The Supreme Court held that a party cannot raise a plea of estoppel against law after its own conduct induced the other party to alter its position to its detriment. The doctrine of election and estoppel by conduct precludes a party from approbating and reprobating, thereby preventing it from challenging the validity of a compromise decree it had previously accepted.
Facts Of The Case:
The respondents, claiming the appellants had been removed as trustees, filed a suit for a perpetual injunction to restrain them from entering a school run by Guru Tegh Bahadur Charitable Trust. The Trial Court rejected the plaint under Order VII Rule 11 CPC, holding the suit was barred by Section 92 CPC. During the pendency of the respondents’ appeal against this order, the parties mutually appointed a sole arbitrator. The arbitrator passed an award on 30.12.2022, which both parties accepted. They filed a joint application before the Appellate Court, seeking disposal of the appeal in terms of the award. Consequently, the District Court disposed of the appeal on 27.01.2023, incorporating the compromise deed based on the award into the decree. When the appellants later sought to enforce this decree, first through execution and then via an application under Section 9 of the Arbitration and Conciliation Act, 1996, the respondents opposed it, contending the award was a nullity as the disputes, pertaining to trust affairs, were non-arbitrable under Section 92 CPC. The Commercial Court and the High Court upheld this objection, leading to the present appeal.
Procedural History:
The procedural history began with the respondents filing a suit for perpetual injunction, which was rejected by the Trial Court under Order VII Rule 11 CPC, holding it barred by Section 92 CPC. The respondents then appealed to the District Court. During this appeal’s pendency, the parties jointly appointed an arbitrator and, upon receiving his award, filed a compromise application. The District Court disposed of the appeal on 27.01.2023, incorporating the award into a consent decree. When the appellants sought to enforce this decree, the respondents opposed it. The appellants subsequently filed an application under Section 9 of the Arbitration Act for interim measures, which was rejected by the Commercial Court, a decision upheld by the High Court in an appeal under Section 37 of the Act, leading to the present civil appeal before the Supreme Court.
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Court Observation:
The Court observed that the respondents, having initially asserted their suit was not barred by Section 92 CPC and having actively pursued arbitration, were estopped from subsequently challenging the validity of the consent decree. Their conduct of first approbating the arbitral award to secure a decree and then reprobating by declaring it a nullity was impermissible. The doctrine of election and estoppel by conduct precluded them from taking such a contradictory stand, especially since their actions had induced the appellants to alter their position to their detriment based on the agreed terms. The legal invalidity of the award was subordinated to the overriding principles of equity and justice, which barred the respondents from resiling from their earlier position.
Final Decision & Judgement:
The Supreme Court allowed the appeal and set aside the orders of the Commercial Court and the High Court. It held that the respondents were estopped by their conduct from challenging the validity of the consent decree. The appellants were granted liberty to revive their execution proceedings (Miscellaneous Case No. 122 of 2023) to enforce the decree, which were to be decided on their own merits. The parties were to bear their own costs.
Case Details:
Case Title: Sanjit Singh Salwan & Ors. vs. Sardar Inderjit Singh Salwan & Ors. Appeal Number: Civil Appeal arising out of SLP (Civil) No. 29398 of 2024 Date of Judgement: August 14, 2025 Judges/Justice Name: Justice Atul S. Chandurkar and Justice Augustine George Masih
Download The Judgement Here