Code of Civil Procedure, 1908 – s.92 – Arbitration and Conciliation Act, 1996 – ss.9, 37 – Estoppel in law – Doctrine of estoppel by conduct – Doctrine of election – Appellants and the respondents claim to be trustees of a Charitable Trust – Dispute arose between them – Respondents filed a suit for perpetual injunction against the appellants – Trial Court rejected the plaint u/Or. VII r.11 holding that in view of s.92 of the Code, the suit was barred – Respondent filed appeal – During the pendency of the appeal, respondents moved an application in which it was stated that the parties had appointed a sole arbitrator to resolve their disputes – Sole Arbitrator passed an award – Thereafter, parties moved a joint application in the pending appeal seeking disposal of the appeal in terms of the award dated 30.12.2022 passed in arbitration – Accordingly, appeal was disposed of in terms of the award – Said award formed the part of the compromise decree – This decree was not challenged – Respondents allegedly failed to discharge their obligation under the award – Appellants filed for execution of compromise decree but, later withdrew to file application u/s.9 of the Arbitration Act – The Commercial Court went into the issue of arbitrability of the disputes between the parties and declared award as a nullity – High Court dismissed the appeal – Respondents contended that consent decree was not binding on them – Correctness:
Held: The issue is more about estoppel by conduct and election rather than estoppel in law – It would be impermissible for the respondents to take such opposite stand from the one that they had taken while initiating the proceedings – Having specifically pleaded that the suit filed by them was not hit by the provisions of s.92 of Code, it would not be now open for them to oppose the validity of the compromise deed dated 02.01.2023 by raising such ground – The pleadings of the respondents clearly indicate the conscious stand taken by them in the initial round of the present litigation – They had stated on more than one occasion that the proceedings initiated by them were maintainable and that the same were required to be decided on merits – They willingly had the matter referred for settlement and when the award was passed on 30.12.2022 they sought disposal of their appeal in terms of the compromise deed that was prepared on the basis of the award dated 30.12.2022 – The respondents therefore by their conduct are now estopped from taking an opposite stand – Therefore, on the doctrine of estoppel by conduct and election the respondents cannot be permitted to now raise a plea that the compromise deed based on the award dated 30.12.2022 was a nullity in view of the provisions of s.92 of the Code – Non-suiting the appellants on the ground that the award dated 30.12.2022 was a nullity in view of the objection raised by the respondents has resulted in grave injustice to the appellants – The justice of the case therefore requires that the appellants ought to be permitted to revive the execution proceedings that they had filed – Thus, the appellants are at liberty to revive the execution proceedings in the form of Miscellaneous Case. [Paras 14, 17, 19, 20, 21]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Ankit Gyan. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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