Back
IN THE HIGH COURT OF JAMMU AND KASHMIR AND LADAKH AT JAMMU
N. Kotiswar Singh, J.
Shukal Singh – Petitioner
Versus
G.M., Jammu Co-Operative Wholesale Ltd. & Anr. – Respondents
AA No. 17/2009
Decided On : 02-06-2023
ARBITRATION - DISPUTE RESOLUTION - Arbitration and Conciliation Act, 1996 - Sections 8, 11; J&K Cooperative Societies Act, 1989 - Section 70 - The court examined the applicability of the Arbitration and Conciliation Act, 1996 and the J&K Cooperative Societies Act, 1989 in resolving a dispute over a lease agreement. It highlighted that while the agreement contained an arbitration clause, the dispute fell under Section 70 of the Societies Act, which mandates that disputes involving cooperative societies be referred to the Registrar. The court concluded that the applicant, despite being an employee, entered the agreement as a lessee, thus allowing the arbitration clause to be invoked, provided the agreement is duly stamped and registered.
Fact of the Case:
The applicant sought the appointment of an arbitrator under the Arbitration and Conciliation Act, 1996 for a dispute regarding a lease agreement for a shop in SMGS Hospital, Jammu. The applicant claimed that the respondent attempted to oust him from the shop and unilaterally increased the rent, leading to a dispute. The respondents contended that the applicant was an employee of the cooperative society and that the dispute should be resolved under the J&K Cooperative Societies Act, 1989.
Finding of the Court:
The court found that the applicant had a valid lease agreement with an arbitration clause. However, it also recognized that the dispute related to the business of the cooperative society, which typically falls under the jurisdiction of the Registrar as per Section 70 of the Societies Act. The court determined that the applicant's status as an employee did not negate his position as a lessee in the context of the agreement.
Issues: 1. Whether the dispute should be referred to arbitration under the Arbitration and Conciliation Act or to the Registrar under the J&K Cooperative Societies Act. 2. The enforceability of the lease agreement given its lack of proper stamping and registration.
Ratio Decidendi: The court held that while the arbitration clause in the lease agreement was valid, the dispute's nature required it to be addressed under Section 70 of the Societies Act, unless the agreement was properly stamped and registered. The court emphasized the importance of the jural relationship between the parties and the need for compliance with statutory requirements for the agreement to be enforceable.
Final Decision: The application was disposed of, allowing the applicant to submit a properly stamped and registered copy of the lease agreement to enable the court to appoint an arbitrator under Section 11 of the Arbitration and Conciliation Act.
JUDGMENT :
N. Kotiswar Singh, J.
1. The present application has been filed under Section 8 read with Section 11 of the Arbitration and Conciliation Act, 1996 (for short the 'Act') for appointment of an arbitrator to settle the dispute between the applicant and the respondents.
2. It is the case of the applicant that there is a shop, being Shop No. 2, situated in SMGS Hospital, Jammu, which is under the management of the respondent no. 1, which was allotted to the applicant on lease for a period of 20 years with effect from 31.01.2003 for which an Agreement was executed on 31.01.2003.
3. As per the aforesaid Agreement, the applicant was to pay a sum of Rs. 50,000 per month as commission-cum-rent for the first 5 years, which was to be enhanced by 10% for the next 5 years and on expiry of 10 years, to be enhanced by another 10% and after 15 years of the contract, the rent was to be increased by 15%.
4. The applicant, accordingly, had been running the Fair Price Shop and selling medicines under the name and style of 'Super Bazar Medical Fair Price Shop'. According to the applicant, he was constrained to approach the Court of Principal District Judge, Jammu, under Section 9 of the Act as the respondent no. 1 sought to oust him but managed to obtain a status quo order from the Court of Principal District Judge, Jammu.
5. The applicant also stated that though he was to pay the monthly rent of Rs. 55,000/- he was compelled to pay the sum of Rs. 60,000 per month because of which a dispute arose between the applicant and respondents.
6. It is also the case of the applicant that as per Clause 5 the aforesaid Agreement dated 31.01.2003, the Respondent No. 1 cannot sublet the shop to any other person and that the Respondent No. 1 had no right to interfere with the running of the shop before expiry of 20 years as per the Agreement.
7. It has been also alleged by the applicant that he was transferred and posted at Medical Co-operative Shop, Gandhi Nagar Hospital, Jammu, by an order dated 30.05.2009 and the respondent no.1 was interfering with the running the shop, though the applicant is neither an employee of the respondent no. 1 nor receiving any salary or emolument from the respondent no. 1, as he is only a lessee as per the aforesaid Agreement.
The applicant also alleged that the respondent no.1 unilaterally rescinded the Agreement, thus, creating a dispute.
8. The applicant stated it is provided under Clause 11 of the Agreement that if any difference arises out of the aforesaid Agreement between the parties, it is required to be referred to an arbitrator to be appointed with consent of both the parties, which shall be final and binding on the parties.
Accordingly, the applicant served a notice to the respondent no. 1 that he will not pay the rent of Rs. 60,000/- and he cannot be ousted before expiry of 20 years w.e.f. 31.01.2003 and proposed the name of an arbitrator for approval by the respondent no.1 for referring the matter to the named arbitrator in terms of Clause 11 of the Agreement, to which the respondent no. 1 responded by denying receiving the rent of Rs. 60,000/-.
9. This application has been vehemently opposed by the respondents by raising a preliminary objection that the application is not at all maintainable on the grounds mentioned hereinafter.
10. It has been contended by the respondents that as per the Agreement executed on 31.01.2003, the parties to the said deed of Agreement are the General Manager, Rampal Sharma, Jammu Cooperative Wholesale Ltd. and Shukal Singh, the applicant who was an employee of the Jammu Cooperative Wholesale Ltd., Super Bazar, Jammu, a society registered under the J&K Co-operative Society Registration Act, 1989 which is controlled by the Government and the shop belonged to the Co-operative Society, as such, if any dispute arises which pertains to the management or business of the said Cooperative Society, such dispute is to be resolved in terms of Section 70 of Chapter 9 of J&K Cooperative Societies Act, 19
The court established that disputes involving cooperative societies must be resolved in accordance with the provisions of the J&K Cooperative Societies Act, unless the parties have a valid and enforc....
Adherence to the terms of the agreement and exhaustion of agreed procedures before seeking court intervention in arbitration disputes.
The main legal point established is that the mere employment of an individual as an Arbitrator does not ipso facto raise a presumption of bias or partiality, and adherence to the terms of the agreeme....
The appointment of an arbitrator with potential bias due to their governmental role violates Section 12(5) of the Arbitration and Conciliation Act, necessitating an independent arbitrator.
The main legal point established in the judgment is the enforceability of arbitration agreements in the Tenancy Agreement and the Consolidated Charges Agreement under Section 8 of the Arbitration and....
Arbitrators under co-operative housing acts cannot declare title; their jurisdiction is limited to disputes over allotments, not ownership rights.
The sufficiency of stamp duty payment rendered the document admissible, and the named arbitrator was disqualified, leading to the appointment of Hon’ble Shri Justice K. K. Lahoti as Arbitrator.
The court's authority under Section 11 of the Arbitration Act restricts to determining the existence of an arbitration agreement, deferring substantive disputes to the arbitrator.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
