Arbitration Act, 1940 – Extent of execution of an award –
249.60 Bighas of land owned by appellant-firm was acquired in 1973 for the benefit of respondent-Company – Challenged by appellant – Rejected by High Court – Special appeal allowed by Division Bench – SLPs filed by respondent and State of Rajasthan, dismissed by Supreme Court – Agreement arrived at between the parties, as well as State of Rajasthan stating that out of 249.60 bighas of land, approx. 104 bighas would be retained by the appellant and the remaining about 145 bighas would be sold to the respondent, subject to fixation of price of land, construction etc. to be finalised through arbitration – Eventually, agreement dated 01.02.1980 entered into between parties and accordingly, the issue as to determination of price of 145 bighas of land was decided by sole arbitrator vide award dated 09.06.1985 – Award was affirmed – Appellant filed SLP – Dismissed – Respondent sought execution of award – Allowed by ADJ-I inter alia directing appellant to execute registered sale deed – Appellant filed Civil Revision Petition – During pendency thereof, respondent filed Civil Suit against appellant seeking specific performance of agreement dated. 01.02.1980 – Withdrawn – Civil Revision Petition dismissed by High Court, upholding the order of ADJ-I – Held: Award passed by the arbitrator could not be independently executed, as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 – 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 was abandoned by it by withdrawing the suit for specific performance of the agreement – Further, execution of an award can be only to the extent what has been awarded/decreed and not beyond it – Arbitrator in its award 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 – Judgment of High Court, quashed – Rajasthan Land Acquisition Act, 1953 – Code of Civil Procedure, 1908 – Or.XXIII, r.1(4) – Registration Act, 1908. Allowing the appeal, the Court
HELD: 1.1 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 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. Once the respondent had given up its claim of execution of sale deed in terms of the Agreement dated 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, 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. [Paras 30, 32][830-F-H; 831-A, C-D]
1.2 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. 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. The impugned judgment of the Rajasthan High Court passed in Civil Revision Petition No. 81 of 1985, upholding the order of the Additional District Judge dated 05.01.1995 is quashed. In terms of the interim order, the petitioner deposited Rs. 50,00,000/- with the Registry of this Court, which was directed to be placed in a short-term fixed deposit account. The amount so deposited by the appellant 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 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. [Paras 38, 44-46 and 48][833-H; 834-A; 836-C-E, G; 837-F-G]
Bhavan Vaja v. Solanki Hanuji Khodaji Mansang (1973) 2 SCC 40; Meenakshi Saxena v. ECGC Limited (2018) 7 SCC 479 : [2018] 5 SCR 421; Topanmal Chhotamal v. Kundomal Gangaram AIR 1960 SC 388 – distinguished.
State of M.P. v. Mangilal Sharma (1998) 2 SCC 510 : [1997] 6 Suppl. SCR 662; Coal Linker v. Coal India Ltd. (2009) 9 SCC 491 : [2009] 14 SCR 155; J&K Bank Ltd. v. Jagdish C. Gupta (2004) 10 SCC 568; Gurdev Singh v. Narain Singh (2007) 14 SCC 173 : [2007] 11 SCR 1093; Ramesh Kumar v. Furu Ram
(2011) 8 SCC 613 : [2011] 10 SCR 453 – relied on. Manakchand v. Manoharlal 71 Ind. App. 65 : (AIR 1944 P.C. 46) – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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