Rajgarhia Vs. M/S. Mahavir Plantation Ltd. & Ors  INSC 698 (16
Sinha & P.K. Balasubramanyan
Leave Petition (Civil) No.17920 of 2005] S.B. SINHA, J :
of a consent order falls for determination by this Court in this appeal which
arises out of a judgment and order dated 17.05.2005 passed by a Division Bench
of High Court of Delhi in EFA(OS) No.
Respondent herein took an advance of certain sum of money from the Appellant
herein. A suit for recovery of Rs. 75 lakhs towards refund of the said amount
with interest and damages was filed by the Appellant. The parties, however,
entered into a compromise in terms whereof the Appellant was to receive a sum
of Rs. 41,69,110/-, the relevant clause whereof reads as under:
is specifically made clear that on dishonour of the said cheques or any one of
them on any ground whatsoever then and in that event the entire remaining
balance amount shall become payable at one time and the plaintiff shall be
entitled to execute the decree for realization of the entire remaining balance
amount which shall remain payable plus interest to be calculated @15% p.a. and
shall also be entitled to take all legal steps as may be permissible under the
law to the plaintiff." It is not in dispute that the Respondent herein
paid a sum of Rs. 5 lakhs to the Appellant and as it failed and/ or neglected
to abide by its undertaking as regard payment of the balance sum, an execution
application came to be filed which was marked as Execution Application No. 58
of 2001. In the said execution proceedings again, the parties entered into a
settlement and a learned Single Judge of the Delhi High Court by an order dated
13.9.2001 recorded the same which reads as under:
undertakings are accepted. He further agrees that in case any of the cheques is
dishonoured he will be liable for not only contempt for violating these
undertaking. The decree holder shall be entitled to execute the balance decree
immediately. It is also agreed between the parties that the decree holder shall
withdraw all civil/ criminal cases after the entire payment is made by judgment
debtor in the manner stated above.
the decree holder shall not pursue these cases and get these cases adjourned
after 20.3.2002 by which time the judgment debtor is supposed to clear the
entire decretal amount.
execution petition accordingly is disposed of." Allegedly, the Respondent
became a defaulter again. As three cheques out of six post dated cheques were
dishonoured, another execution application was filed by the Appellant herein
which was marked as Execution Application No. 45 of 2002. The Respondent,
however, filed an application for extension of time and a learned Single Judge
of the Delhi High Court, relying on or on the basis of the decision of this
Court in Smt. Periyakkal and others v. Smt. Dakshyani, [AIR 1983 SC 428],
granted such extension stating:
is on account of the illness of the Managing Director of the judgment debtor
company and on account of the fact that the company is facing financial
problems, extension/ enlargement of time for the payment of balance decretal
amount is made. The judgment debtor is also agreeable to pay interest at the
rate of 15% per annum on the reduced balance amount. Though ordinarily time for
payment should not be extended on the mere asking of the judgment debtor, but
in the present case disallowing the judgment debtors' request would cause great
injustice to the judgment debtor.
in order to meet the ends of justice, the application for extension of time is
allowed. The decree holder would present the cheque dated 20th January, 2002
and 20th February, 2002 for Rs. 6 lakhs each on 20th March, 2002 along with the
third cheque dated 20th March, 2002 for Rs. 2,04,222/-. The judgment debtor
would also pay Rs. 22,500/- towards interest calculated at the rate of 15% per
annum on that date. The judgment debtor would, thus, clear the entire decretal
amount on 20th March, 2002. The application is accordingly disposed of."
The Appellant preferred an appeal thereagainst and by an order dated 20th
March, 2002, a direction was issued by the Division Bench of the Delhi High
Court. The Division Bench directed the Respondent to present three cheques on
that day itself and in case those cheques were not enchased, it was threatened
that appropriate proceedings would be initiated. It does not appear that any
notice was issued to the Respondent in the said appeal. By an order dated
1.4.2002, the said appeal was disposed of stating:
have perused the record and also the application filed today indicating that
two of the cheques given by the judgment debtor have been dishonoured and the
fate of the third cheque is not known. The respondent primarily filed an
application before the learned Single Judge for grant of extension of time for
learned Single Judge granted the extension for making payment until 20.3.2002.
Since the extended time has already come to an end the appeal to our mind has
become infructuous. The appellant will be, however, within his rights to
approach the learned Single Judge for execution as well as for contempt. The
filing of the appeal will not come in the way of the appellant in pursuing his
remedy before the learned Single Judge." The said order of the Division
Bench is said to be still in force. The Respondent, however, obtained another
extension from another learned Single Judge of the High Court in terms of an
order dated 28.8.2002. The Appellant, herein did not question the said order.
The said order, thus, attained finality.
however, not in dispute that the judgment debtor has paid the entire amount
together with interest in terms of the consent order dated 5.2.2002 passed in
the aforementioned execution petition. It is, furthermore, not in dispute that
the contempt application filed against the Respondent herein by the Appellant
for violating the undertaking by him has ultimately been dismissed.
question which, thus, arises for consideration is the interpretation of the
words "balance decree" occurring in the order dated 13.9.2001, as
contention of the learned counsel appearing on behalf of the Appellant is
two-fold. Firstly, the High Court of Delhi had no jurisdiction to grant
extension of time for payment of the decretal dues without his consent and
secondly, having regard to the fact that the Respondent failed to abide by its
undertaking, the original claim of the Appellant revived.
contention of Mr. C.N. Sree Kumar, learned counsel appearing on behalf of the
Respondent, on the other hand, was that despite Rule 4 of Order XXIII of the
Code of Civil Procedure, there does not exist any bar to enter into a
compromise at the execution stage and, in any event, with regard to the fact
that the entire amount has now been paid, this Court should not exercise its
discretionary jurisdiction under Article 136 of the Constitution of India in
favour of the Appellant.
was filed for recovery of a sum of Rs. 75 lakhs. The consent decree passed by
the court shows that a decree for a sum of Rs. 41,69,110/- became payable
wherefor nine cheques were issued. It is also not in dispute that the plaintiff
waived his remaining claim on the premise that the Respondent had agreed to
settle the disputes.
(b) of the Compromise Petition filed by the parties merely shows that in the
event, any of the cheque is dishonoured or returned unpaid, the entire
remaining balance amount shall become payable at one time in which event, the
decree holder would be entitled to execute the decree for realization of the
entire remaining balance amount plus interest calculated at the rate of 15% per
annum. Order XXIII, Rule 4 of the Code of Civil Procedure states that other
provisions thereof are not applicable to an execution proceedings. But, despite
the same, it is now well-settled that the parties may enter into a settlement
even in a execution proceedings.
Lal Banker (dead) by his legal Representative v. Maharaj Kumar Mahmood Hasan
Khan [AIR 1968 SC 1087], this Court held such compromise to be permissible in
of Order 23, Rule 3, the provisions of Order 21, Rule 2 and Section 47 enable
the executing Court to record and enforce such a compromise in execution
proceedings. Nor does Order 20, Rule 11(2) affect this power of the executing
Court. Order 20, Rule 11 enables the court passing the decree to order
postponement of the payment of the decretal amount on such terms as to the
payment of interest as it thinks fit on the application of the judgment-debtor
and with the consent of the decree-holder. It does not affect the power of the
executing Court under Section 47 and Order 21, Rule 2." Yet again in
Periyakkal (supra), this Court held that, in certain situations, the court has
also jurisdiction to extend the time stating:
parties, however, entered into a compromise and invited the court to make an
order in terms of the compromise, which the court did. The time for deposit
stipulated by the parties became the time allowed by the court and this gave
the court the jurisdiction to extend time in appropriate cases. Of course, time
would not be extended ordinarily, nor for the mere asking. It would be granted
in rare cases to prevent manifest injustice. True the court would not rewrite a
contract between the parties but the court would relieve against a forfeiture
where the contract of the parties has merged in the order of the court, the
court's freedom to act to further the ends of justice would surely not stand
curtailed." There cannot, thus, be any doubt that the compromise entered
into by and between the parties hereto in the execution proceedings was valid
in law. The Appellant moreover does not say that the same was not acted upon.
Admittedly, he received the entire amount thereunder, albeit belatedly; but
even therefor the Respondent applied for and obtained extension of time to pay
or wrongly, the learned Single Judge of the Delhi High Court by an order dated
28.8.2002 extended the time to the Respondent herein for paying the decretal
amount with interest upto 23.7.2002. The Appellant herein had accepted such
amount and that order was not questioned and, thus, the same had attained finality.
What was questioned was the liability incurred by the Respondent not being able
to adhere to the terms thereof.
orders of extension have validly been passed, the order of the court stood
complied with. It may be true that the order dated 1.4.2002 was not questioned
by the Respondent before this Court but then no direction was issued therein.
No judgment was passed. The said order was passed without issuing any notice to
the Respondents. The appeal was disposed of as having become infructuous. It
was, thus, not final. Thereby, merely a liberty had been granted to the
Appellant to agitate his grievances before the learned Single Judge for
execution as well as for contempt. By reason of the said order, alone the
Appellant could not put forth his claim. The Appellant, thus, cannot take any
of a court of law and, in particular, a consent order, must be read in its
entirety for the purpose of ascertaining its true intent and purport.
learned Single Judge in his order dated 13.9.2001 recorded as to how much
amount was paid by the Respondent to the Appellant before the execution case
was filed. The execution case admittedly was filed for recovery of the balance
sum of Rs. 36,59,110/- together with interest at the rate of 15% per annum. The
settlement between the parties was arrived at at this juncture in terms whereof
it was agreed:
The judgment debtor shall pay the balance amount of Rs. 36,59,110 in the
the past period, i.e., from the date of Decree till date the judgment debtor
shall pay the lump sum interest of Rs. 6,35,082.
judgment debtor shall pay 15% interest on the principal amount of the further
period." Not only the Respondent agreed to pay a lump sum interest of Rs.
but also became agreeable to pay 15% interest on the principal amount of the
further payment. On calculation, a sum of Rs. 42,04,222/- was found to be
payable out of which the judgment debtor had paid a sum of Rs. 10,00,000/- by
way of three demand drafts. Appropriating the said amount, the outstanding
principal sum came to Rs. 26,69,110. However, the balance amount outstanding as
on that day came to Rs. 32,04,222. It was that amount which was to be
liquidated by paying instalment of Rs. 6 lakhs each per month. It is in the
aforementioned backdrop, the undertaking given before the learned Single Judge
of the High Court by the Respondent herein is to be construed.
contention of the learned counsel appearing on behalf of the Appellant is that
once a default is committed by the Respondent, the Appellant in terms thereof ,
would be entitled to execute the balance decree immediately which would mean he
would be entitled to a further sum of about Rs. 41 lakhs, which was waived by
him. We do not agree. The word 'decree' after the word 'balance', in our
opinion, has been used loosely. The matter might have been different if the amount
payable under the compromise entered into by the parties in the execution case
would have been less than the amount paid by the Respondent to the Appellant in
terms of the consent decree passed originally. It is not so. Whereas under the
original decree, a sum of Rs. 41,69,110/- was payable, in terms of the consent
order passed in the execution case, a sum of Rs. 42,04,222/- became payable.
The sum which was waived by the Appellant did not form part of the consent
decree. It was merely a claim. Such a claim never fructified into any decree
and in that view of the matter the plea of Respondent being liable to pay the
said amount to the Appellant despite the fact that no decree in relation
thereto was passed cannot be countenanced.
reasons aforementioned, we are of the opinion that the impugned judgment and
order cannot be faulted. This appeal is dismissed.
in the facts and circumstances of this case, there shall be no order as to