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2012 DIGILAW 375 (HP)

Janardhan Mukhaik v. Market Committee Shimla And Kinnaur

2012-07-05

KULDIP SINGH

body2012
JUDGMENT : Kuldip Singh, J. This petition has been filed u/s 11(6) of the Arbitration and Conciliation Act, 1996 (for short 'Arbitration Act') for appointment of an Arbitrator for adjudicating the dispute between the parties. It has been stated that the Market Committee, Shimla and Kinnaur through its Secretary allotted on 10.10.2007 to petitioner shop No. 6, MRF Building, Dhalli, Shimla-12, a formal lease deed of the shop was executed on 13.12.2007. The petitioner was put in possession of the shop in pursuance of the allotment of the shop. The respondent accepted the security and rent of the shop from the petitioner. 1-A. The respondent unilaterally cancelled the allotment of the shop of the petitioner and petitioner was informed about the cancellation vide letter dated 10.11.2009. The petitioner was not served any show cause notice nor he was heard as required under the Himachal Pradesh Agricultural and Horticultural Produce Marketing (Development and Regulation) Act, 2005 (for short 'Act'). The unilateral cancellation of the allotment of shop by respondent is wrong, illegal. 2. The Act provides u/s 80 adjudication of dispute by way of arbitration. There is thus statutory arbitration between the parties. The dispute pertaining to the illegality of the action of the respondent in canceling the allotment of the shop is liable to be referred to arbitration in accordance with Section 80 of the Act. 3. The petitioner had requested the respondent vide letter dated 11.5.2011 to appoint Arbitrator in terms of Section 80 of the Act. The respondent has failed to make the appointment of an Arbitrator despite receipt of request. The respondent on the contrary, declined to appoint Arbitrator on grounds not available in law. The petitioner has prayed for appointment of an Arbitrator. 4. The respondent has filed reply and has taken the preliminary objections. It has been stated that no case has been made out by the petitioner to interfere with the order of cancellation passed by the respondent. The allotment of shop in favour of the petitioner is void, ab initio. The Section 80 of the Act is not applicable in the facts and circumstances of the case. The shop has been allotted to petitioner without prior permission of Managing Director of the H.P. State Agricultural Marketing Board in contravention of Bye-laws 62 of the Himachal Pradesh Agricultural Produce Market Committees Bye-Laws, 2007 (for short 'Bye-Laws'). The Section 80 of the Act is not applicable in the facts and circumstances of the case. The shop has been allotted to petitioner without prior permission of Managing Director of the H.P. State Agricultural Marketing Board in contravention of Bye-laws 62 of the Himachal Pradesh Agricultural Produce Market Committees Bye-Laws, 2007 (for short 'Bye-Laws'). The Bye-Law 62 (2) (vi) provides only those persons are eligible for allotment of shop on lease, who have granted requisite registration by the competent authority. The petitioner on the date of allotment of shop on 10.10.2007 was not registered with the respondent. He was registered subsequently with the respondent. 5. The shop No. 6 was allotted to petitioner on license basis and no lease deed as per the Act was executed on Form 'J' of the bye-laws. The deed was executed in favour of the respondent on 13.12.2007 for a period of 11 months expiring on 12.11.2008. The para-9 of the deed provides that premises was given on lease on temporary basis. The respondent had a right to get the shop vacated before the expiry of license. The para 17 of the deed provides in the event of cancellation of allotment, the respondent shall resume the possession of the shop. The Para 20 of the deed provides that the decision of the Market Committee shall be final and binding on the parties. 6. On 15.12.2008 in the meeting of the Board illegality in the allotment of shops was noticed, the legal opinion was obtained. On 31.3.2009 the Board recommended that an action may be taken in accordance with the condition prevalent at the time of allotment of the shops. The respondent by resolution dated 4.9.2009 decided to cancel the allotment of 7 shops which were allotted in contravention of law. After cancellation of allotment of the shop, the petitioner was requested to hand over the vacant possession of the shop on or before 30.11.2009. 7. On merits, it has been stated that allotment in favour of the petitioner is void, ab initio. The stand taken in the preliminary objections was repeated. The claim of the petitioner was denied. 8. The rejoinder was filed and the stand taken by the petitioner in the petition was reiterated. 7. On merits, it has been stated that allotment in favour of the petitioner is void, ab initio. The stand taken in the preliminary objections was repeated. The claim of the petitioner was denied. 8. The rejoinder was filed and the stand taken by the petitioner in the petition was reiterated. The petitioner filed supplementary affidavit and placed on record a copy of allotment letter dated 10.10.2007 and copy of lease deed executed between petitioner and the respondent regarding shop No. 6. 9. Heard. The petitioner had filed CWP No. 1751 of 2010-B which was disposed of by the Division Bench on 29.12.2011 with the observations as follows:-- Therefore, leaving all options to the petitioners and also leaving all the contentions open, these writ petitions are disposed of with liberty to the petitioners to seek appropriate relief either before the District Court or the Arbitrator or the second respondent. The petitioner also filed Arbitration Case No. 32 of 2010 which was disposed of on 21.10.2010 in which it has been held as follows:-- Section 9 of the Arbitration and Conciliation Act, provides that that Court can be approached for protection of rights, pending adjudication by arbitration, which would have had the jurisdiction but for an agreement for settlement of disputes between the parties by arbitration. Therefore, the Court, which has the jurisdiction to entertain the present petition is that of District Judge, Shimla and not this Court. Consequently, the petition is ordered to be returned to the petitioner. Petition shall be returned by 22nd October, 2010, positively, alongwith a copy of this order. 10. The perusal of judgment dated 29.12.2011 in CWP No. 1751 of 2010-B and judgment dated 21.10.2010 in Arbitration Case No. 32 of 2010 reveals that respondent did not raise the objection that the dispute between the parties is not arbitrable. 11. The shop was allotted to the petitioner vide allotment letter dated 10.10.2007. In the allotment letter, it has been provided that allotment of the shop shall be governed by the Act. The para-11 of the lease deed of the shop No. 6 between petitioner and respondent provides that licensee shall abide by the conditions of the license granted to him under the Act. In the allotment letter, it has been provided that allotment of the shop shall be governed by the Act. The para-11 of the lease deed of the shop No. 6 between petitioner and respondent provides that licensee shall abide by the conditions of the license granted to him under the Act. The Section 80 of the Act provides if any dispute arises out of any agreement or contract entered into under the provisions of that Act, Rules or Bye-laws made thereunder shall be resolved through conciliation and arbitration. The Arbitration Act shall apply to conciliation and arbitration proceedings. 12. The allotment letter dated 10.10.2007 and lease deed of shop No. 6 in favour of petitioner has not been denied by the respondent. The stand of the respondent is that allotment of shop No. 6 in favour of the petitioner is void and, therefore, Section 80 of the Act is not applicable. The allotment is in violation of Bye-law 62. The parties by virtue of their conduct more particularly allotment letter dated 10.10.2007 and lease deed agreed that allotment/lease of shop No. 6 shall be governed by Act. The Bye-law 62(2) (i) also provide lease shall be governed by Act, Rules and Bye-laws, therefore, there is no manner of doubt that parties agreed that Section 80 of the Act shall be applicable to the allotment/lease of Shop No. 6. The Section 80 provides arbitration in case of dispute. 13. The petitioner had served notice dated 11.5.2011 on respondent. In reply to para 7 of the petition, the respondent has not specifically denied that petitioner had not served notice dated 11.5.2011. The respondent despite notice dated 11.5.2011 has not appointed an Arbitrator. The validity of allotment itself has been disputed by the respondent, but no Arbitrator has been appointed by the respondent. The petitioner has made out a case for appointment of an Arbitrator for resolving the dispute regarding allotment and cancellation of allotment of shop No. 6 by the respondent. The petition is allowed. There is no unanimity between the parties on the Arbitrator to be appointed. Mr. M.D. Sharma, Retd. District Judge, Gulab Kunj, Lower Kaithu, Annadale Shimla-171003, is appointed as an Arbitrator to adjudicate the dispute between the parties regarding allotment/cancellation of shop No. 6, who shall make a reasoned award in accordance with law. The petition stands disposed of on above terms. Mr. M.D. Sharma, Retd. District Judge, Gulab Kunj, Lower Kaithu, Annadale Shimla-171003, is appointed as an Arbitrator to adjudicate the dispute between the parties regarding allotment/cancellation of shop No. 6, who shall make a reasoned award in accordance with law. The petition stands disposed of on above terms. The pending application is also disposed of in view of disposal of the main petition.