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I have installed 2 instances on Openstack Controller Running Mitaka-->what does that mean? If you have 2 controllers then I would advice to delete one or add one. I think you should always have an odd number of Controllers in any setup.

So By default the scheduler will look at the available resources in your compute nodes and pick one to spawn your machines. The only way to force it to check elsewhere is to have more availability zones. (which you do),maybe make a new one with only the compute node #2 in it and try to spawn. As for the problem it self this usually means that some service is down or that for some reason your command is malformed. (did you try to boot throught UI ?)

I would check /var/log/nova-all.log and neutron.log at the compute nodes to see what might be the problem.