Supreme Court of India
Sanjit Singh Salwan vs Sardar Inderjit Singh Salwan on 14 August, 2025
Author: Pamidighantam Sri Narasimha
Bench: Pamidighantam Sri Narasimha
2025 INSC 988
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. OF 2025
[Arising out of SLP (Civil) No. 29398 of 2024]
SANJIT SINGH SALWAN & ORS. APPELLANT(S)
VERSUS
SARDAR INDERJIT SINGH SALWAN & ORS. RESPONDENT(S)
JUDGMENT
ATUL S. CHANDURKAR, J.
1. Leave granted.
2. The issue that arises for consideration in these proceedings is
whether a plea of estoppel in law can be permitted to be raised by a
party ignoring its conduct that resulted in the other party altering its
position to its detriment in view of such conduct.
3. Facts relevant for deciding the Civil Appeal are that the appellants
and the respondents claim to be trustees of Guru Tegh Bahadur
Signature Not Verified
Digitally signed by
Jayant Kumar Arora
Charitable Trust (hereinafter referred to as ‘the Trust’). On disputes
Date: 2025.08.14
18:21:30 IST
Reason:
arising between the parties, the respondents claimed that the
CIVIL APPEAL ARISING OUT OF SLP (C) NO. 29398 OF 2024 1
appellants had been removed as trustees. The respondentsapproached the Civil Court by filing a suit for perpetual injunction
seeking to restrain the appellants from entering the school being
conducted by the Trust and also from interfering with the functioning
of the school. The appellants filed an application under provisions of
Order VII Rule 11 of the Code of Civil Procedure, 1908 (hereinafter
referred to as ‘the Code’) seeking rejection of the plaint. The Trial
Court on 13.04.2022, accepted the contentions of the appellants and
rejected the plaint holding that in view of Section 92 of the Code, the
suit was barred. The respondents being aggrieved by the dismissal
of their suit filed an appeal before the District Court. During the
pendency of the appeal, the respondents moved an application dated
07.07.2022 in which it was stated that the appellants as well as the
respondents had appointed a sole arbitrator to resolve their disputes
after which the process of arbitration had been undertaken. It was
stated that the appeal filed by them be decided on the basis of the
award passed by the sole arbitrator.
4. On 30.12.2022, the sole arbitrator passed his award and made an
arrangement between the parties as regards the manner of managing
the affairs of the Trust. In view of the said award, the parties moved
a joint application in the pending appeal before the District Court on
CIVIL APPEAL ARISING OUT OF SLP (C) NO. 29398 OF 2024 2
02.01.2023 stating therein that they had accepted the award and that
they would abide by it in true spirit. They sought disposal of the
appeal in terms of the award. Accordingly, on 27.01.2023, the District
Court disposed of the appeal in terms of the award dated 30.12.2022.
It was directed that the compromise deed recording the said award
would form part of the decree. It is common ground that this decree
passed by the District Court on 27.01.2023 was not challenged any
further and the same continues to hold field even today.
5. According to the appellants, they took various steps in terms of the
award so as to comply with their part of obligations. It was their
grievance that the respondents however failed to discharge their
obligations under the award. Ultimately, on 23.11.2023 the appellants
filed Miscellaneous Case No.122 of 2023 seeking to execute the
aforesaid compromise decree. The said proceedings however were
withdrawn by the appellants on 08.12.2023, after which the
appellants filed an application under Section 9 of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as “the Act of 1996”). In
the said proceedings, the appellants sought various interim measures
in terms of the arbitral award. This application was opposed by the
respondents. The learned Judge of the Commercial Court on
24.05.2024 went into the issue of arbitrability of the disputes between
CIVIL APPEAL ARISING OUT OF SLP (C) NO. 29398 OF 2024 3
the parties and on finding that the disputes pertained to the affairs of
the Trust held that in view of the provisions of Section 92 of the Code,
the arbitrator could not have gone into the same. It was held that the
award dated 30.12.2022 was a nullity and hence there was no
question of its enforcement. Accordingly, the application filed by the
appellants under Section 9 of the Act of 1996 came to be rejected.
The appellants, being aggrieved, filed an appeal under Section 37 of
the Act of 1996. The High Court declined to interfere with the order
passed by the Commercial Court and affirmed the finding that the
dispute was non-arbitrable. The High Court accordingly dismissed
the said appeal on 30.08.2024. The appellants being aggrieved by
the aforesaid decision have approached this Court.
6. Mr. C.U. Singh, learned Senior Advocate for the appellants submitted
that the parties having accepted the award passed by the arbitrator
on 31.10.2022 which thereafter resulted in a consent decree being
passed by the District Court on 27.01.2023, it was not permissible for
the respondents to disregard the same and contend that the consent
decree was not binding upon them. In fact, the consent decree had
become final and therefore the appellants were justified in seeking
interim measures on that basis under Section 9 of the Act of 1996.
The appellants in accordance with the terms of the consent decree
CIVIL APPEAL ARISING OUT OF SLP (C) NO. 29398 OF 2024 4
had complied with their obligations by taking necessary steps but no
reciprocal steps were taken by the respondents. The respondents
had consented to the passing of the consent decree in the suit filed
by them. Hence, by their conduct they were estopped from
questioning the validity of the consent decree and raising the ground
of non-arbitrability. In this regard reliance was placed on the decisions
of this Court in Suzuki Parasrampuria Suitings Private Ltd. v.
Official Liquidator of Mahendra Petrochemicals Limited & Ors.,
(2018) 10 SCC 707, Joint Action Committee of Air Line Pilots’
Association of India (ALPAI) & Ors. v. Director General of Civil
Aviation and Ors., (2011) 5 SCC 435, Mumbai International
Airport Private Ltd. v. Golden Chariot Airport and Anr., (2010) 10
SCC 422 and Karam Kapahi and Ors. v. Lal Chand Public
Charitable Trust and Anr., (2010) 4 SCC 753. The conduct of the
respondents disentitled them to oppose the enforcement of the
consent decree as it had become final.
Without prejudice to the aforesaid contentions, it was urged
that even if it was to be held that in view of Section 92 of the Code,
the disputes were non-arbitrable, the appellants were entitled to the
fruits of the consent decree. The appellants had in fact filed execution
proceedings but the same were withdrawn so as to invoke the
CIVIL APPEAL ARISING OUT OF SLP (C) NO. 29398 OF 2024 5
provisions of Section 9 of the Act of 1996. As a result of the impugned
orders, the appellants were left without any remedy whatsoever
despite the existence of a consent decree that had attained finality.
Reference in this regard was made to the decisions of this Court in
Indore Development Authority v. Manoharlal & Ors., (2020) 8
SCC 129 and Kavita Trehan & Anr. v. Balsara Hygiene Products
Ltd., (1994) 5 SCC 380. It was thus urged that this Court ought to
exercise jurisdiction so as to enable the appellants to enjoy the fruits
of the consent decree.
7. On the other hand, Mr. Gagan Gupta, learned Senior Advocate for
the respondents while opposing the appeal submitted that
notwithstanding the passing of the consent decree, the Commercial
Court was justified in holding the award dated 30.12.2022 to be a
nullity. The issues dealt with by the sole arbitrator related to affairs of
the Trust. In view of Section 92 of the Code, the same could not have
been the subject matter of arbitration. It was submitted that the award
dated 30.12.2022 and the subsequent order passed by the District
Court could not be treated to be a consent decree. The appeal was
merely disposed of on the joint application of the parties. The
Commercial Court therefore rightly held the award to be a nullity
which could not be executed. Since the arbitrator had dealt with an
CIVIL APPEAL ARISING OUT OF SLP (C) NO. 29398 OF 2024 6
issue over which he had no jurisdiction, this aspect went to the root
of the matter and could be raised at any point of time. The
Commercial Court therefore in proceedings filed under Section 9 of
the Act of 1996 rightly refused to grant any interim measures under
Section 9 of the Act of 1996. Reliance was placed on the decisions of
this Court in Vimal Kishor Shah and others v. Jayesh Dinesh Shah
and others, (2016) 8 SCC 788 and Booz Allen & Hamilton Inc. v.
SBI Home Finance Ltd. and others, (2011) 5 SCC 532. It was also
urged that the appellants having themselves withdrawn the execution
proceedings for invoking the jurisdiction under Section 9 of the Act of
1996, they could not be now permitted to contend that they should be
permitted to execute the consent decree. In any event, since the
award had been held to be a nullity there was no question of it being
executed. Reliance was placed on the decisions of this Court in
Sunder Dass v. Ram Prakash, (1977) 2 SCC 662 and Prem Singh
and Ors. v. Birbal & Ors., (2006) 5 SCC 353. To urge that there
could be no estoppel against law, reliance was placed on State of
Rajasthan and another v. Surendra Mohnot and others, (2014) 14
SCC 77. It was thus submitted that the appellants had been rightly
denied the relief and the impugned orders did not warrant any
interference.
CIVIL APPEAL ARISING OUT OF SLP (C) NO. 29398 OF 2024 7
8. We have heard the learned counsel for the parties at length and with
their assistance we have also perused the documentary material on
record. At the outset, it would be necessary to refer to certain
admitted facts on record. The Trust deed in question is dated
15.10.1979 which indicates various objects of the Trust. The same
include providing for educational facilities in various fields by
establishing and maintaining institutions of learning. Various other
ancillary objects have been stated therein. The respondents being
aggrieved by the alleged interference of the appellants in the affairs
of the Trust approached the Civil Court by filing a suit for perpetual
injunction seeking to restrain the appellants from entering the
premises of the school being run by the Trust and also from interfering
with the functioning of the said school. In paragraphs 19A to 19C of
the plaint, the respondents pleaded as under:
“19A. That the relief claimed in the present suit does not fall within the
ambit and scope of Sec. 92 CPC. Provisions of Section 92 CPC in the
matter of dispute is not at all attracted. The suit has not been filed,
seeking relief pertaining to any matter enumerated in Section 92 CPC.
19B. That the suit is not barred by any of the Provisions of Arbitration
& Conciliation Act 1996, because the subject matter and relief of the
suit does not tantamount to dispute which can be referred to
Arbitration. The terms of the Trust Deed do not attract any Arbitration
Clause. The present parties to the suit were not signatories of the Trust
Deed.
CIVIL APPEAL ARISING OUT OF SLP (C) NO. 29398 OF 2024 8
19C. That this Hon’ble Court u/S. 9 CPC has jurisdiction to hear and
decide the suit.”
(Emphasis supplied)
9. It was the appellants who sought to raise an objection to the
jurisdiction of the Civil Court by raising a ground that the suit was
barred by law in view of Section 92 of the Code. This application was
opposed by the respondents asserting that the suit was legally
tenable. The Trial Court by its order dated 13.04.2022 proceeded to
hold that in view of Section 92 of the Code, the Civil Court had no
jurisdiction to try the same. The plaint was accordingly rejected under
provisions of Order VII Rule 11 of the Code. The respondents being
aggrieved, challenged the said order by filing an appeal under
Section 96 of the Code. During pendency of the said appeal, the
respondents moved an application dated 07.07.2022 stating therein
that the respondents as well as the appellants had decided to have
their disputes resolved mutually. In the said application it was averred
as under:
“In this appeal appellants as well as respondents have mutually
decided to get their matter resolved out of the Court under arbitration
of Shri Vipin Sodhi, Advocate, Meerut. The appellants have appointed
Shri Vipin Sodhi, Advocate, 105, Carriappa Street, Meerut Cantt as
their sole arbitrator in all or any dispute pertaining to Guru Tegh
Bahadur Charitable Trust and its school at 227, West End Road,
Meerut Cantt etc. Partnership firm M/s Sri Guru Tegh Bahadur Public
School, Delhi Road, Meerut or any other connected matters, onCIVIL APPEAL ARISING OUT OF SLP (C) NO. 29398 OF 2024 9
27.5.2022. Shri Vipin Sodhi, Advocate, has accepted to be an arbitral
tribunal to decide all disputes and to give his final award. Shri Vipin
Sodhi has entered upon the Reference of arbitration and various
sittings have already taken place. As per oral submissions of appellant
Arbitrator has taken into points in dispute. Version of the appellants
has been recorded. Entire disputes raised by the appellants have been
taken into consideration and the arbitration is in process.
It Is, therefore, very humbly prayed that this appeal should be decided
from the outcome of final award passed by the Arbitrator Shri Vipin
Sodhi, Advocate, Meerut.”
(Emphasis supplied)
10. The sole arbitrator on 30.12.2022 passed his award and issued
various directions. Both the parties thereafter filed a joint application
before the Appellate Court on 02.01.2023 praying that the appeal be
disposed of in terms of the award dated 30.12.2022. In the said joint
application it was stated as under:
“Both the parties humbly submits as under:
That the Learned Arbitral Tribunal Sole Arbitrator Shri Vipin Sodhi,
Advocate Meerut has passed the Award dated 30.12.2022 in our
matter. Copy of the Award is enclosed. We both parties accept the
Award and it shall be binding on us. We shall not challenge the award
and will abide by it in true sense and spirits.
That the Appeal be decided accordingly in terms of award.
It is, therefore, prayed that in view of award enclosed this appeal be
disposed of as per law.”
(Emphasis supplied)
11. The Appellate Court noted the aforesaid and took on record the
compromise deed dated 02.01.2023. The same was marked as
Document No. 25C. On 27.01.2023, the Appellate Court disposed of
CIVIL APPEAL ARISING OUT OF SLP (C) NO. 29398 OF 2024 10
the appeal in terms of the compromise deed which was to form part
of the decree. The said order reads as under:-
1. Challenge in this civil appeal is to the judgment and decree dated
13.04.2022 passed by learned Civil Judge (Sr. Div.) Meerut, which was
passed by him in O.S. No. 227 of 2022 Guru Tegh Bahadur School
and others versus Sardar Sanjt Singh Salwan and others.
2. During pendency of this appeal, good sense prevailed between the
parties and their dispute has been decided by sole Arbitrator Shri Vipin
Sodhi, Advocate who has passed an award on 30.12.2022 and all the
parties have accepted, the same. They filled compromise deed 25C
on 02.01.2023, wherein they accepted passing and finalization of the
award. Compromise deed read over and explained to the parties on
06.01.2023, and they accepted the contents thereof.
3. In opinion of this court, the said compromise is lawful. Hence, it
would be proper to decide this appeal in terms of compromise
deed/application 25C.
Order
This civil appeal is decided in terms of compromise deed/application
25, which shall form part of decree.
The parties shall bear their own respective costs throughout.”
(Emphasis supplied)
12. From the aforesaid material on record, it becomes clear that it was
the respondents who invoked the jurisdiction of the Civil Court by
filing suit for perpetual injunction against the appellants. It was their
case that the suit as filed was not barred by the provisions of Section
92 of the Code. Thereafter, in the appeal preferred by them, the
respondents moved an application dated 07.07.2022 stating therein
that they along with the appellants had decided to end their disputes
CIVIL APPEAL ARISING OUT OF SLP (C) NO. 29398 OF 2024 11
by having the matter resolved out of Court. The parties again jointly
sought disposal of the respondents’ appeal in terms of the award
dated 30.12.2022. This request was accepted by the Appellate Court
and the respondents’ appeal was disposed of in terms of the
compromise deed at Document No. 25C.
These admitted facts clearly indicate that the respondents had
taken a conscious stand that the suit filed by them was not barred by
Section 92 of the Code and that on the basis of the compromise deed
in the form of the award dated 30.12.2022, a decree was passed in
the appeal preferred by them. These facts assume importance since
they reflect on the conduct of the parties, especially the respondents.
13. After the initial round of litigation when the appellants sought to rely
upon the consent deed and filed an application under Section 9 of the
Act of 1996 for seeking interim measures, the respondents took a
completely opposite stand and raised a plea that the compromise
deed in the form of award dated 30.12.2022 was a nullity in view of
Section 92 of the Code. They persisted with this stand which found
favour with the Commercial Court and thereafter in appeal before the
High Court. The question therefore to be considered is whether the
respondents could be permitted to take a diametrically opposite stand
CIVIL APPEAL ARISING OUT OF SLP (C) NO. 29398 OF 2024 12
from the one taken by them in the earlier stage of the proceedings
initiated by them so as to leave the appellants without any remedy.
14. In our view, it would be impermissible for the respondents to take
such opposite stand from the one that they had taken while initiating
the proceedings. Having specifically pleaded that the suit filed by
them was not hit by the provisions of Section 92 of Code, it would not
be now open for them to oppose the validity of the compromise deed
dated 02.01.2023 by raising such ground. The pleadings of the
respondents referred to hereinabove clearly indicate the conscious
stand taken by them in the initial round of the present litigation. They
had stated on more than one occasion that the proceedings initiated
by them were maintainable and that the same were required to be
decided on merits. They willingly had the matter referred for
settlement and when the award was passed on 30.12.2022 they
sought disposal of their appeal in terms of the compromise deed that
was prepared on the basis of the award dated 30.12.2022. The
respondents therefore by their conduct are now estopped from taking
an opposite stand.
15. This position is fortified by the decision of this Court in Mumbai
International Airport Private Ltd. (supra). It was held therein as
under:
CIVIL APPEAL ARISING OUT OF SLP (C) NO. 29398 OF 2024 13
“44. Is an action at law a game of chess? Can a litigant change and
choose its stand to suit its convenience and prolong a civil litigation on
such prevaricated pleas?
45. The common law doctrine prohibiting approbation and reprobation
is a facet of the law of estoppel and well established in our
jurisprudence also. The doctrine of election was discussed by Lord
Blackburn in the decision of the House of Lords
in Scarf v. Jardine [(1882) 7 AC 345 : (1881-85) All ER Rep 651 (HL)]
wherein the learned Lord formulated: (AC p. 361)
“… a party in his own mind has thought that he would choose one
of two remedies, even though he has written it down on a
memorandum or has indicated it in some other way, that alone will
not bind him; but so soon as he has not only determined to follow
one of his remedies but has communicated it to the other side in
such a way as to lead the opposite party to believe that he has
made that choice, he has completed his election and can go no
further; and whether he intended it or not, if he has done an
unequivocal act … the fact of his having done that unequivocal act
to the knowledge of the persons concerned is an election.”
46. In Tinkler v. Hilder [(1849) 4 Exch 187] Parke, B. stated that where
a party had received a benefit under an order, it could not claim that it
was valid for one purpose and invalid for another. (See p. 190.)
47. In Clough v. London and North Western Railway Co. [(1861-73) All
ER Rep 646] the Court referred at All ER p. 651 F to Comyn’s Digest,
wherein it has been stated:
“If a man once determines his election, it shall be determined
forever.”
50. Ashutosh Mookerjee, J. speaking for the Division Bench of the
Calcutta High Court in Dwijendra Narain Roy v. Joges Chandra
De [AIR 1924 Cal 600] , held that it is an elementary rule that a party
litigant cannot be permitted to assume inconsistent positions in court,
to play fast and loose, to blow hot and cold, to approbate and reprobate
to the detriment of his opponent. This wholesome doctrine, the learnedCIVIL APPEAL ARISING OUT OF SLP (C) NO. 29398 OF 2024 14
Judge held, applies not only to successive stages of the same suit, but
also to another suit than the one in which the position was taken up,
provided the second suit grows out of the judgment in the first.
53. This Court in C. Beepathuma case [AIR 1965 SC 241 : (1964) 5
SCR 836] at AIR p. 246, para 17 also took note of the principle stated
in White & Tudor’s Leading Case in Equity, Vol. 18th Edn. at p. 444,
wherein it is stated:
“Election is the obligation imposed upon a party by courts of equity
to choose between two inconsistent or alternative rights or claims
in cases where there is clear intention of the person from whom
he derives one that he should not enjoy both … That he who
accepts a benefit under a deed or will must adopt the whole
contents of the instrument.”
54. In New Bihar Biri Leaves Co. v. State of Bihar [(1981) 1 SCC 537]
this Court observed that it is a fundamental principle of general
application that if a person of his own accord, accepts a contract on
certain terms and works out the contract, he cannot be allowed to
adhere to and abide by some of the terms of the contract which proved
advantageous to him and repudiate the other terms of the same
contract which might be disadvantageous to him. The maxim, qui
approbat non reprobat (one who approbates cannot reprobate),
applies in our laws too.”
16. Reference can also be made to the following observations in R.N.
Gosain vs. Yashpal Dhir, SLP(C) No. 4325 of 1992 decided on
23.10.1992:
“Law does not permit a person to both approbate and reprobate. This
principle is based on the doctrine of election which postulates that no
party can accept and reject the same instrument and that “a person
cannot say at one time that a transaction is valid and thereby obtain
some advantage, to which he could only be entitled on the footing thatCIVIL APPEAL ARISING OUT OF SLP (C) NO. 29398 OF 2024 15
it is valid, and then turn round and say it is void for the purpose of
securing some other advantage”. [see: Verschures Creameries Ltd. V.
Hull and Netherlands Steamship Co. Ltd., (1921), 2 R.B. 608, at p.612,
Scrutton, L.J]. Accoring to Halsbury’s Laws of England, 4th Edn., Vol.
16, “after taking an advantage under an order (for example for the
payment of costs) a party may be precluded from saying that it is
invalid and asking to set it aside. (para 1508)”
17. We would now deal with the contention of the respondents that the
award as passed by the sole arbitrator was a nullity since it dealt with
issues that fell within the purview of Section 92 of the Code. The
invalidity of the award could thus be set up at any stage to prevent its
execution and that there could be no estoppel against law. This plea
as raised by the respondents found favour with the Commercial Court
as well as the High Court.
The contention though attractive cannot enable the
respondents the surmount the equitable hurdle of estoppel. Having
lulled the appellants in having the disputes resolved through
arbitration and thereafter seeking disposal of their appeal on the
strength of the said award, the respondents are definitely estopped
from now setting up its invalidity. The issue is more about estoppel by
conduct and election rather than estoppel in law.
In Dhiyan Singh and another v. Jugal Kishore and another,
AIR 1952 SC 145, a family dispute in relation to certain ancestral and
CIVIL APPEAL ARISING OUT OF SLP (C) NO. 29398 OF 2024 16
self-acquired properties was sought to be resolved through
arbitration. Before the Courts it was urged that not only had the
arbitrator travelled beyond the terms of his reference by awarding
absolute interest in the property to one party when she had limited
interest therein, it was also urged that on factual aspects also he was
incorrect. It was however found that the other party had accepted the
award and by such conduct had induced the former party from parting
with a share in her property.
Vivian Bose, J. (as his Lordship then was) held as under:
“It was urged, among other things, that the arbitrator had travelled
beyond the terms of his reference in awarding Mst. Mohan Dei an
absolute interest. It was also urged that even if Brijlal was bound, his
son Kishan Lal, who did not claim through him but who had an
independent title as reversioner to Shanker Lal, would not be bound,
and it was contended that if Kishan Lal was not bound, the plaintiffs
would not be either. But we need not examine these points because
we do not need to proceed on the binding nature of the award. Even if
the award be invalid we are of the opinion that the plaintiffs’ claim is
completely answered by the plea of estoppel.
Now it can be conceded that before an estoppel can arise, there must
be, first, a representation of an existing fact as distinct from a mere
promise de futuro made by one party to the other; second, that the
other party, believing it, must have been induced to act on the faith of
it; and third, that he must have so acted to his detriment.
It is true that in one sense a question of title is one of law and it is
equally true that there can be no estoppel on a question of law. But
every question of law must be grounded on facts and when Brijlal’s
conduct is analysed it will be found to entail an assertion by him thatCIVIL APPEAL ARISING OUT OF SLP (C) NO. 29398 OF 2024 17
he admitted and recognised facts which would in law give Mst. Mohan
Dei an absolute interest in the lands awarded to her. It was because
of that assertion of fact, namely, his recognition and admission of the
existence of facts which would give Mst. Mohan Dei an absolute
interest, that she was induced to part with about one-third of the
property to which Brijlal, on a true estimate of the facts as now known,
had no right. There can be no doubt that she acted to her detriment
and there can, we think, be equally no doubt that she was induced to
do so on the faith of Brijlal’s statements and conduct which induced
her to believe that he accepted all the implications of the award. But in
any event, we are clear that Brijlal would have been estopped. The
nature of the dispute and the description of it given in the award show
that there was considerable doubt, and certainly much dispute, about
the true state of affairs. Even if the arbitrator was wholly wrong and
even if he had no power to decide as he did, it was open to both sides
to accept the decision and by their acceptance recognise the existence
of facts which would in law give the other an absolute estate in the
properties they agreed to divide among themselves and did divide.
That, in our opinion, is a representation of an existing fact or set of
facts. Each would consequently be estopped as against the other and
Brijlal in particular would have been estopped from denying the
existence of facts which would give Mst. Mohan Dei an absolute
interest in the suit property.”
(Emphasis supplied by us)
18. In our view, the ratio of the aforesaid decision is a complete answer
to the defence raised by the respondents on the plea of estoppel
against law. It is only because the respondents consented to have the
disputes resolved through the arbitration of Mr. Vipin Sodhi that the
compromise deed was executed and the respondents’ appeal was
disposed of accordingly. The appellants thereafter acted in
CIVIL APPEAL ARISING OUT OF SLP (C) NO. 29398 OF 2024 18
accordance with the terms of the consent deed and altered theirposition to their detriment. They took steps to withdraw the First
Information Report and also parted with substantial amounts as
required by the consent deed. All these facts are sufficient to hold that
after the parties accepted the consent deed, the appellants acted in
accordance with its terms and altered their position. The respondents
thus by their conduct of accepting the compromise deed based on
the award of the arbitrator are now precluded from questioning its
validity. As held in Dhiyan Singh (supra), the issue of invalidity of the
award, as a question of law, cannot be considered de hors the
conduct of parties. In these facts, the ratio of decisions relied upon
by the respondents do not further their case. Hence, this contention
of the respondents fails.
19. We therefore find that on the doctrine of estoppel by conduct and
election the respondents cannot be permitted to now raise a plea that
the compromise deed based on the award dated 30.12.2022 was a
nullity in view of the provisions of Section 92 of the Code. On this
count, we do not deem it necessary to go into the legality of the award
dated 30.12.2022 as was done by the Courts in the impugned orders.
20. It can be seen from the order passed by the Commercial Court on
24.05.2024 and thereafter by the High Court on 30.08.2024 that the
CIVIL APPEAL ARISING OUT OF SLP (C) NO. 29398 OF 2024 19
effect of the compromise deed resulting into a decree has not been
given its due importance. The conduct of the respondents of
approbation by first accepting the award and having the appeal
disposed of on that basis and thereafter of reprobation by setting up
its invalidity has been lost sight of. The compromise deed was not
challenged at any point of time by the respondents. The appellants
sought to execute the decree as passed initially by filing execution
proceedings on 23.11.2023. The same were however withdrawn on
08.12.2023. Thereafter jurisdiction under Section 9 of the Act of 1996
was invoked by the appellants. In our view, non-suiting the appellants
on the ground that the award dated 30.12.2022 was a nullity in view
of the objection raised by the respondents has resulted in grave
injustice to the appellants. If the impugned adjudication is accepted,
the respondents would reap benefit from their act of approbation and
reprobation. The respondents having succeeded in having a decree
being passed on the strength of the arbitral award dated 30.12.2022
now cannot be permitted to contend that the award itself was a nullity.
The justice of the case therefore requires that the appellants ought to
be permitted to revive the execution proceedings that they had filed
being Miscellaneous Case No. 122 of 2023. These proceedings were
withdrawn shortly after being filed to enable the appellants to file the
CIVIL APPEAL ARISING OUT OF SLP (C) NO. 29398 OF 2024 20
application under Section 9 of the Act of 1996 and there was no
adjudication of the same on merits. In our view, the appellants cannot
be left remediless especially in the backdrop of the fact that the
compromise decree was passed in the respondents’ appeal which
remained unchallenged by them.
21. For aforesaid reasons, the order passed by the Commercial Court in
Arbitration Suit No.25 of 2023 dated 24.05.2024 as well as the
judgment of the Division Bench in Appeal No.356 of 2024 dated
30.08.2024 are set aside. The appellants are at liberty to revive the
execution proceedings in the form of Miscellaneous Case No.122 of
2023. The execution proceedings shall be decided on their own
merits and in accordance with law. The civil appeal is allowed in
aforesaid terms leaving the parties to bear their own costs.
…………………..………………..J.
[AUGUSTINE GEORGE MASIH]
…………………..………………..J.
[ATUL S. CHANDURKAR]
NEW DELHI,
AUGUST 14, 2025.
CIVIL APPEAL ARISING OUT OF SLP (C) NO. 29398 OF 2024 21