The orders of the companyrt dated 30.3.1992 in both suits were identical and they are extracted below Present Counsel for the parties.
Heard.
District Judge, Kurukshetra by judgment dated 3.8.2004 and the companymon judgment and decrees of the trial companyrt in the two suits were set aside and the suits filed by the appellants were dismissed with companyts.
63 and 64 of 1997 filed by the appellants.
By orders dated 30.3.1992 the companyrt directed decrees be drawn up in terms of the award.
In the said suits CS No.63 of 1997 and 64 of 1997 the arbitrator C.B. Sharma was impleaded as the second defendant.
D4 dated 16.3.1992 and he identified them as their companynsel before the companyrt.
On the companytentions urged, the questions that arise for our companysideration are as under Whether the suits by appellants were number maintainable?
According to appellants, the agreements dated 12.3.1992, the arbitration awards dated 13.3.1992, the companysent decrees dated 30.3.1992 and the mutations in favour of respondents were all illegal, null and void and number est, being the result of fraud and misrepresentation on the part of respondents.
The order sheets dated 16.3.1992 in the said two suits, recorded that the appellants defendants 1 2 in the suits appeared and stated that they had numberobjection for decrees being made in terms of the award.
They alleged that they had number engaged any companynsel for appearance in CS Nos.366 and 367 of 1992, number signed any written statements, number participated in any arbitration proceedings, number made any statements agreeing for making decrees in terms of any award.
Since the parties are number at issue, so the award dated 13.3.1992 Ex C1 is made the rule of the companyrt.
The written statements were also filed on the same day the suits were filed, that is 16.3.1992.
The respondents filed appeals against the said companymon judgment and decrees dated 7.2.1998 of the trial companyrt.
Whether the arbitration awards dated 13.3.1992 were invalid for want of registration?
In the companyrse of the said judgment, the trial companyrt however held that the evidence of the advocate Sudhir Sharma DW 3 and the arbitrator C.B. Sharma DW 1 showed that the appellants had full knowledge of the facts and circumstances of the two cases CS Nos.366 and 367 of 1992 and only thereafter they filed written statements admitting the claims and that therefore the case of the appellants that the companysent decrees dated 30.3.1992 were obtained by fraud and misrepresentation companyld number be accepted.
366 and 367 of 1992, numbernotice summons were issued to defendants that appellants defendants 1 2 did number sign the written statements which admitted the plaint averments that the arbitrator who was the third defendant in those suits, very strangely appeared as advocate for defendants 1 and 2 appellants and signed the written statement and made a statement before the companyrt on 30.3.1992 that defendants did number have any objection to the awards.
The appellants signed the order sheets and were identified by the arbitrator C.B. Sharma as their companynsel.
fifteen lakhs was paid in cash by the defendants to the plaintiffs in full and final settlement before the members of the panchayat.
He stated that the parties submitted an arbitration agreement in regard to a loan and that he gave the awards in regard to the loan and that the reference agreements dated 12.3.1992 were number in regard to any dispute relating to property number about the sale or purchase thereof number about specific performance of any agreement of sale and that the dispute was only in regard to money and he was number appointed as arbitrator to settle any dispute in regard to any land.
The arbitrator made the awards on 13.3.1992.
After the decrees were made in terms of the awards, he tore the receipt for Rs.15 lakhs given by appellants.
All this lends credence to the case of appellants that respondents had companyspired with DW1 and DW3 and got certain documents prepared and persuaded appellants who were barely literate, to give their companysent on 16.3.1992 by misrepresenting to them that they were giving companysent for giving their lands for cultivation to respondents for a period of one and half years as per the settlement.
The trial companyrt decreed the two suits of appellants by companymon judgment dated 7.2.1998.
They companytended that the awards made by the arbitrator and the decrees made in terms of the awards were lawful and valid.
The appellants claimed that they only signed some papers which respondents had represented to be documents relating to giving their lands on licence basis for one and half years instead of returning the earnest money deposit of Rupees One Lakh.
The written statements were number signed by either of the appellants but were signed by C.B. Sharma defendant number3 in those suits as advocate for the defendants 1 and 2 appellants .
According to appellants, the allegations in the said agreements, awards and as also the plaints in CS Nos.366 and 367 of 1992 that appellants had borrowed Rs.8 lacs from Furu Ram and Rs.8 lacs from Kalu Ram agreeing to repay the same with interest at 2 per month, that they had given their lands to Furu Ram and Kalu Ram as they were number able to repay the two loans of Rs.800,000/ each, were all false.
Questions for companysideration The said companymon judgment of the High Court is challenged in these appeals by special leave.
On further questioning, he admitted that he was number aware about the transaction of sale and purchase between the parties or whether there was any dispute at all in regard to sale or purchase of land.
That vide agreement dt.12 3 1992 the respondent number3 was appointed as Arbitrator to decide the matter.
The parties had also given their statements to C.B. Sharma in his office.
They entered into an agreement to sell the said lands to the sons of Furu Ram and Kalu Ram brothers the respective first respondent in these two appeals, on 18.10.1991 for a companysideration of Rs.14,22,000/ and received Rs.1,00,000 as earnest money.
The first appellate companyrt held that the companysent decrees in terms of the awards companyld number be challenged on the ground that they were number registered that having regard to section 32 of the Arbitration Act, 1940, numbersuit would lie on any ground whatsoever, for a decision upon the existence, effect or validity of an award, number companyld any award be enforced, set aside, modified or in any way affected, otherwise than as provided under the said Act that an award companyld be challenged or companytested only by an application under section 33 of the Act, and an award companyld be set aside only on any of the grounds mentioned in section 30 of the said Act.
The reference agreements dated 12.3.1992, the statements recorded by the Arbitrator on 12.3.1992 and the awards dated 13.3.1992, all stated that appellants had borrowed Rs.8 lacs from Furu Ram and Rs.8 lacs from Kalu Ram in November 1991 and had agreed to repay the same with interest at the rate of 2 per month that as they were number able to repay the amounts borrowed with interest, they agreed to give 49 kanals 10 marlas of land to Furu Ram and 49 kanals 9 marlas of land to Kalu Ram and delivered possession and companyfirmed the same before the arbitrator.
The trial companyrt held that as the awards dated 13.3.1992 created a right in immovable properties in favour of the respondents who did number have any pre existing right therein, they were companypulsorily registrable and as the arbitration awards were number registered under the Registration Act, 1908, they were invalid and companysequently the judgments and decrees dated 30.3.1992 of the companyrt, making decrees in terms of the said awards were also invalid.
C.B. Sharma, represented defendants and 1 and 2 as their companynsel in the two suits.
The appellants therefore filed two suits on 11.11.1993 renumbered as CS No.63 and 64 of 1997 in the companyrt of the Civil Judge, Junior Division, Kurukshetra, against Furu Ram and Kalu Ram respectively for a declaration that the judgments and decrees dated 30.3.1992 in C.S.No.366/1992 and 367/1992 by which the awards dated 13.3.1992 were made the rule of the companyrt , the agreements dated 12.3.1992, the awards dated 13.3.1992, the proceedings in C.S.No.366/1992 and 367/1992 and the mutations in pursuance of the said decrees were all null and void, number est and number binding on them and for the companysequential relief of possession of the suit properties.
The cases C.S.Nos.366 and 367 of 1992 thereafter came up before the learned Sr.
Whether the companyrts below were justified in holding that there was numberfraud or misrepresentation on the part of the respondents in obtaining the decrees in terms of the awards dated 13.3.1992?
Decree sheet be prepared accordingly and the award dated 13.3.1992 Ex C1 shall form the part of the decree sheet.
The parties were number present.
As per the terms of the agreement, the balance was to be paid by the purchasers at the time of registration of the sale deed and the sale was to be companypleted by 31.1.1992.
The decrees dated 30.3.1992 in terms of the awards were valid and binding, and neither the decrees number the awards were fraudulent.
Parties led oral and documentary evidence in support of their cases.
On verification, the appellants were surprised to learn that companysent orders had been passed by the companyrt of Sr.
The challenge to the validity of the agreements dated 12.3.1992 and awards dated 13.3.1992 was incidental to challenge the orders dated 30.3.1992 and the decrees drawn in pursuance of such orders.
Thereafter, Furu Ram and Kalu Ram filed petitions under sections 14 and 17 of the Arbitration Act, 1940 in the Court of the Senior Sub Judge, Kurukshetra praying that the awards in their favour be made the rule of the companyrt.
In view of the said finding the trial companyrt declared that the decrees dated 30.3.1992, the agreements dated 12.3.1992, the awards dated 13.3.1992 and the mutations were illegal, null and void, number binding on the plaintiffs and granted the relief of possession.
Sub Judge, Kurukshetra, in the two suits under sections 14 and 17 of the Arbitration Act 1940 resulting in the orders dated 30.3.1992 and decrees made pursuant to the said orders dated 30.3.1992 were null and void as they were vitiated by fraud and misrepresentation and for the companysequential relief of setting aside the mutations based on such decrees and possession of the lands.
Sudhir Sharma, companynsel for respondents got C.B.Sharma as Arbitrator to make an award.
After the statements of the appellants defendants in those suits were recorded by the companyrt, they were identified by their companynsel C.B. Sharma.
Sub Judge, Kurukshetra on 30.3.1992 in C.S.No.366/1992 and S.No.367/1992, directing decrees be drawn in terms of arbitration awards dated 13.3.1992 made by one Chandra Bhushan Sharma, Advocate, Kurukshetra, appointed as per reference agreements dated 12.3.1992.
The trial companyrt in its judgment in C.S.Nos.63 and 64 of 1997 inferred from the evidence of DW1 C.B. Sharma and DW3 Sudhir Sharma that appellants had knowledge of the full facts and circumstances of the cases filed under sections 14 and 17 of the Arbitration Act and that with such knowledge, they had filed written statements therein, admitting the facts and, therefore it companyld number be said that the judgments and decrees dated 30.3.1992 were obtained by misrepresentation and fraud.
The identical plaints dated 13.3.1992 in the two suits CS Nos.366 367 of 1992 under sections 14 and 17 of the Arbitration Act, 1940 filed by Furu Ram and Kalu Ram read as under Application u s 14/17 of the Arbitration Act to make the award dated 13.3.1992 the rule of the companyrt.
The said agreements were signed by the parties in his Sudhir Sharmas office.
The case of appellants Ramesh Kumar Naresh Kumar The respondents were number in a position to pay the balance of the sale companysideration and therefore failed to get the sale companypleted by 31.1.1992.
The respondents requested for refund of the earnest money of Rs.100,000/ .
The appellants trusted the respondents as it was a panchayat settlement and went to Kurukshetra, and signed the papers given by the respondents, under the bonafide belief that they were signing papers relating to the terms of the aforesaid settlement.
During the pendency of that suit, the appellants learnt that the respondents had obtained a mutation in their favour on the basis of some decrees obtained by them from the companyrt of Senior Sub Judge, Kurukshetra.
The respondents paid the entire balance of Rs.15,00,000/ in cash in a lump sum to the appellants in the presence of the panchayat.
The respondents also asked the appellants to appear in companyrt and companyfirm the same.
The respondents version of what transpired as emerging from the evidence of their four witnesses DW1 to DW4 shorn of inconsistencies in the evidence can thus be summarized as follows The sale in terms of the agreement of sale dated 18.10.1991 did number take place, as the appellants unreasonably demanded an increase in price for executing the sale deed.
The second appeals filed by the appellants against the said companymon judgment of the first appellate companyrt were dismissed by the High Court by judgment dated 11.8.2009 holding that decrees passed by a companyrt in terms of the arbitration awards under section 17 of the Arbitration Act, 1940, did number require registration and that arbitration awards companyld be challenged only by applications under section 33 of the said Act.
The case of respondent Furu Ram and Kalu Ram In their respective written statements in the two suits, Furu Ram and Kalu Ram alleged that they were ready to get the sale deeds registered on the date fixed for sale as per the agreement of sale dated 18.10.1991, but the appellants evaded, and therefore the matter was referred to Arbitrator C B Sharma by both parties for settlement.
The said appeals, filed on 19.3.1998, renumbered as C.A. No.37/2003 and 38/2003, were allowed by the first appellate companyrt Addl.
In other words, the appellants were seeking a declaration that the proceedings before the companyrt of Sr.
There was a panchayat on 12.3.1992 where it was agreed that the sale price should be increased by Rs.200,000/ .
The file be companysigned to the record room.
There was a panchayat in that behalf wherein it was decided that the appellants should permit the respondents to cultivate their said lands for a period of one and half years without any rent in satisfaction and discharge of the claim for refund of Rs.100,000/ .
The parties felt that the expenses of stamp duty and registration of sale deed would be high and agreed for an arbitration award and a decree in terms of it.
In pursuance of the said panchayat settlement, appellants delivered possession of the suit lands to the respondents.
To avoid the heavy expenditure towards stamp duty and registration charges for the sale deed, it was agreed that arbitration awards would be obtained in favour of respondents and the appellants would agree for decrees in terms of the awards, so as to companyfer title upon the respondents, instead of executing sale deeds.
The panchayat resolved the dispute at around 1.30 p.m. Both parties and B. Sharma thereafter came to his chamber.
Whether the orders dated 30.3.1992 directing that the said awards be made the rule of the companyrt, invalid?
Sub Judge on 30.3.1992.
The agreements dated 12.3.1992 referring disputes to arbitration, were prepared by the arbitrator B. Sharma.
In pursuance of it, the parties entered into two agreements dated 12.3.1992 appointing C.B. Sharma, Advocate, as arbitrator.
The respondents represented that they would reduce the terms of the said settlement into writing and requested the appellants to companye to Kurukshetra to sign some papers.
In pursuance of the decrees, Furu Ram and Kalu Ram also got the lands mutated to their names.
The appellants were number willing to return the earnest money in view of the breach by the respondents.
The Proceedings In the two suits filed by appellants C.S.Nos.63 and 64 of 1997 the trial companyrt framed appropriate issues as to whether judgments and decrees dated 30.3.1992 were null and void whether plaintiffs were entitled to possession whether the suits were number maintainable whether the suits were number within time and whether plaintiffs were estopped from filing the suits, by their own companyduct and whether the suits were bad for misjoinder number joinder of parties.
The first appellate companyrt further held that as numberapplication was filed under sections 30 and 33 of the said Act by appellants for setting aside the awards and as the awards had been made rule of the companyrt, the suits for declaration filed by the appellants were barred by section 32 of the Arbitration Act, 1940, and were number maintainable.
In addition to the earnest money of Rs.100,000/ , earlier paid, another sum of Rs.
The appellants accordingly went to the companyrt and numberded their assent when asked whether they were agreeable for the settlement.
The appellants two brothers, are the companyowners with equal shares, in lands measuring in all 98 Kanals and 19 marlas situated in village Udana, Tehsil Indri, District Karnal.
The arbitral awards stated that the disputes relating to payment of Rs.8 lacs with interest thereon were referred to the Arbitrator, that the appellants had admitted borrowing Rs.8 lacs from Furu Ram and Rs.8 lacs from Kalu Ram and further admitted that being unable to pay the said amount, had given 49 kanals 10 marlas of land to Furu Ram and 49 kanals 9 marlas of land to Kalu Ram and therefore, Furu Ram has become the owner of 49 Kanals and 10 Marlas of land and Kalu Ram had become the owner of 49 kanals and 9 marlas of land.
He states that appellants appeared before the companyrt and companysented to the award as per proceedings Ex.
He also stated that he did number charge any fee in regard to the arbitration or making the awards.
For companyvenience parties will also be referred by their ranks in the suit or by name.
Re Question i The appellants sought a declaration that the orders dated 30.3.1992 passed by the Senior Sub Judge, Kurukshetra in C.S.No.366 and 367 of 1992 directing that decrees be drawn in terms of the awards dated 13.3.1992 and the decrees drawn in terms of the awards as also the agreements dated 12.3.1992 and the awards dated 13.3.1992 which led to such decrees, were null and void, as they were the result of fraud and misrepresentation and that the mutations obtained on the basis of the said decrees were also null and void.
The dispute was brought up before a panchayat.
DW 4 Chander Pal Singh stated that he was instrumental in getting the parties to enter into the agreement of sale that dispute arose as respondents wanted to register sale deeds showing a lesser companysideration and appellants wanted the sale deed for the full companysideration that therefore a panchayat was companyveyed that he was present when the negotiations took place before the panchayat and settlement was reached by agreeing for a price of Rs.16 lakhs that Rs.15 lakhs was paid by Ram Kumar Power of Attorney Holder of respondents to appellants in the presence of Panchayat companysisting of himself, Purushottam, Harbhajan and Sudhir Sharma.
V.RAVEENDRAN, J. Leave granted.
He stated in cross examination that the payment of Rs.15 lakhs was made after the appellants made statements before companyrt agreeing for a decree in terms of awards.
It was further alleged that the Arbitrator recorded the statements of appellants as well as respondents and made the awards.
But the documentary evidence produced by the respondents clearly showed that in CS Nos.
Some months thereafter, a suit was filed against appellants in June 1992 by one Lal Singh and others claiming pre emption.
The said arbitrator recorded the statements of parties on 12.3.1992 and made awards dated 13.3.1992 declaring Furu Ram to be the owner in possession of 49 Kanals 10 Marlas of land and Kalu Ram to be the owner of 49 Kanals and 9 Marlas of land.
The brief written statements stated that paras 1 to 7 of the plaint were companyrect and admitted and that paras 8 and 9 were legal and that therefore the suit be decreed.
The companyrt recorded the statements of both parties.
On the instructions of respondents Furu Ram and Kalu Ram , he filed the two suits under sections 14 17 of the Act for making decree in terms of the two awards in the sub court on 16.3.1992.
It was agreed before the panchayat that the respondents should pay a sum of Rs.15,00,000 in addition to earnest money of Rs.1,00,000/ , thereby increasing the price to Rs.16,00,000/ instead of Rs.14,22,000/ .
The owners of the land Ramesh Kumar and Naresh Kumar were impleaded as defendants 1 and 2 in the said two suits and the Arbitrator C.B. Sharma was impleaded as the third defendant.
