Firm Rajasthan Udyog vs Hindustan Engineering And … on 24 April, 2020


Supreme Court of India

Firm Rajasthan Udyog vs Hindustan Engineering And … on 24 April, 2020

Author: Vineet Saran

Bench: Vineet Saran, Hemant Gupta, M.R. Shah

                                                                                     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)



                                               JUDGMENT

Vineet Saran, J.

Leave granted.

2. The question for consideration in the present appeal is as

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
3

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
4

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.

5

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

respondent for execution of the sale deed _ _ _ _”. The prayer made

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
6

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
7

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.

11. It was then, after more than a decade of withdrawal of

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
8

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.

12. The submission of Mr. Sudhir Chandra Agarwala,

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
9

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.
10

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.

11

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
12

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
13

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
14

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
16

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.

17

(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
18

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.
19

(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
20

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……………………….

21

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.

23

 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

24. In the award dated 09.06.1985 passed by the sole

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 J&K Bank Ltd. Vs. Jagdish C. Gupta (2004) 10 SCC

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

Topanmal Chhotamal vs Kundomal Gangaram AIR 1960 SC

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

Manakchand v. Manoharlal, 71 Ind. App. 65: (AIR 1944 P.C.

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.

44. Going behind the decree for doing complete justice

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.

46. Now what is to be next considered by this Court is as

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.

48. In our view, in the aforesaid facts and circumstances

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.

49. Accordingly, this appeal stands allowed in terms of the

directions given hereinabove.

………………………………..J
(UDAY UMESH LALIT)

……………………………….J
(VINEET SARAN)
NEW DELHI;

APRIL 24, 2020.



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