 of 2006. By the said order, the learned trial court allowed the application of the defendant under Section 5 and 8 of the Arbitration and Conciliation Act, 1996 and referred the dispute to the Director, Marketing of the Indian Oil Corporation to decide the dispute either himself or through any other officer to be nominated by him, if he so desires.
2. Pursuant to the agreement dated 4.1.2002, the Indian Oil Corporation Ltd.-opposite party appointed the petitioner as its dealer for retail sale of Petrol/HSD/motor Oil/grease and other petroleum products. On 19.6.2006, the Area Field Officer of the opposite party inspected the retail outlet of the petitioner and found certain irregularities. Samples of MS (Petrol/H.S.D.) were taken from the outlet. The same was sent to the laboratory for testing. After receipt of the report, the opposite party issued a show cause notice to the petitioner on 28.6.2006 for taking penal action as per MDG-2005. Thereafter the petitioner filed Civil Suit No. 262 of 2006 in the court of the learned Civil Judge (Jr. Division), Bhubaneswar impleading the opposite party as defendant praying, inter alia, to declare the letter dated 28.6.2006 issued by the opposite party as illegal and restrain the opposite party from taking any penal action. After issuance of summons, the defendant entered appearance and filed an application under Section 5 read with section 8 of Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act") to refer the dispute to an arbitrator in terms of clause 69 of the agreement. By order dated 4.11.2008, the learned trial court allowed the application of the opposite party.
3. Assailing the order dated 4.11.2008, Mr. S.P. Mishra, learned Senior Advocate for the petitioner submitted that the learned trial court committed a manifest illegality and impropriety in referring the matter to the arbitration in terms of clause 69 of the agreement. He further submitted that in view of clause 68 of the agreement, the learned trial court alone shall have jurisdiction to entertain any suit, application or other proceeding in respect of any claim or dispute arising under the agreement. The cause of action has accrued within the territorial jurisdiction of Bhubaneswar and as such the learned trial court is competent to try the suit. Thus, the suit is maintainable. According to Mr. Mishra, learned Senior Advocate, when there are two clauses in the agreement, then the Civil Court will continue its jurisdiction. The plaintiff is the Dominus Litis. In view of existence of two clauses, the plaintiff has approached the Civil Court at Bhubaneswar. He relied on the decisions of the apex Court in the case of P. Anand Gajapathi Raju and others v. P.V.G. Raju (died) and others, , AIR 2000 SC 1886, Sukanya Holdings Pvt. Ltd. v. Jayesh H. Pandya and another, , AIR 2003 SC 2252, Hindustan Petroleum Corpn. Ltd. v. Pinkcity Midway Petroleums, , AIR 2003 SC 2881, Chandra Singh v. State of Rajasthan and another, AIR 2002 SC 2889 and Bidulata Maharana v. Bank of India and Others, , AIR 2009 Orissa 108.
4. Per contra, Mr. Mohanty, learned Advocate for the opposite party submitted that clause 69 of the agreement contains the arbitration clause. Immediately after appearance of the defendant, a petition under Section 8 of the Act was filed to refer the dispute to the arbitrator in terms of clause 69. So far as clause 68 is concerned, the same relates to all payments and the Civil Court at Calcutta alone shall have jurisdiction to entertain any suit, application or other proceeding in respect of any claim or dispute arising under the agreement, but not Bhubaneswar. Mr. Mohanty, learned Advocate further submitted that in the event any dispute arises out of the agreement containing arbitration clause and the requirement of Section 8 of the Act is satisfied, it is obligatory on the part of the Court to refer the parties to arbitration in terms of the said agreement. He took a strong exception of the photostat copy of the agreement filed by the petitioner, under Annexure-1, and submitted that clause 68 provides that the Courts in the city of Calcutta alone shall have jurisdiction to entertain any suit, application or other proceeding in respect of any claim or dispute arising under the agreement. The word ''Calcutta'' has been scored out by the petitioner in Annexure-1. He relied on the decisions of the apex Court in the case of P. Ananda Gajapathi Raju and others v. P.V.G. Raju (died) and others, , AIR 2000 SC 1886, Hindustan Petroleum Corpn. Ltd. v. Pinkcity Midway Petroleums, , AIR 2003 SC 2881, Rashtriya Ispat Nigam Ltd. v. Verma Transport Co., , (2006) 7 SCC 275, Agri Gold Exims Ltd. v. Sri Laxmi Knits & Wovens & Others, , (2007) 3 SCC 686, National Insurance Co. Ltd. v. Mam Chand and another, , (2007) 3 SCC 691, Ardy International (P) Ltd. and another v. Inspiration Clothes & U and another, , (2006) 1 SCC 417, Sameer Barar and others v. Ratan Bhushan Jain and others, , (2006) 1 SCC 419, Branch Manager, M/s. Magma Leasing & Finance Ltd., & Another v. Potluri Madhavilata and another, , 2009 AIR SCW 7041, Delhi Development Authority v. Jitender Pal Bhardwaj , (2009) AIR SCW 7051, Indian Oil Corporation Limited and others v. Raja Transport Private Limited, , (2009) 8 SCC 520, Karnail Singh v. State of Haryana, , (2009) 8 SCC 539, Jagdish Chander v. Ramesh Chander and others, , (2007) 5 SCC 719, Afcons Infrastructure Limited and another v. Cherian Varkey Construction Company Private Limited and others , (2010) 8 SCC 24, M/s. Sundaram Finance Limited and another v. T. Thankam, , AIR 2015 SC 1303, S.T. Sadiq v. State of Kerala and others, , AIR 2015 SC 1306 and Chloro Controls India Private Limited v. Severn Trent Water Purification Inc. and others, , (2013) 1 SCC 641.
5. To appreciate the rival contentions, it is apt to quote clause 68 and 69 of the agreement.
"68. This Agreement has been made in Bhubaneswar and all payments thereunder shall be due and made in Bhubaneswar, unless otherwise directed by the Corporation. The Courts in the city of Calcutta alone shall have jurisdiction to entertain any suit, application or other proceeding in respect of any claim or dispute arising under this agreement.
69. Any dispute or difference of any nature whatsoever or regarding any right, liability act, omission or account of any of the parties hereto arising out of or in relation to this Agreement shall be referred to the sole arbitration of the Director Marketing of the Corporation, or of some Officer of the Corporation who may be nominated by the Director Marking. The Dealer will not be entitled to raise any objection to any such arbitrator on the ground that the arbitrator is an officer of the Corporation or that he has to deal with the matters to which the contract relates or that in the course of his duties as an officer of the Corporation he had expressed views on all or any of the matters in dispute or difference. In the event of the arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason the Director Marketing as aforesaid at the time of such transfer, vacation of office or inability to act shall designate another person to at as arbitrator in accordance with the terms of the Agreement. Such person shall be entitled to proceed with the reference from the point at which it was left by his predecessor. It is also a term of this contract that no person other than the Director Marketing or a person nominated by such Marketing Director Marketing of the Corporation as aforesaid shall act as arbitrator hereunder. The award of the arbitrator so appointed shall be final, conclusive and binding on all parties to the Agreement, subject to the provisions of the Arbitration Act, 1940 or any statutory modification of or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceedings under this clause."
6. In P. Anand Gajapathi Raju and others (supra), during pendency of the appeal before the apex Court, all the parties entered into an arbitration agreement. They had agreed to refer their disputes in the appeal and others to a retired Judge of the High Court as sole arbitrator. The arbitration agreement was in the form of an application and was signed by all the parties and satisfied the requirements of Section 7 of the Arbitration and Conciliation Act, 1996 (new Act). The apex Court allowed the application and referred the parties to arbitration. In paragraphs-5 and 6 of the said report, the apex Court held as follows:-
"5. The conditions which are required to be satisfied under sub-sections (1) and (2) of Section 8 before the Court can exercise its powers are: (1) there is an arbitration agreement; (2) a party to the agreement brings an action in the Court against the other party; (3) subject matter of the action is the same as the subject matter of the arbitration agreement; (4) the other party moves the Court for referring the parties to arbitration before it submits his first statement on the substance of the dispute. This last provision creates a right in the person bringing the action to have the dispute adjudicated by Court, once the other party has submitted his first statement of defence. But if the party, who wants the matter to be referred to arbitration applies to the Court after submission of his statement and the party who has brought the action does not object, as is the case before us, there is no bar on the Court referring the parties to arbitration.
6. In our view, the phrase "which is the subject of an arbitration agreement" does not, in the context, necessarily require that the agreement must be already in existence before the action is brought in the Court. The phrase also connotes an arbitration agreement being brought into existence while the action is pending. Blacks Law Dictionary has defined the word ''is'' as follows:
"This word, although normally referring to the present, often has a future meaning, but is not synonymous with "shall have been". It may have, however, a past signification, as in the sense of has been."
7. In Sukanya Holdings Pvt. Ltd., (supra), the apex Court in paragraphs 12, 13 and 14 of the report held as follows:-
"12. For interpretation of Section 8, Section 5 would have no bearing because it only contemplates that in the matters governed by Part-I of the Act, Judicial authority shall not intervene except where so provided in the Act. Except Section 8, there is no other provision in the Act that in a pending suit, the dispute is required to be referred to the arbitrator. Further, the matter is not required to be referred to the arbitral Tribunal, if (1) the parties to the arbitration agreement have not filed any such application for referring the dispute to the arbitrator; (2) in a pending suit, such application is not filed before submitting first statement on the substance of the dispute; or (3) such application is not accompanied by the original arbitration agreement or duly certified copy thereof. This would, therefore, mean that Arbitration Act does not oust the jurisdiction of the Civil Court to decide the dispute in a case where parties to the Arbitration Agreement do not take appropriate steps as contemplated under sub-sections (1)85(2) of Section 8 of the Act.
13. Secondly, there is no provision in the Act that when the subject matter of the suit includes subject matter of the arbitration agreement as well as other disputes, the matter is required to be referred to arbitration. There is also no provision for splitting the cause or parties and referring the subject matter of the suit to the arbitrators.
14. Thirdly, there is no provision - as to what is required to be done in a case where some parties to the suit are not parties to the arbitration agreement. As against this, under Section 24 of the Arbitration Act, 1940, some of the parties to a suit could apply that the matters in difference between them be referred to arbitration and the Court may refer the same to arbitration provided that the same can be separated from the rest of the subject matter of the suit. Section also provided that the suit would continue so far as it related to parties who have not joined in such application."
8. In Hindustan Petroleum Corpn. Ltd. (supra), Rashtriya Ispat Nigam Ltd. and another (supra), M/s. Sundaram Finance Limited and another (supra) and Agri Gold Exims Ltd. (supra), the apex Court reiterated its earlier view in the case of P. Anand Gajapathi Raju and others (supra).
9. In Branch Manager, M/s. Magma Leasing & Finance Ltd., & another (supra), the apex Court held that Section 8 is in the form of legislative command to the court and once the pre-requisite conditions as aforestated are satisfied, the court must refer the parties to arbitration. As a matter of fact, on fulfillment of conditions of Section 8, no option is left to the court and the court has to refer the parties to arbitration.
10. In Indian Oil Corporation Limited and others (supra), though the clause provides for appointment of Director, Marketing of the Corporation or of some officer of the Cooperation who may be nominated by the Director, Marketing as the arbitrator in the event any dispute or a difference of any nature, but then application under Section 11 of the Act, the High Court appointed a retired High Court Judge as the sole arbitrator to decide the dispute holding that the Director (Marking) of the appellant, being its employee, should be presumed not to act independently or impartially. The apex Court held that arbitration is a binding voluntary alternative dispute resolution process by a private forum chosen by the parties. It is quite common for Governments, statutory corporations and public sector undertakings while entering into contracts, to provide for settlement of disputes by arbitration, and further provide that the Arbitrator will be one of its senior officers. If a party, with open eyes and full knowledge and comprehension of the said provision enters into a contract with a Government/statutory corporation/public sector undertaking containing an arbitration agreement providing that one of its Secretaries/Directors shall be the arbitrator, he can not subsequently turn around and contend that he is agreeable for settlement of the disputes by arbitration, but not by the named arbitrator who is an employee of the other party. No party can say he will be bound by only one part of the agreement and not the other part, unless such other part is impossible of performance or is void being contrary to the provisions of the Act, and such part is severable from the remaining part of the agreement. The arbitration clause is a package which may provide for what disputes are arbitrable, at what stage the disputes are arbitrable, who should be the arbitrator, what should be the venue, what law would govern the parties etc. A party to the contract cannot claim the benefit of arbitration under the arbitration clause, but ignore the appointment procedure relating to the named Arbitrator contained in the arbitration clause.
11. The judgments of the apex Court in the case of Ardy International (P) Ltd. and another (supra), Afcons Infrastructure Limited and another (supra) and Chiloro Controls India Private Limited (supra) are distinguishable on facts.
12. On a survey of the authoritative pronouncements of the apex Court in the cases cited supra, it is pellucid that Section 8 of the Act is in the form of legislative command. Once prerequisite conditions as enumerated in paragraph-5 of P. Anand Gajapathi Raju and others (supra) are satisfied, the Court must refer the parties to arbitration. No option is left to the Court.
13. Mr. Mishra, learned Senior Advocate does not deny or dispute the existence of arbitration clause. He submitted that in view of clause 68 of the agreement, the Courts in the city of Bhubaneswar alone shall have jurisdiction to entertain any suit, application or other proceeding in respect of any claim or dispute arising under the agreement.
14. At a first blush, clause 68 and 69 of the agreement appear to be self-contradictory, but is not really so. On a conspectus of clause 68, it is evident that the Courts in the city of Calcutta alone shall have jurisdiction to entertain any suit, application or other proceeding in respect of any claim or dispute arising under the agreement. But then in the photostat copy filed by the petitioner, vide Annexure-1, the word ''Calcutta'' has been scored out and the word ''Bhubaneswar'' has been inserted in its place. When a specific query was made by this Court as to how it was possible, Mr. Mishra, learned Senior Advocate for the petitioner expressed his inability to apprise this Court about the anomaly. He submitted that photostat copy of the agreement has been supplied by the opposite party to the petitioner. In the said copy, the city of Calcutta has been scored out and in its place, Bhubaneswar has been inserted. This Court has compared the original agreement produced by Mr. Mohanty, learned Advocate for the opposite party along with the photostat copy of the said agreement filed by the learned counsel for the petitioner, vide Annexure-1. After comparison of the same, the original agreement has been returned to the learned counsel for the opposite party. The photostat copy of the agreement filed by the opposite party, vide Annexure-A, tallies with the original agreement. There is variance between the photostat copy of the agreement filed by the respective parties, vide Annexure-1 and Annexure-A. In Annexure-1, in place of the word ''Calcutta'', the word ''Bhubaneswar'' has been inserted, whereas in Annexure-A, the word ''Calcutta'' still exists. Be it noted that in the first sentence of clause 68 of the original agreement, at two places the word ''Calcutta'' was there, which was scored out and in its place, ''Bhubaneswar'' had been inserted, but with regard to the second sentence, the word ''Calcutta'' still exists. On a comparison the word ''Bhubaneswar'' appearing in the first and second sentence of Annexure-1, transpires that the same has been written in different hand writings. In view of the same, this Court holds that the petitioner has approached the Court with a pair of unclean hands and is not entitled to any relief asked for.
15. Clause 69 of the agreement provides that any dispute or difference of any nature whatsoever or regarding any right, liability act, omission or account of any of the parties hereto arising out of or in relation to the agreement shall be referred to the sole arbitration of the Director Marketing of the Corporation, or of some Officer of the Corporation who may be nominated by the Director Marketing. In view of the same, the Court is under obligation to refer the parties to the arbitration in terms of clause 69 of the Act. Since Section 8 of the Act is peremptory in nature, rightly the learned trial court allowed the application of the defendant.
16. There being no perversity or illegality in the order dated 4.11.2008 passed by the learned Civil Judge (Jr. Division), Bhubaneswar in C.S. No. 262 of 2006, this Court is not inclined to interfere with the same. Accordingly, the petition is dismissed. No costs.
