NAVODAYA MASS ENTERTAINMENT LTD. Vs. JM COMBINES

JUDGEMENT

(1.) THESE appeals have been filed assailing the common judgment and order dated 1st September, 2009 passed by the Madras High Court in OSA Nos. 34 of 2009 and 140 of 2009 by which the High Court while allowing OSA No. 34 of 2009 filed by Respondent No. 1, dismissed OSA No. 140 of 2009 filed by the Appellant herein. The facts of the case briefly stated are as follows: The Appellant offered a business proposal to the first Respondent herein and they entered into an agreement on 30th July, 1998, whereby it was agreed that the first Respondent shall procure, install and operate an amusement ride for both adults and children called 'SLAMBOB' in the amusement park 'Kishkinta' which was maintained by the Appellant. The Agreement also provided that the first Respondent shall maintain the equipment by effecting necessary repairs, etc. The Agreement further provided that the collection from the ride would be shared in the ratio of 60: 40 by the first Respondent and the Appellant in the first year of its operation, and thereafter in the ratio of 50: 50 in the subsequent years. It also provided for a guaranteed minimum gross collection of Rs. 10 lakh for the first year and Rs. 8.33 lakh for the subsequent 9 years. The agreement was in force for a period of 10 years and could be renewed/terminated as per the terms thereof. Pursuant to the agreement, the first Respondent installed the equipment on 16th April, 1999 and it started functioning from the said date. The Appellant defaulted in making the payments from the year 2000 -2001 onwards. Despite repeated demands, the Appellant failed to make the payments, hence notice was served to the Appellant calling upon the Appellant to pay the outstanding amount, along with interest at the rate of 24 percent per annum.

(2.) IN these circumstances, dispute arose between the parties which was covered under the said agreement by arbitration clause and accordingly an arbitrator was appointed. The first Respondent filed a claim for a sum of Rs. 13,94,240 together with interest on 16th October, 2006. The arbitrator published his award allowing the claim to the tune of Rs. 13,94,240 with interest at the rate of 12 percent per annum, but disallowed the Minimum Guaranteed amount of Rs. 69,416 per month for the remaining 69 months, commencing from July, 2003. Aggrieved by the award in respect of the disallowed claim, the first Respondent challenged the award before the Madras High Court under by filing OP No. 37 of 2007 and aggrieved over the entire award, the Appellant challenged the same before the Madras High Court by filing OP No. 362 of 2007 Under Section 34 of the Arbitration and Conciliation Act, 1996. The learned Single Judge of the Madras High Court dismissed both these applications. Aggrieved by the order passed by the learned Single Judge of the High Court, appeals were filed by both the parties before the Division Bench of the High Court. The High Court by a common judgment and order dated 1st September, 2009 dismissed the appeal filed by the Appellant but allowed the appeal filed by the first Respondent herein. The High Court after scrutinizing all the materials placed before it came to the conclusion that it is not in controversy that the agreement was entered into between the parties on July 30, 1998. The parties also agreed to the ratio in which the collection of the amusement ride was to be shared and the said Agreement was in force for a period of 10 years and was also renewable. The agreement also stipulated for a guaranteed minimum gross collection of Rs. 10 lakh for the first year and Rs. 8.33 lakh for the subsequent 9 years.

(3.) WE have perused the order passed by the Division Bench of the High Court. We have also heard the Learned Counsel for the parties. Learned Counsel appearing on behalf of the Appellant submitted that the arbitrator and the courts have failed to appreciate the fact that the claim was not on revenue sharing basis, i.e., the gross income but it was on the basis of minimum guaranteed amount stated in the petitions. Learned Counsel appearing on behalf of the Appellant tried to argue before us that the alleged agreement was not legal, valid and enforceable. He further submitted that the same was one -sided agreement. He also submitted that the Division Bench of the High Court ignored and overlooked Clause 14 of the agreement which deals with the termination of the agreement by the conduct of the parties. We are afraid that such points, as has been tried to be contended before us, it appears, were never urged before the learned Single Judge or before the Division Bench of the High Court. The dispute between the parries has been adjudicated upon by the arbitrator and the award has been published. The Division Bench of the High Court has found that the award cannot be said to be perverse or that there is any cogent reason to set aside the same.