Firm Rajasthan Udyog and others vs Hindustan Engineering Industries ltd. Civil Appeal No. 2376 of 2020
Appellant– Partnership Firm
Respondant– Hindustan Engineering Industries ltd.
- Land of the Appellant was acquired under Section 4 of Rajasthan Land Acquisition Act, 1953.
- Division Bench of Rajasthan High Court quashed the acquisition proceedings. Later, Respondent and State filed SLP before the apex court which was dismissed.
- During the pendency of the aforesaid SLP, an agreement for sale between the parties (Appellant, Respondent and State) was signed according to which 104 bigah of land out off 249 bigah would be sold to respondant subject to the fixation of price of land etc to be finalised through arbitration.
- Arbitrator decided the compensation payable by the Respondent to Appellant of Rs. 12,18,700 and which was accepted by the both parties.
- Appellant challenged the award of arbitrator before District Judge which was allowed and matter was sent back to the sole arbitrator.
- Respondent challenged the order of District Judge before Rajasthan High Court. HC reaffirmed the order of the arbitrator.
- Appellant then challenged order of the Rajasthan High Court before Supreme Court. SC dismissed the appeal and hence award attained finality.
- Respondent filed execution of the award in terms of execution of the sale deed before District Judge, which was allowed.
- Appellant opposed the execution and denied any such direction of execution of sale deed by the final award and therefore approached Rajasthan HC, which was dismissed.
- Finally, Appellant approached SC.
Issue before SC:
The question before SC was that “whether an Arbitration Award, which determined the compensation amount for the land to be paid under agreement for sale, can be directed to be executed as a suit for specific performance of agreement, when the reference to the Arbitrator (as per the agreement) was only for fixation of price of land in question, and the Arbitration Award was also only with regard to the same”.
To which SC answered in Negative.
Supreme Court’s Decision:
- The Apex Court quashed the order of the Rajasthan HC.
- The bench noted that the Award of the Arbitrator in the present case was not a conclusive contract between the parties which could be executed. The Court noted that a right would only have accrued to the Respondent to purchase the land at the fixed land price, could the Agreement which had been executed between parties been enforced at the behest of Respondent.
- The Supreme Court said that going behind the decree for doing complete justice would not mean that the entire nature of the case could be changed, and what was not awarded in favour of the respondent, could be granted by the executing court.
- Also, an executing court cannot travel beyond the relief granted in a decree. An arbitration award fixing the price of land cannot be executed like a decree for specific performance of sale deed, when the reference to arbitrator was only for determining the compensation under the sale agreement.
- Further, The Court said that as per registration act any award or instrument which creates title, right or interest in immovable property had to registered as per registration act. In the present case, both award and agreement were not registered and therefore as a result cannot be executed.