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TMI Blog1973 (3) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... ertain sum of money to the Board in discharge of the liability of the respondents and on their failure to make the payment, they were to give, back the, possession of the plot and the factory to the respondents. The appellants not having paid the amount, respondents filed a series of execution applications the last of which is dated January 15, 1964. Appellants opposed that application on various grounds which were rejected by the executing court and the execution was directed to proceed. Appellants filed an appeal against the judgment of the executing court, which was allowed by a learned single Judge of the High Court of Punjab and Haryana. Respondents challengeed that judgment in Letters Patent Appeal No. 139 of 1965. That appeal was allowed by a Division Bench on September 15, 1967 and the judgment of the executing court was restored. The High Court has granted to the appellants leave to appeal to this court from its judgment under Article 13 3 (1 ) (a) and (c) of the constitution. Under clause 2 of the award, the appellants were liable to discharge the liability of the respondents to the Faridabad Development Board in the sum of ₹ 23,686-6-0. Under clause 7, the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as is relevant on this aspect,. reads thus : In case the second party does not make payment to the Faridabad Development Board as mentioned in clause No. 2, mentioned above, for a period of 1 1/2 years or does not take the liability of the Development Board on itself as a result whereof the liabilities of the first party do not come to an end, as mentioned in clause No. 2, ........ 1...... the first party shall be entitled to take back the possession. It is clear that the appellants, had a two-fold option under this clause. They had either to make the payment to the Board within the stated period or they had to enter into an arrangement with the Board in order, effectively, to terminate the liability of the respondents to the Board. The first option was not availed of by the appellants. But the appellants drew our attention to the correspondence between the concerned parties in an effort to establish that by accepting part payment of the amount from the appellants, the Board had agreed to substitute the appellants as its debtors in place- of the respondents, thereby terminating the liability of the respondents. The agreement between the appellants and respondents, wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the property from the, respondents and that they were ready and willing to pay the entire dues of the Board according to the terms of the award. The Board did not send a reply to this letter and that abstention, though not commendable in a publicbody, militates against the inference that the Board had recognised the appellants as its debtors in place of the respondents. Along with the letter Ex. J.D.2 1, appellants enclosed 7 cheques ,of ₹ 1,000 each and agreed to pay the balance in monthly instalments of ₹ 1,000. By their letter Ex, J.D.22 the appellants requested the Board to deposit the aforesaid 7 cheques in the bank, not all at once but one per week. It appears that in course ,of time, the Board realised the amount sent by the appellants through the 7 cheques. By their letter Ex. J.D.25, the appellants requested the Board to send an official receipt in respect of the ,sum of ₹ 7,000. Finally, by. the letter Ex. J.D. 23 the appellants ,sent to the Board yet another cheque in the sum of ₹ 1,000 along with true copies of verified claims in the sum of ₹ 10,000. The cheque for ₹ 1,000 was cashed by the Board in course of time ' but the ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e these letters on the supposition that the Board had entered into a conspiracy with the respondents in order to defeat the title of the appellants. Such on inference was pressed upon us but there is no basis for it. The attitude of the Board rather shows that it was interested in recovering its dues and had waited long enough to enable the appellants to make the payment. The truth of the matter, as held by the Division Bench of the High Court, seems to be that the appellants were not in a position to make the payment. It is interesting to note that the appellants had themselves stated in paragraph 8 of their Objections to the execution application filed by the respondents, that they wanted to make the payment of the entire amount to the Board but that the Board had refused to recognise them and that the payment of ₹ 8,000 made by them was shown in the accounts of the Board as if it were made by respondents. It is clear from this statement that the appellants were conscious that the Board had refused to recognise them as its debtors, in place of the respondents. In this view, it is unnecessary to consider whether the letter Ex.D.H. 7 dated February 17, 1956 alleged to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he interregnum ,hall be deemed to be in trust . This' recital leaves no 'doubt that if the appellants committed default in discharging their obligations under the award, not merely possession of the property but the title thereto would pass to the res- pondents; or else, it was meaningless to put restraints on the power of the appellants to deal with The property as owners and to provide that so long as they did not discharge their obligations they would be in possession as trustees. Such a trusteeship can, in the circumstances, enure for the benefit of the respondents alone. If the appellants, on defaulting, were liable to handover mere possession to the respondents, it would, be difficult to work out the consequent rights and obligations of the parties. There is no provision in the award as to the further period within which the appellants must discharge their obligations, nor indeed is there any provision as to whether the respondents, after getting back possession from the appellants, would be free to deal with the property in the ordinary course of business. If the title to the property was to remain vested in the appellants and the respondents were to obtain the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the award and no relief can be granted as against the terms of a decree stands on the same footing as a consent decree because both the parties expressly agreed that the award should be made a rule of the court. The failure of the respondents to object to the award may stem from several considerations, including the one that an award can be set aside only on the grounds specified in section 30 of the Arbitration Act, 1940, and none of those grounds may have been available to them. We, therefore, see no warrant for the view that the award decree should be treated as a consent decree. The award of the arbitrator did not get its efficacy by reason of the fact that the parties agreed to it. The award was valid on its own, independently of the decision of the parties not to object to it. On the other hand, the validity of a compromise decree flows from the consent of the parties. The decisions in Kandarpa Nag v. Banwari Lal Nag and Ors.,( A.I.R. 1921 Cal 356) Mitha and Ors. v. Remal Dass Ors., (A. I.R. 1937 Lab. 828) and Ana Sheikh Mohidin Tharagan v. Vadivalagianambia Pillai(22 1. C. 37) relate to penal clauses in compromise decrees and are therefore distinguishable. The Full Benc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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