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2014 (10) TMI 1071 - HC - Indian LawsSeeking execution of an ex parte Award - whether the Award dated 9.5.2005 was an Award/decree which was illegal, non est and void in law and therefore could not be executed inasmuch as effectively the Award was passed for enforcement of protection money amounts? - HELD THAT - The executing court by reference to Sections 23 and 24 of the Indian Contract Act, 1872 has held the agreement to be illegal/non est/void by holding that really the agreement pertains to basically protection money being payable by the bus owners to the petitioner. The executing court has also observed that issues which are raised in the agreement effectively make the petitioner a super traffic police man under the Motor Vehicles Act, 1988 and which position is inconceivable in law. Executing court has also referred to the judgment of the Supreme Court in the case of Jaipur Development Authority Vs. Radhey Shyam and others for holding that an illegal Award cannot be executed. The contention urged on behalf of the counsel for the respondent agreed upon, that really the amount received under the Agreement dated 6.10.2004 was protection money being paid when the buses used to ply through 'area' under the 'control' of the petitioner. Surely, the petitioner is not a Traffic Inspector under the Motor Vehicles Act or any other designated authority under the Motor Vehicles Act and therefore if the petitioner is given money by each bus owner running buses on route no. 212 it can only be because either the petitioner was a 'saint' who was trusted by all the bus owners for disciplining the bus owners or actually the petitioner is a notorious person who was taking money in the guise of the Agreement dated 6.10.2004, and in my opinion, actually it is the latter which the petitioner is and with respect to which aspect one is left in doubt when one reads the clauses of the Agreement dated 6.10.2004 and the reasoning given by the executing court below. The issues which have been raised and decided by the impugned judgment were therefore not decided by the court in which objections were filed under Section 34 of the Arbitration and Conciliation, 1996. An Award which is a nullity being against public policy can always be challenged even at the stage of execution inasmuch as, if we take a most extreme example that an Award is passed that 'A' will steal money for 'B' then surely 'B' cannot enforce the Award/decree stating that 'A' should give him particular amount of money which was to be stolen by 'B' for being given to 'A'. There is no merit in the petition which is an abuse of the process of law and is therefore dismissed with costs of Rs.1,00,000/- to be deposited within a period of four weeks with the Prime Minister's National Relief Fund - It is clarified that in case the respondents have paid any amount to the petitioner pursuant to the illegal Award dated 09.2.2005, the respondents are entitled to restitution under Section 144 of Code of Civil Procedure, 1908 (CPC) and other powers of restitution provided in law alongwith the interest @ 12% per annum simple. The restitution proceedings can be initiated in the executing court itself by the respondents.
Issues Involved:
1. Legality of the Agreement dated 6.10.2004. 2. Validity of the ex parte Award dated 9.5.2005. 3. Jurisdiction and authority of the petitioner under the Motor Vehicles Act. 4. Public policy and enforceability of the Award. 5. Objections under Section 34 of the Arbitration and Conciliation Act, 1996. 6. Restitution under Section 144 of the Code of Civil Procedure, 1908. Detailed Analysis: 1. Legality of the Agreement dated 6.10.2004: The core issue was whether the Agreement dated 6.10.2004, under which the petitioner was to be paid Rs.100/- per day per bus and fines of Rs.250/- for certain violations, was lawful. The executing court found the agreement to be illegal, non est, and void under Sections 23 and 24 of the Indian Contract Act, 1872. The court held that the agreement effectively pertained to protection money, which is illegal and against public policy. The court noted that the petitioner was attempting to assume the role of a "super traffic policeman," a position inconceivable under the Motor Vehicles Act, 1988. 2. Validity of the ex parte Award dated 9.5.2005: The Award dated 9.5.2005, which granted the petitioner Rs. 7,33,500/- along with interest, was challenged on the grounds of its legality. The executing court, referencing the Supreme Court judgment in Jaipur Development Authority Vs. Radhey Shyam (1994) 4 SCC 370, concluded that an illegal award cannot be executed. The court found that the Award was based on an agreement that was void ab initio due to its unlawful considerations and objects. 3. Jurisdiction and Authority of the Petitioner under the Motor Vehicles Act: The court emphasized that regulating traffic is the sole domain of the traffic police under the Motor Vehicles Act and the Delhi Police Act. The petitioner, by the agreement, was attempting to usurp these functions, which is not permissible. The court was "surprised and rather anguished" by the petitioner's attempt to encroach upon state functions and noted that the petitioner had no legal standing to impose fines or exercise force as stipulated in the agreement. 4. Public Policy and Enforceability of the Award: The court held that any contract or agreement that is against public policy is void under Sections 23 and 24 of the Indian Contract Act, 1872. The agreement in question was deemed to be against public policy as it involved considerations that were unlawful. Consequently, the Award based on such an agreement was also unenforceable. 5. Objections under Section 34 of the Arbitration and Conciliation Act, 1996: The petitioner argued that since the objections under Section 34 against the Award were dismissed, the executing court had no option but to execute the Award. However, it was conceded that the objections were dismissed on the grounds of being time-barred, not on merits. The court clarified that an Award that is a nullity and against public policy can be challenged at the execution stage. 6. Restitution under Section 144 of the Code of Civil Procedure, 1908: The court clarified that if the respondents had paid any amount to the petitioner pursuant to the illegal Award, they are entitled to restitution under Section 144 of the CPC. The respondents can initiate restitution proceedings in the executing court to recover any amounts paid, along with interest at 12% per annum. Conclusion: The petition was dismissed with costs of Rs.1,00,000/- to be deposited with the Prime Minister's National Relief Fund within four weeks. The court upheld the executing court's judgment that the agreement was void and the Award unenforceable. The respondents were entitled to restitution for any amounts paid under the illegal Award.
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