Introduction
This case involves a dispute between parties claiming to be trustees of the Guru Tegh Bahadur Charitable Trust, focusing primarily on the question of whether a plea of estoppel can prevent a party from raising a challenge to a settlement or award when the party’s previous conduct induced the other to act to its detriment. The case navigates the complex interplay of arbitration law, injunction suits, estoppel doctrines, and court jurisdiction, particularly concerning the arbitrability of disputes involving charitable trusts.
Factual Background
The appellants and respondents were both involved in managing the Guru Tegh Bahadur Charitable Trust and had disputes concerning its administration, including allegations of interference in the management of a school run by the Trust. The respondents filed a suit for perpetual injunction to restrain the appellants from entering the school premises and interfering with its functioning. The appellants challenged the suit’s maintainability under Section 92 of the Code of Civil Procedure (CPC), contending that the suit was barred. During the appeals process, parties decided to resolve their disputes through arbitration by appointing a sole arbitrator who, after hearings, passed an award with directions for managing the Trust’s affairs.
Procedural Background
Following the sole arbitrator’s award on December 30, 2022, both parties filed a joint application seeking disposal of the pending appeal in view of the award, which was accepted, and a consent decree incorporating the award was passed by the District Court on January 27, 2023. This decree was unchallenged and remained operative. Subsequently, the appellants sought to enforce the award and consent decree by filing execution proceedings in November 2023 but withdrew these to file an application under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim measures. The Commercial Court rejected this application, holding the dispute non-arbitrable under Section 92 of the CPC and declaring the arbitral award null and void. The High Court affirmed this decision, leading the appellants to approach the Supreme Court.
Core Dispute
The core legal issue centers on whether the respondents, who initially accepted the arbitration award and consent decree, could later challenge the award’s validity on the basis of non-arbitrability under Section 92 of the CPC. Relatedly, the question arose whether the appellants were entitled to enforcement of the consent decree and protection under the doctrine of estoppel, given that the respondents’ conduct induced the appellants to act to their detriment.
Discussion on Judgments
The appellants relied heavily on precedent establishing that a party cannot approbate and reprobate—that is, cannot accept the benefits of a judgment, decree, or contract and later repudiate it to the detriment of the other party. Important case law cited by the appellants included Suzuki Parasrampuria Suitings Pvt. Ltd. v. Official Liquidator of Mahendra Petrochemicals Ltd., (2018) 10 SCC 707; Joint Action Committee of Air Line Pilots’ Association of India v. Director General of Civil Aviation, (2011) 5 SCC 435; Mumbai International Airport Pvt. Ltd. v. Golden Chariot Airport, (2010) 10 SCC 422; and Karam Kapahi v. Lal Chand Public Charitable Trust, (2010) 4 SCC 753. These decisions underscored that a litigant’s conduct in accepting an award or decree can estop them from later asserting its invalidity.
Conversely, the respondents argued that under Section 92 CPC, disputes concerning the management of a trust are non-arbitrable; thus, the arbitrator lacked jurisdiction, rendering the award a nullity. This position, supported by rulings such as Vimal Kishor Shah v. Jayesh Dinesh Shah, (2016) 8 SCC 788 and Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd., (2011) 5 SCC 532, was upheld by both the Commercial Court and the High Court.
The Supreme Court also relied on older foundational principles such as those enshrined in Dhiyan Singh v. Jugal Kishore, AIR 1952 SC 145, to articulate how estoppel by conduct applies even if an award may be invalid in law when parties accept and act upon that award, changing their position to their detriment. The Court additionally cited Mumbai International Airport Pvt. Ltd. v. Golden Chariot Airport to emphasize that a party cannot adopt inconsistent legal positions to prolong litigation or gain unfair advantage.
Reasoning and Analysis of the Judge
The Supreme Court recognized that the respondents had expressly contended in earlier pleadings that their suit was maintainable and not barred by Section 92 of the CPC. They joined the arbitration process and accepted the arbitral award, prompting the disposal of the respondents' appeal by the District Court via a consent decree incorporating the award terms. The Court ruled that the respondents' later contention of non-arbitrability and invalidity of the award amounted to approbation and reprobation, which is impermissible.
The Court emphasized that the appellants acted on the consent decree to their detriment, such as by withdrawing FIRs and remitting substantial amounts per the award terms. Consequently, the principle of estoppel operated to preclude the respondents from challenging the decree's validity. The Court deemed it unjust to allow a party to accept benefits under a decree or award and later repudiate the same to thwart enforcement.
Furthermore, the Court acknowledged that the question of arbitrability was deemed by the lower courts without due regard to the principle of estoppel by conduct. Therefore, the Supreme Court restored the appellants' right to revive execution proceedings on the consent decree and ordered that the matter be dealt with on merit in accordance with law.
Final Decision
The Supreme Court allowed the civil appeal filed by the appellants and set aside the orders of the Commercial Court and the High Court that had held the arbitration award null and void and denied interim measures. The appellants were permitted to revive the execution proceedings filed earlier and to enforce the consent decree. The Court held that the respondents were estopped by their own conduct from denying the award’s enforceability, and justice required that the appellants not be left remediless. The parties were left to bear their own costs.
Law Settled in This Case
This case firmly establishes the application of the doctrine of estoppel by conduct and election in arbitration and civil litigation contexts, particularly when one party accepts a consent decree or arbitral award and induces the other party to act to its detriment. It confirms that a party who approbates a legal instrument cannot later reprobate the same to undermine its enforcement. Importantly, the Court clarified that objections concerning arbitrability under Section 92 CPC, though serious, cannot be invoked to defeat an award once consented to and acted upon by the parties. The judgment underscores that the finality and enforceability of arbitration awards and consent decrees are to be respected in the interest of justice and fairness, preventing litigious gamesmanship.
Case Details
Case Title: Sanjit Singh Salwan & Ors. Vs. Sardar Inderjeet Singh Salwan & Ors.
Date of Order: August 14, 2025
Case Number: Civil Appeal arising out of SLP (Civil) No. 29398 of 2024
Neutral Citation: 2025 INSC 988
Name of Court: Supreme Court of India
Name of Judge: Justice Augustine George Masih and Justice Atul S. Chandurkar
Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
Suggested Titles for Publication in Law Journal:
1. "Doctrine of Estoppel in Arbitration and Consent Decrees: A Judicial Perspective from Sanjit Singh Salwan v. Sardar Inderjeet Singh Salwan"
2. "Arbitrability and Estoppel: Balancing Jurisdictional Barriers and Party Conduct in Trust Disputes"
3. "Approbation and Reprobation in Civil Litigation: Lessons from the Guru Tegh Bahadur Trust Arbitration Dispute"
4. "Enforceability of Arbitral Awards and Consent Decrees Amidst Non-Arbitrability Challenges: Legal Insights"
5. "Navigating Section 92 CPC and Arbitration Law: Supreme Court’s Approach to Trust Management Disputes"
