Mohan Lal Son of Leela Ram Prop of M/S Mohan Lal and Sons Vs. Haryana Warehousing Corporation Bay No.15-18 Sector-2 - Court Judgment

SooperKanoon Citationsooperkanoon.com/1042818
CourtPunjab and Haryana High Court
Decided OnFeb-01-2013
AppellantMohan Lal Son of Leela Ram Prop of M/S Mohan Lal and Sons
RespondentHaryana Warehousing Corporation Bay No.15-18 Sector-2
Excerpt:
cr no.6531 of 2012(o&m) [1].in the high court of punjab and haryana at chandigarh cr no.6531 of 2012(o&m) date of decision:01. 02.2013 mohan lal son of leela ram, prop of m/s mohan lal and sons, shop no.68, near grain market pehowa, tehsil pehowa, district kurukshetra..petitioner versus haryana warehousing corporation, bay no.15-18, sector-2, panchkula and others..respondents coram: hon'ble mr.justice k. kannan present:mr.rajesh bhatheja, advocate for the petitioner. mr.ashwani talwar, advocate, for respondent 1. mr.jagdish manchanda, advocate, for respondents 2, 3 and 5. ***** 1.whether reporters of local papers may be allowed to see the judgment?. yes 2.to be referred to the reporters or not?. yes 3.whether the judgment should be reported in the digest?. yes k. kannan, j. (oral) 1. the revision is against the order in execution passed by the court directing the arrest of the guarantor to an agreement of loan transaction. there was a dispute with reference to the supplies made and the amounts payable to warehousing corporation. the agreement provided for a clause of arbitration. m/s bharat rice trading company, which was one cr no.6531 of 2012(o&m) [2].of the parties to the agreement, sought for arbitration of the dispute. the warehousing corporation had a claim against the rice trading company and the arbitrator determined a particular sum as payable. this award was sought to be enforced as if it were a decree before the executing court. the warehousing corporation was trying to enforce a surety obtained before the award, which it cannot do. it could execute only the award in the manner that it provided. the arrest was sought in execution on the basis of a term in the agreement whereby the petitioner was said to have given an undertaking to discharge the principal debtor's liability. the whole exercise of seeking for enforcement of the award against the person, who was not a party to the award, is not tenable in law. if the corporation would rely on an agreement of guarantee by the petitioner for due payment, it is bound to bring its own suit for enforcement of the same especially when the surety himself had not been made a party before the arbitrator. an agreement, which is anterior to the award, cannot be put in operation in the execution of the award to which the petitioner was not a party. the only remedy for the corporation would be to secure an independent action for enforcement by a suit for recovery of the amount and not to file an execution petition in the manner done before the executing court.”2. the order of the executing court is set aside and the cr no.6531 of 2012(o&m) [3].civil revision is allowed. this order confines itself only to the liability of the guarantor and not against the principal debtor who was a party to the arbitral proceedings. 1st february, 2013 ( k. kannan ) rajan judge
Judgment:

CR No.6531 of 2012(O&M) [1].IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CR No.6531 of 2012(O&M) Date of Decision:

01. 02.2013 Mohan Lal son of Leela Ram, Prop of M/s Mohan Lal and sons, shop No.68, Near Grain market Pehowa, Tehsil Pehowa, District Kurukshetra..Petitioner Versus Haryana Warehousing Corporation, Bay No.15-18, Sector-2, Panchkula and others..Respondents CORAM: HON'BLE Mr.JUSTICE K.

KANNAN Present:Mr.Rajesh Bhatheja, Advocate for the petitioner.

Mr.Ashwani Talwar, Advocate, for respondent 1.

Mr.Jagdish Manchanda, Advocate, for respondents 2, 3 and 5.

***** 1.Whether reporters of local papers may be allowed to see the judgment?.

YES 2.To be referred to the reporters or not?.

YES 3.Whether the judgment should be reported in the digest?.

YES K.

KANNAN, J.

(Oral) 1.

The revision is against the order in execution passed by the Court directing the arrest of the guarantor to an agreement of loan transaction.

There was a dispute with reference to the supplies made and the amounts payable to Warehousing Corporation.

The agreement provided for a clause of arbitration.

M/s Bharat Rice Trading Company, which was one CR No.6531 of 2012(O&M) [2].of the parties to the agreement, sought for arbitration of the dispute.

The Warehousing Corporation had a claim against the Rice Trading Company and the Arbitrator determined a particular sum as payable.

This award was sought to be enforced as if it were a decree before the Executing Court.

The Warehousing Corporation was trying to enforce a surety obtained before the award, which it cannot do.

It could execute only the award in the manner that it provided.

The arrest was sought in execution on the basis of a term in the agreement whereby the petitioner was said to have given an undertaking to discharge the principal debtor's liability.

The whole exercise of seeking for enforcement of the award against the person, who was not a party to the award, is not tenable in law.

If the Corporation would rely on an agreement of guarantee by the petitioner for due payment, it is bound to bring its own suit for enforcement of the same especially when the surety himself had not been made a party before the Arbitrator.

An agreement, which is anterior to the award, cannot be put in operation in the execution of the award to which the petitioner was not a party.

The only remedy for the Corporation would be to secure an independent action for enforcement by a suit for recovery of the amount and not to file an execution petition in the manner done before the Executing Court.”

2. The order of the Executing Court is set aside and the CR No.6531 of 2012(O&M) [3].civil revision is allowed.

This order confines itself only to the liability of the guarantor and not against the principal debtor who was a party to the arbitral proceedings.

1st February, 2013 ( K.

KANNAN ) Rajan JUDGE