Mohan Lal son of Leela Ram v. Haryana Warehousing Corporation
2013-02-01
K.KANNAN
body2013
DigiLaw.ai
JUDGMENT Mr. K. Kannan, J. (Oral) - The revision is against the order in execution passed by the Court directing the arrest of the guarantor to an agreement of loan transaction. There was a dispute with reference to the supplies made and the amounts payable to Warehousing Corporation. The agreement provided for a clause of arbitration. M/s Bharat Rice Trading Company, which was one of the parties to the agreement, sought for arbitration of the dispute. The Warehousing Corporation had a claim against the Rice Trading Company and the Arbitrator determined a particular sum as payable. This award was sought to be enforced as if it were a decree before the Executing Court. The Warehousing Corporation was trying to enforce a surety obtained before the award, which it cannot do. It could execute only the award in the manner that it provided. The arrest was sought in execution on the basis of a term in the agreement whereby the petitioner was said to have given an undertaking to discharge the principal debtor’s liability. The whole exercise of seeking for enforcement of the award against the person, who was not a party to the award, is not tenable in law. If the Corporation would rely on an agreement of guarantee by the petitioner for due payment, it is bound to bring its own suit for enforcement of the same especially when the surety himself had not been made a party before the Arbitrator. An agreement, which is anterior to the award, cannot be put in operation in the execution of the award to which the petitioner was not a party. The only remedy for the Corporation would be to secure an independent action for enforcement by a suit for recovery of the amount and not to file an execution petition in the manner done before the Executing Court. 2. The order of the Executing Court is set aside and the civil revision is allowed. This order confines itself only to the liability of the guarantor and not against the principal debtor who was a party to the arbitral proceedings. ------------------