TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 928
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.... appellants filed an application under provisions of Order VII Rule 11 of the Code of Civil Procedure, 1908 (hereinafter referred to as 'the Code') seeking rejection of the plaint. The Trial Court on 13.04.2022, accepted the contentions of the appellants and rejected the plaint holding that in view of Section 92 of the Code, the suit was barred. The respondents being aggrieved by the dismissal of their suit filed an appeal before the District Court. During the pendency of the appeal, the respondents moved an application dated 07.07.2022 in which it was stated that the appellants as well as the respondents had appointed a sole arbitrator to resolve their disputes after which the process of arbitration had been undertaken. It was stated that the appeal filed by them be decided on the basis of the award passed by the sole arbitrator. 4. On 30.12.2022, the sole arbitrator passed his award and made an arrangement between the parties as regards the manner of managing the affairs of the Trust. In view of the said award, the parties moved a joint application in the pending appeal before the District Court on 02.01.2023 stating therein that they had accepted the award and that they would a....
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.... the respondents to disregard the same and contend that the consent decree was not binding upon them. In fact, the consent decree had become final and therefore the appellants were justified in seeking interim measures on that basis under Section 9 of the Act of 1996. The appellants in accordance with the terms of the consent decree had complied with their obligations by taking necessary steps but no reciprocal steps were taken by the respondents. The respondents had consented to the passing of the consent decree in the suit filed by them. Hence, by their conduct they were estopped from questioning the validity of the consent decree and raising the ground of non-arbitrability. In this regard reliance was placed on the decisions of this Court in Suzuki Parasrampuria Suitings Private Ltd. v. Official Liquidator of Mahendra Petrochemicals Limited & Ors., (2018) 10 SCC 707, Joint Action Committee of Air Line Pilots' Association of India (ALPAI) & Ors. v. Director General of Civil Aviation and Ors., (2011) 5 SCC 435, Mumbai International Airport Private Ltd. v. Golden Chariot Airport and Anr., (2010) 10 SCC 422 and Karam Kapahi and Ors. v. Lal Chand Public Charitable Trust and Anr.,....
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....selves withdrawn the execution proceedings for invoking the jurisdiction under Section 9 of the Act of 1996, they could not be now permitted to contend that they should be permitted to execute the consent decree. In any event, since the award had been held to be a nullity there was no question of it being executed. Reliance was placed on the decisions of this Court in Sunder Dass v. Ram Prakash, (1977) 2 SCC 662 and Prem Singh and Ors. v. Birbal & Ors., (2006) 5 SCC 353. To urge that there could be no estoppel against law, reliance was placed on State of Rajasthan and another v. Surendra Mohnot and others, (2014) 14 SCC 77. It was thus submitted that the appellants had been rightly denied the relief and the impugned orders did not warrant any interference. 8. We have heard the learned counsel for the parties at length and with their assistance we have also perused the documentary material on record. At the outset, it would be necessary to refer to certain admitted facts on record. The Trust deed in question is dated 15.10.1979 which indicates various objects of the Trust. The same include providing for educational facilities in various fields by establishing and maintaining instit....
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.... Meerut Cantt as their sole arbitrator in all or any dispute pertaining to Guru Tegh Bahadur Charitable Trust and its school at 227, West End Road, Meerut Cantt etc. Partnership firm M/s Sri Guru Tegh Bahadur Public School, Delhi Road, Meerut or any other connected matters, on 27.5.2022. Shri Vipin Sodhi, Advocate, has accepted to be an arbitral tribunal to decide all disputes and to give his final award. Shri Vipin Sodhi has entered upon the Reference of arbitration and various sittings have already taken place. As per oral submissions of appellant Arbitrator has taken into points in dispute. Version of the appellants has been recorded. Entire disputes raised by the appellants have been taken into consideration and the arbitration is in process. It Is, therefore, very humbly prayed that this appeal should be decided from the outcome of final award passed by the Arbitrator Shri Vipin Sodhi, Advocate, Meerut." ( Emphasis supplied ) 10. The sole arbitrator on 30.12.2022 passed his award and issued various directions. Both the parties thereafter filed a joint application before the Appellate Court on 02.01.2023 praying that the appeal be disposed of in terms of the award dated 30....
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....022 stating therein that they along with the appellants had decided to end their disputes by having the matter resolved out of Court. The parties again jointly sought disposal of the respondents' appeal in terms of the award dated 30.12.2022. This request was accepted by the Appellate Court and the respondents' appeal was disposed of in terms of the compromise deed at Document No. 25C. These admitted facts clearly indicate that the respondents had taken a conscious stand that the suit filed by them was not barred by Section 92 of the Code and that on the basis of the compromise deed in the form of the award dated 30.12.2022, a decree was passed in the appeal preferred by them. These facts assume importance since they reflect on the conduct of the parties, especially the respondents. 13. After the initial round of litigation when the appellants sought to rely upon the consent deed and filed an application under Section 9 of the Act of 1996 for seeking interim measures, the respondents took a completely opposite stand and raised a plea that the compromise deed in the form of award dated 30.12.2022 was a nullity in view of Section 92 of the Code. They persisted with this stand which....
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.... opposite party to believe that he has made that choice, he has completed his election and can go no further; and whether he intended it or not, if he has done an unequivocal act ... the fact of his having done that unequivocal act to the knowledge of the persons concerned is an election." 46. In Tinkler v. Hilder [(1849) 4 Exch 187] Parke, B. stated that where a party had received a benefit under an order, it could not claim that it was valid for one purpose and invalid for another. (See p. 190.) 47. In Clough v. London and North Western Railway Co. [(1861-73) All ER Rep 646] the Court referred at All ER p. 651 F to Comyn's Digest, wherein it has been stated: "If a man once determines his election, it shall be determined forever." 50. Ashutosh Mookerjee, J. speaking for the Division Bench of the Calcutta High Court in Dwijendra Narain Roy v. Joges Chandra De [AIR 1924 Cal 600], held that it is an elementary rule that a party litigant cannot be permitted to assume inconsistent positions in court, to play fast and loose, to blow hot and cold, to approbate and reprobate to the detriment of his opponent. This wholesome doctrine, the learned Judge held, applies not only....
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....s a nullity since it dealt with issues that fell within the purview of Section 92 of the Code. The invalidity of the award could thus be set up at any stage to prevent its execution and that there could be no estoppel against law. This plea as raised by the respondents found favour with the Commercial Court as well as the High Court. The contention though attractive cannot enable the respondents the surmount the equitable hurdle of estoppel. Having lulled the appellants in having the disputes resolved through arbitration and thereafter seeking disposal of their appeal on the strength of the said award, the respondents are definitely estopped from now setting up its invalidity. The issue is more about estoppel by conduct and election rather than estoppel in law. In Dhiyan Singh and another v. Jugal Kishore and another, AIR 1952 SC 145, a family dispute in relation to certain ancestral and self-acquired properties was sought to be resolved through arbitration. Before the Courts it was urged that not only had the arbitrator travelled beyond the terms of his reference by awarding absolute interest in the property to one party when she had limited interest therein, it was also urged t....
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....there was considerable doubt, and certainly much dispute, about the true state of affairs. Even if the arbitrator was wholly wrong and even if he had no power to decide as he did, it was open to both sides to accept the decision and by their acceptance recognise the existence of facts which would in law give the other an absolute estate in the properties they agreed to divide among themselves and did divide. That, in our opinion, is a representation of an existing fact or set of facts. Each would consequently be estopped as against the other and Brijlal in particular would have been estopped from denying the existence of facts which would give Mst. Mohan Dei an absolute interest in the suit property." ( Emphasis supplied by us ) 18. In our view, the ratio of the aforesaid decision is a complete answer to the defence raised by the respondents on the plea of estoppel against law. It is only because the respondents consented to have the disputes resolved through the arbitration of Mr. Vipin Sodhi that the compromise deed was executed and the respondents' appeal was disposed of accordingly. The appellants thereafter acted in accordance with the terms of the consent deed and altere....