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2014 (10) TMI 1071 - HC - Indian Laws


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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