In a recent case, Firm Rajasthan Udyog & Ors v. Hindustan Engineering and Industries Ltd, Supreme Court Bench comprising of Justice UU Lalit and Justice Vineet Saran expounded that,"Execution of an award can be only to the extent what has been awarded/decreed and not beyond the same".
The question for consideration in the appeal before Apex Court Bench was 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.
Facts of the case:
Appellant firm is owner of 249.60 Bighas (approximately 100 acres) of land, which was purchased by the appellant in the year 1966. Dispute in the appeal relates to a period spreading over four decades. The said land was subject matter of acquisition, for which a Notification under Rajasthan Land Acquisition Act, 1953 (for short, “Act of 1953”), was issued by the State of Rajasthan, which acquisition was for the benefit of the respondent industry.
The said notification was challenged by the appellant before the Rajasthan High Court, which was dismissed by a learned Single Judge of the High Court. Challenging the same, the appellant filed Special Appeal before the Division Bench of the High Court, during the pendency of which a declaration under Section 6, read with Section 17 of the Act of 1953, was issued by the State of Rajasthan.
During the pendency of the said Special Leave Petitions, on the intervention of the then Chief Minister-cum-Minister of Industries of the State of Rajasthan, an agreement was arrived at between the parties herein, as well as the State of Rajasthan, which was to the effect that out of the 249.60 bighas of land belonging to the appellant firm, approximately 104 bighas would be retained by the appellant and the remaining about 145 bighas would be sold to the respondentCompany,
subject to the fixation of price of land, construction etc. to be finalised through Arbitration.The matter of determination of price of the land to be sold by the appellant to the respondent Company, was decided by the sole Arbitrator.
The respondent, Company filed an application for execution of the Award with Additional District Judge. The ADJ allowed the application of the respondent herein and directed the appellants to execute and register the sale deed and hand over possession of the land in question to the respondent herein.In the said application Upholding the order of the Additional District Judge, the Civil Revision Petition was dismissed by the Rajasthan High Court. Aggrieved by the said judgment, the present appeal was been filed by way of Special Leave Petition.
Supreme Court's Decision:
SC Bench stated that,"It is clear that 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".
Apex Court Bench enunciated that,"Execution of an award can be only to the extent what has been awarded/decreed and not beyond the same".
"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", Bench added.
Bench stated 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".
The Bench concluded by allowing the appeal and stating that with this, a quietus would be put to the long drawn litigation between the parties.
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