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1992 Supreme(AP) 621

Andhra Pradesh High Court
Judges : P.VENKATRAMA REDDY
M/s.Hyderabad Sheet Metal and Allied, Industries - Appellant
Versus
M/s.Industrial Packages - Respondent
Decided On : 11-26-92

The Arbitrator's jurisdiction is limited to deciding disputes between members and the society or other persons mentioned in Section 61 of the Act. The Arbitrator cannot direct the allotment of a plot to a sub-lessee without first resuming the plot from the lessee.

Headnote:

ARBITRATION - CO-OPERATIVE SOCIETIES - DISPUTE - ALLOTMENT OF PLOT - JURISDICTION OF ARBITRATOR - AWARD DIRECTING ALLOTMENT OF PLOT TO SUB-LESSEE - VALIDITY - CO-OPERATIVE SOCIETIES ACT, 1964 (A.P.), SECS. 61, 62.

Fact of the Case:

Petitioner, a member of the Co-operative Industrial Estate Ltd., Balanagar, Hyderabad, leased out a portion of the plot allotted to him to the 1st respondent. The 1st respondent became a full-fledged member of the Co-operative Industrial Estate and filed an arbitration petition before the General Manager, District Industrial Centre, under Section 61 of the Andhra Pradesh Co-operative Societies Act, 1964 (the Act), seeking allotment of the plot in her possession. The Arbitrator directed the Co-operative Industrial Estate to take over the plot from the petitioner and allot it to the 1st respondent.

Finding of the Court:

The court held that the Arbitrator exceeded his authority in directing allotment of the plot to the 1st respondent after taking it over from the petitioner. The court found that there was no dispute between the 1st respondent and the Co-operative Industrial Estate with regard to the allotment of the plot and that the Arbitrator could only decide the dispute between the 1st respondent and the petitioner. The court also found that the Arbitrator erred in law by directing the allotment of the plot to the 1st respondent without first resuming the plot from the petitioner.

Issues: 1. Whether the Arbitrator had the jurisdiction to direct the allotment of the plot to the 1st respondent? 2. Whether the Arbitrator erred in law by directing the allotment of the plot to the 1st respondent without first resuming the plot from the petitioner?

Ratio Decidendi: 1. The Arbitrator's jurisdiction is limited to deciding disputes between members and the society or other persons mentioned in Section 61 of the Act. In this case, there was no dispute between the 1st respondent and the Co-operative Industrial Estate with regard to the allotment of the plot. Therefore, the Arbitrator did not have the jurisdiction to direct the allotment of the plot to the 1st respondent. 2. The Arbitrator erred in law by directing the allotment of the plot to the 1st respondent without first resuming the plot from the petitioner. The Co-operative Industrial Estate could only allot the plot to the 1st respondent after following the due procedure for resuming the plot from the petitioner.

Final Decision: The court quashed the impugned Award and directed the Co-operative Industrial Estate to consider the request of the 1st respondent for allotment of the plot on its own merits after resuming the plot from the petitioner.

P. VENKATARAMA REDDY, J.

( 1 ) THE Award dated 4-6-1988 passed by the 3rd respondent acting as Arbitator under Section 62 of the Andhra Pradesh Co-operative Societies Act, 1964 (hereinafter, referred to as the Act ) has been question in this writ petition. By that Award, the Co-operative Industrial Estate Ltd. , Balanagar, Hyderabad (2nd respondent herein) was directed to take over the plot of 6,000 sq. ft. in B-l unit which was in possession and enjoyment of the first respondent since 7-8-1979 and to allot the same to the 1st respondent under Clause 24 of the deed of Agreement of lease-cum-sale.

( 2 ) THE relevant facts are these : The petitioner herein, M/s. Hyderabad Sheet Metal and Allied Industries was allotted plot No. B-l of an extent of 2620 sq. meters in the Co-operative Industrial Estate, Balanagarfor the establishment of its factory under a deed of agreement of lease-cum-sale dated 19-6-1973. After setting up its factory, the petitioner let out a portion of the said plot admeasuring 6000 sq. ft. to the 1st respondent under a lease-deed dated 15-9-1979 for a period of three years. On 1-2-1983, it appears, there was an extension of lease. The 1st respondent became an associate member of the Co-operative Industrial Estate Ltd. in the year 1983. Thereafter, a Tripartite agreement was entered into between the Co-operative Industrial Estate (R2) M/s. Hyderabad Sheet Metal and Allied Industies (petitioner) and M/s. Industrial Packages (Rl ). It is stated in that agreement that the petitioner leased out with the approval of the 2nd respondent a portion of the Unit to the 1st respondent on a rent of Rs. 700/ - per month to run a registered small scale industry for a period of eleven months commencing from 1-2-1983. It was stipulated in that agreement that the petitioner and the 1st respondent shall be jointly and severally liable to pay to the 2nd respondent servicing charges at 2 1/2% of rent per month subject to a minimum of Rs. 25. 00 per month. R1 undertook to pay the monthly rent to the Industrial Estate in case the petitioner defaults in the payment of rent to the Industrial Estate. It appears that in or about the year 1985, the petitioner called upon R1 to hand over the possession of the plot and on her refusal to do so, there has. been civil litigation between the parties. It is not relevant to refer to those details. R1 became full-fledged member of the Co-operative Industrial Estate on 19-9-1987. It appears from the material papers filed by the Counsel for R1 that R1 filed an application before R2 on 9-10-1987 for the allotment of plot of 6000 sq. ft. which was in her possession. A few days thereafter, Rl submitted a represenlation on 16-10-1987 to the Commissioner of Industries. The contents of this representation are not known. However, on the basis of this representation, the Commissioner of Industries, by his communication dated 21-10-1987, advised Rl to file an arbitration case against the petitioner under Section 61 of the Act before the General Manager, District Industries Centre, Rangareddy District/ Registrar of the District and obtain an interlocutory order under S. 62 (4) of the Act against any dislocation of the unit. On the same day, the Commissioner of Industries addressed a letter to the Chairman of the Cooperative Industrial Estate Ltd. While referring to the representation of Rl, the Commissioner requested the Chairman to take necessary action to see that no disturbance or dislocation was caused to the Industrial Unit of R1 till her case is disposed of by the Government. A day earlier, Rl filed an arbitration petition before the General Manager, District Industrial Centre (R4) under Section 61 of the Act. By proceedings dated 19-1-1988, R4 appointed Sri G. V. Raghavaiah, Manager (VI and T) District Industries Centre, R. R. District (R3) in purported exercise of power under Section 62 (1) (c) of the Act. R3 issued a notice on 29-1-1988 calling upon the petitioner and R2 to file counters together











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