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2006 DIGILAW 169 (DEL)

VAKIL AHMED v. RAJ RANI BANSAL

2006-01-23

A.K.SIKRI

body2006
A. K. SIKRI, J. ( 1 ) PETITIONER and respondent had entered into agreement dated 12th October 1991 in respect of property bearing municipal no. 2359 to 2363, Chuna Mandi, Pahar Ganj, delhi. As per this agreement between the parties, the petitioner was to construct a building on land measuring 208. 5 sq. yds. approximately, which was half of the aforesaid property. He had paid Rs. 2 lacs to the respondents and was put into possession of vacant portion of the premises. However, for one reason or the other no construction was carried out. Ultimately, disputes arose between the parties. In the agreement one mr. Yash Pal was named as the arbitrator and, therefore, disputes were referred to him. However, a petition was filed in this court for his removal and appointing an independent arbitrator being Suit No. 524/94 which was allowed vide order dated 6th January 1997 and Mr. Justice P. K. Bahri, retired Judge of this Court, was appointed as the arbitrator. Parties appeared before the arbitrator and filed their respective pleadings. When the matter was at the stage of evidence and evidence of the petitioner had been recorded partly, the parties arrived at compromise. This compromise was recorded by the arbitrator on 30th January 1999. The compromise was arrived at on the following terms :-"1]. The petitioner shall pay a sum of rs. 24 lacs to the respondents as the total consideration for the property in question. 2]. Rs. 10 lac out of Rs. 24 lac shall be paid before the arbitrator in cash on 10-03-99 at 4 p. m. and Rs. 6. 50 lac shall be paid to the respondents on 27. 03. 99 at 11. 30 a. m. before the arbitrator and balance of Rs. 7. 50 lac shall be paid by bank Draft at the time of execution and registration of the sale deed of the property in question in favour of the petitioner or his nominee by the respondents. The petitioner shall pay the necessary expenses for the purchase of stamp paper other miscellaneous expenses to the counsel for the respondents on 27-03-99 and the sale deed shall be prepared by 30-03-99 by the respondents and shall be executed and registered on 02-04-99. 3]. In case the petitioner fails to pay the amounts on the date mentioned above for any reason whatsoever then the above agreement would stand cancelled. 4]. 3]. In case the petitioner fails to pay the amounts on the date mentioned above for any reason whatsoever then the above agreement would stand cancelled. 4]. In that event the respondents shall refund the entire amount in case paid by the petitioner as above plus Rs. 5 lac as compensation which will cover entire claim of the respondents and the petitioner shall hand over the physical possession of the property in question to the respondents on 05-04-1999 on which date the amount shall be paid by the respondents before the arbitrator and possession delivered. 5]. The balance fee of the arbitrator shall be paid by the parties on 05-04-1999. 6]. The final award shall be made by the arbitrator on 05-04-1999. 7]. In case the petitioner is able to pay the whole amount as undertaken or is ready to pay the amounts on due dates and the respondents either refused to accept or after receiving payments fail to execute and get registered the sale deed in time, then the sale deed shall be got executed and registered through the court in execution of decree which may be passed on the basis of, the award. It is agreed that Rs. 2:50 lac out of the amount of consideration shall be kept with the arbitrator. In case the respondents fail to get executed and registered sale deed up to 60 days after 02-04-1999 then Rs. 2. 50 lac shall be returned to the petitioner but in case the sale deed is executed and registered maximum within 60 days from 02-04-1999 then Rs. 2. 50 lac shall be paid to the respondents by the arbitrator. 8]. The sale deed would be executed and registered either in name of the petitioner or his nominee whose name must be disclosed while paying the expenses of execution and registration. 9]. The claims and counter claims of the parties and any suit or proceedings pending between the parties shall stand satisfied in above terms. 10]. The petitioner shall clear the dues if any of the local authorities in respect of the property in question. " ( 2 ) TO put in nutshell, as per the aforesaid terms, the petitioner was to make a payment of Rs. 24 lacs to the respondents and the payments were to be made in instalments- (i) rs. 10 lacs on 10th March 1999, Rs. 6. " ( 2 ) TO put in nutshell, as per the aforesaid terms, the petitioner was to make a payment of Rs. 24 lacs to the respondents and the payments were to be made in instalments- (i) rs. 10 lacs on 10th March 1999, Rs. 6. 50 lacs on 27th March 1999 and balance amount of rs. 7. 50 lacs at the time of execution and registration of sale deed. ( 3 ) IN this also schedule was charted as per which sale deed was to be prepared by 30th march 1999 and it was to be registered by 2nd April 1999. Thus, respondent was to get balance amount of Rs. 7. 50 lacs by 2nd April 1999. The agreement further provided that in case petitioner failed to make the complete payment, then whatever payment is made by the petitioner to the respondent shall be refunded and the respondent shall also make further payment of Rs. 5 lacs to the petitioner and on making this payment, possession of the property in question was to be handed over by the petitioner back to the respondent. ( 4 ) THE petitioner did not make the payment as per the aforesaid compromise. According to the petitioner, this was because of the reason that in the meantime one Mr. Krishna kumar filed injunction suit against the parties in the District Court and in the said suit some injunction had been granted. When the matter came up before the learned arbitrator on 27th March 1999 and this fact was pointed out, the learned arbitrator in order to resolve the problem suggested that the consideration which was to be paid by the petitioner under the compromise dated 30th January 1999 be deposited with the arbitrator for sale keeping and for payment to the respondents after the controversy is solved to the satisfaction of the arbitrator. It would be apposite to reproduce the entire order passed on the said date:-"the petitioner states that some suit has been filed by Shri Yash Paul Gupta in respect of this property and an injunction order has been obtained. However, the compromise made in this matter has to be presently given effect. If any such injunction order has been obtained then the consideration shall be paid to the respondents after that controversy is solved. However, the compromise made in this matter has to be presently given effect. If any such injunction order has been obtained then the consideration shall be paid to the respondents after that controversy is solved. The petitioner shall deposit the amount as mentioned in the compromise with the Arbitrator for safe keeping and for payment to the respondents after the controversy is solved to the satisfaction of the arbitrator. The petitioner shall bring the amount as stipulated in the compromise on the next date. The hearing shall take place on 7th April 1999 at 6:30 p. M. " ( 5 ) THE petitioner, however, did not deposit this amount with the arbitrator even thereafter and case was adjourned from time to time. In fact, thereafter adjournments were mostly occasioned because of the reason that the petitioner was hospitalised and, therefore, could not appear before the arbitrator. Order sheet reveals that wife of the petitioner appeared before the learned arbitrator on april 22, 1999 and stated that the petitioner was still ailing and was advised not to move from the bed. The learned arbitrator, in these circumstances, gave final date of 4th may 1999. The petitioner, however, did not appear even on that date and on subsequent dates. When the matter came up for hearing on 14th May 1999, the claimant sent his cousin with request for an adjournment: The matter was adjourned to 26th July 1999. On 26th July 1999 the claimant appeared. Time for making the award was extended by another four months from that date by the parties. It was noticed that due to the illness of the claimant further proceedings could not be held. The claimant sought 10 days time and was accordingly adjourned to 10th august 1999. On 10th August 1999 on the non-availability of the learned arbitrator hearing could not be held. In these circumstances, the arbitrator fixed next date as 28th August 1999 and sent notice dated 16th August 1999 to the parties. However, on 28th August 1999 nobody appeared on behalf of the claimant and the learned arbitrator proceeded ex parte. He, in fact, noted that "as a matter of act nothing more is required to be done in this case except to give award on the basis of the terms already settled between the parties on 30th January 1999. The award shall be made in due course. He, in fact, noted that "as a matter of act nothing more is required to be done in this case except to give award on the basis of the terms already settled between the parties on 30th January 1999. The award shall be made in due course. " the perusal of the award would show that the learned arbitrator has noted that since the petitioner did not make the payment, the other alternate of the compromise would not be acted upon as per which, the respondent is to make payment of Rs. 5 lacs to the petitioner and the petitioner is to hand over vacant physical possession of the property. The portion of the award giving these directions reads as under:-"in terms of the settlement, I make the award as follows:- 1. It is directed that the respondent shall hand over vacant physical possession of the property in question to the respondents. 2. The respondents shall pay Rs. 5 [five] lac to the petitioner on his giving possession of the property to the respondents. 3. That the claims and counter claims and any suit or proceedings pending between the parties shall stand satisfied in above terms. 4. The petitioner shall clear all dues of the local authorities in respect of the property in question. This award is made and pronounced on 10th September, 99 at AB-81, shahjahan Road, New Delhi-110 011. " ( 6 ) THE petitioner has challenged this award primarily on the following grounds:- i) The learned arbitrator altered the terms of the compromise unilaterally. ii) The arbitrator wrongly and illegally proceeded ex parte against the petitioner. iii) The compromise is invalid and illegal as fraud has been played upon the petitioner. ( 7 ) IN so far as the first contention is concerned, submission of the learned counsel for the petitioner was that the arbitrator could not direct, in the hearing held on 27th March 1999, that the money be deposited with him and it amounts to variation of the compromise, terms. I am afraid this contention is wholly misconceived. ( 8 ) AS noted above, in terms of the compromise the petitioner was required to make payment of Rs. 10 lacs on 10th March 1999 and another payment of Rs. 6. 50 lacs on 27th March 1999. I am afraid this contention is wholly misconceived. ( 8 ) AS noted above, in terms of the compromise the petitioner was required to make payment of Rs. 10 lacs on 10th March 1999 and another payment of Rs. 6. 50 lacs on 27th March 1999. When the matter was listed before the learned arbitrator, on 10th march 1999 the petitioner did not appear before the arbitrator and even on that the learned arbitrator recorded that the terms of the agreement were not complied by the petitioner. However, in the interest of justice, case was adjourned to 27th March 1999 since that was the date on which second instalment was to be given by the petitioner as per the compromise. On 27th March 1999 the petitioner brought to the notice of the arbitrator about the suit filed in which injunction had been obtained by Mr. Krishna kumar (although In the order dated 27th march 1999, name is wrongly mentioned as yash Paul Gupta instead of Krishna Kumar ). Therefore, in these circumstances and in order to ensure that the terms of compromise are adhered to by both the parties, the learned arbitrator suggested the petitioner to deposit the amount with the arbitrator and not to pay the same to the respondents. This does not amount to variation of the terms of the compromise. It rather was an attempt of the learned arbitrator to facilitate the compromise. It was categorically recorded In the proceedings of 27th March 1999, while giving the petitioner direction to deposit the amount with the arbitrator, that the same shall be for "safe keeping and for payment to respondent after the controversy is solved to the satisfaction of the arbitrator. " If in spite of such an order when the interest of the petitioner was fully protected, the petitioner did not make the payment, it is clear that the petitioner had been looking for excuses for not making the payment. This modality ordered by the learned arbitrator was rather in the interest of the petitioner and by no stretch of imagination it can be treated as alteration of the terms of the compromise. ( 9 ) ONCE the matter is looking from the aforesaid prospective, the other submissions of the petitioner are of no consequence. This modality ordered by the learned arbitrator was rather in the interest of the petitioner and by no stretch of imagination it can be treated as alteration of the terms of the compromise. ( 9 ) ONCE the matter is looking from the aforesaid prospective, the other submissions of the petitioner are of no consequence. In fact, when even after order dated March 27, 1999 the petitioner did not deposit the amount with the arbitrator, the natural consequence was to give effect to the alternate terms contained in the compromise. Therefore, the arbitrator was not required to do anything further. However, adjournments were given from time to time only because the petitioner had thereafter fallen sick and was not able to attend the arbitration proceedings. As is seen from the arbitration award itself the learned arbitrator has done nothing but to give effect to the compromise entered into between the parties. In fact, it was not even necessary to proceed ex parte against the petitioner and the arbitrator was within his right to straightway proceed with the publication of the award. Therefore, it is not necessary to go into the question whether the learned arbitrator rightly proceeded ex parte against the petitioner or not. It is not a case where any substantial arguments were to be heard or submissions were to be considered by the petitioner. It is stated at the cost of repetition that the arbitrator was only supposed to give effect to the compromise which he has done. The only other submission which is required to be considered is as to whether the compromise is vitiated by any fraud, as alleged by the petitioner . The averments of fraud are founded on the allegation that Smt. Raj Rani, mother of the respondents, for herself and on behalf of the respondents had entered into agreement* dated 30th August 1994 to sell the said property with Mr. Krishna Kumar. I fail to understand that even if this fact is not disclosed how it would amount to fraud. Admittedly, proceedings were pending between the petitioner and the respondent before the arbitrator. These proceedings arose because of the agreement between the parties entered into on 12th October 1991. Possession of the property in question was with the petitioner. The only step which was taken subsequently by Mr. Krishna Kumar was to file the suit and obtain injunction. Admittedly, proceedings were pending between the petitioner and the respondent before the arbitrator. These proceedings arose because of the agreement between the parties entered into on 12th October 1991. Possession of the property in question was with the petitioner. The only step which was taken subsequently by Mr. Krishna Kumar was to file the suit and obtain injunction. That happened much after the recording of compromise. It is curious that though the alleged agreement is of 30th August 1994 between Smt. Raj Rani (mother of the present respondents) and Sh. Krishna Kumar, suit was filed at the time when payment was to be made by the petitioner to the respondents. Learned counsel for the respondent has pointed out that there was no such agreement to sell and in fact, this suit was also subsequently dismissed. In fact, it is only because of this suit, as pointed out above, the learned arbitrator gave the direction that the money be deposited with him and be not given to the respondents and shall be kept with him till it is resolved to the satisfaction of the arbitrator. I, therefore, do not find any merit in any of these objections, which are accordingly dismissed. CS (OS) No. 2146a/99 the award is made rule of the court. Decree shall follow. .