The main legal point established in the judgment is the principle of estoppel, where NDMC, having accepted the award and agreed to pay the amount, was precluded from challenging the award or the decree at the execution stage.

A.K. Sikri, J.-Two municipal authorities in Delhi, namely, Municipal Corporation of Delhi (MCD) and New Delhi Municipal Committee (NDMC) are in legal imbroglio since 1976. Disputes started when MCD levied electricity tax under Section 113(2)(d) of the Delhi Municipal Corporation Act (in short the DMC Act) on the supplies of electricity made to NDMC from 1.7.1959. Suit No. 506/76 was filed in which Arbitrator was appointed and the aforesaid dispute with the following three propositions was referred to the arbitration of Justice J.N. Bhat (Retd.):

"(1) Whether the Municipal Corporation of Delhi is empowered under various provisions of the D.M.C. Act, 1957 to levy the tax on the supplies of electricity made to the New Delhi Municipal Committee with effect from 1st July. 1959.

(2) Whether the said tax has been validly levied by the Delhi Municipal Corporation and is binding on the New Delhi Municipal Committee.

(3) The amount, if any, payable by the New Delhi Municipal Committee to the Delhi Municipal Corporation or refundable by the Delhi Municipal Corporation to the New Delhi Municipal Committee as the case may be."

2. The learned Arbitrator entered upon reference and decided the above issues vide his award dated 5.5.1976. In this award the learned Arbitrator, inter alia, directed NDMC to pay to MCD immediately a sum of Rs.2, 15,86, I 25.30 plus interest at the rate of5% per annum from 15.9.1975 lip to the date of decree on Rs. 5,15,86,125.30 Balance amount of Rs. 3 crores was to be paid in instalments of Rs. 1 crore each. Since the award was under the provisions of Arbitration Act, 1940, it was required to be made rule of the Court. For this purpose award was filed in this Court. No objections were filed. On the contrary, the parties filed a joint application under Order 23 Rule 5 read with Section 151 of the Code of Civil Procedure and order dated 30. 11.1976 was passed thereon. Operative portion of this order reads as under:

"xxxxx It is now agreed that the amount awarded be paid in the following manner:

That the N.D.M.C. has agreed to pay a sum of Rs. 2 crores in two equated installments of Rs. 1 crore each. The first instalment has been agreed to be paid by N.D.M.C. by 30th November, 1976. Second instalment of Rs.l crore has been agreed to be paid by N.D.M.C. by 27th February, 1977.

That the parties have agreed that interest on the awarded amount of Rs. 5,15,86,125.30 at 5% calculated from 15.9.75 to 30.9.76 will also be paid by the N.D.M.C. alongwith the first instalment of Rs.1 crore, failing which the amount of overdue interest for the period from 15.9.75 to 30.11.76 shall constitute the part of the payment due to the M.C.D. as on 1.12.1976 and shall be chargeable at the rate of interest of 7.5. per annum.

It has further been agreed that the interest on the amount of Rs. 4,15,86,125.30 (after deducting the first instalment of Rs.1 crore agreed to be paid by 30th Nov. 1976) plus unpaid interest upto 30.11.76, if any, will be payable and paid at the rate fixed by the Government, i.e. 7.75% per annum w.e.f. 1st December, 1976.

That it has further been agreed between the parties that N.D.M.C. will pay Rs. 3,15,86,125.30 remaining due after the payment of the second instalment on 28th Feb. 1977 and the interest due thereon as per the terms mentioned hereinabove in Clauses (ii) and (iii) in eight equated annual instalments payable on or before 31st March, 1978, 31st March, 1979, 31st March, 1980, 31st March, 1981, 31st March, 1982, 31st March, 1983, 31st March, 1984, and 31st March, 1985.

It has further been agreed that in the event of the N.O.M.C. failing to pay any of the installments due as per this agreement, the Corporation will be entitled to execute the decree through a Court of law, for recovery of the overdue principal, overdue interest as well as interest thereon at the rate of 7.75% per annum."

3. As is clear from the above, the NDMC admitted the liability. Only the modalities for payment were re-scheduled. A sum of R