Urmila Durlabji and Others vs Pink City Developers Pvt. Ltd.

Bela M. Trivedi, J.—With the consent of the learned counsels for the parties the revision petition is decided at the admission stage.

The present revision petition filed under Section 115 of C.P.C. by the petitioners-objectors arises out of the order dated 21.02.2014 passed by the Additional District Judge No. 2, Jaipur Metropolitan (hereinafter referred to as "the executing court") in Objection Petition No. 73/2008 filed by the petitioners-objectors under Section 47 of C.P.C., whereby the executing court has dismissed the same.

The short facts giving rise to the present petition are that the respondent-decree holder had entered into an agreement with the petitioners on 09.02.2005 to develop the property situated at C-9, New Colony, Block-C, Scheme-D, Jaipur. Some dispute having arisen between the parties in respect of the said agreement, the same was referred to the sole arbitrator under the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the said Act"). The arbitrator vide the award dated 14.06.2007 passed the following award: -

"After hearing both the parties in detail and taking into consideration the contentions raised, I am of the view and order that: -

a. As a penalty, the claim ant may not reclaim the Rs. 50,00,000/- they pay as Security Deposit to the Respondents. The claimant has paid Rs. 15,00,000/- at the time of the Agreement; they should pay Rs. 5,00,000/- at the time of re-instating the Power of Attorney and another Rs. 30,00,000/- at the time of taking over vacant possession of the property. The above amounts totaling Rs. 50 lacs will be non-refundable. This is in lieu of the Rs. 60 lacs Security Deposit agreed to in the agreement.

b. The claimant be given four months (including one month grace period) for conversion of the land and approval of building plan from the local authority i.e. from 15.06.2007 to 15.10.2007, further one month i.e. upto 15.11.2007 be given to the claim ant at the cost of Rs. 10,00,000/- as penalty and if the land is not converted and plans are not approved by 15.11.2007, the Developer Agreement stands cancelled and the respondents shall be at liberty to enter into a fresh agreement at there sweet will."

The respondent thereafter filed the execution proceedings by filing the execution application being No. 26/2008 seeking execution of the said award made by the arbitrator under the provisions contained in the said Act. The petitioners-objectors resisted the said object ion by filing the objection petit ion No. 73/08 under Section 47 of C.P.C. contending inter alia that the conditions mentioned in the said award were not fulfilled by the respondent within the prescribed time limit and even otherwise the award being declaratory in nature was not executable. The executing court vide the impugned order dated 21.02.2014 dismissed the objection petition filed by the petitioners, on the ground that the same was baseless and devoid of merits. Being aggrieved by the said order, the petitioners have preferred this revision petit ion.

It is vehemently submitted by the learned senior counsel Mr. Ashok Mehta for the petitioners that as per the award, the respondent had to get the land converted and building plans approved from the local authority before 15.10.2007 and at the most by 15.11.2007, at the cost of penalty of Rs. 10 lacs, and in the instant case, the respondent had failed to obtain the necessary order for conversion as well as for approval of building plan before 15.10.2007, and therefore the conditions mentioned in the award could not be said to be complied with. He further submitted that there was no direction contained in the award for handing over the possession of the property in question to the respondent, and the award being declaratory in nature, the same was inexecutable. Mr. Mehta has placed reliance on the decisions in case of Sant Lal & Ors. Versus Ramaya Ram & Anr., , AIR 1938 (Lahore) 177 , in case of Union of India Vs. Jagat Ram Trehan and Sons, , and decision of the Allahabad High Court in case of Kailashpati Singhania and Others Vs. Ram Gopal Gupta and Others, , in support of his submissions. Mr. Mehta has also relied upon the decision of Bombay High Court in case of Commissioner, Kolhapur Municipal Corporation and Another Vs. Fairdeal Constructions, to submit that when the award is of declaratory in nature, the same cannot be executed.

Per contra the learned counsel Mr. R.D. Rastogi for the respondent taking the court to the various notings of the JDA and the orders issued by the JDA, submitted that the decision to convert the use of land was already taken on 23.08.2007 and the decision to approve the map was also taken by the concerned authority on 11.10.2007, taking note of the approval of conversion of land, and therefore the respondent had complied with the conditions of getting the land converted and building plans approved on or before 15.10.2007. He further submitted that there being difference between approving and releasing the approved plans, the date of approval would be material and not of issuance for the purpose of interpreting the award in question. He further submitted that the petitioners having not challenged the award made by the Arbitrator, they were not entitled to challenge the same by filing the objections under Section 47 of C.P.C. Relying upon the decision of Apex Court in case of Parkash Chand Khurana, etc. Vs. Harnam Singh and Others, , he submitted that the tenor of the award is required to be seen for the purpose of execution of the award. Reliance has also been placed on the decision of Apex Court in case of Sunder Dass Vs. Ram Prakash, , to submit that the executing court cannot go behind the decree nor can it question its legality or correctness, and that the executing court in the instant case has rightly not gone into the said issue and dismissed the objection petition of the petitioners. Mr. Rastogi has also relied upon the decisions of the various High Courts to buttress his submissions and also the decision of Calcutta High Court in case of Krishna Kumar Mundhra Vs. Narendra Kumar Anchalia, , to submit that if the objections in respect of the award are permitted to be raised in the objection petition under Section 47 of C.P.C., the very purpose of Section 34 of the said Act would be frustrated.

Having regard to the submissions made by the learned counsels for the parties and to the documents on record as also the impugned order passed by the executing court, it appears that there are certain undisputed facts. The execution of the development agreement dated 09.02.2005 is not in dispute. The passing of the award dated 14.06.2007 by the sole Arbitrator under the said Act is also not in dispute. Admittedly, none of the parties had challenged the said Award by filing the application under Section 34 of the said Act. It is also admitted that pursuant to the said Award, the petitioners had restored the power of attorney after receiving Rs. 5,00,000/- from the respondent. The question that falls consideration before this Court is whether the executing court has committed any error of law by rejecting the objection petition of the petitioners under Section 47 of C.P.C.?

Now, it cannot be gainsaid that the award passed by the Arbitrator could be enforced in the same manner as decree under C.P.C. as per Section 36 of the said Act. So far as the execution of the decree is concerned, it is well settled position of law that all questions arising between the parties to the suit in which the decree was passed, relating to the execution, discharge or satisfaction of the decree have to be determined by the Court executing the decree and not by the separate suit as per Section 47 of C.P.C. The petitioners-objectors having raised the objections challenging the very executability of the award which is sought to be enforced as decree, by filing objection petition under Section 47 of C.P.C., the executing court was required to decide the same and the petitioners could not have filed separate suit or other proceedings for the said objections. The Award sought to be executed being conditional one, and the executability of the Award having been challenged by the petitioners, it was expected from the executing court to permit the parties to lead the evidence if they desired to do so, before deciding objection petition under Section 47 of C.P.C. There cannot be disagreement to the proposition of law laid down by the Apex Court in the decisions relied upon by the learned counsel for the respondent to the effect that the executing court cannot go beyond the decree. However, it is required to be noted that in the instant case the award was the conditional award, and it would be a matter of evidence, as to whether the said conditions were complied with by the respondent or not, whether the said award could be said to be merely a declaratory award or not, and whether the same was executable or not. It also appears that some of the documents produced by the respondent before this Court, like the minutes of meeting dated 11.10.2007 and 23.08.2007 were not part of the execution proceedings. Similarly the order dated 19.05.2008 passed by the JDA, directing the respondent to deposit the amount of cheques which were dishonoured, was also not part of the record before the executing court. The executing court has also not considered whether the said decision dated 11.10.2007 could be said to be approval of plans or not. Hence, the Court is of the opinion that let the executing court, give an opportunity to both the parties to lead evidence in this regard, if they desired to do so, and decide the objection petition afresh in accordance with law.

Though, it is sought to be submitted by the learned counsel Mr. R.D. Rastogi for the respondent that scope of revision under Section 115 of C.P.C. is very limited, the same may not be entertained, the said submission cannot be accepted, when this Court has found that the executing court has failed to exercise the jurisdiction vested in it while dismissing the application under Section 47 .

In that view of the matter, the impugned order dated 21.02.2014 deserves to be set-aside and is hereby set-aside. The executing court is directed to decide the objection petition of the petitioners in accordance with law, after permitted the parties to lead the evidence, if they desired to do so. It is clarified that this Court has not expressed any opinion on the merits of the case, and the executing court shall decide the objection petition and the execution petition independently on merits. It is expected that the execution proceedings shall be decided by the executing court as expeditiously as possible. The revision petition stands allowed accordingly. It is needless to say that the respondent shall be at liberty to move the executing court for appropriate interim order pending the execution proceedings.