M P FRUIT PRODUCT Vs. M P STATE AGRO INDUSTRIES DEVELOPMENT CORPORATION LTD

JUDGEMENT

(1.) THE appeal has been preferred under section 39 of the Arbitration Act, 1940 by the lessee aggrieved by judgment dated 20-11-2003 passed by Fifth Additional District Judge, Bhopal in the case RSC No. 97-A/01.

(2.) THE facts giving rise to the appeal are that on 22-11-1985 the appellant firm M. P. Food Products Ltd. entered into a lease agreement with the M. P. Agro industries Development Corporation Ltd. , Bhopal (hereinafter referred to as the corporation ). The Corporation has floated tender for leasing out its Canning Unit at Bhopal. The offer made by the appellant to obtain it on the rent of Rs. 6663. 33/- per month, was accepted. Initially the period of lease was 5 years, on 1-4-1986 the possession was given. The rent was not paid and certain disputes were raised by the appellant. One after the other six Arbitrators were appointed. First three Arbitrators had to be changed, fourth Arbitrator Shri S. S. Sharma submitted resignation after recording of the evidence. Fifth Arbitrator Shri D. N. Dixit after working for sometime expressed his inability to continue. Sixth arbitrator Shri M. M. Dubey has passed the impugned award dated 30th June, 2001 directing payment of agreed rent w. e. f. 1-10-1987 without any increase for subsequent years, less the amount already paid and also less the rent of the period for which the appellant firm was kept out possession and also after deducting the security deposit amount, if forfeited, and after adjusting the bank guarantee amount, if encashed. As regards the counter-claim which mainly consists of claim on account of interest, the Corporation has been given the liberty to determine the tenancy or the lease of the appellant firm after due notice under the provisions of the Transfer of Property Act and take possession of the leased unit and the property attached to it. No other ancillary claim or counter-claim was sustainable. The amount payable by the appellant firm, if paid on or before the determination of its lease and delivery of possession back to the Corporation, shall carry interest @ 6% per annum and in default, the interest payable from the date of default would be @ 12% per annum. The parties shall bear their own costs.

(3.) THE appellant firm assailed the award before the Court below mainly on the ground that the Court has fixed the fee to be paid to the Arbitrator of Rs. 10,000/ -. The Arbitrator had demanded a sum of Rs. 11,000/- as fee for counterclaim made by the Corporation. The objector firm declined to make the payment of the additional fee demanded by the Arbitrator to adjudicate the counter-claim. The sum fixed for adjudication of the counter-claim was paid by the Corporation. The demand of the additional fee by the Arbitrator amounted to the misconduct. The second objection raised by the firm was that the award was not passed within the period of four months fixed by the Court. The third objection was that on 5-5-2001 order sheet was written in the absence of counsel of the firm. On 19-5-2001 the Court was approached. Court had issued the notice to the Arbitrator, the notice was received by him, but still he did not stay the proceedings. The advocate of the firm did not appear on 26-5-2001, arguments were heard on 27-5-2001 and thereafter the award was passed. The objector further submitted that the machinery supplied was not proper, telephone, water connection, compound wall, furniture were not provided, that caused loss to the firm. For certain period unit remained closed. The firm prayed for appointment of new Arbitrator. The firm also prayed for initiating action to prosecute the Arbitrator as he committed the misconduct,