JUDGMENT
R.C. Jain, J.
1. This order will dispose of objections under Section 47, CPC filed by the judgment debtor in the execution taken out by the decree holder for realisation of the balance decretal amount.
2. The undisputed facts are that disputes/differences arose between the parties in relation to lease agreement dated 10.10.1988 and Mr. P.S. Khera, Advocate, Supreme Court was appointed as a sole Arbitrator to settle the disputes/differences. The sole Arbitrator entered upon the reference, made and published his Award dated 27.12.1999 awarding a sum of Rs. 30,33,398 with interest @ 18% p.a. and Rs. 50,000 as cost of the Arbitration proceedings in favor of the decree holder and against the judgment debtor. The said Award was challenged by the judgment debtor by filing an application under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”). However, after filing of the said application/objections, the parties reached a settlement which were reduced into writing vide a document titled as “Declaration Undertaking” on 09.08.2000 whereby the judgment debtor agreed to pay Rs. 16 lacs towards full and final settlement of the claim of the decree holder in 9 Installments commencing from 09.08.2000 as per the time schedule prescribed under the said “Declaration Undertaking”. It is not disputed that the amount of Rs. 16 lacs was in fact paid by the judgment debtor to the decree holder by 05.04.2001, however, there was delay in the payment of certain intervening Installments. On 01.08.2001 the application/objection of the judgment debtor under Section 34 of the Act were disposed of as not maintainable and infructuous in view of the settlement reached between the parties and entire agreed amount of Rs. 16 lacs having been paid by the judgment debtor to the decree holder before that date. The said order was
not challenged by any of the parties and became final.
3. After about couple of months, the decree holder took out the present execution for realisation of the balance decretal amount in terms of the Award dated 27.12.1999 after adjusting a sum of Rs. 16 lacs already received by them under the settlement and sought the transfer of the decree to the Court of District Judge, Rudrapur, District Udham Singh Nagar, for its further execution. The judgment debtor after being noticed, filed the objections under Section 47 read with Section 151, CPC challenging the very maintainability of the present execution on the ground that the subject-matter of the Award dated 27.12.1999 stood settled vide settlement deed dated 09.08.2000 for a sum of Rs. 16 lacs and the settled amount has already been received by the decree holder and consequently there is no balance decretal amount which the judgment debtor is liable to pay ; the execution has been filed with dishonest intention and by abusing the process of the Court and by playing fraud on the judgment debtor and the Court. It is also urged that the decree holder has not come to the Court with clean hands in as much as it has suppressed the fact of settlement reached between the parties on 09.08.2000 and the entire amount as per the settlement having being paid to the decree holder.
4. I have heard Mr. S.P. Kalra learned senior counsel representing the decree holder and Mr. Anil Seth learned counsel representing the judgment debtor and have given my thoughtful consideration to their respective submissions.
5. Mr. Kalra, learned senior counsel for the decree holder has not disputed the factum of settlement reached between the parties on 09.08.2000 by which the decree holder had agreed to settle all its claims under the Award subject to the judgment debtor paying a sum of Rs. 16 lacs as also about the decree holder having received the entire settled amount of Rs. 16 lacs by the due date but he has strongly contended that since the amount of Rs. 16 lacs was not paid by the judgment debtor as per the time schedule prescribed in the settlement deed dated 09.08.2000, the said settlement will go and will not bind the decree holder and consequently the decree holder is entitled to the entire decretal amount under the Award dated 27.12.1999 after adjusting a sum of Rs. 16 lacs paid by the judgment debtor. Mr. Seth, on the other hand has admitted that the payment of Rs. 16 lacs was not made strictly in conformity with the time schedule prescribed in the “Declaration Undertaking” dated 09.08.2000 and there were delays of some days ranging from 2 days to 13 days in payment of five Installments which had become due and payable on 07.09.2000, 11.10.2000, 06.11.2000, 18.12.2000 and 16.01.2001. However, he has argued that these delays were condonable and in any case would be deemed to have been waived by the decree holder by accepting the future Installments. Alternatively his submission is that by virtue of the “Declaration Undertaking” dated 09.08.2000, the decree holder cannot seek the execution of the Award dated 27.12.1999 firstly because the settlement incorporated in “Declaration Undertaking” has superseded the Award dated 27.12.1999 and secondly the entire amount under the settlement was admittedly received by the decree holder.
6. To appreciate the rival contentions put forth on behalf of the parties, it is necessary to extract below the relevant portion of settlement/declaration undertaking dated 09.08.2000 reached between the parties :
“Now in consideration of REL agreeing to accept the said sum of Rs. 16,00,000 from KOL and/or its Directors, it is hereby declared and undertaken as under :
That KOL and/or its Directors shall pay to REL a sum of Rs. 16,00,000 (Rupees sixteen lacs only) as per the following schedule :
On or Before Amount to be Paid
09.08.2000 4,00,000
31.08.2000 1,50,000
30.09.2000 1,50,000
31.10.2000 1,50,000
30.11.2000 1,50,000
31.12.2000 1,50,000
31.01.2001 1,50,000
28.02.2001 1,50,000
31.03.2001 1,50,000
16,00,000
(ii) Only on KOL making the payment of conformity with the schedule referred in (i) above REL shall withdraw the cases pending against KOL and its Directors. In case KOL and/or its directors default in payment of any of the Installments given in Clause IV, Sub-clause (i) above, REL shall be at liberty to proceed against KOL in accordance with law. However, delay up to 5 days from the specified above will not be considered default in payment for the aforesaid purpose.
The above declaration and undertaking received and accepted. It is made clear that acceptance of the above declaration and undertaking shall not in any manner affect the rights and contention of Roger Enterprises Ltd. till the amount of Rs. 16,00,000 is received by REL in conformity with the Schedule in Clause IV, Sub-clause (i) above. All rights and obligations of the parties under the lease agreement dated 10.10.1988 shall remain in full force till liability of REL is discharged in conformity with the Schedule in Clause IV, Sub-clause (i) above.”
7. Mr. Kalra, learned senior counsel representing the decree holder on the strength of Sub-clause (ii) of Clause 4 has vehemently urged that default in the payment of any of the Installments referred to in Clause (i) of Clause 4 would automatically revive the Award thereby entitling the decree holder to realise the entire decretal amount in terms of the said Award. This Court is not persuaded to accept this contention for more than one reasons. In the first instance from a conjoint reading of Clause 4(ii) and the ultimate clause, it is not possible to hold that the Award of the sole Arbitrator stood revived or became enforceable on default in payment of any one or more Installment(s). The clauses no doubt show that strict adherence to the time schedule for payment of various Installments was envisaged but it cannot be said that it was the essence of the said settlement or that the decree holder could not condone the delay in making the payment of one or more Installment because the delay uptiil 5 days was excusable as per Clause 4(ii) of the agreement and the decree holder always possessed a right or authority to waive any such delay. There was undoubtedly some default/delay in making the payment of some of the Installments but it is also pertinent to notice that the decree holder has accepted the said Installments despite delay and without any protest and continued to accept the future Installments even after accepting the delayed Installments. In the opinion of this Court, this acceptance of delayed payment of some of the Installments by the decree holder without any protest amounts to waiver of his right, if any, accrued to him under the said settlement on account of delayed payment of Installments.
8. Apart from the above it is pertinent to note that the applications/ objections of the judgment debtor under Section 34 of the Arbitration and Conciliation Act, 1996 were dismissed by the Court on 01.08.2000 in presence of the counsel for the parties and on instructions, the Court had recorded that entire amount of Rs. 16 lacs under the settlement stood paid by the judgment debtor to the decree holder and, therefore, the application under Section 34 was rendered infructuous. At that stage no objection was raised on behalf of the decree holder in regard to the default/delay in payment of some of the Installments which would clearly show that the decree holder after acceptance of the entire amount of Rs. 16 lacs was fully satisfied and was not left with any subsisting claim against the judgment debtor.
9. Mr. Kalra, has then urged that the order dated 01.08.2000 was passed without prejudice to the rights and claims of the parties and, therefore, the factum of recording the payment of 16 lacs in the order pursuant to the settlement is of no consequence as the rights and claims of the parties were kept intact. In the opinion of this Court, this is not the correct reading of the order and it does not mean that the Court while disposing of the objections under Section 34 had left any question to be determined or rights or claims of the parties still persisted.
10. Assuming for the sake of argument that default/delay in the payment of certain Installments would amount to non-compliance of terms to settlement but still the question would be as to whether the Award can be deemed to have revived and is capable of execution even after the settlement dated 09.08.2000. In support of his contention that the Award and decree and for that purpose the claims of the decree holder stood superseded by the settlement dated 09.08.2000, Mr. Seth has sought support from the Supreme Court cases titled as Munshi Ram v. Banwari Lal, and Dadri Cement Co. and Anr. v. Bird and Co. Pvt. Ltd., .
11. In the former case, the Apex Court held that an Award of the Arbitrator can be challenged under the provisions of the Arbitration and Conciliation Act but there was nothing in the said Act which disabled the parties from terminating their disputes in a different way, and if they do, it could not be intended by law that a dispute, which has been successfully terminated, should again become the subject of litigation. The Court further laid down that if the parties are dissatisfied with the Award and want to substitute it by a compromise involving matters alien to the original dispute which are inseparable, the Court may supersede the submission, and leave the parties to work or their agreement in accordance with the law outside the Arbitration Act. In such circumstances, the new compromise itself may furnish a very good ground for superseding the reference and thus revoking the Award. It was further laid down that the mode of payment was a matter on which the parties could agree, and the Court could substitute their agreement in the operative part of the decree. There was nothing in the Arbitration Act, which disentitled the Court from taking note of an agreement of that character and the decree incorporating the Award as modified by the parties, could not be characterised as a nullity on that ground.
12. In the latter case, a Division Bench of this Court was concerned with a similar situation wherein the parties had agreed and undertook to pay the sum by Installments in terms of the agreement. The Court held that a fresh arrangement was thus made between the parties in substitution of original Award which amounted to accord and satisfaction of the original contract and, therefore, the substituted agreement was only executory in sense that payment of amount due to the plaintiff under it had yet to be made but it was still a valid contract by itself enforceable at law. Relying upon a decision of English case titled as Trade Outlook Ltd. v. Associated Newspaper Ltd., (1993) 2 KB 616, the Court held that after assenting to the fresh arrangement the position of the plaintiff had changed.
13. Keeping in view the above legal proposition, the Award dated 27.12.1999 will be deemed to have been superseded and revoked by the settlement dated 09.08.2000 reached between the parties and shall remain enforceable only in terms and conditions of the said settlement. Therefore, by no stretch, it can be said that the Award dated 27.12.1999 got revived on the failure of the judgment debtor not making the payment of some of the Installments strictly in conformity with the time schedule prescribed in the settlement. The present execution is, therefore, wholly misconceived and is liable to be dismissed.
14. In the result, the objections under Section 47, CPC are hereby allowed and the execution is hereby dismissed leaving the parties to bear their own costs.