PARKASH CHAND KHURANA ETC. versus HARNAM SINGH & ORS.

Citation: [1973] 3 S.C.R. 802 · Decided: 28-03-1973 · Supreme Court of India · Bench: S.N. DWIVEDI · Disposal: Dismissed

Judgment (excerpt)

802 
PARKASH CHAND KHURANA ETC. 
v. 
HARNAM SINGH & ORS. 
March 28, 1973 
[S. N. DwlVEDI AND Y. V. CHANDRACHUD,- JJ.] 
Practice---iA ward of arbitrator-Decree in 1erms of award-Provision 
for return of property in default of certain payments-Executability. 
The respondent erected a factory on a plot of land allotted to them 
by the Faridabad Development Board. They agreed to sell their rights in 
the plot and the factory to the appellants. Disputes :iaving arisen between 
the parties on certain matters relating to the agreement, they were referred 
to arbitration. 
The arbitrator gave an award and a decree was passed 
in terms of the award. . Under the award, the appellants were liable to 
discharge the liability of the respondents to the Faridabad Development 
Board In the sum of about Rs. 23,000/-. The appellruits were to pay thi• 
amount within H years, or, alternatively, to obtain from the Board within 
that period a complete 
di.charge for the respondents. In default of 
such payment, the respondents were entitled to take back possession of 
the plot and factory. The appellants paid only a sum of. Rs. 8,000/ - to 
the Board and this sum was shown in the accounts of the Board as lf 
_paid by the respondents. 
As the appellants committed default the res-
jloodeoto took out execution. The appellants opposed the application but 
the High Court, in Letters Patent appeal, directed execution to proceed. 
Dismissing the appeal to this Cour~ 
HELD: ( 1) There is no support for the contention of the appellants 
that the default on their part occurred by reason of the non-cooperation 
of the respondents. The evidence shows that the appellants were not in a 
position to make the payment. 
[807F-GJ 
(2) By the respondents transferring their entire interest in the property 
to the appellant. there existed a foundation for the creation of privity 
between the appellants and the Board; but 1he Board never agreed 
to 
substitute the appellants as its debtors in place of the respondents. Even 
after accepting the sum of Rs. 8,000/- from the appellants, ihe Board 
was entitled to recover the balance from the respondents. 
[807H; 
808B-DJ 
Kandarpa Nag v. Banwari Lal Nag and Ors., A.LR. 1921 Cal.. 356(2), 
Mitha and Ors. v. Remal Dass and Ors., A.I.R. 1937 Lah. 828 and Sheikh 
Mohidin Tharagan v. Vadiva/agianambia Pillai, 22 J.C. 37, referred to. 
B 
c 
D 
E 
F 
(3) The recital in the award that on the failure of the appellants to 
make the payment the respondents were entitled to take back possession 
of the plot and the factory has to be considered in the entire scheme of 
G 
the award, and so considered, there is no doubt that it was not merely 
the possession of the property but the title thereto also would pass to the 
respondents. 
[809 C-DJ 
(4) The appellants' liability to pay the dues 
of the Board would 
operate only if the title to the property is vested in them. [809E-F] 
(5) Tho -tenor of the award shows that the arbitrator did not intend 
merely to declare the rights of the parties. It is a clear intendment of 
H 
the award that if the appellants defaulted in discharging their obligation 
under the award the respondents would be entitled to apply for execution 
and obtain possession of the property. 
[809 F-Hl 
A 
B 
c 
D 
E 
F 
G 
H 
P. c. KHURANA v. HARNAM SINGH (Chandrachud, J.) 
803" 
( 6) The clause in the award providing 'for the right of th~ ~espondent" 
to obtain possession of the property on. the appellants committing de~auit. 
is not in the nature of a penalty against which the appellants are entitled 
to be relieved. 
Moreover, the term is contained in a decree passed. by the 
Court in terms of the award and no relief can be granted as agamst the 
terms of a decree~ The award-decree could not be treated as a consent 
decree, because, the award was valid on its own, independently of any 
decision of the parties not to object to it. 
[810 A-DJ 
Kandarpa Nag v. BanwarG Lal Nag and Ors .• AI.R. 1921 Cal., 356(2), 
Mitha and Ors. v. Renu:·I Dass and Ors., A.I.R. 1937 Lab. 828 Sheikh 
Mohidin Tharagan v. Vadivalagianambia Pillai 22 l.C. 37 and Chanba-
sappa Gurushantappa Hire111ath v. Basalingayya Gokurnaya, 
51 
I.L.R. 
Born. 908, referred to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1866 of 
1967. 
Appeal by certificate from tl).e judgment and decree dated 
September 15, 1967 of the Punjab & Haryana High Court at 
Chandigarh in Letters Patent Appeal No. 139 of 1965. 
D. V. Patel, G. S. Vohra, R. P. Agar

Excerpt shown. Read the full judgment & AI analysis in Lexace.