Steel Industries Vs. M/S. Jolly Steel Industries pvt. Ltd. & Anr  INSC
1185 (23 September 1996)
C. A. Nos
. 13001-13005/-96 @ With/S.L.P.(C)No.18933-18937/96 O R D E R Leave granted We
have heard learned counsel on both sides.
appeals by special leave arise from the order of the Division Bench of the High
Court of Bombay made July
18, 1996 in Civil
Application Nos. 89/91 in FA No.1 & 2/90.
admitted position is that pursuant to a compromise entered into between the
parties, pending the first appeal in the High Court, a compromise decree came
to be made by the Division Bench on 12.4.1991. Clause (2) of the Compromise
Decree reads as under;
The parties agree that Jolly Steel Industries Pvt. Ltd. and Jolly Torsteel Pvt
. Ltd ., the respondents herein and the Original plainltiffs in Suit No.446 of
1987 and Suit No.447 of 1987, respectively, shall between them s deposit in the
Trial Court a sum of Rs, 15,00,000/- (Rupees Fifteen Lakhs only) in the
aggregate on or before 31st May, 1991 and a further sum of Rs.10,40,000/-
(Rupees Ten Lakhs and forty thousand only) on or before 29th June, 1991;
These amounts are to be deposited in Suit No.446 of 1987 in the Court of
Additional Civil Judge, Senior Division Pune, on account of over payment by the
Appellants (Original Defendants) as the Defendants were not liable to pay and
the Respondents (Original Plaintiffs) were not entitled to receive the same.
The Appellants (Original Defendants) are at liberty to withdraw the aforesaid
amounts." Admittedly, Rs.12 lakhs was deposited after expiry of the last
date, namely, June 29,1991 after one month. In the meanwhile,
the respondents filed an application for extension of time in the trial Court.
That was dismissed on the ground that it had no jurisdiction Consequently, the
application the come to be filed in the High Court.
under clause 5(a) the appellants also agreed to hand over possession of the
disputed land and the machinery to the receiver on or before 31st March, 1992. In view of the default committed
by the respondent, the appellants come to file an application, on the basis of
which the High Court passed an order to maintain the status quo on March 27, 1992. The appellants have taken out
contempt proceedings against the respondents in which another Division Bench of
the High Court passed an order on July 18, 1996 stating that the respondents have
prevented the appellants from taking possession due to the factory having been
locked by the respondent. Nonetheless, no action was taken on the contempt
petition. In the impugned order, the Division Bench passed an order accepting
the delayed payment by the respondents and directed the appellants to pay
damages for use and occupation as may be determined by the civil Court. Thus,
these appeals by special leave.
principle of law, the High Court was obviously incorrect in interfering with
and modifying the consent decree unless parties agree for the same. Though it
is contended by Shri Bhimrao Naik, learned senior counsel for the appellants,
that the High Court has no power after the expiry of the period to extend the
time for the compliance on the facts and circumstances, we do not think that we
would be justified to interfere With this order at this distance of time.
However, as regards the direction to make payment of compensation, we do not
think that it would be appropriate at this stage to give any finding; however,
the trial Court is directed to conduct an enquiry whether the appellant was
prevented by the acts of the respondents to remain in possession and work out
the factory. In the event of the finding being recorded that the appellant was
prevented by the acts of the respondent for working out the factory, the
appellant will not be liable to pay damages whatsoever. On the other hand, if
it is found that the appellant had worked out the factory in view of the fact
that the High Court had granted the order of status quo, we think that they are
liable to Pay @ Rs,2,500/-P.m.
stated by Mr. Soil J. Sorabjee, learned senior counsel for the respondents,
that Rs.12,00,000/- (Rupees Twelve lakhs only) deposited by the respondents
before the expiry of the period six month by way Of a demand draft, has been encashed
by the appellant. The appellants are denying the same. The trial Court is
directed to verify whether the amount was subsisting till the date of the order
passed by the High Court and whether the amount stands deposited in any
interest earning security, within a period of six months from the date of
receipt of-this order. Tn case the amount was deposited to the credit of the
suit and it had not been invested in interest earning security then the
respondents are directed to pay interest at the commercial rate from the date
of the deposit till date of the judgment of the High Court. In case the
appellant was found to have withdrawn it, the need to pay interest does not
Naik further requestes that the amount of Rs.20,00,000/- (Rupees twenty lakhs
only) standing to the credit of the suit, may be directed to be withdrawn by
the appellant. We are not inclined to give any direction. After the enquiry
into mesne profits is conducted by the trial Count and if there is any amount
due to either party, the same may worked out accordingly by of adjustment.
appeals are accordingly disposed of, costs.