Goel Associates vs Din. Coop. Group Housing Society ...
1997 Latest Caselaw 913 Del

ORDER

K.S. Gupta, J.

1. M/s. Goel Associates, petitioner had filed objections (IA No. 4225/96) under Sections 30 & 33 of the Arbitration Act read with Section 151 CPC against the award dated 5.12.95 made by Justice Avadh Behari Rohtagi, former Judge of this Court and Sh. Mahinder Pal, former Additional District Judge, Delhi. Din Coop-Group Housing Society Ltd., respondent has contested the objections by filing reply. By way of preliminary objections, it is alleged that the arbitrators signed the award on 5.12.95 and the same was received by the respondent-society on 16.12.95. A cheque for Rs. 3,67,000/- was sent by the respondent to the petitioner on 18.12.95 towards full and final settlement of the claim and the cost as granted under the award. Cheque in question was enclosed by the petitioner and radiated in the account of the respondent on 21.12.95. Petitioner having obtained full benefit under the award has no right to challenged it and the objections, therefore, deserve, to be rejected on that sole ground.

2. Relying on the decisions in Kripa Sindhu Biswas Vs. Sudha Sindhu Biswas and others , Ramsahal Sheduram Vs. Harischandra Dulichandji and another , J. Thomas and Co. (Jute and Gunnies) Pvt. Ltd. (In liquidation) Vs. The Bengal Jute Bailing Co. Ltd. , Ananta Lal Parkrasi Vs. Jnanada Sundari Debya and others , & M/s. Govindji Jevat and Co. Vs. Shree Saraswati Mills Ltd. , the submission advanced by learned counsel for the respondent-society was that the petitioner after having received Rs. 3,67,000/- through a cheque dated 18.12.95 towards full and final settlement of the claims, is estopped from challenging the aforesaid award by filing the objections under Sections 30 & 33 of the Act. My attention was drawn to the photostat copies of the covering letter dated 18.12.95 sent alongwith cheque in question and the extract of the relevant entry made in S.B. account No. 11180 of the respondent-society with S.B. Indore, Connaught Circus, New Delhi dated 6th September, 1996 placed on the file. Relevant portion of the aforesaid letter sent by the Hony, Secretary of the respondent-society to the petitioner-objector reads thus :-

"The award of Hon'ble Arbitrators in the matter of Goel Associates and Din Co-operative Group Housing Society Ltd., dated 5.12.95 has been received by the Society on 16.12.95. In terms of this award, we are pleased to enclose herewith our cheque No. 171155 dated 18.12.95 for Rs. 3,67,000/- (Rupees three lacs sixty seven thousand only) drawn on State Bank of Indore, Connaught Circus Branch, New Delhi, in full and final settlement, of your claim and costs as granted vide Award dated 5.12.95.

Please acknowledge the receipt and issue your official receipt."

3. In the aforementioned statement of account (Annexure-C) cheque dated 18.12.95 in the sum of Rs. 3,67,000/- is shown to have been credited in the account of the petitioner on 21.12.95. It will not be out of place to refer here the letter dated 22.12.95 (Annexure-D) sent by M.P. Goel on behalf of the petitioner to the respondent-society in response to their said letter dated 18.12.95. Relevant portion thereof reads thus:-

"A cheque bearing No. 171195 dated 18.12.95 for Rs. 3,67,000/- as payment in favour of Goel Associates in full & final settlement was delivered in my office in my absence. The same has been deposited in the bank. This is, however, subject to any of my legal rights."

4. In the decision in M/s. Govindji Jevat Company's (supra), facts whereof are somewhat identical to the facts of this case, disputes and differences which resulted in a claim being filed by the petitioner before the arbitrators, an ex parte award came to be passed for Rs. 1,15,164.13 in favour of the petitioner and on appeal by the respondent, the amount was reduced to Rs. 37,500/- and interest. After the appeal was dedicated, the respondent sent to the petitioner a sum of Rs. 38,944.67 through a bank draft in full implementation of the award along with letter dated 24.3.1980. This amount included aforesaid principal amount and the interest. After encashing the draft, the petitioner sent a letter to the respondent stating that it intended to take proceedings to set aside or modify the award and that the demand draft was accepted without prejudice to the petitioner's rights and contentions in the matter. Thereafter, petition was filed challenging the award in the High Court. One of the contentions advanced on behalf of the respondent before the High Court was that having accepted the payment of Rs. 38,944.67, the petitioner is estopped from challenging the award. This contention was upheld and the petition was held to be not maintainable. While, arriving at this conclusion Bombay High Court heavily relied upon a judgment of the Division Bench of the Court dated 28th August, 1952 in Appeal No. 32/52 in Kantilal Jiwabhai Vs. Vadila Chunilal. Para 6 of the judgment on page 77 of the report which is material reads thus :-

"Coming to the first contention of Mr. Jhunjhunwala, it appears to me clear from the authorities cited by him that in the facts and circumstances of this case, the petitioner is estopped from challenging the award. Though several authorities were cited, I would refer only two three of them. One is a judgment of the Division Bench of this Court consisting of Chagla C.J. and Bhagwati J. dated 28th August 1952 in Appeal No. 32 of 1952. Kantilal Jiwabhai Vs. Vadila Chunilal. In that case an award was given in favour of the appellant against the respondent for Rs. 22,736-15- 10. and one of the respondents sent a cheque for Rs.21,736-15-10. This cheque was accepted by the appellant and was sent to the bank for encashment. Even before the cheque was sent the appellant had intimated to the respondents his intention to challenge the award. The appellant also replied to the letter sending the cheque under protest and without prejudice to his rights and contentions. It was held by the single Judge that the appellant having received the benefit under the award could not challenge the award relying on the principle that a person cannot approbate and reprobate. This judgment was upheld by the Division Bench. While dismissing the appeal the Division Bench held, inter alia, as follows :-

But in this case the appellant's case was that the award bad and illegal, and that the arbitrator had no right to make it. Therefore, nothing whatever was due to the appellate under the award, and acceptance of any amount awarded to him under the award is clearly a case where he accepted a benefit under the award and thereby acquiesced in the correctness of the award and the validity of the award, and thereby precluded himself from challenging the award.

The Principle on which the learned Judge acted is to be found in Russel on Arbitration, 14th Edition, page 19; and what the learned author says is that it will be good answer to a motion to set aside an award if the opposing party can show that the party moving has acquiesced in the award by knowingly accepting a benefit under it. The emphasis on 'knowingly' is in order to point out that the acceptance of the benefit under the award should not be in ignorance of the fact that the award has been made. If the party accepting the benefit wishes to challenge the award, as in this case there cannot be the slightest doubt that the benefit was accepted knowingly by the party.

But before he filed this petition he never thought it advisable to return the cheque or the amount of the cheque which he had cashed and which he had utilised. It is difficult to see how it would ever be open to a party solemnly to get up in Court and challenge the award in respect of which he has obtained a substantial behalf and which he never thinks of returning to the other side."

5. Sum and substance of the remaining four decisions referred to above is also that where a party to an award has taken benefit under it, it cannot turn round, and say that the award is invalid.

6. Ratio in the aforementioned decisions applies on all fours to the facts of the present case. I am unable to agree with the submission advanced on behalf of the petitioner objector that the objections which seek to assail the illegal rejection of the petitioner's balance claim of Rs. 15, 87, 600/- by the arbitrators, are still legally maintainable.

7. For the foregoing discussion, IA No. 4225/96 is dismissed being not maintainable. No order as to costs.