JAWAHARLAL WADHWA AND ANOTHER versus HARIPADA CHAKROBERTY

Citation: [1988] SUPP. 3 S.C.R. 513 · Decided: 14-10-1988 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Disposed off

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Judgment (excerpt)

JAWAHARLAL WADHWA AND ANOTHER 
v. 
HARJPADA CHAKROBERTY 
OCTOBER 14, 1988 
[SABYASACHJ MUKHARJI, M.H. KANIA AND 
S. RANGANATHAN, JJ.] 
Arbitration Act, 1940-Sections 30,33 and 34-Award-Setting 
aside-Only an error of law and not mistake of fact committed by 
Arbitrator justiciable before Court. 
Transfer of Property Act, i88;;-Section 53A-Anticipatory 
breach of contract-Option to claim damages-Otherwise keep contract 
alive by pe1fornung its part of contract (..lfUi. sho~v readiness and willing-
ness in order to claini. specific pe1forn1ance-Tra11sfcree in possession of 
premises-Stopped paying monthly instalments-Could not claim pro-
tection under section 53A. 
The respondent had taken a loan of Rs.15,000 from the Ministry 
of Defence for construction of a house on a plot allotted to him. As the 
amount of loan was insufficient to complete the construction, he took a 
loan of Rs.S,000 from Appellant No. I and on 6th September, 197 J he 
entered into an agreement to sell the house and the plot to Appellant 
No. I. The aforesaid amount of Rs.S,000 was shown as advance of sale 
price. Clause 2(b) of the Agreement provided that the appellant.pur-
chaser shall pay to the seller /respondent a sum of Rs. !OS every month 
against the sanctioned loan of Rs.15,000 till the full amount is recovered 
from the respondent. The payment of Rs. I OS per month was made by 
the appellant only up to January 1976 and this payment covered upto 23 
instalments, and more than JOO instalments remained unpaid. 
On January 29, 1974 another agreement, for construction, was 
entered into between Appellant No. I and the respondent. Under this 
agreement, Appellant No. I was to complete construction of the house 
A 
B 
c 
D 
E 
F 
and after the completion of the house the respondent was to return the cost of 
G 
construction amounting to Rs. I, 15,000 including appellant's profit of 
Rs.20,000 and security amount ofRs.15,000 deposited by the Appellant 
No. 1 with the respondent, within three years in a lump sum and on 
such payment the Appellant No. I was to hand over the possession of the 
building and the plot to the respondent. Till that amount wa• paid, 
• 
Appellant No. 1 was entitled to possess and occupy and enjoy the build-
H 
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513 
514 
SUPREME COURT REPORTS 
[ 1988) Supp. 3 S.C.R. 
A 'ing. The house was not completed but the appellants who are husband 
and wife were occupying the same. 
B 
c 
D 
E 
F 
G 
According to the respondent this transaction was sham and bogus 
and he repudiated the same. Disputes arose between the parties. 
The respondent filed a suit claiming for the return of possession of 
the said plot of land and house. The application of the appellant under 
s. 34 of the Arbitration Act was dismissed. 
In the appeals preferred by the appellant the Additional District 
Judge, appointed a sole arbitrator with the consent of'the parties. The 
arbitrator made and published his award which went against the appel· 
!ants. The High Court dismissed the appeal filed by the appellants 
against the order of the District Judge dismissing their application chal· 
lenglngthe Award. 
This Court, in appeal, set aside the award of the Arbitr.ator and 
also the judgment of the High Court and appointed Shri A.C. Gupta, a 
former Judge of this Court as the sole arbitrator. 
It was contended before the said Arbitrator that the agreement 
for sale was not registered and might not convey any interest to appel-
lant No. 1 in the property, but the appellants, who had been put in 
possession of the said land and construction, were entitled to retain 
possession under the protection afforded by s. 53A of the Transfer of 
Property Act. The arbitrator made and published his award which went 
against the appellants. The arbitrator held from the receipts filed, that 
the respondent.paid only rent up to January 1976 which covered 23 
instalments only, and more than 100 instalments remained to be paid, 
and that there was no valid reason why the respondent should have 
failed to carry out his obligation under the contract. The arbitrator 
further held that the respondent could not, therefore, claim that bis 
possession was protected, under s. 53A of the Transfer of Property Act, 
and was, therefore, not entitled to retain possession of the disputed 
property beyond January 1976. 
In the objections filed by the appellants challenging the award 
before this Court it was contended that the award is bad in law and 
liable to be set aside as there is an err

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