G.S. Kushwaha vs Industrial Aids And Ors.
2002 Latest Caselaw 80 Del

JUDGMENT

A.K. Sikri, J.

1. Certain disputes had arisen between the parties. Mr. Justice P.N. Khanna (Retd.) of this court was appointed as the arbitrator. He made and published his award dated 19th February, 1990 and filed the same in this court. As per the this award, the arbitrator awarded a sum of Rs. 5,50,000/- together with interest at the rate of 18 per cent p.a. to the petitioner. The arbitrator also held that the respondents 2-6, who were partners of the respondent No. 1, were to pay all liabilities and were allowed to retain and recover all assets of the partnership firm. The petitioner was also one of the partners and in fact Managing partner of the respondent No. 1 firm. On receipt of the award, notice thereof was issued to the parties for filing the objections, if any, within the statutory period. The respondents 3 to 5 filed objections to this award under Sections 30 & 33 of the Arbitration Act, 1940 vide IA No. 100029/90. It is not necessary to go into these objections as the case has taken a different turn during the proceedings.

2. the petitioner had filed IA No. 481/93 under Order XXIII Rule 1 CPC, inter alia, stating that he had compromised with the respondents and that he had gone through the accounts and taken the entire accounts and the position as it stands. He had agreed to take over all assets and liabilities of the respondent No. 1 firm. It was also stated in this application that the respondents had paid sum of Rs. 6 lacs to him in full and final settlement of his share and the respondents would not be responsible for any of the liabilities of whatsoever nature of the partnership firm. However, the petitioner did not press this application and made an oral prayer to withdraw this application which was allowed to be withdraw this application which was allowed to be withdrawn vide order dated 2nd March, 1993. The respondents filed SLP challenging this order which was dismissed by the Supreme Court. Thereafter, the respondents 3 to 5 filed IA No. 10408/93 stating that as the petitioner's claim stands satisfied under the award made by the arbitrator, nothing survives in this suit which had become infructuous. On this application order dated 24th March, 1999 was passed posing the question which was required to be answered in this case. It would be appropriate to reproduce this order which is in the following words:

"By an order of the court passed in suit No. 2617/86 Justice P.N. Khanna (Retd.) was appointed Arbitrator to adjudicate upon the disputes between the parties. The Arbitrator entered upon the reference and after giving opportunities to the parties made and published his award on February 19, 1990 awarding a sum of Rs. 5,50,000/- to Mr. G.S. Kushwaha in full and final settlement of all his claims together with interest at the rate of 18% per annum from the date of the award till full payment was made. The Award was filed in court. After notice of the same was served upon the parties objections thereto were filed by respondents 3 to 5. During the pendency of the objections certain agreement is stated to have been arrived at between the parties on 11th January, 1993 wherein the respondents had made a payment of Rs. 6 lacs to the petitioner by means of a Bank draft in full and final settlement of all his claims and the second party was to pay neither any money to the petitioner nor towards any liability of the partnership firm. After this agreement was arrived at the respondent filed the present application for satisfaction of the award and for allowing objections.

In reply to the objections the petitioner does not deny having signed the agreement. However, it is stated that an oral settlement was arrived at between the parties on 7.1.1993 and the sum of Rs. 6 lacs was paid to him by means of bank draft in compliance of the oral settlement and the signatures of the petitioner were obtained by the respondents on 9.1.1993 on the agreement while the same was blank on the pretext that it was required for Income-tax purpose. The agreement was shown today in court to the petitioner and he admits having signed the same. However, it is stated that it was signed by him under fraud and coercion.

The question, therefore, before the court is whether the award dated 19.2.1990 made and published by the Arbitrator stands satisfied. Mr. Jain submits that in view of the settlement having been arrived at between the parties he does not press the objections.

put up on 5.8.1999.

3. Thereafter, the petitioner filed review application No. 36/99 which he withdrew on 26th November, 1999. The petitioner then filed IA No. 929/2000 under Order XIII Rule 2 CPC by which the petitioner wanted to place certain documents pertaining to Car No. DEA-6294 and certain machineries on record. This application was dismissed vide order dated 19th October, 2000 holding that these documents had no relevancy on the issued involved in the case. While dismissing this application the court had earlier noted order dated 24th March, 1999 as per which the question which remained to be determined was as to whether award dated 19th February, 1990 made and published by the arbitrator stood satisfied or not. Thereafter, the arguments were heard on the aforesaid question on 8th January, 2001. After some arguments, the respondents sought time to move an appropriate application to point out that the suit does not survive in view of the settlement as in view of the same Rs. 6 lacs were paid by the respondents to the petitioner. The respondents then filed IA No. 2168/2001 which is an application under Order XXIII Rule 3 CPC. Since all these applications are inter-related and have bearing on the suit itself, the entire matter was heard. Parties also filed written arguments in support of their submissions.

4. As noticed above, as per the impugned award the arbitrator has warded a sum of Rs. 5,50,000/- to the petitioner in full and final settlement of his claim together with interest at the rate of 18 per cent per annum from the date of award till full payment was made. The respondents have paid a sum of Rs. 6 lacs to the petitioner on 11th January, 1993 by means of a bank draft. This payment of course is made pursuant to the settlement having been arrived at between the parties. The petitioner does not deny having signed the settlement. On the other hand, his case is that an oral settlement was arrived at between the parties on 7th January, 1993 and a sum of Rs. 6 lacs was paid in compliance with the said oral settlement. The petitioner's further case is that his signatures were obtained by the respondents on 9th January, 1993 on the agreement while the same was blank on the pretext that it was required for income-tax purposes. He, however, admits his signatures on this settlement alleging that it was obtained under fraud and coercion.

5. At the outset, it may be mentioned that in the present case we are concerned with the impugned award rendered by Mr. Justice P.N. Khanna (Retd.). It is on filing of this award that notice thereof was sent to the parties and the respondents 3 to 5 have filed objections thereto. As per this award, a sum of Rs. 5,50,000/- is awarded to the petitioner along with interest at the rate of 18 per cent per annum from the date of ward i.e. 19th February, 1990 till the payment. The payment of Rs. 6 lacs was made on 11th January, 1993. This payment would therefore fall short of the awarded amount as after adjusting the interest. the amount would come to more than Rs. 6 lacs. There, if the payment is to be considered dehors any other aspect, it does not fully satisfy the award. Because of this reason, the respondents 3 to 5 claimed that the settlement was arrived at between the parties as per which in terms of the award only a sum of Rs. 6 lacs was to be paid to the petitioner, and therefore, amount of Rs. 6 lacs paid to the petitioner would satisfy the award.

6. It is recorded in the order dated 24th March, 1999 that the agreement dated 9th January, 1993 was shown to the petitioner in the court and the petitioner having singed the same. Therefore, there is no dispute that the agreement has been signed by the parties. It can also be not disputed that as per this agreement a sum of Rs. 6 lacs was to be paid by the respondents 3 to 5 to the petitioner which amount stands paid. The petitioner, however, has challenged this settlement primarily on the following grounds:

1) On 7th January, 1993 there was an oral settlement between the parties as per which the respondents were to pay the petitioner as sum of Rs. 15 lacs in cash, machinery worth Rs. 20 lacs and assets of the firm on the condition of his unilaterally withdrawing the seven suits filed by him. Rs. 6 lacs was given to the petitioner pursuant to this settlement. Another sum of Rs. 9 lacs was given by way of two post dates cheques.

2) The respondents 3 to 5 deceitfully be undue influence and giving petitioner inducement of having paid Rs. 15 lacs and promising to deliver machinery and assets abruptly produced before him an incomplete black spaced pretyped agreement and got his signatures alone on the said blank agreement. This agreement is therefore, result of undue influence and against the petitioner's free consent which was taken on the pretext that it was mean for income-tax purposes and as such it is not binding on the petitioner.

3) Although the petitioner had filed on 11th January, 1993 applications for withdrawing six suits and in fact withdrew five suits on 13th and 15th January, 1993 the respondents did not adhere to their promise of delivering the machinery and assets also got the payment stopped of Rs. 9 lacs for which three DDs and two cheques were given. The petitioner withdrew IA No. 481/93 filed under Order XXIII Rule 1 CPC for withdrawal of the instant suit.

7. A legal objection was also raised to the effect that after IA 481/93 was allowed to be withdrawn and the respondents' SLP there against was dismissed, the present application filed by the respondents under Order XXIII Rule 3 CPC was not maintainable. According to the petitioner, it amounted to review which was impermissible and number of judgments were cited in support of this proposition.

8. However, it is not necessary to go into all these questions inasmuch as the petitioner has filed suit No. 2385/93 for cancellation of this agreement on the ground that the same is void, fraudulent and forged. Both the parties shall produce their evidence in the said suit and ultimately on the basis of the evidence that the issued involved would be thrashed out. During the pendency of such a suit, it is not necessary to go into this question.

9. Since there are various disputed questions which are to be resolved and which can suitably be resolved in the suit filed by the petitioner herein, the IA No. 2168/2001 filed by the respondents 3 to 5 cannot be accepted at this stage and the same is accordingly dismissed.

10. As already noted above, in the present case, we are concerned with the impugned award whereby a sum of Rs. 5,15,000/- along with interest has been awarded in favor of the petitioner. Since the respondents have already withdrawn their objections, the said award can be made rule of the court. At the same time, it has to be noted that the petitioner has accepted that he signed the settlement/agreement dated 9th January, 1993. He also admits having received a sum of Rs. 6 lacs in terms of this settlement. In case the suit of the petitioner ultimately fails and it is held that the settlement/agreement dated 9th January, 1993 is a valid and binding settlement, the petitioner shall not be entitled to any further amount than sum of Rs. 6 lacs already received by the petitioner. Therefore, while making the award rule of the court and passing the decree in terms thereof, it is clarified that this would be subject to the outcome of Suit No. 2385/93 filed by the petitioner. The respondents shall deposit the balance decretal amount, after adjusting the sum of Rs. 6 lacs, in this court within a period of six weeks form today and this amount would not be paid to the petitioner. the amount shall be kept in the fixed deposit in the name of Registrar General of this court. The disposal of this amount would depend upon the outcome of the Suit No. 2385/93.

11. In case the Suit No. 2385/93 filed by the petitioner is decreed and settlement/agreement dated 9th January, 1993 is declared as void, the petitioner shall be entitled to withdraw this amount otherwise it shall be refunded to the respondents.

12. With these directions, the suit and IA stand disposed of.