Millennium Centre Shop Owners Assn. v. Millennium Centre Authority
2021-11-02
NELSON SAILO
body2021
DigiLaw.ai
JUDGMENT : 1. Heard Mr. T. Lalnunsiama, learned counsel for the petitioners and Mr. C. Zoramchhana, learned Addl. Advocate General for the respondents. 2. This is an application filed by the petitioners under section 11 of the Arbitration and Conciliation Act, 1996 (Act of 1996) for appointment of an Arbitrator to resolve the dispute which according to them has cropped up between the parties. 3. The petitioner No. 1 is an Association whose members are shop owners in Millennium Centre, located at Dawrpui, Aizawl and the petitioner No. 2 is an Association whose members run shops in the Millennium Centre building. According to the petitioners, the cause of action and the interest of both the two Associations being common, they have filed the instant petition. 4. The respondent No. 1, i.e., Millennium ‘Centre -Building Authority, Aizawl, Mizoram (the Authority) is a body corporate, constituted by the Govt. of Mizoram under the Registration Act, 1860 having its office at Aizawl, Mizoram and the Chief Secretary to the Govt. of Mizoram is designated as the Chairman of the authority. The respondent No. 2 is the Executive Director of Millennium Centre authority who is responsible for the management of the authority. 5. The case of the petitioners is that the respondents and the petitioner. No. 1-Association executed lease agreement for shop units of Millennium Centre by executing individual lease agreement with each of the members of the petitioner No. 1-Association individually. As per the lease agreement for shop units of Millennium Centre, the amount of lease money payable to the lessee will be subject to revision by the Authority, after 91 years with effect from 3.11.2009 or at any time thereafter or/and thereafter at any interval of any 91 years or at such interval as may be approved by the Authority from time-to time and that the lessee agrees to pay such revised money without any reservation or protest. The same has been stated in paragraph No. 3 of the lease agreement. 6. Further, the second part of paragraph No. 3 of the lease agreement provides that in addition to the lease money, the lessee shall pay a sum of Rs. 600 for each shop for the maintenance charges of services and common areas per month which shall be revised by the Authority as required from time-to-time during the lease period depending on cost of actual maintenance.
600 for each shop for the maintenance charges of services and common areas per month which shall be revised by the Authority as required from time-to-time during the lease period depending on cost of actual maintenance. The said payment shall be made within 15 days of the close of each month. 7. According to the petitioners, the respondent-Authority of late has been making revision of the maintenance charges of services of common areas which adds up to more than the actual cost of maintenance and thereby causing heavy financial burden upon the petitioner-Association. As a result, the petitioners approached the respondent-Authority for redressal of their grievance, which, however, was not fruitful. Consequently they submitted a representation through their counsel on 21.7.2020 for referring the dispute to the sole arbitration of a person to be appointed by the Chairman of the Authority to adjudicate the dispute in terms of paragraph No. 34 of the lease agreement. 8. In response to the representation, the respondent-Authority through the respondent No. 2 vide Communication dated 12.12.2020 (Annexure 4) wrote back stating that the revision of the maintenance charge was reasonable and in fact there was deficit in the expense towards the maintenance are required to be compensated from other sources of income such as, parking contract, rent and hire charges, etc. Therefore, the representation for referring the matter to the arbitrator was regretted. Aggrieved with the reply, the petitioners are before this court through the instant arbitration petition. 9. Mr. T. Lalnunsiama, learned counsel for the petitioners by referring to the income and expenditure amount for the year ending on 31st March, 2019, prepared by the Chartered Accountant concerned submits that the expenditure towards repair and maintenance for the aforesaid period was Rs. 31,22,467 while the income for the same period towards maintenance was Rs. 46,21,892.04. Therefore, it is clear that the maintenance charge has been levied by the authority in excess of the actual requirement in violation of the second part of paragraph No. 3 of the lease agreement. Referring to paragraph No. 34 of the lease agreement, the learned counsel submits that all disputes and differences arising out or in any other way touching or relating to the agreement has to be referred to a sole arbitration of a person to be appointed by the Chairman of the Authority.
Referring to paragraph No. 34 of the lease agreement, the learned counsel submits that all disputes and differences arising out or in any other way touching or relating to the agreement has to be referred to a sole arbitration of a person to be appointed by the Chairman of the Authority. Since the Authority has refused to refer the matter for arbitration, this court may appoint an arbitrator to adjudicate the matter as provided by paragraph No. 34 of the lease agreement. The learned counsel further submits that since the shop owner at Millennium Centre are many and likewise, the persons running the shops and, therefore, they have come in the name of an Association concerned. The learned counsel also submits that although the Association is not a registered Association but nevertheless, the instant arbitration petition is maintainable in terms of the decision of the Apex Court in Umesh Goel v. Himachal Pradesh Co- operative Group Housing Society Ltd., (2016) 11 SCC 313 . He submits that Court may be please to appoint an arbitrator to adjudicate the dispute between the rival parties. 10. Mr. C. Zoramchhana, learned Addl. Advocate General appearing for the respondents submits that the arbitration petition filed by the petitioners is not maintainable, inasmuch as, both the petitioner-Associations are unregistered association and, therefore, they being a non-juristic person, they cannot file the instant petition. In this connection, he relies upon the Division Bench judgment of this court rendered in Rangapara Development Circle v. State of Assam, (2007) 3 GLR 805. 11. The learned Addl. Advocate General further submits that in respect of the petitioner No. 2-Association, they are not a party to the lease agreement and, therefore, they have no locus standi to file the present petition. In this connection, he relies upon the Apex Court decision rendered in S.N. Prasad, Hitek Industries (Bihar) Ltd. v. Monnet Finance Ltd:, (2011) 1 SCC 320 . 12. On merits, the learned Addl. Advocate General submits that the second part of paragraph No. 3 of the lease agreement clearly provides that the Authority is empowered to revise the maintenance charge of services and common areas payable per month from time to time depending upon the actual cost of maintenance. He submits that in tune with the said provision, the Authority has made appropriate revision of the maintenance charge, which cannot be considered was exorbitant and excessive by any means.
He submits that in tune with the said provision, the Authority has made appropriate revision of the maintenance charge, which cannot be considered was exorbitant and excessive by any means. Referring to the Assessment of Income and Expenditure for the financial year of 2010-19 based on audit report and also the maintenance of services and common areas (2010-19) annexed as Annexures-IV and V in the counter-affidavit dated 10.8.2021, respectively, he submits that there are huge deficits for each year under assessment. He submits that the expenditure towards repair and maintenance includes wages of sweepers, security contract cost, water expense, repair and maintenance, building insurance, diesel expense, purchase of electrical goods and garbage disposal contracts. Therefore, there is a huge amount of deficit in the expenditure, which somehow is befog made from other source of income such as, parking contract, rent and hire charges etc. Therefore, the petitioners are clearly mistaken in contending that the cost of maintenance and repair has been revised excessively and over and above the cost of actual maintenance. 13. The learned Addl. Advocate General by referring to paragraph No. 34 of the lease agreement further submits that dispute differences arising out of or in any way touching or relating to the agreement except those decision expressly provided may be referred for arbitration. As can be seen, since revision of maintenance and repair charges are clearly provided in the lease agreement, there is no occasion for the matter to be referred for arbitration. Under the circumstances h submits that the instant petition may be dismissed. 14. I have heard the submissions made by the learned counsels for the rival parties and I have perused the matenals available on record. With regard to the contention that the arbitration petition is not maintainable on account of the petitioner-Association being an unregistered Association, it may be seen that the question before the Apex Court1 in Umesh Goel (supra) was with regard to the interpretation of section 69(3) of the Indian Partnership Act.
With regard to the contention that the arbitration petition is not maintainable on account of the petitioner-Association being an unregistered Association, it may be seen that the question before the Apex Court1 in Umesh Goel (supra) was with regard to the interpretation of section 69(3) of the Indian Partnership Act. Section 69(1) of the said Act provides that no suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the register of firms as a partner in the firm. Section 69(2) of the said Act again provides that no suit to enforce a right arising from a contract shall be instituted in any court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the register of firms as partners in the firm. Section 69(3) further provides that the provisions of sub-sections (1) and (2) shall apply also to a claim of set off or other proceedings to enforce a right arising from a contract, but shall not effect the enforcement of any right to sue for dissolution of a firm or for accounts of a dissolved firm etc. The Apex Court by relying upon the case of Jagdish Chander Gupta v. Kajaria Traders (India) Ltd., AIR 1964 SC 1882 and Kamal Pushp Enterprises v. D.R. Construction Co., (2000) 6 SCC 659 held that section 69 of the Partnership Act vis-a-vis the Act of 1996 having already interpreted in the said two (2) judgments that an arbitral proceedings will not come under the expression “other proceedings” mentioned in section 69(3) of the Partnership Act, the ban imposed under the said section 69 can have no application to arbitral proceedings as well as the arbitral award. The ratio laid down by the Apex Court in my considered view would squarely apply to the present case as well in respect of the petitioner No. 1-Association.
The ratio laid down by the Apex Court in my considered view would squarely apply to the present case as well in respect of the petitioner No. 1-Association. However, in respect of the petitioner No. 2 association, it is an admitted position that they have not entered into any lease agreement with the Authority and that they are only running the shops owned by the members of the petitioner No. 1-Association. Therefore, the petitioner No. 2-Association in my considered view has no locus standi to file the present arbitration petition. 15. From a perusal of the materials available on record, importantly paragraph No. 3 of the lease agreement, there is no explanation or definition as to what heads would be included under the maintenance charge and services and common areas. While the petitioner No. 1-Association rely solely on the expenditure made towards repair and maintenance, the respondent-Authority has imported several other heads, which according to them are to be necessarily included under the head repair and maintenance or for that matter maintenance charges of services and common areas. Therefore, in my considered view, the same has to be examined in appropriate proceedings. In the present petition made under section 11 of the Act of 1996, this court is only called upon to appoint an arbitrator to adjudicate the dispute or otherwise raised by the parties. Therefore, upon due consideration of the petition in its entirety, I am of the considered view that an arbitrator is required to be appointed to consider the dispute raised by the petitioner No. 1-Association against the respondents. 16. I have personally contacted Sh. Saingura Sailo, MJS retired and enquired as to whether he will be willing to be the sole Arbitrator and to which, he has consented to the same. Accordingly, this court appoints Sh. Saingura Sailo, MJS retired, H/No — 15, Middle Kanan, P.O. Vaivakawn, Aizawl-796009 as the sole Arbitrator in terms of section 11 of the Act of 1996. 17. The parties are directed to appear before the Arbitrator with a copy of this order within a period of one (1) month from today whereafter, the Arbitrator shall proceed with the matter in accordance with law and decide the matter within a reasonable period of time. 18.
17. The parties are directed to appear before the Arbitrator with a copy of this order within a period of one (1) month from today whereafter, the Arbitrator shall proceed with the matter in accordance with law and decide the matter within a reasonable period of time. 18. The arbitrator is requested to firstly look into the issue as to whether the nature of dispute raised by the petitioner No. 1-Association calls for an arbitration proceeding and settlement. If the same is decided in the affirmative, the Arbitrator may proceed with the matter on merits. 19. With the above observations and directions, the arbitration petition stands disposed of. Registry to furnish a copy of this order to Mr. Saingura Sailo, MJS retired, the appointed arbitrator.