R.S.A.No.3229 of 2004 1 In the High Court of Punjab and Haryana at Chandigarh Date of decision: 11.8. 2009 R.S.A.No.3229 of 2004 Ramesh Kumar and another ......Appellants Versus Furu Ram and another .......Respondents R.S.A.No.3230 of 2004 Ramesh Kumar and another ......Appellants Versus Kalu Ram and another .......Respondents CORAM: HON'BLE MRS. JUSTICE SABINA Present: Mr. S.M.Sharma, Advocate, for the appellants. Mr.S.K.Garg Narwana, Advocate, for respondent No.1. **** SABINA, J. Vide this judgment, RSA Nos. 3229 and 3230 of 2004 would be disposed of as the civil suits, out of which the said appeals have arisen, were consolidated and were disposed of vide common judgment. R.S.A.No.3229 of 2004 2 Plaintiffs Ramesh Kumar and Naresh Kumar filed suits separately, which were decreed by the Civil Judge (Jr.Divn.) Kurukshetra vide judgment and decree dated 7.2.1998. In appeals filed by the defendants, the said judgment and decree were set aside by the Additional District Judge, Kurukshetra vide judgment and decree dated 3.8.2004. Hence, the present appeals by the plaintiffs. Brief facts of the case, as noticed by the lower appellate Court in para Nos. 3 to 7 of its judgment, are as under:- “3. Brief facts of the case, leading to the present litigation, are that plaintiffs Ramesh Kumar and Naresh Kumar sons of Ram Sarup were owners in possession of 98 Kanals 19 marlas of land, in equal shares, duly described in para No.1 of the plaint, situated in village Udana, Tehsil Indri, District Karnal, as per jamabandi for the year 1987-888 and mutation no.491. They agreed to sell the aforesaid land to Furu Ram and Kalu Ram defendants by entering into an agreement to sell dated 18.10.1991 against a sale consideration of Rs.14,22,000/- and an amount of Rs.1,00,000/- was paid a earnest money at the time of execution of the aforesaid agreement and balance was to be paid at the time of registration of sale deed on 31.1.1992. As per version of the plaintiffs. The defendants Furu Ram and Kalu Ram R.S.A.No.3229 of 2004 3 could not arrange the balance sale consideration to get the sale deed registered and, therefore, wanted refund of their earnest money back. Parties to the agreement to sell then entered into a settlement that if the suit land was given to the defendants for a period of 1 ½ years for cultivation, without charging any rent or licence fee, in that event, the earnest money so paid by them to the plaintiffs, would be satisfied and their claim of refund of the same would meet the end. In pursuance of the aforesaid settlement, Plaintiffs gave possession of the suit land to them. Thereafter defendants wanted to reduce the said settlement in writing and for that purpose they asked the plaintiffs to come to Kurukshetra to sign certain papers and accordingly the Plaintiffs under bonafide belief, signed certain papers on the asking of defendants and also appeared in the Court. Court had also asked the Plaintiffs whether they agreed to give the suit land to the defendants and considering the representation of the defendants according to aforesaid settlement, they made a statement of giving land to defendants for cultivation for a period of 12 ½ years to satisfy their earnest money. In June 1992, one Lal Singh and others had also filed a suit for possession of the suit land by way of presumption against the defendants, in R.S.A.No.3229 of 2004 4 which the defendants imp leaded them a a Party by moving an application on the basis of the aforesaid agreement to sell dated 18.10.1991. Further stand of the plaintiffs is that they came to know that defendants had got entered and sanctioned a mutation in their favour on the basis of some fake and forged decree, allegedly passed in their favour by the Court of learned Senior Sub Judge, Kurukshetra, and on enquiry it was revealed that defendants had obtained some false and frivolous decrees by mis-representation and also by playing a fraud upon them as well as on the Court. Said decrees were passed by the Court in favour of defendants on the basis of some arbitration award dated 13.3.1992, given by defendants no. 2 namely Shri Chander Bhushan Sharma, Advocate, Kurukshetra, on the basis of some agreements dated 12.3.1992 allegedly executed by the Plaintiffs and defendants on.1 in his favour and the impugned judgment and decrees dated 30.3.1992 in Civil Suit no.366 of 1992 and 367 of 1992 were passed on the basis of the aforesaid award. The aforesaid agreement dated 12.3.1992 in favour of Arbitrator and award thereof dated 13.3.1992 as well as the impugned judgment and decreed dated 30.3.1992 passed in both the civil suits, were the result of fraud and mis-representation and the R.S.A.No.3229 of 2004 5 mutations no. 492 and 493 sanctioned on the basis of the same are illegal, null and void, nonest, for the following reasons. (i) That the Plaintiffs never borrowed any alleged amount of Rs.8 lakh each and never agreed to pay any alleged interest at the rate of 2% per month on the said amount, nor they had any occasion or necessity to borrow the said amount. In fact they had entered into an agreement to sell vide agreement dated 18.10.1991 to sell the sit land to defendants Furu Ram and Kalu Ram, and, therefore, there was no reason or occasion for them to borrow any amount from the defendants. The prevalent rent per acre at the relevant time was Rs.5500/- and when the defendants cold not arrange the balance sale consideration of Rs.13,22,000/- and also could not get the sale deed registered, on their demand of earnest money back, some settlement with the intervention of Panchayat had taken place in between them, as a result of which suit land was given to them without payment of any rent for a period of 1 ½ years to compensate the defendants towards their earnest money. There was no occasion for the plaintiffs to enter into an R.S.A.No.3229 of 2004 6 agreement to refer the dispute to the Arbitrators regarding return of the alleged loan amount mentioned in the impugned award. (ii) The defendants could not have lent the huge amount of Rs.8 laks each, as alleged in the agreements, without getting any writing from the Plaintiffs or any Pronote or receipt etc. and in the absence of any such document, it was abundantly clear that no consideration was ever passed as alleged in the aforesaid agreements. Plaintiffs never took part in the arbitration proceedings nor made any statement and the impugned arbitration award was made at the instance of defendants Furu Ram and Kalu Ram. They never engaged any counsel nor signed any written statement, but while appearing in the Court, they were under the impression that they wee making a statement regarding gibing of the land for cultivation to the defendants for a period of 1 ½ year and with the belief they signed their respective statement in the Court. Plaintiffs had never consented for transfer of their land in favour of defendants as owners nor had ever admitted passing of the award or decrees on the basis of the said award, because the same was R.S.A.No.3229 of 2004 7 a result of fraud and mis-representation by the defendants, which was apparent on the face of record, because said decrees passed on the basis of said awards, were never made known to the plaintiffs. Defendants also played a fraud upon the Court because the land in question is situated in village Udana, Tehsil Indri, District Karnal, whereas the suit was filed in the courts at Kurukshetra. The decrees passed on the basis of awards were jot got registered, though these were compulsorily registerable, therefore, the decrees were illegal and were liable to be set aside. 4. The aforesaid controversy in between the parties led to filing of two separate sits by Ramesh Kumar and Naresh Kumar Plaintiffs against Furu Ram ( Civil Suit No.63/1997 of 1993) and Kalu Ram (Civil Suit No.64/97 of 1993) both real brothers, for declaration to the effect that the agreements for appointment of arbitrator, award given by them and the judgments and decrees passed on the basis of the said awards, were illegal, null and void, for the reasons and grounds mentioned above, and that they were entitled to get back the possession of the suit land from the defendants. 5. It is pertinent to mention here that two R.S.A.No.3229 of 2004 8 separate suits were filed by Ramesh Kumar and Naresh Kumar because there were to arbitration agreements allegedly executed by them separately in their individual capacity, allegedly borrowing and amount of Rs.8 lakh each from the defendants Furu Ram and Kalu Ram, in interest at the rate of 2% per month, for a period of four months. 6. Furu Ram and Kalu Ram, defendant No.1 respectively in both the suits, contested both the suits by filing wertten statement, wherein they took various preliminary objections regarding locus-standi, maintainability, time barred, non-joinder and mis-joinder of necessary parties, estoppel, jurisdiction and that the suit of plaintiffs ere false, frivolous, vexatious. On merit it was pleaded that the defendants wee in possession of the suit land as its owners. They pleaded legality and validity of the civil court decrees dated 30.3.1992 passed in both the civil suits No.366 and 367 of 1992 in their favour. They further pleaded that they wanted to get the sale deed executed and registered on the agreed date, but it were plaintiffs who evaded and so the matter was referred to the arbitrator, i.e. defendant no.2 namely Shri Chander Bhushan Sharma, Advocate. As a matter of fact, on failure of the Plaintiffs to get the sale deed R.S.A.No.3229 of 2004 9 executed, matter was referred to the Arbitrator, who had recorded the statements of both the parties, which were duly signed by them and were read over to them by him and after admitting the contents of the same, both the parties had allowed the Arbitrator to pass an award and thus the same was legal and the judgments and decrees dated 30.3.1992 based on the same were also legal and valid. With regard to suit for pre-emption filed by Lal Singh etc. it was pleaded that defendants sere not impleaded as party by pre-emptors Lal Singh etc, in collusion with the Plaintiffs and when the defendants came to know of the same they became party in that suit. It was also pleaded that mutations sanctioned on the basis of aforesaid decrees dated 30.3.1992 were also legal and valid. With this broad submissions, dismissal of the suit was paryed. 7. Defendant no.2, Chander Bhushan Sharma, Advocate, who was arbitrator, in his written statement, in both the suits, pleaded that he was legally appointed as Arbitrator by the parties to this litigation and so the award announced by him as legal and valid. Judgments and decrees dated 30.3.1992 were passed in legal manner.” On the pleadings of the parties, following issues were framed by the trial Court:- R.S.A.No.3229 of 2004 10 “1. Whether judgment and decree dated 30.3.1992 passed in civil suit No.367 of 1992 by Shri Dewan Chand, the then senior Sub Judge, Kurukshetra, is illegal, null and void and not binding on the rights of the plaintiffs? OPP 2. If issue No.1 is proved, whether plaintiffs are entitled to possession of the suit property ? OPP 3. Whether plaintiff has no locus-standi to file and maintain the suit ? OPD 4. Whether suit is not maintainable in the present form? OPD 5. Whether suit is not within time? OPD 6. Whether this Court has got no jurisdiction to try the suit? OPD 7. Whether plaintiffs are estopped from filing the suit by their own act and conduct ? OPD 8. Whether suit is bad for mis-joinder and non- joinder of parties ? OPD 9. Whether plaintiff has no cause of action to file the suit ? OPD 10. Whether suit has not been properly valued for the purpose of court fees and jurisdiction ? OPD 11. Whether suit is false and frivolous? OPD 12. Whether defendants are entitled to special R.S.A.No.3229 of 2004 11 costs under Section 35-A CPC ? OPD 13. Relief. ” During the course of arguments, learned counsel for the appellants has submitted that the decree in question dated 30.3.1992 was liable to be set aside as the same was not a registered decree. Learned counsel for the respondent, on the other hand, has submitted that the decree in question dated 30.3.1992 was not required to be registered as the same has been passed on the basis of arbitration award. After hearing counsel for the parties, I am of the opinion that the present appeals deserve to be dismissed. As per the Arbitration Act, 1940 (for short 'the Act') an award is passed under Section 14 of the said Act. The judgment in terms of the award is passed under Section 17 of the Act. Section 14 of the Act reads as under:- Award to be singed and filed 14. (1) When the arbitrators or umpire have made their award, they shall sign it and shall give notice in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbitration and award. (2) The arbitrators or umpire shall, at the request of any party to the arbitration agreement or any person claiming under such party or if so directed by the Court R.S.A.No.3229 of 2004 12 and upon payment of the fees and charges due in respect of the arbitration and award and of the costs and charges of filing the award, cause the award or a signed copy of it, together with any depositions and documents which may have been taken and proved before them to be filed in Court, and the Court shall thereupon give notice to the parties of the filing of the award. (3) Where the arbitrators or umpire state a special case under clause (b) of Section 13, the Court, after giving notice to the parties and hearing them, shall pronounce its opinion thereon and such opinion shall be added to and shall form part of, the award. Section 17 of the Act reads as under:- Judgment in terms of award. Where the Court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award, the Court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow and no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in R.S.A.No.3229 of 2004 13 accordance with, the award.” The present cases fall under the old Act although now the new Act i.e. Arbitration and Conciliation Act, 1996 has come in operation w.e.f. 22.8.1996. The plaintiffs had challenged the arbitration agreement dated 12.3.1992, arbitration award dated 13.3.1992 and the civil Court decrees dated 30.3.1992 passed in two civil suits bearing 366 and 367 of 1992. Vide the said decrees, the arbitration award dated 13.3.1992 were made rule of Court. Learned counsel for the appellants, during the course of arguments, has not challenged findings of the trial Court to the effect that the plaintiffs had failed to prove that the award as well as decree in question were a result of fraud or misrepresentation as the same were not even challenged before the learned Appellate Court. The only ground on which the learned counsel for the appellants has challenged the decrees dated 30.3.1992 is that the same were not got registered and were illegal. However, I am unable to agree with the submissions made by learned counsel counsel for the appellants. The decree in question was passed on the basis of arbitration award and in these circumstances, the same was not required to be registered. The decree did not create any right, title or interest in favour of the defendants for the first time. As per Section 32 of the Act, notwithstanding any law for the time being in force, no suit shall lie on any ground whatsoever for R.S.A.No.3229 of 2004 14 a decision upon the existence, effect or validity of an arbitration agreement or award, nor shall any arbitration agreement or award be enforced, set aside, amended, modified or any way affected otherwise than as provided in this Act. As per Section 33 of the Act, any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits. Provided that where the Court deems it just and expedient, it may set down the application for hearing on other evidence also, and it may pass such orders for discovery and particulars as it may do in a suit. Thus the awards could be challenged by the plaintiffs in terms of the provisions of the Arbitration Act. However, the decree passed on the basis of the arbitration award was not required to be registered and as such, there is no force in the argument raised by learned counsel for the appellants. In these circumstances, the learned Additional District Judge had rightly dismissed the suits of the plaintiffs. No substantial question of law arises in these regular second appeals. Accordingly, the same are dismissed. (SABINA) JUDGE August 11, 2009 anita