FIRM RAJASTHAN UDYOG & ORS. versus HINDUSTAN ENGINEERING & INDUSTRIES LTD. on 24 April 2020

[2020] 5 S.C.R. 813

FIRM RAJASTHAN UDYOG & ORS.

v.

HINDUSTAN ENGINEERING & INDUSTRIES LTD.

(Civil Appeal No. 2376 of 2020)

APRIL 24, 2020

[UDAY UMESH LALIT AND VINEET SARAN, JJ.]

Arbitration Act, 1940 – Extent of execution of an award –249.60 Bighas of land owned by appellant-firm was acquired in1973 for the benefit of respondent-Company – Challenged byappellant – Rejected by High Court – Special appeal allowed byDivision Bench – SLPs filed by respondent and State of Rajasthan,dismissed by Supreme Court – Agreement arrived at between theparties, as well as State of Rajasthan stating that out of 249.60bighas of land, approx. 104 bighas would be retained by theappellant and the remaining about 145 bighas would be sold to therespondent, subject to fixation of price of land, construction etc. tobe finalised through arbitration – Eventually, agreement dated01.02.1980 entered into between parties and accordingly, the issueas to determination of price of 145 bighas of land was decided bysole arbitrator vide award dated 09.06.1985 – Award was affirmed– Appellant filed SLP – Dismissed – Respondent sought executionof award – Allowed by ADJ-I inter alia directing appellant to executeregistered sale deed – Appellant filed Civil Revision Petition – Duringpendency thereof, respondent filed Civil Suit against appellantseeking specific performance of agreement dated. 01.02.1980 –Withdrawn – Civil Revision Petition dismissed by High Court,upholding the order of ADJ-I – Held: Award passed by the arbitratorcould not be independently executed, as the same was only forfixation of price of land and not for enforcement of the agreement– Respondent could not be permitted to achieve the goal of executionof sale deed by indirectly claiming for execution of award, whenthe direct claim for execution of sale deed of the agreement dated.01.02.1980 was abandoned by it by withdrawing the suit for specificperformance of the agreement – Further, execution of an awardcan be only to the extent what has been awarded/decreed and notbeyond it – Arbitrator in its award only declared the price of land

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Aand nothing more – Thus, the question of execution of a sale deedof 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.

BAllowing the appeal, the CourtHELD: 1.1 The Award passed by the Arbitrator could notbe independently executed, as the same was only for fixation ofprice of land and not for enforcement of the Agreement. The Awardwas only declaratory of the price of the land. As per the agreement,Cif the respondent agreed to the price so fixed, it could then getthe sale deed executed in terms of the Agreement dated01.02.1980 as it had the option of either accepting the price andgetting the sale deed executed, or not accepting the price andthus not getting the sale deed executed. This would clearly meanthat the Award was merely for the declaration of the price of theDland, which would be subject to the agreement and it was notnecessary for the respondent to get the sale deed executed atthe price so determined by the Arbitrator. What was thusexecutable was the agreement, and not the Award. The reliefgranted by the Court below for execution of the sale deed inEterms of the Award, is thus outside the realm of law, as the Awarddid not contemplate the transfer of land in favour of therespondent, but only determined the price of land. Once therespondent had given up its claim of execution of sale deed interms of the Agreement dated 01.02.1980 by withdrawing thesuit for specific performance of the agreement (Civil Suit No. 60Fof 1996), which was permitted to be withdrawn unconditionallyon 13.02.2006, the appellant had abandoned its claim forexecution of the sale deed. Thus, the respondent could not bepermitted to achieve the goal of execution of sale deed byindirectly claiming for execution of Award, when the direct claimGfor execution of sale deed of the Agreement dated 01.02.1980had 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 whathas been awarded/decreed and not beyond the same. In theHpresent case, the Arbitrator in its Award had only declared the price of land and nothing more. Thus, the question of executionof a sale deed of the land at the price so declared by the Arbitratorin its Award, could not be directed. Going behind the decree fordoing complete justice would not mean that the entire nature ofthe case could be changed, and what was not awarded in favour ofthe respondent, could be granted by the executing court. It wasonly after the respondent had exercised its right to purchase theland at the price fixed by the Arbitrator that a right to enforce theAgreement could have arisen in favour of the respondent. TheAward of the Arbitrator, in the present case, in itself was not aconclusive contract between the parties, which could be executed.The impugned judgment of the Rajasthan High Court passed inCivil Revision Petition No. 81 of 1985, upholding the order ofthe Additional District Judge dated 05.01.1995 is quashed. Interms of the interim order, the petitioner depositedRs. 50,00,000/- with the Registry of this Court, which was directedto be placed in a short-term fixed deposit account. The amountso deposited by the appellant along with interest accrued thereon,shall be paid to the respondent, and besides this a further sum ofRs.10,00,000/- shall also be paid by the appellant to the respondentwithin six weeks from today, which all would be towards the costof litigation and other expenses incurred by the respondent. Withthis, a quietus would be put to the long drawn litigation betweenthe 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; TopanmalChhotamal 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 IndiaLtd. (2009) 9 SCC 491 : [2009] 14 SCR 155; J&KBank 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 : (AIR1944 P.C. 46) – referred to.

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ACase Law Reference

From the Judgment and Order dated 04.07.2016 of the High CourtDof Judicature for Rajasthan, Jaipur Bench, Jaipur in S.B. Civil RevisionPetition No. 81 of 1995.

Sudhir Chandra Agarwala, Brijender Chahar, Sr. Advs., PradeepKumar Bakshi, Kushara Pandit, Shashi Bhushan, Advs. for theAppellants.EDushyant Dave, Sr. Adv., T.S. Ahuja, Varun S. Ahuja, Ms. Neha,D.K. Thakur, Nitin Kumar Thakur, Advs. for the Respondent.

The Judgment of the Court was delivered by VINEET SARAN, J.

F1. Leave granted.

2. The question for consideration in the present appeal is as towhether an Arbitration Award, which determined the compensationamount for the land to be paid under agreement for sale, can be directedto be executed as a suit for specific performance of agreement, whenGthe reference to the Arbitrator (as per the agreement) was only forfixation of price of land in question, and the Arbitration Award was alsoonly with regard to the same.

3. Briefly stated, the facts of this case are that the appellant no.1is a partnership firm and other appellants are its partners. The appellantHfirm is owner of 249.60 Bighas (approximately 100 acres) of land, whichwas purchased by the appellant in the year 1966. The dispute in the present appeal relates to a period spreading over four decades. The saidland was subject matter of acquisition, for which a Notification dated13.03.1973 under Section 4 of the Rajasthan Land Acquisition Act, 1953(for short, “Act of 1953”), was issued by the State of Rajasthan, whichacquisition was for the benefit of the respondent-industry. The saidnotification was challenged by the appellant before the Rajasthan HighCourt in Writ Petition no.389 of 1974, which was dismissed by a learnedSingle Judge of the High Court vide judgment dated 23.07.1974.Challenging the same, the appellant filed Special Appeal No.448 of 1974before the Division Bench of the High Court, during the pendency ofwhich a declaration under Section 6, read with Section 17 of the Act of1953, was issued by the State of Rajasthan on 13.09.1975. The SpecialAppeal challenging the said acquisition was allowed by the Division Benchof the Rajasthan High Court, vide its judgment dated 05.10.1976 and theacquisition proceedings were thus quashed. Challenging the said decisionof the Rajasthan High Court, respondent-Hindustan Engineering &Industries Limited, as well as the State of Rajasthan, filed separate SpecialLeave Petitions (No. 4199 of 1977 and 1060 of 1978, respectively), whichpetitions were dismissed by this Court by order dated 29.3.1994.

4. During the pendency of the said Special Leave Petitions, onthe intervention of the then Chief Minister-cum-Minister of Industries ofthe State of Rajasthan, an agreement was arrived at between the partiesherein, as well as the State of Rajasthan, which was recorded in theMinutes of the meeting dated 27.11.1978, which was to the effect thatout of the 249.60 bighas of land belonging to the appellant firm,approximately 104 bighas would be retained by the appellant and theremaining about 145 bighas would be sold to the respondent-Company,subject to the fixation of price of land, construction etc. to be finalisedthrough Arbitration.

5. Pursuant thereto, an Agreement dated 16.02.1979 was enteredinto between the appellant-firm and the respondent-Company. The saidAgreement dated 16.02.1979 was superseded by another Agreementdated 01.02.1980 executed between the parties.

6. The matter of determination of price of the land to be sold bythe appellant to the respondent-Company, was decided by the soleArbitrator, Justice Chandra Bhan Bhargav (Retired), vide his Awarddated 09.06.1985. In the said Award, the Arbitrator mentioned that theparties had “referred their dispute regarding determination of ABC

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Acompensation of land to me as Sole Arbitrator”. The salient featuredecided in the said Award was that the market value of the land to betransferred in favour of the respondent-Company would be determinedas on 27.11.1978, which was the date on which the parties agreed totransfer the land. In pursuance thereof, the total compensation amountfor the land in question was determined by the Arbitrator asBRs.12,18,700/-. The said Award was filed before the Additional DistrictJudge-1, Bharatpur on 10.06.1985. After the Award was passed, therespondent-Company, vide its communication dated 15.07.1985 conveyedits acceptance of the Award to the appellant by registered post. Thesame was also conveyed to the Arbitrator vide communication datedC18.07.1985.

7. The appellant then filed its objections to the Award before theAdditional District Judge-1, Bharatpur and vide order dated 22.11.1988,the objections were allowed and the matter was remanded back to theSole Arbitrator. Challenging the said order dated 22.11.1988, theDrespondent-Company filed Civil Revision Petition No. 163 of 1990 beforethe Rajasthan High Court, which Revision Petition was allowed on01.12.1993 and the Award dated 09.06.1985 passed by the Arbitratorwas affirmed and made Rule of the Court. Challenging the said order ofthe Rajasthan High Court, the appellant had filed the Special LeavePetition No.3684 of 1994, which was dismissed by this Court onE29.03.1994. The Award thus attained finality.

8. It was thereafter that on 16.05.1994, the respondent-Companyfiled an application for execution of the Award. In the said application,it was stated that “according to the directions contained in the Awardof the Arbitrator, the petitioner Hindustan Corporation Limited, isFrequired to furnish stamp paper to the respondent for execution ofthe sale deed _ _ _ _”. The prayer made in the said application wasthat the appellants herein be directed to take steps and execute the saledeed on the stamp papers filed by the respondent herein and thereafterproduce the sale deed before the Sub Registrar for its registration. InGthe alternative, it was prayed that if the appellants herein failed to executethe sale deed, the same may be executed by the Court. In response tothe same, the appellants filed its reply on 19.7.1994 opposing the executionapplication and specially denied that any such direction for the executionof the sale deed, as has been made in the prayer of the application by therespondent herein, was made in the Award of the Arbitrator.H

9. By judgment and order dated 05.01.1995, the Additional DistrictJudge-I, Bharatpur, exercising its power under Section 17 of theArbitration Act, 1940, allowed the application of the respondent hereinand directed the appellants to execute and register the sale deed andhand over possession of the land in question to the respondent herein.Aggrieved by the judgment of the Additional District Judge-I, Bharatpur,dated 05.01.1995, the appellants filed Civil Revision Petition No. 81 of1995 before the Rajasthan High Court.

10. During the pendency of the Civil Revision Petition filed by theappellants, the respondent-Company filed Civil Suit No. 60 of 1996 againstthe appellants seeking specific performance of the Agreement dated01.02.1980 between the parties i.e., the appellants and the respondent-Company. The Civil Revision Petition No. 81 of 1995 filed by theappellants remained pending before the Rajasthan High Court, when therespondent-Company had filed the Civil Suit No. 60 of 1996. Even whenthe Civil Suit of the appellants was not decided, the respondent - Companysought to withdraw the Civil Suit No. 60 of 1996 vide its applicationdated 06.02.2006. Pursuant thereto, the Civil Suit No. 60 of 1996 seekingspecific performance of the Agreement dated 01.02.1980 was permittedto be unconditionally withdrawn by the respondent-Company vide orderdated 13.02.2006 passed by the Trial Court.

11. It was then, after more than a decade of withdrawal of thesuit by the respondent – Company, that the Civil Revision Petition 81 of1995, challenging the order of the Additional District Judge-I dated05.01.1995 was dismissed by the Rajasthan High Court by a detailedorder 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 abundantprecaution but was later withdrawn and mere filing of the Civil Suitwould not amount to admission by the respondent-Company that theAward and subsequent order based on it, were not suitable andenforceable. Upholding the order of the Additional District Judge-I dated05.01.1995, the Civil Revision Petition was dismissed by the RajasthanHigh Court. Aggrieved by the said judgment dated 04.07.2016, this appealhas been filed by way of Special Leave Petition.

12. The submission of Mr. Sudhir Chandra Agarwala, learnedSenior Counsel for the appellants is that the Executing Court has travelledbeyond the Award while passing the order dated 05.01.1995, inasmuchas by the Arbitration Award dated 09.06.1985 only price of the land in ABCD

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Aquestion was determined by the Arbitrator and it did not declare, createor confer any right, title or interest in the land in question in favour ofthe respondent – Company. It was contended that by the Agreementdated 01.02.1980, the appellants had agreed to sell their land to therespondent-Company at the rate to be fixed in future by an Arbitrator,and the respondent-Company was given an option in the agreement toBbe exercised within a period of 45 days of the fixing of the price by theArbitrator, either to purchase or decline to purchase the land. Thus,according to the learned Senior Counsel, the Agreement dated 01.02.1980was to result in a concluded contract only after the respondent-Companyhad either given its consent to purchase the land at the price fixed by theCArbitrator or declined to do so. It was thus contended that the respondenthad not acquired any enforceable right even at the time of the passing ofthe Award, as there did not exist any concluded contract between theparties even at the time of the passing of the Award, as the contractualobligations of the parties were to arise subsequent to the passing of theAward and only after the respondent-Company had exercised its optionDof purchasing the land at the price fixed by the Arbitrator. Learned SeniorCounsel contended that the Executing Court could not have gone behindor beyond the Award, and thus could not have considered the Agreementdated 01.02.1980 entered into between the parties. The scope ofreference to the Arbitrator being only with regard to determination ofEthe price of land at which it may be sold by the appellants to therespondent-Company, thus in execution of the Award, no direction forexecution of the sale deed by the appellants in favour of the respondent-Company in pursuance of the Agreement dated 01.02.1980 could havebeen issued by Executing Court, especially when the suit for specificperformance of the Agreement dated 01.02.1980 had been withdrawnFby the respondent-Company on 13.02.2006, which was without anycondition.

13. Learned Senior Counsel for the appellants further submittedthat any instrument or award creating right, title or interest in animmoveable property would be required to be compulsorily registeredGunder Registration Act, and the same having not been registered, couldnot be executable. It was contended that neither the Agreement dated01.02.1980 nor the Award dated 09.06.1985, was registered in the presentcase. It was vehemently urged that when the respondent-Companywas barred for seeking execution of the Agreement dated 01.02.1980H(which was not registered) and also when the Civil Suit No. 60 of 1996

filed by the respondent-Company for specific performance dated01.02.1980 was dismissed as unconditionally withdrawn on an applicationfiled under Order XXXIII Rule 1 Code of Civil Procedure by therespondent on 06.02.2006, the execution of the said agreement dated01.02.1980 (while deciding the application under Section 17 of theArbitration Act, 1940) in execution of the Award determining the priceof the land could not have been passed. In the alternative, it wascontended that the Agreement dated 01.02.1980 was not enforceablealso because the same had been obtained by undue influence.

14. With regard to the price of land as determined in the Award ofthe Arbitrator, on merits, it was submitted that the price which was fixedas on 27.11.1978, and not the date on which the sale deed was to beexecuted. Since the price fixed was a meagre amount of Rs. 12.18 lacsfor about 145 bighas (about 55-60 acres) of land, the fixation of the priceunder the Award was highly unreasonable as the present value of theland would be in crores. In the end, learned Senior Counsel for theappellants submitted that as proposed and recorded in this Court’s Orderdated 23.02.2007 in this appeal, the appellants were ready to compensatethe respondent–Company towards costs of litigation and other expensesincurred by it, which the appellants are still ready and willing to pay.While concluding his submission, learned Senior Counsel reiterated thatthe Executing Court had grossly erred and exceeded its jurisdiction intravelling beyond the Award, which was only for fixation of the price ofland and not execution of sale deed. It was thus urged that the ordersdated 05.01.1985 passed by the Executing Court and the order dated04.07.2016 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 respondent-Companycontended that this is not a case where the Court should exercise itsdiscretionary jurisdiction under Article 136 of the Constitution as theappellants had agreed to sell the land in question in terms of the Agreementdated 01.02.1980, at the price to be fixed by the Arbitrator, and once theArbitrator had fixed price of land, the execution of the same, as directedby the Executing Court, was perfectly justified. It was the solemnagreement entered into between the parties in the year 1980, which wassought to be executed after the passing of the Award of the Arbitratoron 09.06.1985 and by directing execution of sale deed, the Executing AB

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ACourt has done substantial justice between the parties. It has beencontended that the appellants had never filed any suit for declarationthat the Agreement dated 01.02.1980 was void by virtue of Section 23of the Indian Contract Act, 1872, nor did it ever raise the challenge tothe validity and legality of the agreement while assailing the Award orwhile resisting the execution proceedings. Learned Senior CounselBsubmitted that it was wrong to allege that the agreement entered into bythe appellants was purportedly under coercion. The agreement alwaysremained binding between the parties and was executable after thedetermination of price of land in question by the Arbitrator, and theappellants could not seek to wriggle out of the same on any count. TheCquantum of price of the land as fixed by the Arbitrator could not now bereagitated on the ground that the current market value of the land is veryhigh. It was then contended that the power of the Executing Court wasvery 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 uponDwhich the Award is based, and also the pleadings. Thus, while consideringthe above, the Executing Court was justified in ordering the execution ofthe agreement and by having done so, it was not only justified and suitablein the facts of the present case, but the Court has done complete justicebetween the parties.

E16. As regards the filing the Civil Suit No. 60 of 1996 for specificperformance of the Agreement dated 01.02.1980 by the respondent-Company, learned Senior Counsel for the respondent - Company hassubmitted that on receiving legal advice, the said Civil Suit No. 60 of1996 was withdrawn on 13.02.2006, as the petition for execution of the FAward was already pending. It has been submitted that the contentionthat filing of the Civil Suit No. 60 of 1996 for specific performance ofthe Agreement dated 01.02.1980 tantamounts to admission on the partof the respondent-Company that the Award did not envisage directionfor execution of sale deed and handing over the possession of the land in question, is wholly misconceived, as in any case, there cannot be anyGadmission against the law. Learned Senior Counsel for the respondentthus contended that the appeal is devoid of merits, and deserves to bedismissed.

17. In the end, with regard to the order of this Court dated23.02.2017 passed in this appeal, giving suggestion to the respondent-H

Company that whether the respondent- Company would be satisfied ifRs.60 lacs was paid to it towards cost of litigation and other expensesmade by it and put the controversy to the end, learned Senior Counselfor the respondent suggested that the respondent-Company would be,on the other hand, agreeable to deposit Rs.60 lacs to be paid to theappellants for putting a quietus to the litigation.

18. We have heard learned Senior Counsel for the parties at lengthand have perused the record.

19. Learned Senior Counsel for the parties have, in support oftheir respective submissions, relied on several decisions rendered by thisCourt, 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 RajasthanLand Acquisition Act, 1953 was issued for acquisition of saidland for benefit of respondent-industry.

(c) On 23.07.1974, Rajasthan High Court dismissed the WritPetition of the appellant herein, challenging the aforesaidacquisition.

(d) On 13.09.1975, a declaration under Section 6 of the Act of1953 issued by the State of Rajasthan.

(e) On 05.10.1976, a Special Appeal against the order dated23.07.1974 passed in Writ was allowed by the Division Benchof the Rajasthan High Court and the acquisition proceedingswere quashed.

(f) In 1977/1978, Special Leave Petitions challenging the judgmentdated 05.10.1976 were filed by respondent and State ofRajasthan, which petitions were dismissed by this Court on29.03.1994.

(g) On 27.11.1978, on the intervention of the Chief Minister ofthe State of Rajasthan, an agreement was arrived at to theeffect that out of 249.60 bighas, 104 bighas would be retainedby the appellant herein and 145 bighas be sold to the respondentherein, subject to price to be fixed through Arbitration.

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A(h) On 16.02.1979, an agreement was entered into between theappellant and respondent herein.

(i) On 01.02.1980, a fresh agreement was entered into betweenthe parties superseding the earlier agreement dated 16.02.1979,whereby it was provided that the price of about 145 bighas ofBland to be sold to the respondent would be determined througharbitration.

(j) On 09.06.1985, an award passed by the Arbitrator fixing priceof 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 toCthe respondent.

(k) Appellant herein filed objections to the award before the ADJ-1, Bharatpur.

(l) On 22.11.1988, ADJ-1, Bharatpur allowed the objections andremanded the matter back to the Arbitrator.D

(m) Challenging the said order, respondent filed Civil RevisionPetition No. 163 of 1993 before the Rajasthan High Court.

(n) On 01.12.1993, Civil Revision Petition was allowed by theRajasthan High Court and the award dated 09.06.1985, wasaffirmed and made Rule of the Court.E

(o) On 29.03.1994, the Special Leave Petition filed by theappellant against the order dated 01.12.1993 was dismissedby this Court and the award attained finality.

(p) On 16.05.1994, the respondent filed an application underFSection 17 of the Arbitration Act for execution of the awarddated 09.06.1985.

(q) On 06.07.1994, the appellant filed objections to the applicationfor execution of the award.

(r) On 05.01.1995, ADJ-1 Bharatpur allowed the application ofGthe respondent and directed the appellant to execute aregistered sale deed and hand over the possession of land inquestion to the respondent.

(s) In 1995, the appellant filed Civil Revision Petition No. 81 of1995 before the Rajasthan High Court, challenging the orderH

of the ADJ-1 Bharatpur dated 05.01.1995 which remainedpending till 04.07.2016.

(t) On 29.11.1996, the respondent filed Civil Suit No. 60 of 1996against appellant seeking specific performance of Agreementdated 01.02.1980.

(u) On 06.02.2006, the respondent filed an application to withdrawits Civil Suit No. 60 of 1996.

(v) On 13.02.2006, Civil Suit No. 60 of 1996 allowed to bewithdrawn unconditionally.

(w) On 04.07.2016, impugned order passed by the Rajasthan HighCourt in Civil Revision Petition No. 81 of 1995 filed by therespondent, whereby order of ADJ-1, Bharatpur dated05.01.1985 was upheld.

(x) On 17.08.2016, the appellant filed this Appeal, challengingthe judgment dated 04.07.2016.

(y) On 02.09.2016, this Court passed Stay Order in this Appealon deposit of Rs.50,00,000/- by the appellant in the Registryof this Court.

(z) On 23.02.2017, this Court recorded a suggestion in the orderthat whether the respondent would be satisfied to takeRs.60,00,000/- towards the cost of litigation and other expensesand put the controversy to an end.

21. The anchor sheet of the case of the respondent is the Agreementdated 01.02.1980 between the parties (i.e. appellant and respondent) aswell 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 reproducedbelow:

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AND WHEREAS in pursuance of the aforementionedagreement for arbitration, the dispute was agreed to bereferred to arbitrationby Hon’ble ex-chief Justice Mr. B.P.Beri for determining the quantum of compensation to be paidto Party No.2in respect of land under acquisition in A

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accordance with the provisions of the Rajasthan LandAcquisition Act.

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AND WHEREAS in the course of arbitration proceedings theparties with a view to accommodate each other have agreedto modify the aforementioned agreement to refer the disputefor arbitration in the following manner:- 1……………………….

2. That Party No.1 Hindustan Development Corporation Ltd.and General Engineering Works expressly abandon thedetermination of the price by the arbitrator of the areameasuring approximately 104 bighas marked, A, B, C, D, E,F, G, H in plain No.1 dated 14.01.1977 and all claimsregarding acquisition thereof before all authorities shall bedeemed to have been abandoned by Party No.1 in respect ofthe land marked A,B,C,D,E,F,G,H of plan No.1 dated14.01.1977. The Party No.1 shall not claim the aforesaidland A,B,C,D,E,F,G,H by way of acquisition or otherwise infuture.

3. That after excluding portion marked, A,B,C,D,E,F,G,H theremaining land under acquisition measures about 145 bighasin “L” shape shown in green colour marked asA,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 theaforesaid plan.

4. That the arbitrator shall determine compensation for theland referred to in para No.3 above.

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8. That the amount of compensation determined by thearbitrator shall be binding on the parties. Provided that incase such amount of compensation is not acceptable to partyNo.1 it shall have the option of not accepting the sameandwill not in whatsoever manner be entitled to take theaforementioned land.

9. In case the Party No.1 in exercise of the option reserved toit in para 8 accepts the amount of compensation determinedby the arbitrator, is shall within 45 days from the date of thereceipt of the copy of the Award from the Arbitratorcommunicate to the party No.2 as well as to the Arbitrator theexercise of its option. The communication to the arbitratorwill be considered as sufficient communication, that the PartyNo.1 has chosen to exercise its option to purchase the area ofthe 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. TheParty No.2 will be bound to execute the sale deed (the draftwhereof is enclosed to this deed of arbitration) within thirtydays of the delivery of the stamped deed of transfer, by theParty No.1 to the Party No.2 (The stamp duty and registrationcharges shall be borne by Party No.1) and the considerationof the sale deed shall be paid by the Party No.1 to the PartyNo.2 in the presence of the sub-Registrar, at Bharatpur at thetime of registration. The Party No.2 shall hand overpossession simultaneously to party No.1 of the aforesaid landat the time of registration.

10. That the award of the arbitrator shall be conclusive andbinding upon both the parties aforesaid and any proceedingspending anywhere at any stage with regard to the matter ofthe acquisition of the said land shall be deemed to have beenpropped for all practical purposes.

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(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 determiningthe quantum of compensation for the land (145 bighas) to bepaid by the respondent.

• Respondent-company was to abandon its claim of app. 104bighas of land in favour of the appellant-firm.

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A• Arbitrator was to determine compensation of the 145 bighas ofland (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 respondent-company,it shall have an option of not accepting the same.B• If respondent accepted the same, it was to communicate to theappellant in 45 days, after which the appellant would be boundto execute the sale deed within 30 days of the delivery of thestamp deeds of transfer by the respondent to the appellant, andthe consideration was to be paid before the Sub-Registrar atCthe time of registration, and the appellant was to simultaneouslydeliver the possession.

(Note: In the earlier agreement dated 16.02.1979, theprovision was for the respondent to deposit thecompensation amount in the bank account of the appellant,Dif the appellant was unwilling to accept the same, whichwas to be considered as valid payment.)

24. In the award dated 09.06.1985 passed by the sole Arbitrator,in the opening paragraph it was observed that by the Agreement dated01.02.1980, the parties (i.e. appellant and respondent) had “referredEtheir dispute regarding determination of compensation of land tome as Sole Arbitrator”. While determining the question of price ofland the Arbitrator held that “I accordingly hold that the market valueof the land shall be determined (as) on 27.11.1978”. This wasdecided on the basis that the initial Minutes of the meeting prior to theagreement were recorded on the said date i.e. 27.11.1978. The operativeFportion of the said award reads as under:

“As a result of the above findings, Party No. 2 (i.e. respondentherein) is entitled to the following amounts as compensationfrom Party No. 1 (i.e. appellant herein).

Construction for land mentioned in Para 3 of Ex. A.1 andGshown 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

per BighaH

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(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 withregard to the determination of price of land of 145 bighas or thecompensation to be awarded to the appellant by the respondent for thesaid land, which is clear from the very observation of the Arbitrator inaward that the parties had “referred their dispute regardingdetermination 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.

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26. In the aforesaid facts of this case, the only question whicharise for determination by this Court is as to whether the reference tothe Arbitrator, in terms of the Agreement dated 01.02.1980, was merelyfor fixation of price of land to be sold by the appellant to the respondentin terms of the agreement, and if that be so, could a direction to executethe sale deed have been issued vide order dated 04.07.2016, even thoughthe Civil Suit No. 60 of 1996 seeking specific performance of Agreementdated 01.02.1980 filed by the respondent was unconditionally withdrawnby the respondent on 13.02.2006.

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27. In our considered opinion, in the facts of the present case, theanswer to the same would be an emphatic “no”.

28. There cannot be any doubt that in terms of the Agreementdated 01.02.1980, the Arbitrator was authorized to only fix the price ofthe land which was to be sold by the appellant to the respondent as per H

Athe aforesaid agreement. In the said Agreement dated 01.02.1980, therewas an option given to the respondent to either accept the price fixed bythe Arbitrator and go ahead with the sale deed, or to refuse to get thesale deed executed at the price fixed by the Arbitrator. Thus, there wasno certainty that the sale was to be executed at the price fixed by theArbitrator. As such, it was the Agreement dated 01.02.1980 alone whichBcould have been executed at the price fixed by the Arbitrator, in case therespondent agreed to the same.

29. After the passing of the Award by the Arbitrator dated09.06.1985, which was later confirmed and made Rule of the Court bythe Rajasthan High Court on 01.12.1993 and the Special Leave PetitionCfiled by the appellant against the said order was dismissed on 29.03.1994and the Award had attained finality, the respondent filed a Civil SuitNo.60 of 1996 for specific performance of the Agreement dated01.02.1980. It was this suit for specific performance of agreement underwhich a direction could have been issued for execution of the sale deedDin terms of the Agreement dated 01.02.1980. However, the same wasunconditionally withdrawn on 13.02.2006, on an application filed by therespondent on 06.02.2006. With the withdrawal of such suit for specificperformance, the matter with regard to the execution of the sale deed interms of the Agreement dated 01.02.1980 came to an end. The effect ofwithdrawing Civil Suit No. 60 of 1996 would be that the plaintiff thereinE(respondent herein) had abandoned its claim of execution of the saledeed in terms of the Agreement dated 01.02.1980, which would be clearfrom the provisions of Rule 1(4) of Order XXIII CPC.

30. From the facts of this case, it is clear that the Award passedby the Arbitrator could not be independently executed, as the same wasFonly for fixation of price of land and not for enforcement of theAgreement. The Award was only declaratory of the price of the land.As per the agreement, if the respondent agreed to the price so fixed, itcould then get the sale deed executed in terms of the Agreement dated01.02.1980 as it had the option of either accepting the price and gettingGthe sale deed executed, or not accepting the price and thus not gettingthe sale deed executed. This would clearly mean that the Award wasmerely for the declaration of the price of the land, which would be subjectto the agreement and it was not necessary for the respondent to get thesale deed executed at the price so determined by the Arbitrator. Whatwas thus executable was the agreement, and not the Award. The reliefH

granted by the Court below for execution of the sale deed in terms ofthe Award, is thus outside the realm of law, as the Award did notcontemplate the transfer of land in favour of the respondent, but onlydetermined the price of land.

31. It is also noteworthy that the application for execution of Awardfiled on 16.05.1994 before the Additional District Judge-I, Bharatpur didnot provide for any provision of law under which the same was filed.Though, in paragraph 2 of the said application, it was mentioned that theAward 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 theArbitrator had only fixed the price of the land and nothing more.

32. In our view, once the respondent had given up its claim ofexecution of sale deed in terms of the Agreement dated 01.02.1980 bywithdrawing the suit for specific performance of the agreement (CivilSuit No. 60 of 1996), which was permitted to be withdrawnunconditionally on 13.02.2006, the appellant had abandoned its claim forexecution of the sale deed. Thus, in our opinion, the respondent couldnot be permitted to achieve the goal of execution of sale deed by indirectlyclaiming for execution of Award, when the direct claim for execution ofsale deed of the Agreement dated 01.02.1980 had been abandoned bythe respondent.

33. At the cost of repetition, it may be mentioned that the specificperformance could only be of the Agreement dated 01.02.1980 and notof the Award dated 09.06.1985. Even the operative portion of the Awardalso does not give any direction for execution of the sale deed. It wasafter the passing of the Award that the respondent could have fallenback on the agreement for execution of the sale deed, which respondentdid by filing the suit for specific performance, but abandoned such claimby withdrawing the suit unconditionally.

34. The submission of the learned Senior Counsel for therespondent that substantial justice has been done by the Court by directingexecution of the sale deed, is not worthy of acceptance. In a Civil Case,the Courts have to follow the law in letter and spirit, which has not beendone in the present case, as in law the sale deed could have been directedto be executed in execution of the Agreement dated 01.02.1980 and notthe Award, which was only a declaration, fixing the price of land.

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832SUPREME COURT REPORTS

A35. This Court, while considering the question of execution of adecree which only declared the rights of the decree holder and nothingmore, has in the case of State of M.P. vs. Mangilal Sharma (1998) 2SCC 510 held as follows:

“6. A declaratory decree merely declares the right of theBdecree-holder vis-à-vis the judgment-debtor and does not interms direct the judgment-debtor to do or refrain from doingany particular act or thing. Since in the present case decreedoes not direct reinstatement or payment of arrears of salarythe executing court could not issue any process for the purposeas that would be going outside or beyond the decree. TheCrespondent as a decree-holder was free to seek his remedyfor arrears of salary in the suit for declaration. The executingcourt has no jurisdiction to direct payment of salary or grantany other consequential relief which does not flow directlyand necessarily from the declaratory decree………..”D36. In Coal Linker vs. Coal India Ltd. (2009) 9 SCC 491,where this Court was considering an Award of an Arbitrator wherebyinterest was awarded for certain period but not for other period, andexecuting court had awarded interest for such period also, this Courtheld as under:E

“16. Admittedly, in the instant case interest has been grantedby the arbitrator in the award for the first two periods. Butinterest has not been granted by the arbitrator in the awardfor the last period. As noted above, the appellant awardeeherein, filed an application under Section 17 of the Act forFpronouncing a judgment in terms of the award. So there is noscope for the executing court to go beyond the award andgrant interest for the post-award period which was not grantedin the award. Here the executing court has gone beyond theaward and thus had gone beyond its jurisdiction and passeda decree which thus becomes a nullity.”G

37. While considering the power of the executing court for grantingpromotion which was not part of the decree, this Court in the case ofJ&K Bank Ltd. Vs. Jagdish C. Gupta (2004) 10 SCC 568 held asunder:

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“2. The short question involved in the case is whether theexecuting court could go beyond the decree by directing thatthe respondent be promoted to the post of Chief Manager. Itis no more res integra that the executing court has nojurisdiction to go behind the decree. It is not disputed thatthe decree did not contain any direction to promote therespondent to the post of Chief Manager. Under suchcircumstances, we are of the view that the executing court aswell as the High Court fell in error in issuing directions inexecution case that the respondent be promoted to the post ofChief Manager. The order under challenge, therefore,deserves to be set aside. We order accordingly. The appeal isallowed. 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 prayedfor was beyond what was decreed, this Court held as follows:

“7. We agree with the said contention. A bare perusal of thedecree in question would clearly demonstrate that theappellant herein was restrained by a permanent injunctionfrom planting any tree on Khasra No. 17/2 on the one sideand Khasra Nos. 218/1 and 17/1 on the other side. The decreedid not speak of removal of any tree which had already beenplanted. The executing court, as noticed hereinbefore, whileinterpreting the said decree proceeded completely on a wrongpremise to hold that there should not be any tree within twokarams on either side of the common boundary of the parties.Such an interpretation evidently is not in consonance withthe tenor of the decree. A jurisdictional error, thus, has beencommitted by the High Court.

8. It is well settled that executing court cannot go behind thedecree. As the decree did not clothe the decree-holder to prayfor execution of the decree by way of removal of the trees, thesame could not have been directed by the learned executingcourt in the name of construing the spirit of the decree underexecution.”

It is thus clear that execution of an award can be only to theextent what has been awarded/decreed and not beyond the same. In the AB

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Apresent case, the Arbitrator in its Award had only declared the price ofland and nothing more. Thus, the question of execution of a sale deed ofthe land at the price so declared by the Arbitrator in its Award, could notbe directed.

39. Even otherwise, there cannot be any equity in favour of theBrespondent, as neither any amount was paid nor deposited by therespondent. No earnest money was also paid by the respondent. It wasonly the stamp paper worth Rs.1,21,870/-, which was deposited by therespondent along with a deposit of Rs.5,500/- in Court at the time offiling of the application on 16.05.1994 for execution of the Award.

C40. It is also noteworthy that neither the Agreement dated01.02.1980 nor the Award dated 09.06.1985 had been registered underthe Registration Act, 1908. This Court in the case of Ramesh Kumarvs. Furu Ram (2011) 8 SCC 613 had considered the effect of non-registration of an Arbitration Award relating to right, title and interest inan immovable property and held as under:D

“46. Thus the awards are clearly documents which purportor operate to create and declare a right, title or interest in animmovable property of the value of more than Rs. 100 whichwas not the subject of the dispute or reference to arbitration.Therefore, the awards were compulsorily registrable. If theyEwere not registered, they could not be acted upon under Section49 of the Registration Act, 1908 nor could a decree be passedin terms of such unregistered awards.”

41. Although, in the present case, the Award did not relate toright, title or interest in an immovable property and was only forFdetermination of the price of land, yet if the execution court was to treatthe same for execution of sale deed of land (immovable property), itought to have considered the impact of non-registration of such Award,which has not been done in the present case.

42. In support of his contention that the powers of the executingGCourt are wide enough, learned Senior Counsel for the respondent hasrelied on the decision of this Court in the case of Bhavan Vaja vs SolankiHanuji Khodaji Mansang (1973) 2 SCC 40, wherein it has been heldthat:

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“20…………For Construing a decree it can and in appropriatecases, it ought to take into consideration the pleadings aswell as the proceedings leading up to the decree. In order tofind out the meaning of the words employed in a decree theCourt, often has to ascertain the circumstances under whichthose words came to be used. That is the plain duty of theexecution Court and if that Court fails to discharge that dutyit has plainly failed to exercise the jurisdiction vested init………”

The question in the present case is different, which is as to whetherthe execution of an award could have been directed in the absence ofthere being any direction in the Award for execution of the sale deed,which direction could have been given only in the case of execution ofthe Agreement dated 01.02.1980. The question under consideration inthe aforesaid case was that of a decree which was under execution,whereas there was no such decree passed by any Court which was tobe executed in the present case. The facts of the present case are thusdistinguishable from those in the aforesaid case.

43. Learned Senior Counsel for the respondent has also relied onthe decisions of this Court rendered in Meenakshi Saxena vs ECGCLimited (2018) 7 SCC 479 as well as Topanmal Chhotamal vsKundomal Gangaram AIR 1960 SC 388, which in our opinion areboth distinguishable on facts. In the case of Meenakshi Saxena (supra),there was a clear verdict of the Consumer Court, which was to beexecuted by the Court. In paragraph 17 of the said judgment, this Courtheld that “the whole purpose of the execution proceedings is toenforce the verdict of the Court. Executing court while executingthe decree is only concerned with the execution part of it but nothingelse. The court has to take the judgment in its face value.” In thecase of Topanmal (supra), the decree under consideration was againstthe partnership firm and was to be executed against the personal assetsof 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 acase it is the duty of the executing Court to construe the decree.For the purpose of interpreting a decree, when its terms areambiguous, the Court would certainly be entitled to look into thepleadings and the judgment: see Manakchand v. Manoharlal, 71Ind. App. 65: (AIR 1944 P.C. 46). In the plaint in the Agra suit, Suit ABC

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ANo. 205 of 1949, not only relief was asked for against the firm, butalso a personal decree was claimed against defendants 2 to 6.” Inthe present case, the Court is concerned about execution of the Awardand not the Agreement. In the Award passed by the Arbitrator, the priceof land was fixed, which was to be executed in terms of the Agreementdated 01.02.1980, and that too at the option of the respondent. Thus,Bthere could be no direction to execute the sale deed at the price fixed inthe Award, that too in a petition for execution of the Award, withoutthere being any prayer for execution of the Agreement dated 01.02.1980.

44. Going behind the decree for doing complete justice would notmean that the entire nature of the case could be changed, and what wasCnot awarded in favour of the respondent, could be granted by the executingcourt. It was only after the respondent had exercised its right to purchasethe land at the price fixed by the Arbitrator that a right to enforce theAgreement could have arisen in favour of the respondent. The Awardof the Arbitrator, in the present case, in itself was not a conclusive contractDbetween the parties, which could be executed.

45. For the reason given hereinabove, we are of the definite opinionthat the impugned judgment of the Rajasthan High Court dated 04.07.2016passed in Civil Revision Petition No. 81 of 1985, upholding the order ofthe Additional District Judge dated 05.01.1995 is liable to be quashed,Eand is hereby quashed, and this appeal deserves to be allowed.

46. Now what is to be next considered by this Court is as towhether any compensation is to be awarded in favour of the respondent,keeping in view the interim order passed by this Court on 02.09.2016,which is reproduced below:F“Issue notice returnable within eight weeks.

There shall be stay of operation of the impugned judgmentsubject to the petitioner depositing a sum of Rs.50,00,000/-(Rupees fifty lac only) before the Registry of this Court withinsix weeks hence.”GIn terms of the said order, the petitioner has depositedRs.50,00,000/- with the Registry of this Court, which has been directedto be placed in a short-term fixed deposit account.

47. Then on, 23.02.2017, this Court passed the following order:

H“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 therespondent become the owner of the property, more so whenthe award has not been registered as per the Stamps Act.Additionally, it was also put to him whether when the suit forspecific performance of the contract was withdrawn, couldhe get right, title and interest on the basis of the award passedby the Arbitrator, who had entered into reference on the basisof intervention by an authority who wanted that the partiesshould negotiate and arrive at a settlement.

Be it noted, prima facie, the award relates to quantificationof the price and, therefore, the issue that would arise forconsideration is whether determination of price creates anyright, title and interest in the respondent. Apart from all thesequestions, a suggestion was given to the learned counsel forthe respondent as to whether he would, apart from money heclaims to have deposited before the District Court, be satisfied-to take Rs.60,00,000/ for the cost of litigation and otherexpenses made by him and put the controversy to an end.”

(emphasis supplied)

When the aforesaid facts were put to the learned Counsel for theparties, Mr. Sudhir Chandra Agarwala learned Senior Counsel appearingfor the petitioner agreed to pay such amount towards cost of litigationand other expenses to the respondent, as may be fixed/determined bythis Court.

48. In our view, in the aforesaid facts and circumstances of thiscase, 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 interestaccrued thereon, shall be paid to the respondent, and besides this a furthersum of Rs.10,00,000/- shall also be paid by the appellant to the respondentwithin six weeks from today, which all would be towards the cost oflitigation and other expenses incurred by the respondent. With this, aquietus would be put to the long drawn litigation between the parties.

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

Divya Pandey

Appeal allowed.

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