Full Judgment Text
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2376 OF 2020
[ARISING OUT OF SPECIAL LEAVE PETITION [C] NO. 25056 OF 2016]
FIRM RAJASTHAN UDYOG & ORS. …..APPELLANT(S)
VERSUS
HINDUSTAN ENGINEERING & INDUSTRIES LTD.
…RESPONDENT(S)
J U D G M E N T
Vineet Saran, J.
Leave granted.
The question for consideration in the present appeal is as
2.
to whether an Arbitration Award, which determined the
compensation amount for the land to be paid under agreement for
Signature Not Verified
sale, can be directed to be executed as a suit for specific
Digitally signed by
DEEPAK SINGH
Date: 2020.04.24
16:59:09 IST
Reason:
performance of agreement, when the reference to the Arbitrator (as
2
per the agreement) was only for fixation of price of land in question,
and the Arbitration Award was also only with regard to the same.
3. Briefly stated, the facts of this case are that the
appellant no.1 is a partnership firm and other appellants are its
partners. The appellant firm is owner of 249.60 Bighas
(approximately 100 acres) of land, which was purchased by the
appellant in the year 1966. The dispute in the present appeal
relates to a period spreading over four decades. The said land was
subject matter of acquisition, for which a Notification dated
13.03.1973 under Section 4 of the Rajasthan Land Acquisition Act,
1953 (for short, “Act of 1953”), was issued by the State of
Rajasthan, which acquisition was for the benefit of the respondent
industry. The said notification was challenged by the appellant
before the Rajasthan High Court in Writ Petition no.389 of 1974,
which was dismissed by a learned Single Judge of the High Court
vide judgment dated 23.07.1974. Challenging the same, the
appellant filed Special Appeal No.448 of 1974 before the Division
Bench of the High Court, during the pendency of which a
declaration under Section 6, read with Section 17 of the Act of
1953, was issued by the State of Rajasthan on 13.09.1975. The
Special Appeal challenging the said acquisition was allowed by the
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Division Bench of the Rajasthan High Court, vide its judgment
dated 05.10.1976 and the acquisition proceedings were thus
quashed. Challenging the said decision of the Rajasthan High
Court, respondentHindustan Engineering & Industries Limited, as
well as the State of Rajasthan, filed separate Special Leave Petitions
(No. 4199 of 1977 and 1060 of 1978, respectively), which petitions
were dismissed by this Court by order dated 29.3.1994.
4. During the pendency of the said Special Leave Petitions,
on the intervention of the then Chief MinistercumMinister of
Industries of the State of Rajasthan, an agreement was arrived at
between the parties herein, as well as the State of Rajasthan, which
was recorded in the Minutes of the meeting dated 27.11.1978,
which was to the effect that out of the 249.60 bighas of land
belonging to the appellant firm, approximately 104 bighas would be
retained by the appellant and the remaining about 145 bighas
would be sold to the respondentCompany, subject to the fixation of
price of land, construction etc. to be finalised through Arbitration.
5. Pursuant thereto, an Agreement dated 16.02.1979 was
entered into between the appellantfirm and the respondent
Company. The said Agreement dated 16.02.1979 was superseded
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by another Agreement dated 01.02.1980 executed between the
parties.
6. The matter of determination of price of the land to be sold
by the appellant to the respondentCompany, was decided by the
sole Arbitrator, Justice Chandra Bhan Bhargav (Retired), vide his
Award dated 09.06.1985. In the said Award, the Arbitrator
mentioned that the parties had “referred their dispute regarding
determination of compensation of land to me as Sole Arbitrator”. The
salient feature decided in the said Award was that the market value
of the land to be transferred in favour of the respondentCompany
would be determined as on 27.11.1978, which was the date on
which the parties agreed to transfer the land. In pursuance thereof,
the total compensation amount for the land in question was
determined by the Arbitrator as Rs.12,18,700/. The said Award
was filed before the Additional District Judge1, Bharatpur on
10.06.1985. After the Award was passed, the respondent
Company, vide its communication dated 15.07.1985 conveyed its
acceptance of the Award to the appellant by registered post. The
same was also conveyed to the Arbitrator vide communication dated
18.07.1985.
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7. The appellant then filed its objections to the Award before
the Additional District Judge1, Bharatpur and vide order dated
22.11.1988, the objections were allowed and the matter was
remanded back to the Sole Arbitrator. Challenging the said order
dated 22.11.1988, the respondentCompany filed Civil Revision
Petition No. 163 of 1990 before the Rajasthan High Court, which
Revision Petition was allowed on 01.12.1993 and the Award dated
09.06.1985 passed by the Arbitrator was affirmed and made Rule of
the Court. Challenging the said order of the Rajasthan High Court,
the appellant had filed the Special Leave Petition No.3684 of 1994,
which was dismissed by this Court on 29.03.1994. The Award thus
attained finality.
8. It was thereafter that on 16.05.1994, the respondent
Company filed an application for execution of the Award. In the
said application, it was stated that “ according to the directions
contained in the Award of the Arbitrator, the petitioner Hindustan
Corporation Limited, is required to furnish stamp paper to the
”. The prayer made
respondent for execution of the sale deed _ _ _ _
in the said application was that the appellants herein be directed to
take steps and execute the sale deed on the stamp papers filed by
the respondent herein and thereafter produce the sale deed before
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the Sub Registrar for its registration. In the alternative, it was
prayed that if the appellants herein failed to execute the sale deed,
the same may be executed by the Court. In response to the same,
the appellants filed its reply on 19.7.1994 opposing the execution
application and specially denied that any such direction for the
execution of the sale deed, as has been made in the prayer of the
application by the respondent herein, was made in the Award of the
Arbitrator.
9 . By judgment and order dated 05.01.1995, the Additional
District JudgeI, Bharatpur, exercising its power under Section 17
of the Arbitration Act, 1940, allowed the application of the
respondent herein and directed the appellants to execute and
register the sale deed and hand over possession of the land in
question to the respondent herein. Aggrieved by the judgment of
the Additional District JudgeI, Bharatpur, dated 05.01.1995, the
appellants filed Civil Revision Petition No. 81 of 1995 before the
Rajasthan High Court.
10 . During the pendency of the Civil Revision Petition filed
by the appellants, the respondentCompany filed Civil Suit No. 60 of
1996 against the appellants seeking specific performance of the
Agreement dated 01.02.1980 between the parties i.e., the
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appellants and the respondent Company. The Civil Revision
Petition No. 81 of 1995 filed by the appellants remained pending
before the Rajasthan High Court, when the respondentCompany
had filed the Civil Suit No. 60 of 1996. Even when the Civil Suit of
the appellants was not decided, the respondent Company sought
to withdraw the Civil Suit No. 60 of 1996 vide its application dated
06.02.2006. Pursuant thereto, the Civil Suit No. 60 of 1996
seeking specific performance of the Agreement dated 01.02.1980
was permitted to be unconditionally withdrawn by the respondent
Company vide order dated 13.02.2006 passed by the Trial Court.
. It was then, after more than a decade of withdrawal of
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the suit by the respondent – Company, that the Civil Revision
Petition 81 of 1995, challenging the order of the Additional District
JudgeI dated 05.01.1995 was dismissed by the Rajasthan High
Court by a detailed order dated 04.07.2016. The High Court opined
that the Civil Suit No. 60 of 1996 was filed by the respondent–
Company as a matter of abundant precaution but was later
withdrawn and mere filing of the Civil Suit would not amount to
admission by the respondentCompany that the Award and
subsequent order based on it, were not suitable and enforceable.
Upholding the order of the Additional District JudgeI dated
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05.01.1995, the Civil Revision Petition was dismissed by the
Rajasthan High Court. Aggrieved by the said judgment dated
04.07.2016, this appeal has been filed by way of Special Leave
Petition.
The submission of Mr. Sudhir Chandra Agarwala,
12.
learned Senior Counsel for the appellants is that the Executing
Court has travelled beyond the Award while passing the order dated
05.01.1995, inasmuch as by the Arbitration Award dated
09.06.1985 only price of the land in question was determined by
the Arbitrator and it did not declare, create or confer any right, title
or interest in the land in question in favour of the respondent –
Company. It was contended that by the Agreement dated
01.02.1980, the appellants had agreed to sell their land to the
respondentCompany at the rate to be fixed in future by an
Arbitrator, and the respondentCompany was given an option in
the agreement to be exercised within a period of 45 days of the
fixing of the price by the Arbitrator, either to purchase or decline to
purchase the land. Thus, according to the learned Senior Counsel,
the Agreement dated 01.02.1980 was to result in a concluded
contract only after the respondentCompany had either given its
consent to purchase the land at the price fixed by the Arbitrator or
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declined to do so. It was thus contended that the respondent had
not acquired any enforceable right even at the time of the passing of
the Award, as there did not exist any concluded contract between
the parties even at the time of the passing of the Award, as the
contractual obligations of the parties were to arise subsequent to
the passing of the Award and only after the respondentCompany
had exercised its option of purchasing the land at the price fixed by
the Arbitrator. Learned Senior Counsel contended that the
Executing Court could not have gone behind or beyond the Award,
and thus could not have considered the Agreement dated
01.02.1980 entered into between the parties. The scope of
reference to the Arbitrator being only with regard to determination
of the price of land at which it may be sold by the appellants to the
respondentCompany, thus in execution of the Award, no direction
for execution of the sale deed by the appellants in favour of the
respondentCompany in pursuance of the Agreement dated
01.02.1980 could have been issued by Executing Court, especially
when the suit for specific performance of the Agreement dated
01.02.1980 had been withdrawn by the respondentCompany on
13.02.2006, which was without any condition.
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13. Learned Senior Counsel for the appellants further
submitted that any instrument or award creating right, title or
interest in an immoveable property would be required to be
compulsorily registered under Registration Act, and the same
having not been registered, could not be executable. It was
contended that neither the Agreement dated 01.02.1980 nor the
Award dated 09.06.1985, was registered in the present case. It was
vehemently urged that when the respondentCompany was barred
for seeking execution of the Agreement dated 01.02.1980 (which
was not registered) and also when the Civil Suit No. 60 of 1996 filed
by the respondentCompany for specific performance dated
01.02.1980 was dismissed as unconditionally withdrawn on an
application filed under Order XXXIII Rule 1 Code of Civil Procedure
by the respondent on 06.02.2006, the execution of the said
agreement dated 01.02.1980 (while deciding the application under
Section 17 of the Arbitration Act, 1940) in execution of the Award
determining the price of the land could not have been passed. In
the alternative, it was contended that the Agreement dated
01.02.1980 was not enforceable also because the same had been
obtained by undue influence.
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14 . With regard to the price of land as determined in the
Award of the Arbitrator, on merits, it was submitted that the price
which was fixed as on 27.11.1978, and not the date on which the
sale deed was to be executed. Since the price fixed was a meagre
amount of Rs. 12.18 lacs for about 145 bighas (about 5560 acres)
of land, the fixation of the price under the Award was highly
unreasonable as the present value of the land would be in crores.
In the end, learned Senior Counsel for the appellants submitted
that as proposed and recorded in this Court’s Order dated
23.02.2007 in this appeal, the appellants were ready to compensate
the respondent–Company towards costs of litigation and other
expenses incurred by it, which the appellants are still ready and
willing to pay. While concluding his submission, learned Senior
Counsel reiterated that the Executing Court had grossly erred and
exceeded its jurisdiction in travelling beyond the Award, which was
only for fixation of the price of land and not execution of sale deed.
It was thus urged that the orders dated 05.01.1985 passed by the
Executing Court and the order dated 04.07.2016 passed by the
Rajasthan High Court in Civil Revision Petition, be quashed.
15 . Per contra Shri Dushyant Dave and Shri Sidharth Dave,
learned Senior Counsel appearing for the respondentCompany
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contended that this is not a case where the Court should exercise
its discretionary jurisdiction under Article 136 of the Constitution
as the appellants had agreed to sell the land in question in terms of
the Agreement dated 01.02.1980, at the price to be fixed by the
Arbitrator, and once the Arbitrator had fixed price of land, the
execution of the same, as directed by the Executing Court, was
perfectly justified. It was the solemn agreement entered into
between the parties in the year 1980, which was sought to be
executed after the passing of the Award of the Arbitrator on
09.06.1985 and by directing execution of sale deed, the Executing
Court has done substantial justice between the parties. It has
been contended that the appellants had never filed any suit for
declaration that the Agreement dated 01.02.1980 was void by virtue
of Section 23 of the Indian Contract Act, 1872, nor did it ever raise
the challenge to the validity and legality of the agreement while
assailing the Award or while resisting the execution proceedings.
Learned Senior Counsel submitted that it was wrong to allege that
the agreement entered into by the appellants was purportedly
under coercion. The agreement always remained binding between
the parties and was executable after the determination of price of
land in question by the Arbitrator, and the appellants could not
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seek to wriggle out of the same on any count. The quantum of price
of the land as fixed by the Arbitrator could not now be reagitated on
the ground that the current market value of the land is very high.
It was then contended that the power of the Executing Court was
very wide and it was its duty to give effect to the Award of the
Arbitrator. It was thus urged that the scope and power of the
Executing Court has been held to be wide enough to interpret the
Award, the agreement upon which the Award is based, and also the
pleadings. Thus, while considering the above, the Executing Court
was justified in ordering the execution of the agreement and by
having done so, it was not only justified and suitable in the facts of
the present case, but the Court has done complete justice between
the parties.
16 . As regards the filing the Civil Suit No. 60 of 1996 for
specific performance of the Agreement dated 01.02.1980 by the
respondentCompany, learned Senior Counsel for the respondent
Company has submitted that on receiving legal advice, the said
Civil Suit No. 60 of 1996 was withdrawn on 13.02.2006, as the
petition for execution of the Award was already pending. It has been
submitted that the contention that filing of the Civil Suit No. 60 of
1996 for specific performance of the Agreement dated 01.02.1980
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tantamounts to admission on the part of the respondentCompany
that the Award did not envisage direction for execution of sale deed
and handing over the possession of the land in question, is wholly
misconceived, as in any case, there cannot be any admission
against the law. Learned Senior Counsel for the respondent thus
contended that the appeal is devoid of merits, and deserves to be
dismissed.
17 . In the end, with regard to the order of this Court dated
23.02.2017 passed in this appeal, giving suggestion to the
respondentCompany that whether the respondent Company
would be satisfied if Rs.60 lacs was paid to it towards cost of
litigation and other expenses made by it and put the controversy to
the end, learned Senior Counsel for the respondent suggested that
the respondentCompany would be, on the other hand, agreeable to
deposit Rs.60 lacs to be paid to the appellants for putting a quietus
to the litigation.
18 . We have heard learned Senior Counsel for the parties at
length and have perused the record.
19 . Learned Senior Counsel for the parties have, in support
of their respective submissions, relied on several decisions rendered
15
by this Court, which shall be considered while dealing with their
submissions.
20. The facts of this case, relevant for the purpose of this
appeal, may be summarised as follows:
(a) In 1966, the appellant firm purchased 249.60 bighas
(app. 100 acres) of land.
(b) On 13.03.1973, a Notification under Section 4 of the
Rajasthan Land Acquisition Act, 1953 was issued for
acquisition of said land for benefit of respondent
industry.
(c) On 23.07.1974, Rajasthan High Court dismissed the
Writ Petition of the appellant herein, challenging the
aforesaid acquisition.
(d) On 13.09.1975, a declaration under Section 6 of the
Act of 1953 issued by the State of Rajasthan.
(e) On 05.10.1976, a Special Appeal against the order
dated 23.07.1974 passed in Writ was allowed by the
Division Bench of the Rajasthan High Court and the
acquisition proceedings were quashed.
(f) In 1977/1978, Special Leave Petitions challenging the
judgment dated 05.10.1976 were filed by respondent
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and State of Rajasthan, which petitions were dismissed
by this Court on 29.03.1994.
(g) On 27.11.1978, on the intervention of the Chief
Minister of the State of Rajasthan, an agreement was
arrived at to the effect that out of 249.60 bighas, 104
bighas would be retained by the appellant herein and
145 bighas be sold to the respondent herein, subject to
price to be fixed through Arbitration.
(h) On 16.02.1979, an agreement was entered into
between the appellant and respondent herein.
(i) On 01.02.1980, a fresh agreement was entered into
between the parties superseding the earlier agreement
dated 16.02.1979, whereby it was provided that the
price of about 145 bighas of land to be sold to the
respondent would be determined through arbitration.
(j) On 09.06.1985, an award passed by the Arbitrator
fixing price of 145 bighas of land (as on 27.11.1978) to
be Rs.12,18,700, which would be the price payable for
the land to be sold to the respondent.
(k) Appellant herein filed objections to the award before
the ADJ1, Bharatpur.
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(l) On 22.11.1988, ADJ1, Bharatpur allowed the
objections and remanded the matter back to the
Arbitrator.
(m) Challenging the said order, respondent filed Civil
Revision Petition No. 163 of 1993 before the Rajasthan
High Court.
(n) On 01.12.1993, Civil Revision Petition was allowed by
the Rajasthan High Court and the award dated
09.06.1985, was affirmed and made Rule of the Court.
(o) On 29.03.1994, the Special Leave Petition filed by the
appellant against the order dated 01.12.1993 was
dismissed by this Court and the award attained
finality.
(p) On 16.05.1994, the respondent filed an application
under Section 17 of the Arbitration Act for execution of
the award dated 09.06.1985.
(q) On 06.07.1994, the appellant filed objections to the
application for execution of the award.
(r) On 05.01.1995, ADJ1 Bharatpur allowed the
application of the respondent and directed the
appellant to execute a registered sale deed and hand
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over the possession of land in question to the
respondent.
(s) In 1995, the appellant filed Civil Revision Petition No.
81 of 1995 before the Rajasthan High Court,
challenging the order of the ADJ1 Bharatpur dated
05.01.1995 which remained pending till 04.07.2016.
(t) On 29.11.1996, the respondent filed Civil Suit No. 60 of
1996 against appellant seeking specific performance of
Agreement dated 01.02.1980.
(u) On 06.02.2006, the respondent filed an application to
withdraw its Civil Suit No. 60 of 1996.
(v) On 13.02.2006, Civil Suit No. 60 of 1996 allowed to be
withdrawn unconditionally.
(w) On 04.07.2016, impugned order passed by the
Rajasthan High Court in Civil Revision Petition No. 81
of 1995 filed by the respondent, whereby order of ADJ
1, Bharatpur dated 05.01.1985 was upheld.
(x) On 17.08.2016, the appellant filed this Appeal,
challenging the judgment dated 04.07.2016.
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(y) On 02.09.2016, this Court passed Stay Order in this
Appeal on deposit of Rs.50,00,000/ by the appellant in
the Registry of this Court.
(z) On 23.02.2017, this Court recorded a suggestion in the
order that whether the respondent would be satisfied to
take Rs.60,00,000/ towards the cost of litigation and
other expenses and put the controversy to an end.
21. The anchor sheet of the case of the respondent is the
Agreement dated 01.02.1980 between the parties (i.e. appellant and
respondent) as well as the Arbitration award dated 09.06.1985.
22. The relevant portion of the Agreement dated 01.02.1980
(superseding the earlier Agreement dated 16.02.1979) is reproduced
below:
“………………………….
AND WHEREAS in pursuance of the
aforementioned agreement for
arbitration, the dispute was agreed
to be referred to arbitration by
Hon’ble exchief Justice Mr. B.P. Beri
for determining the quantum of
compensation to be paid to Party
No.2 in respect of land under
acquisition in accordance with the
provisions of the Rajasthan Land
Acquisition Act.
…………………………..
AND WHEREAS in the course of
arbitration proceedings the parties
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with a view to accommodate each
other have agreed to modify the
aforementioned agreement to refer
the dispute for arbitration in the
following manner:
1……………………….
2. That Party No.1 Hindustan
Development Corporation Ltd. and
General Engineering Works
expressly abandon the
determination of the price by the
arbitrator of the area measuring
approximately 104 bighas marked,
A,B,C,D,E,F,G,H in plain No.1 dated
14.01.1977 and all claims regarding
acquisition thereof before all
authorities shall be deemed to have
been abandoned by Party No.1 in
respect of the land marked
A,B,C,D,E,F,G,H of plan No.1 dated
14.01.1977. The Party No.1 shall
not claim the aforesaid land
A,B,C,D,E,F,G,H by way of
acquisition or otherwise in future.
3. That after excluding portion
marked, A,B,C,D,E,F,G,H the
remaining land under acquisition
measures about 145 bighas in “L”
shape shown in green colour
marked as
A,B,C,D,E,F,G,H,I,J,K,L,M,N,O,P,Q,R
,S,T,U,V,W,X,Y, in the aforesaid
plan.
4. That the arbitrator shall
determine compensation for the land
referred to in para No.3 above.
5……………………….
6……………………….
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7……………………….
8. That the amount of
compensation determined by the
arbitrator shall be binding on the
parties. Provided that in case such
amount of compensation is not
acceptable to party No.1 it shall
have the option of not accepting the
same and will not in whatsoever
manner be entitled to take the
aforementioned land.
9. In case the Party No.1 in
exercise of the option reserved to it
in para 8 accepts the amount of
compensation determined by the
arbitrator, is shall within 45 days
from the date of the receipt of the
copy of the Award from the
Arbitrator communicate to the party
No.2 as well as to the Arbitrator the
exercise of its option. The
communication to the arbitrator will
be considered as sufficient
communication, that the Party No.1
has chosen to exercise its option to
purchase the area of the land
marked as
A,B,C,D,E,F,G,H,I,J,K,L,M,N,O,P,Q,R
,S,T,U,V,W,X,Y in the plan dated
14.01.77. The Party No.2 will be
bound to execute the sale deed (the
draft whereof is enclosed to this
deed of arbitration) within thirty
days of the delivery of the stamped
deed of transfer, by the Party No.1
to the Party No.2 (The stamp duty
and registration charges shall be
borne by Party No.1) and the
consideration of the sale deed shall
22
be paid by the Party No.1 to the
Party No.2 in the presence of the
subRegistrar, at Bharatpur at the
time of registration. The Party No.2
shall hand over possession
simultaneously to party No.1 of the
aforesaid land at the time of
registration.
10. That the award of the
arbitrator shall be conclusive and
binding upon both the parties
aforesaid and any proceedings
pending anywhere at any stage
with regard to the matter of the
acquisition of the said land shall be
deemed to have been propped for all
practical purposes.
11…………………….
12…………………….
13…………………….”
( emphasis supplied )
23. Salient features of the Agreement dated 01.02.1980 are,
thus, as under:
Reference to be made to the Arbitrator was for
determining the quantum of compensation for
the land (145 bighas) to be paid by the
respondent.
Respondentcompany was to abandon its claim
of app. 104 bighas of land in favour of the
appellantfirm.
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Arbitrator was to determine compensation of
the 145 bighas of land (meant to be transferred
by the appellant to the respondent), which was
to be binding on the parties in all respects.
If compensation was not acceptable to the
respondentcompany, it shall have an option of
not accepting the same.
If respondent accepted the same, it was to
communicate to the appellant in 45 days, after
which the appellant would be bound to execute
the sale deed within 30 days of the delivery of
the stamp deeds of transfer by the respondent
to the appellant, and the consideration was to
be paid before the SubRegistrar at the time of
registration, and the appellant was to
simultaneously deliver the possession.
(Note: In the earlier agreement dated
16.02.1979, the provision was for the
respondent to deposit the compensation amount
in the bank account of the appellant, if the
appellant was unwilling to accept the same,
which was to be considered as valid payment.)
24
In the award dated 09.06.1985 passed by the sole
24.
Arbitrator, in the opening paragraph it was observed that by the
Agreement dated 01.02.1980, the parties (i.e. appellant and
respondent) had “referred their dispute regarding determination of
compensation of land to me as Sole Arbitrator”. While determining
the question of price of land the Arbitrator held that “ I accordingly
hold that the market value of the land shall be determined (as) on
27.11.1978”. This was decided on the basis that the initial Minutes
of the meeting prior to the agreement were recorded on the said
date i.e. 27.11.1978. The operative portion of the said award reads
as under:
“ As a result of the above findings, Party No. 2 (i.e. respondent
herein) is entitled to the following amounts as compensation from
Party No. 1 (i.e. appellant herein).
Construction for land mentioned in Para 3 of Ex. A.1 and shown in
green colour in Ex. A.2;
(i) 95 Bighas of land @ Rs.9,000/ per Bigha
...Rs.8,55,000.00
(ii) 50 Bighas of land @ Rs.4,500/ per Bigha
...Rs.2,25,000.00
Rs.10,80,000.00
(iii) Solatiam (illegible) on the above Amount. …Rs.1,08,000.00
Rs.11,88,000.00
(iv) Compensation for the compound wall …Rs.20,700.00
(v) Compensation for the trees. ...Rs.10,000.00
Total Rs. 12,18,700.00
25
(Rupees Twelve Lakhs Eighteen Thousand Seven Hundred).
Announced and signed in the presence of the parties”.
25. It is noteworthy that the reference to Arbitrator was only
with regard to the determination of price of land of 145 bighas or
the compensation to be awarded to the appellant by the respondent
for the said land, which is clear from the very observation of the
Arbitrator in award that the parties had “referred their dispute
regarding determination of compensation of land to me as Sole
Arbitrator”, meaning thereby the Arbitrator was to declare the price
of land/compensation to be paid for the land by the respondent to
the appellant, and nothing more.
26 . In the aforesaid facts of this case, the only question
which arise for determination by this Court is as to whether the
reference to the Arbitrator, in terms of the Agreement dated
01.02.1980, was merely for fixation of price of land to be sold by the
appellant to the respondent in terms of the agreement, and if that
be so, could a direction to execute the sale deed have been issued
vide order dated 04.07.2016, even though the Civil Suit No. 60 of
1996 seeking specific performance of Agreement dated 01.02.1980
26
filed by the respondent was unconditionally withdrawn by the
respondent on 13.02.2006.
27. In our considered opinion, in the facts of the present
case, the answer to the same would be an emphatic “no”.
28. There cannot be any doubt that in terms of the
Agreement dated 01.02.1980, the Arbitrator was authorized to only
fix the price of the land which was to be sold by the appellant to the
respondent as per the aforesaid agreement. In the said Agreement
dated 01.02.1980, there was an option given to the respondent to
either accept the price fixed by the Arbitrator and go ahead with the
sale deed, or to refuse to get the sale deed executed at the price
fixed by the Arbitrator. Thus, there was no certainty that the sale
was to be executed at the price fixed by the Arbitrator. As such, it
was the Agreement dated 01.02.1980 alone which could have been
executed at the price fixed by the Arbitrator, in case the respondent
agreed to the same.
29. After the passing of the Award by the Arbitrator dated
09.06.1985, which was later confirmed and made Rule of the Court
by the Rajasthan High Court on 01.12.1993 and the Special Leave
Petition filed by the appellant against the said order was dismissed
on 29.03.1994 and the Award had attained finality, the respondent
27
filed a Civil Suit No.60 of 1996 for specific performance of the
Agreement dated 01.02.1980. It was this suit for specific
performance of agreement under which a direction could have been
issued for execution of the sale deed in terms of the Agreement
dated 01.02.1980. However, the same was unconditionally
withdrawn on 13.02.2006, on an application filed by the respondent
on 06.02.2006. With the withdrawal of such suit for specific
performance, the matter with regard to the execution of the sale
deed in terms of the Agreement dated 01.02.1980 came to an end.
The effect of withdrawing Civil Suit No. 60 of 1996 would be that
the plaintiff therein (respondent herein) had abandoned its claim of
execution of the sale deed in terms of the Agreement dated
01.02.1980, which would be clear from the provisions of Rule 1(4)
of Order XXIII CPC.
30. From the facts of this case, it is clear that the Award
passed by the Arbitrator could not be independently executed, as
the same was only for fixation of price of land and not for
enforcement of the Agreement. The Award was only declaratory of
the price of the land. As per the agreement, if the respondent
agreed to the price so fixed, it could then get the sale deed executed
in terms of the Agreement dated 01.02.1980 as it had the option of
28
either accepting the price and getting the sale deed executed, or not
accepting the price and thus not getting the sale deed executed.
This would clearly mean that the Award was merely for the
declaration of the price of the land, which would be subject to the
agreement and it was not necessary for the respondent to get the
sale deed executed at the price so determined by the Arbitrator.
What was thus executable was the agreement, and not the Award.
The relief granted by the Court below for execution of the sale deed
in terms of the Award, is thus outside the realm of law, as the
Award did not contemplate the transfer of land in favour of the
respondent, but only determined the price of land.
31 . It is also noteworthy that the application for execution of
Award filed on 16.05.1994 before the Additional District JudgeI,
Bharatpur did not provide for any provision of law under which the
same was filed. Though, in paragraph 2 of the said application, it
was mentioned that the Award of the Arbitrator contained a
direction for execution of the Award, but in fact there was no such
direction issued in the Award, in which the Arbitrator had only
fixed the price of the land and nothing more.
32 . In our view, once the respondent had given up its claim
of execution of sale deed in terms of the Agreement dated
29
01.02.1980 by withdrawing the suit for specific performance of the
agreement (Civil Suit No. 60 of 1996), which was permitted to be
withdrawn unconditionally on 13.02.2006, the appellant had
abandoned its claim for execution of the sale deed. Thus, in our
opinion, the respondent could not be permitted to achieve the goal
of execution of sale deed by indirectly claiming for execution of
Award, when the direct claim for execution of sale deed of the
Agreement dated 01.02.1980 had been abandoned by the
respondent.
33 . At the cost of repetition, it may be mentioned that the
specific performance could only be of the Agreement dated
01.02.1980 and not of the Award dated 09.06.1985. Even the
operative portion of the Award also does not give any direction for
execution of the sale deed. It was after the passing of the Award
that the respondent could have fallen back on the agreement for
execution of the sale deed, which respondent did by filing the suit
for specific performance, but abandoned such claim by withdrawing
the suit unconditionally.
34. The submission of the learned Senior Counsel for the
respondent that substantial justice has been done by the Court by
directing execution of the sale deed, is not worthy of acceptance. In
30
a Civil Case, the Courts have to follow the law in letter and spirit,
which has not been done in the present case, as in law the sale
deed could have been directed to be executed in execution of the
Agreement dated 01.02.1980 and not the Award, which was only a
declaration, fixing the price of land.
35 . This Court, while considering the question of execution of
a decree which only declared the rights of the decree holder and
nothing more, has in the case of
State of M.P. vs. Mangilal
Sharma (1998) 2 SCC 510 held as follows:
“6. A declaratory decree
merely declares the right of the
decreeholder visàvis the
judgmentdebtor and does not in
terms direct the judgmentdebtor to
do or refrain from doing any
particular act or thing. Since in the
present case decree does not direct
reinstatement or payment of arrears
of salary the executing court could
not issue any process for the
purpose as that would be going
outside or beyond the decree. The
respondent as a decreeholder was
free to seek his remedy for arrears
of salary in the suit for declaration.
The executing court has no
jurisdiction to direct payment of
salary or grant any other
consequential relief which does not
flow directly and necessarily from
the declaratory decree………..”
31
36 . In Coal Linker vs. Coal India Ltd . (2009) 9 SCC 491 ,
where this Court was considering an Award of an Arbitrator
whereby interest was awarded for certain period but not for
other period, and executing court had awarded interest for such
period also, this Court held as under:
“16. Admittedly, in the instant
case interest has been granted by
the arbitrator in the award for the
first two periods. But interest has
not been granted by the arbitrator in
the award for the last period. As
noted above, the appellant awardee
herein, filed an application under
Section 17 of the Act for pronouncing
a judgment in terms of the award.
So there is no scope for the
executing court to go beyond the
award and grant interest for the
postaward period which was not
granted in the award. Here the
executing court has gone beyond the
award and thus had gone beyond
its jurisdiction and passed a decree
which thus becomes a nullity.”
37. While considering the power of the executing court for
granting promotion which was not part of the decree, this Court in
the case of . (2004) 10 SCC
J&K Bank Ltd Vs. Jagdish C. Gupta
568 held as under:
32
| “2. The short question involved in | |
|---|---|
| the case is whether the executing | |
| court could go beyond the decree by | |
| directing that the respondent be | |
| promoted to the post of Chief | |
| Manager. It is no more res integra | |
| that the executing court has no | |
| jurisdiction to go behind the decree. | |
| It is not disputed that the decree did | |
| not contain any direction to promote | |
| the respondent to the post of Chief | |
| Manager. Under such | |
| circumstances, we are of the view | |
| that the executing court as well as | |
| the High Court fell in error in issuing | |
| directions in execution case that the | |
| respondent be promoted to the post | |
| of Chief Manager. The order under | |
| challenge, therefore, deserves to be | |
| set aside. We order accordingly. The | |
| appeal is allowed. There shall be no | |
| order as to costs.” |
38. Similarly, in the case of
Gurdev Singh vs. Narain Singh
(2007) 14 SCC 173 , where the question of execution of a decree
prayed for was beyond what was decreed, this Court held as
follows:
“7. We agree with the said
contention. A bare perusal of the
decree in question would clearly
demonstrate that the appellant
herein was restrained by a
permanent injunction from planting
any tree on Khasra No. 17/2 on the
one side and Khasra Nos. 218/1
33
and 17/1 on the other side. The
decree did not speak of removal of
any tree which had already been
planted. The executing court, as
noticed hereinbefore, while
interpreting the said decree
proceeded completely on a wrong
premise to hold that there should
not be any tree within two karams
on either side of the common
boundary of the parties. Such an
interpretation evidently is not in
consonance with the tenor of the
decree. A jurisdictional error, thus,
has been committed by the High
Court.
8. It is well settled that executing
court cannot go behind the decree.
As the decree did not clothe the
decreeholder to pray for execution
of the decree by way of removal of
the trees, the same could not have
been directed by the learned
executing court in the name of
construing the spirit of the decree
under execution.”
It is thus clear that execution of an award can be only to the
extent what has been awarded/decreed and not beyond the same.
In the present case, the Arbitrator in its Award had only declared
the price of land and nothing more. Thus, the question of execution
of a sale deed of the land at the price so declared by the Arbitrator
in its Award, could not be directed.
34
39 . Even otherwise, there cannot be any equity in favour of
the respondent, as neither any amount was paid nor deposited by
the respondent. No earnest money was also paid by the
respondent. It was only the stamp paper worth Rs.1,21,870/,
which was deposited by the respondent along with a deposit of
Rs.5,500/ in Court at the time of filing of the application on
16.05.1994 for execution of the Award.
40. It is also noteworthy that neither the Agreement dated
01.02.1980 nor the Award dated 09.06.1985 had been registered
under the Registration Act, 1908. This Court in the case of
Ramesh Kumar vs. Furu Ram (2011) 8 SCC 613 had considered
the effect of nonregistration of an Arbitration Award relating to
right, title and interest in an immovable property and held as
under:
| “46. | Thus the awards are | ||
|---|---|---|---|
| clearly documents which purport or | |||
| operate to create and declare a | |||
| right, title or interest in an | |||
| immovable property of the value of | |||
| more than Rs 100 which was not | |||
| the subject of the dispute or | |||
| reference to arbitration. Therefore, | |||
| the awards were compulsorily | |||
| registrable. If they were not | |||
| registered, they could not be acted | |||
| upon under Section 49 of the | |||
| Registration Act, 1908 nor could a |
35
| decree be passed in terms of such | |
|---|---|
| unregistered awards.” |
41. Although, in the present case, the Award did not relate
to right, title or interest in an immovable property and was only
for determination of the price of land, yet if the execution court
was to treat the same for execution of sale deed of land
(immovable property), it ought to have considered the impact of
nonregistration of such Award, which has not been done in the
present case.
42. In support of his contention that the powers of the
executing Court are wide enough, learned Senior Counsel for the
respondent has relied on the decision of this Court in the case of
Bhavan Vaja vs Solanki Hanuji Khodaji Mansang (1973) 2
SCC 40, wherein it has been held that:
“20…………For Construing a decree
it can and in appropriate cases, it
ought to take into consideration the
pleadings as well as the
proceedings leading up to the
decree. In order to find out the
meaning of the words employed in a
decree the Court, often has to
ascertain the circumstances under
which those words came to be used.
That is the plain duty of the
execution Court and if that Court
36
fails to discharge that duty it has
plainly failed to exercise the
jurisdiction vested in it………”
The question in the present case is different, which is as to
whether the execution of an award could have been directed in the
absence of there being any direction in the Award for execution of
the sale deed, which direction could have been given only in the
case of execution of the Agreement dated 01.02.1980. The question
under consideration in the aforesaid case was that of a decree
which was under execution, whereas there was no such decree
passed by any Court which was to be executed in the present case.
The facts of the present case are thus distinguishable from those in
the aforesaid case.
43. Learned Senior Counsel for the respondent has also
relied on the decisions of this Court rendered in
Meenakshi
Saxena vs ECGC Limited (2018) 7 SCC 479 as well as
AIR 1960 SC
Topanmal Chhotamal vs Kundomal Gangaram
388, which in our opinion are both distinguishable on facts. In
the case of Meenakshi Saxena (supra), there was a clear verdict of
the Consumer Court, which was to be executed by the Court. In
paragraph 17 of the said judgment, this Court held that “the
37
whole purpose of the execution proceedings is to enforce the
verdict of the Court. Executing court while executing the decree is
only concerned with the execution part of it but nothing else. The
court has to take the judgment in its face value.” In the case of
Topanmal (supra) , the decree under consideration was against
the partnership firm and was to be executed against the personal
assets of the partners. In paragraph 4 of the said judgment, this
Court held that
“at the worst the decree can be said to be
ambiguous. In such a case it is the duty of the executing Court to
construe the decree. For the purpose of interpreting a decree,
when its terms are ambiguous, the Court would certainly be
entitled to look into the pleadings and the judgment: see
, 71 Ind. App. 65: (AIR 1944 P.C.
Manakchand v. Manoharlal
46). In the plaint in the Agra suit, Suit No. 205 of 1949, not only
relief was asked for against the firm, but also a personal decree
was claimed against defendants 2 to 6.” In the present case, the
Court is concerned about execution of the Award and not the
Agreement. In the Award passed by the Arbitrator, the price of
land was fixed, which was to be executed in terms of the
Agreement dated 01.02.1980, and that too at the option of the
38
respondent. Thus, there could be no direction to execute the sale
deed at the price fixed in the Award, that too in a petition for
execution of the Award, without there being any prayer for
execution of the Agreement dated 01.02.1980.
. Going behind the decree for doing complete justice
44
would not mean that the entire nature of the case could be
changed, and what was not awarded in favour of the respondent,
could be granted by the executing court. It was only after the
respondent had exercised its right to purchase the land at the
price fixed by the Arbitrator that a right to enforce the Agreement
could have arisen in favour of the respondent. The Award of the
Arbitrator, in the present case, in itself was not a conclusive
contract between the parties, which could be executed.
45. For the reason given hereinabove, we are of the definite
opinion that the impugned judgment of the Rajasthan High Court
dated 04.07.2016 passed in Civil Revision Petition No. 81 of
1985, upholding the order of the Additional District Judge dated
05.01.1995 is liable to be quashed, and is hereby quashed, and
this appeal deserves to be allowed.
. Now what is to be next considered by this Court is as
46
to whether any compensation is to be awarded in favour of the
39
respondent, keeping in view the interim order passed by this
Court on 02.09.2016, which is reproduced below:
“Issue notice returnable within eight
weeks.
There shall be stay of operation of
the impugned judgment subject to
the petitioner depositing a sum of
Rs.50,00,000/ (Rupees fifty lac
only) before the Registry of this
Court within six weeks hence.”
In terms of the said order, the petitioner has deposited
Rs.50,00,000/ with the Registry of this Court, which has been
directed to be placed in a shortterm fixed deposit account.
47. Then on, 23.02.2017, this Court passed the following
order:
“ In the course of hearing, it was put to
Mr. Gopal Jain, learned senior counsel
for the respondent, whether by virtue of
the award passed by the learned
Arbitrator, could the respondent become
the owner of the property, more so when
the award has not been registered as
per the Stamps Act. Additionally, it was
also put to him whether when the suit
for specific performance of the contract
was withdrawn, could he get right, title
and interest on the basis of the award
passed by the Arbitrator, who had
entered into reference on the basis of
intervention by an authority who wanted
40
that the parties should negotiate and
arrive at a settlement.
Be it noted, prima facie, the award
relates to quantification of the price and,
therefore, the issue that would arise for
consideration is whether determination
of price creates any right, title and
interest in the respondent. Apart from all
these questions, a suggestion was given
to the learned counsel for the respondent
as to whether he would, apart from
money he claims to have deposited
before the District Court, be satisfied to
take Rs.60,00,000/ for the cost of
litigation and other expenses made by
him and put the controversy to an end.”
( emphasis supplied )
When the aforesaid facts were put to the learned Counsel for
the parties, Mr. Sudhir Chandra Agarwala learned Senior Counsel
appearing for the petitioner agreed to pay such amount towards
cost of litigation and other expenses to the respondent, as may be
fixed/determined by this Court.
In our view, in the aforesaid facts and circumstances
48.
of this case, we are of the opinion that the amount so deposited
by the appellant, in terms of the interim orders passed by this
Court, along with interest accrued thereon, shall be paid to the
respondent, and besides this a further sum of Rs.10,00,000/
shall also be paid by the appellant to the respondent within six
41
weeks from today, which all would be towards the cost of
litigation and other expenses incurred by the respondent. With
this, a quietus would be put to the long drawn litigation between
the parties.
Accordingly, this appeal stands allowed in terms of the
49.
directions given hereinabove.
………………………………..J
(UDAY UMESH LALIT)
...…………………………….J
(VINEET SARAN)
NEW DELHI;
APRIL 24, 2020.