FIRM RAJASTHAN UDYOG & ORS. versus HINDUSTAN ENGINEERING & INDUSTRIES LTD.

Citation: [2020] 5 S.C.R. 813 · Decided: 24-04-2020 · Supreme Court of India · Bench: UDAY UMESH LALIT · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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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 in
1973 for the benefit of respondent-Company – Challenged by
appellant – Rejected by High Court – Special appeal allowed by
Division Bench – SLPs filed by respondent and State of Rajasthan,
dismissed by Supreme Court – Agreement arrived at between the
parties, as well as State of Rajasthan stating that out of 249.60
bighas of land, approx. 104 bighas would be retained by the
appellant and the remaining about 145 bighas would be sold to the
respondent, subject to fixation of price of land, construction etc. to
be finalised through arbitration – Eventually, agreement dated
01.02.1980 entered into between parties and accordingly, the issue
as to determination of price of 145 bighas of land was decided by
sole arbitrator vide award dated 09.06.1985 – Award was affirmed
– Appellant filed SLP – Dismissed – Respondent sought execution
of award – Allowed by ADJ-I inter alia directing appellant to execute
registered sale deed – Appellant filed Civil Revision Petition – During
pendency thereof, respondent filed Civil Suit against appellant
seeking 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Withdrawn – Civil Revision Petition dismissed by High Court,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 arbitrator
could not be independently executed, as the same was only for
fixation of price of land and not for enforcement of the agreement
– Respondent could not be permitted to achieve the goal of execution
of sale deed by indirectly claiming for execution of award, when
the direct claim for execution of sale deed of the agreement dated.
01.02.1980 was abandoned by it by withdrawing the suit for specific
performance of the agreement – Further, execution of an award
can be only to the extent what has been awarded/decreed and not
beyond it – Arbitrator in its award only declared the price of land
[2020] 5 S.C.R. 813
813
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SUPREME COURT REPORTS
[2020] 5 S.C.R.
and nothing more – Thus, the question of execution of a sale deed
of 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.
Allowing the appeal, the Court
HELD: 1.1 The Award passed by the Arbitrator could not
be independently executed, as the same was only for fixation of
price of land and not for enforcement of the Agreement. The Award
was only declaratory of the price of the land.  As per the agreement,
if the respondent agreed to the price so fixed, it could then get
the sale deed executed in terms of the Agreement dated
01.02.1980 as it had the option of either accepting the price and
getting the sale deed executed, or not accepting the price and
thus not getting the sale deed executed. This would clearly mean
that the Award was merely for the declaration of the price of the
land, which would be subject to the agreement and it was not
necessary for the respondent to get the sale deed executed at
the price so determined by the Arbitrator. What was thus
executable was the agreement, and not the Award. The relief
granted by the Court below for execution of the sale deed in
terms of the Award, is thus outside the realm of law, as the Award
did not contemplate the transfer of land in favour of the
respondent, but only determined the price of land. Once the
respondent had given up its claim of execution of sale deed in
terms of the Agreement dated 01.02.1980 by withdrawing the
suit for specific performance of the agreement (Civil Suit No. 60
of 1996), which was permitted to be withdrawn unconditionally
on 13.02.2006, the appellant had abandoned its claim for
execution of the sale deed. Thus, the respondent could not be
permitted to achieve the goal of execution of sale deed by
indirectly claiming for execution of Award, when the direct claim
for execution of sale deed of the Agreement dated 01.02.1980
had 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 what
has been awarded/decreed and not beyond the same. In the
present case, the Arbitrator in its Award had only declared the
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