IMPORTANT POINT
Estoppel – Plea of estoppel in law cannot be permitted to be raised by a party ignoring its conduct that resulted in other party altering its position to its detriment in view of such conduct.

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 Charitable Trust (hereinafter referred to as ‘the Trust’). On disputes arising between the parties, the respondents claimed that the appellants had been removed as trustees. The respondents approached 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 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 the parties and on finding that the disputes pertained to the affairs of the Trust held th