Rajasthan High Court - Jaipur
Man Industrial Corporation Ltd. vs Rajasthan Financial Corporation on 13 September, 1996
Equivalent citations: AIR1997RAJ108, 1997(1)WLC140, 1997(2)WLN471
ORDER Arun Madan, J.
1. The above noted revision petition was initially preferred as an appeal vide C.M.A. No. 35/96 under Section 32(9) of the State Financial Corporation Act, 1951 (hereinafter referred as the "Act of 1951") against the Order dated 19-12-1995, passed by the learned District Judge, Jaipur City, Jaipur in Civil Execution Case No. 19/87. On 19th April 1996 the learned counsel for the parties were directed to address arguments regarding the maintainability of the appeal under the Act. During the course of hearing, Shri Man-dhana, learned counsel for the appellant had stated at the bar that the said appeal may be treated as revision against the Order dated 19-12-1995 passed by the learned District Judge, Jaipur City, Jaipur instead of appeal. He had further stated that under a bona fide belief that appeal was maintainable under the Act, he had preferred the appeal, but subsequently it transpired that revision should have been filed instead of appeal. He had further stated at the bar that it is a settled practice of law that in order to save limitation and when the case has to be heard and decided on merits and under a bona fide mistake, the proper remedy has not been adopted and which if availed of at such later such would result in making the matter barred by limitation, the limitation should not come in the way of the petitioner and for this reason the appeal should be treated as revision in the interest of justice. Shri S.M. Mehta, learned counsel for the respondent, while controverting the contentions advanced by the learned counsel for the appellant regarding maintainability of the revision stated that revision is barred by limitation, if the present appeal is permitted to be converted into a revision petition the same would attract the bar of limitation and as such the request of the appellant should not be permitted at this stage. This Court after hearing the learned counsel for the parties and regard being had to the interest of justice was of the view that the appeal should be converted into a revision and it was accordingly treated and registered as a revision petition and the learned counsel for the parties were directed to address their arguments against the impugned order, passed by the trial court as referred to above.
2. The case of the petitioner judgment debtor in short is that the M/s. Man Industrial Corporation Ltd. a public limited company (hereinafter referred to as the Company) had secured a loan from respondent R.F.C. (hereinafter referred to as the corporation) of Rs. 10 lacs and Rs. 4.66 lacs totalling Rs. 14.66 lacs on 11-8-1962 and 20-10-1966 respectively.
3. The aforesaid loans were obtained by the petitioner-company by executing two separate mortgage deeds in favour of the corporation. The rate of interest as against both the mortgage deeds executed in favour of the corporation was agreed between the parties as against first loan at 7.50 per cent with half yearly rest and @3 per cent above the bank rate prevailing from time to time subject to minimum of 8.50 per cent with half yearly rest as against the second loan. In discharge of its liability the company paid Rs. 6.37 lacs towards the principal amount as against the first loan and a sum of Rs. 1 lac towards the second loan i.e. 7.37 lacs in all. It has been further contended on behalf of the petitioner that over and above the amount, the company had further paid a sum of Rs. 5.07 lacs as interest towards the first loan and Rs. 2.58 lacs as interest towards the second loan. Thus the total payments made by the company towards the principal sum of the two loans comes to Rs. 7.37 lacs and Rs. 7.65 lacs as interest making an aggregate of Rs. 15.02 lacs in all during the period 1962 to 23-12-1975. M.I.C. could not pay the balance of loans due to unavoidable circumstances.
4. On 23-12-1975 the Corporation filed an application under Sections 31(A) and (C) and Section 32 of the Act 1951 in the Court of District Judge, Jaipur City, Jaipur claiming Rs. 10,89,265.88 against the M.I.C. In the said application, the Corporation claimed future interest @ 9 per cent per annum on the principal amount. The application was duly contested by the company and objections were filed on the grounds inter alia that as against the sanctioned loan of Rs. 12,72,000/-only a sum of Rs. 4,66.000/- had been paid as a result of which the levied interest was not applicable. The company also demanded their settlement of claim and demands. It has further been contended that subsequently the parties entered into a compromise and the same was filed in the court of District Judge, Jaipur on 12-9-1977. In the said compromise a sum of Rs. 12,8,806.83/- as per the statement of account enclosed therewith was agreed to be payable by the company to the corporation as on 5-9-1977. One of the important clauses of the aforesaid compromise as contained in para 2 thereof reads as under:--
"That the Company hereby confirms the balance dues of the Corporation (after deduction of Rs. 1 lac received on 1-4-1976), as on 5-9-1977 at Rs. 12,08,806.83/- as per the Statement of Account enclosed herewith and agrees to pay the said dues as follows along with future interest @ 5 per cent above the Bank rate prevailing from time to time subject to a minimum of Rs. 13.5 per annum or at such other rate of interest as may be decided by the Corporation for similar advances from time to time. With half yearly rests on product basis and expenses and cost of litigation. The increase rate of interest shall apply from the 1st January 1977."
5. It was further agreed between the parties that the above amount as agreed shall be paid by the Company to the Corporation in nine instalments of Rs. 1,34,311.87/- each and were to be paid as mentioned in Clause 2 of the compromise.
6. The learned District Judge took the compromise on record and verified the same on 12-9-1977 and in the order sheet of the said date, fixed next date for hearing on 21-9-1977 since the parties had sought time to advance arguments before recording of the compromise in view of the fact that terms regarding future interest were conflicting, uncertain and un-conscionable and the date of commencement of future interest was also prior to the date of compromise. On 21-9-1977 the arguments were heard by the learned trial Court and the case was adjourned to 22nd Sept. 1977 for orders when the impugned order was passed and decree was drawn up as per its operative part which reads as under:--
"Therefore, the application is accepted and according to the compromise and the terms and conditions mentioned in the compromise, the suit of Corporation plaintiff for Rs. 12,08,806.83/- is hereby decreed in favour of the Corporation plaintiff and against defendant non-applicant. On this decretal, amount the defendant shall be liable to pay interest @5% above the then prevailing interest rate of the bank and it shall not be less than 13.5% in any condition and further the defendant shall pay the cost of the litigation, Increased rate of interest shall be effective from 1st January, 1978 and the aforesaid amount shall be paid in instalments, according to the terms and conditions of the compromise. The compromise shall form part of this order and Corporation shall be at liberty to realise the amount due from the property mortgaged and attached by the Corporation."
7. No appeal was preferred by the parties against the above decree which therefore became final. Pursuant to the above the Company paid to the Corporation an amount of Rs. 7.50 lacs against the decretal amount of Rs. 12.08,806.83 for the period 21-6-1978 to 25-7-1981 and could not make the payment of further instalments to the Coropration due to financial constraints. The Corporation then initiated execution proceedings for execution of the decree in the Court of District Judge, Jaipur on 5-2-1987.
8. In the execution application, the Corporation had mentioned the rate of interest as 5 per cent above six monthly rest, which was obviously contrary to the order, dated 22nd Sept. 1977. The Corporation had outstanding dues from the Company for the period 1-7-1977 to 2-2-1987 at Rupees 4,59,920.83/- out of which a sum of Rupees 7,75,000/-, which was already received by the Corporation was deducted and the balance amount of Rs. 38,84,920.83/- with penal interest and half yearly rest was claimed. According to the petitioner Judgment Debtor, if the calculation was made with half yearly rest, the total sum due comes to Rs. 31,64,958/- as on 12-9-1995.
9. It has further been contended that manufacturing activities of the company (M.I.C.L.) stopped in Nov. 1987. The Company became sick and as per the statutory requirements the Government referred the matter to B.I.F.R. B.I.F.R. declared the peti- . tioner as a sick industrial company on 20-9-1988 as a result of which the execution proceedings in the Civil Court automatically stood suspended under Section 22(1) of the Sick Industrial Companies Act. B.I.F.R. passed an order for winding up of the Company on 15-5-1992. Against this order, the company preferred an appeal before A.A.I.F.R. The A.A.I.F.R. after hearing admitted the appeal. Thereafter series of meetings followed between the Company and the Corporation, as a result of which the latter agreed for reschedule ment of balance of loan amount as per the norms prescribed by the Reserve Bank of India. As per the R.B.I., the total outstanding were to be divided into principal and interest and concessional rate of interest was charged at 13.5% and 10.5% respectively towards principal and interest separately. It has further been contended that subsequently without notice, the Corporation insisted upon one time settlement and claimed the dues at Rs. 1.50 Crore and under duress, the Company had agreed to pay one time settlement at Rs. 62.72 lacs towards full and final settlement of their dues as lump sum amount and not as an amount arrived at after calculating on the basis of six monthly rest.
10. Under the aforesaid settlement, the functions of the Corporation were determined as follows:--
(A) To agree for one time settlement of its dues at Rs. 62.72 lacs. The said sum of Rs. 62.72 lacs is to be paid by the promoters on sanction of the scheme without any linkage (sic) bridge loan from the Government.
(B) The release, the charge of the land to be surrendered to the State Government and on other assets on sanction of Rehabilitation Scheme and on receipt of payment of settlement dues.
(C) In the event of the package not getting through RFC would reserve their fights to proceed against the Company in terms of Court Decree."
11. It has further been contended by the petitioner that on close scrutiny of the decree, passed by the learned District Judge dated 22nd Sept. 1977, it came to the notice of the Company that the liability of the Company of Rs. 62,72 lacs was far in excess of decretal liability. As a consequence the company filed its objections under Section 47, C.P.C. before the learned executing court (District Judge, Jaipur City) for calculating interest as per the terms of the order and decree dated 22-9-1977 so that the Company could make the payment to the Corporation in view of the proceedings pending under the Sick Industrial Companies (Special Provisions) Act 1985. The A.A. I.F.R. on the request of the Company consented under Section 22(1) of S.I.C.A. that the parties may get their liabilities cristallized under the decree from the Civil Court. The order was passed on 13-10-1995.
12. The contention of the Company was that under the decree as passed by the learned District Judge on 22-9-1977, it was not liable to pay interest calculated on the basis of half yearly rest, while the Corporation took the stand that the Company was liable to pay interest with half yearly rest. The Corporation did not contest the date of commencement of future interest, which was w.e.f. 1-1-1978.
13. The learned District Judge vide his Order dated 19-12-1995 rejected all the objections of the petitioner's company by observing "that they are liable to pay Rupees 12,08,806.88/- along with . future interest @ 5% above the Bank rate prevailing from time to time subject to minimum of 13.5% per annum or at such other rate of interest 98 might have been decided by the D.H. (Corporation) for similar advanced from time to time, with half yearly rests on product basis and expenses and cost of litigation. This new rate of interest was specifically made enforceable w.e.f. 1-1-1978 instead of 1-1-1977 and the same having gone unchallenged throughout and so nothing contrary finds favour."
14. Aggrieved by the aforesaid order of the executing court dated 19-12-1995, the Company has preferred this revision petition before this court on the grounds inter alia:--
1. That the impugned order/decree dated 22-9-1977 passed by the learned District Judge, Jaipur, by which the learned trial court had directed the payment of Rupees 12,08,806.83/- which was determined as on 5-9-1977 and the interest up to 4-9-1977 was charged, while calculating the dues at Rs. 12,08,806.83 along with interest to be charged w.e.f. 1-1-1977 would mean allowing the corporation to charge double interest from 1-1-1977 to 4-9-1977 would be unconscionable being contrary to the letter and spirit of the agreement.
2. It has further been contended that in the compromise, recorded between the parties, there were two conflicting terms of interest. The learned District Judge has committed the error of jurisdiction in accepting the first term of interest, agreed between the parties under compromise and directed its enforcement. This order regarding the rate of interest, was specifically passed and specifically recorded in the order sheet dated 22-9-1977. It was further directed that the decree shall Be prepared in conformity with the order and not as per the compromise.
3. It has further been contended by the petitioner that on close scrutiny, of the interest clause in the compromise, it becomes evident that half yearly rest on product basis starts after a comma of the second option. From this it is clear that half yearly rest on product basis was for second term only otherwise it would have been recorded as follows:
"Half yearly rest on product basis, expenses and cost of litigation. In this case all the three terms i.e. half yearly rest, expenses and cost of litigation would have become common to both the terms. But in this case expenses and cost of litigation have been mentioned "after and" not "refer a comma" . It is due to this only that the learned trial Court has consciously left the term of half yearly rest but expressly mentioned expenses and cost of litigation both in order as well as in decree. Otherwise why was the half yearly rest not mentioned along with and expenses and cost of litigation."
4. No appeal was preferred by the corporation against the impugned award and decree passed by the learned trial court and consequently it became final. No reference was made in column No. 7 of the application, filed by the decree-bolder under Order 21, Rule 11, C.P.C. about the half yearly rests.
5. The outer and decree, passed by the learned District Judge, dated 22nd Sept. 1977, could not be reopened or re-examined by the executing court and that the decree had to be executed as it stood on the date of execution.
6. That the executing court has observed at page 6 of the impugned order that due to accidental slip, The term of interest with half yearly rest has been omitted in the order passed by the learned District Judge. It was contended in this regard that the executing court has no jurisdiction or authority to hold that the omission was an accidental slip and not in intentional omission. If a particular relief is not granted by the court, then the legal presumption is that it was refused by the Court and the executing court has no jurisdiction to read the intention of the Court passing the decree. It was contended in this regard that for a correction of accidental slips or omissions, there is a specific procedure, prescribed under Section 152, C.P.C. to the Court which has passed decree or order and since no such application was ever filed by the Corporation, it was not open to the executing court to have arrogated this power (under Section 152 of C.P.C. (sic) passed the decree to itself. The executing court had thus placed erroneous interpretation on the decree by passing a new order which was altogether contrary to the original order and decree, Hence by the impugned order, the executing court has sought to make out a new case and decree which is beyond the scope and jurisdiction of the executing court and "the impugned order is totally without jurisdiction of the executing court. Thus the decree, passed by the learned Distt. Judge as on 22-9-1977, was rendered inexecutable as a result thereof.
15. In support of his contentions, learned counsel for the petitioner has placed reliance upon the following judgments reported in (1) AIR 1970 SC 1475, (2) 1995 (2) WLC 99 (3) AIR 1951 SC 189 and (4) AIR 1957 Raj (sic).
(1) In the matter of Vasudev Dhanjibhai Modi v. Rajabhai Abdul Rehman (supra) the question, which had arisen for consideration of the Apex Court was as to whether the executing court can go behind the decree, even if it is erroneous in law or on facts. The Apex Court, while examining this proposition held as follows:--
"A Court executing a decree cannot go behind the decree between the parties or their representatives it must take the decree according to its tenor and, cannot entertain any objection that the decree was incorrect in law or on facts. Until it is set aside by an appropriate proceeding in appeal or revision, a decree even if it be erroneous is still binding between the parties.
When the decree is made by a Court which has no inherent jurisdiction to make it, objection as to its validity may be raised in an execution proceeding if the objection appears on the face of the record. But where the objection as to jurisdiction of the Court to pass the decree d oes not appear on the face of the record and requires examination of the questions iaised and decided at the trial or which could have been but have not been raised, the executing Court will have no jurisdiction to entertain an objection as to the validity of the decree even on the ground of absence of jurisdiction."
(2) In the matter of M/s. Texamco I.T.D. & Ant. v. Ghanshyam Das (supra). The question, which had arisen for consideration of this court in this revision under Section 115, C.P.C. was in respect of interpretation of a document containing clause that stamp duty if deficit will be paid for with penally and fixing liability of particular person to make up deficiency, if any. The trial court had interpreted the said document in a manner so as to saddle the plaintiff with several lakhs in penalty for alleged deficit of stamp duty. The plaintiff had preferred revision against the order of the trial court to this Court. It was held by this Court that it was bound to interfere in the matter in exercise of its revi-sional jurisdiction since impugned order of the trial Court had resulted in great prejudice to the plaintiff to sustain his suit. It was further held by this court that after the the amendment of Section 115, C.P.C. in the year 1976, what has to be seen by this Court is as to whether an illegal order, passed by the trial Court will result in manifest injustice, and if so, this Court should not hesitate from interfering?
(3) In the case of V. Ramaswami Aiyenagar v. T.N.V. Kailasa Thevar (supra), the Apex Court held that the duty of an executing Court is to give effect to the terms of the decree. It has no power to go beyond its terms. Though it has power to interpret the decree, it cannot make a new decree for the parties under the guise of interpretation.
(4) In the matter of Anraj v. Bijairaj (supra). It has been held by the apex Court that the general rule is that an executing court cannot go behind a decree. It must take the decree as it is, and proceed to execute it. The decree might have been correctly passed, or it might be erroneous or not according to law: but it is nonetheless binding on, and conclusive as between, the parties unless set aside on appeal, revision or other appropriate proceedings. The function of the executing court is to enforce and execute it and not to question its correctness. To this general rule, however, there is a well established exception that if there was a lack of inherent jurisdiction in the court which had passed the decree, or for some other reason the decree is a nullity, the executing court must refuse to execute it. It is a question for consideration in each case whether a decree can be held to be a nullity by the executing Court. It is only within certain very narrow limits that the executing court has got this power."
16. By way of illustration, it was contended that the difference in the amount of interest when calculated under both the terms separately would be to the tune of 60 lacs (apprx.). Under the first term it has been held under the decree that the total amount due to the Corporation from the company comes to Rs. 32 lacs (Approx.) While, under the second term it comes to Rs. 92 lacs (Approx.) Thus by passing the impugned order, the executing court had not only passed a new decree in place of the original decree passed on 22-9-1977 by placing its own interpretation as aforesaid it had rendered the same in executable. Further, the executing court vide its judgment dated 19-12-1995 has added a new sentence "option lying with the Corporation". This matter of option even in the compromise arrived at between the parties was not clarified since it was totally unclear as to whose option it was to decide the two terms of interest, whether it was that of judgment-debtor or of decree-holder? There was no such clarification or clarity and under these circumstances the learned District Judge had stamped and completely eliminated the latter term since in fact if both the terms were to exist the difference would obviously be very heavy between the two i.e. 32 lacs and 92 lacs respectively. This ambiguity would render the compromise itself unlawful since no decree could be passed or drawn up on the basis of unlawful compromise. It was further contended by the learned counsel for the petitioner that executing court has conveniently omitted to mention in the impugned order dated 22-9-1977, the observation of trial curt having taken a specific decision on the matter of interest by recording that the "matter of interest was also specifically ordered."
17. The learned executing court has further changed the date of commencement of furture interest as mentioned in the compro-
mise from 1-1-1977 to 1-1-1978. The corporation had not questioned the correctness of this change made by the trial Court. The decree had to be executed as it stood and not in terms of compromise since the purpose of attaching the compromise with the decree was to indicate the manner in which the instalments of repayments were to be made and any other interpretation, will have the effect of superseding the order passed by the learned trial court and render the decree inexecutable. It was further contended that in the compromise, two terms between interest were mentioned. Thereafter the term regarding the expenses of litigation was also indicated. The learned trial court accepted the first term of interest and allowed the third term of case and expenses of litigation in the order while the second term between interest which was uncertain and contrary was disallowed. The compromise which was verified and placed on record on 12-9-1977 was recorded by the learned trial court on 22-9-1977 after hearing the arguments of the parties and the same had thus been rendered inexecutable by the executing court.
18. Shri S.M. Mehta, learned senior counsel, while appearing for the respondent-Corporation controverted the contentions; advanced by the learned counsel for the, petitioner as factually incorrect and vehemently contended at the bar that the impugned order dated 19-12-1995, passed by the learned District Judge was not open to challenge before this Court in exercise of its revisional jurisdiction under Section 115, C.P.C. since the executing Court could merely execute the decree lawfully passed on the basis of a compromise, recorded between the parties on 12-9-1977 and that it had pronounced the order of the basis of the said compromise. It was further contended by the learned counsel for the respondent that the executing court had neither passed any order in exercise of its jurisdiction nor it had overstepped its powers in any way whatsoever, nor it could be said to be an order passed by the executing court contrary to Order 23, Rule 3, C.P.C. the compromise duly arrived at between the parties, was recorded by the trial Court and since it had never challenged on account of having been vitiated on any of the alleged grounds of its being void and since the findings recorded by the learned trial Court in its order dated 22-9-1977, were also based on the said compromise and since it was clearly mentioned by the learned trial court that the compromise shall be an integral part of the decree and consequently, a decree which followed based on the said judgment or order, could not be faulted on any of the alleged grounds as referred to by the petitioner.
19. It was further contended by the learned counsel for the respondent that initially miscellaneous appeal No. 35/1996 was filed by the petitioner and on objection being taken regarding the maintainability of the said appeal, the petitioner requested this Court for treating the appeal as a revision petition, upon which the matter was registered as a revision petition. It was further contended by the learned counsel that the only relevant facts for determination of the present dispute are that when the petitioner had failed to pay the loan in time, the respondent-corporation filed an application under Sections 31 and 32 of the Act 1951 in the court of District Judge, Jaipur. Compromise was arrived at between the parties and same was filed in the court of learned-District Judge, Jaipur City on 12-9-1977 of which relevant clause two has already been referred here unto above.
20. It has further not been disputed by the respondent-Corporation that the compromise was verified and placed on record on 12-9-I977 and the matter was fixed for passing of the order and decree on 21-9-1977. The respondent has, however, not disputed the terms of compromise of Clause 2 of the compromise as aforesaid. It will be appropriate to refer to Order 23, Rule 3 of C.P.C. which is reproduced below:--
"Compromise of suit.
Where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by any lawful agreement or compromise (in writing and signed by the parties), or where the defendant satisfies the plaintiff in respect of the whole or any part of the subject-
matter of the suit the Court shall pass a decree in accordance therewith (so far as it relates to the parties to the suit, whether or not the subject matter of the agreement, compromise or satisfaction is the same as the subject matter of the suit) Provided that where it is alleged by one party and denied by the other that an adjustment or satisfaction has been arrived at the Court shall decide the question; but no adjournment shall be granted for the purpose of deciding the question, unless the Court, for reasons to be recorded, thinks fit to grant such adjournment.
Explanation:
An agreement or compromise which is void or voidable under the Indian Contract Act, 1872 (9 of 1872) shall not be deemed to be lawful within the meaning of this rule".
21. It was contended by the learned counsel that the Court before which the compromise is submitted has only to satisfy itself whether any such compromise was entered into between the parties. It has no jurisdiction to vary or modify the terms of compromise. The compromise is an act of parties and the Court has nothing to do with it and in fact the Court recorded the compromise, which is evident from the fact that in the impugned order and decree the compromise has been made its part. In support of his contentions at the bar, the learned counsel for the respondent placed reliance upon the following rulings : --
(1) AIR 1940 PC 70, Jagat Singh v. Sangat Singh.
(2) AIR 1930 Pat 394, Mangu Ram Marwari v. Homeshwar Singh.
(3) AIR 1968 Guj 265, Alarakha Hassan v. Amir Hussain Aladmiya.
(4) AIR 1980 Orissa 108, Bhaja Govinda Maikap v. Janki Dei.
(1) In the matter of Jagat Singh v. Sangat Singh (supra), it was held that the will, which was subject mater of challenge before the Court provided that after the death of testator, his widow would be the reasonable owner of certain kind of property with all kinds of power to deal with that property and after her death, whatever property remained would be owned by the sons of testator's nephew. Both widow and the sons of the nephew were prohibited from selling any immovable property. During the pendency and hearing a compromise was arrived at between the parties. It was held that where a reference to the compromise is made in the decree and the decree directs [hat effect should be given to the whole of compromise. Order 23, Rule 3, C.P.C. is sufficiently complied with and the decree can be regarded to have recorded the comprise even though the compromise was not recited textually either in the body of the decree or in the schedule thereto.
(2) In the matter of Mangu Ram Marwari v. Homeshwar Singh (supra), the question, which had arisen before the Patna High Court was regarding the extent to which High Court should exercise its revisional powers under Section 115, C.P.C. against an order passed by the trial Court in respect of the proceedings arising out of the Order 21, Rule 63, C. P.C. It was held by the Patna High Court that the Court should not interfere in such matters as it is open to the petitioner to avail the alternative remedy provided by Rule 63 of the said Order. In my considered opinion the ratio of the aforesaid decisions are not applicable to this case in view of the fact that the impugned order passed by the executing Court suffers from inherent defects which are contrary to the decree and which are apparent on the face of the order and therefore it was a duty of the Executing Court to have corrected those errors, which has not been done in this case. Hence I am of the view, that this is one of the most appropriate cases where the trial Court should not have felt hesitant in exercising its powers in correcting those errors and if the power is so exercised by the executing Court, it cannot be said that the executing Court has exercised its powers illegally or with material irregularity.
(3) In the matter of Alarakha Hassan v. Amir Hussain Aladmiya (supra). It was held by the Gujarat High Court that the compromise is an act of parties and not being an act of the Court, and cannot be set-aside. It was further held that if the compromise has been recorded by the Court as a compromise of the parties to the suit, the act of recording will be set-aside. It was further held that the Court will have to ignore the compromise as two of the plaintiffs, are not the parties to the compromise.
(4) In the matter of Bhaja Govinda Maikap v. Janaki Dei (supra), the question, which had arisen before the Orissa High Court was as to what should be the ambit and scope of jurisdiction of the Court recording the compromise under Order 23, Rule 3, C.P.C. It was held by the High Court that the words where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part in Order 23, Rule 3, C.P.C. clearly show that the Court has power under this rule, where an agreement or compromise is denied, to decide whether as a fact the alleged agreement or compromise was made and if it is satisfied that it was made to record it. Where there had been lawful compromise, the objections raised by the plaintiffs in their petition on date of consideration of petition for compromise of suit under Order 23, Rule 3 did not authorise the Court to refuse to record the compromise."
22. It was held by the High Court that if there had been a lawful compromise, the objection raised by either party in respect of the said compromise would not authorise the Court to refuse to record the said compromise.
23. Learned counsel for the respondent placed reliance upon the following rulings with regard to the extent of revisional jurisdiction of the High Court under Section 115, C.P.C.
.
(1) AIR 1965 SC 553.
(2) AIR 1971 SC 2324, titled : M/s. D.L.F. Housing and Construction Company (P) Ltd. v. Sarup Singh.
24. The ratio of the aforesaid decision is to the effect that while exercising jurisdiction under Section 115, C.P.C. it is not competent for the High Court to correct the errors of fact however gross or even errors of law unless the said errors have related to the jurisdiction of the Court to try the dispute itself, but where the exercise of power by the executing Court has been such so as to interpret the decree in such a manner as would result in the executing Court travelling behind decree or contrary to the compromise arrived at between the parties then for which the executing Court is not competent to do so as the same would result in exercise of jurisdiction by the executing Court with material, irregularity and illegality, as has happened in this case then it is certainly competent for this Court to interfere in the exercise of its revisional jurisdiction and correct the jurisdictional errors apparent on the face of the record. In my considered opinion in such situation, nothing would prevent this Court from exercising its jurisdiction under Section 115 of C.P.C. for correcting the errors which have crept in the exercise of jurisdiction by the executing Court in the matter irregularity committed by the trial Court in interfering with the decree. It is settled law that the decree and order passed by a Court should normally not be interfered with or re-examined by the executing Court and the decree has to be executed as it stands, but if the executing Court has gone or travelled beyond terms of the decree and has set up a new case, which is not the case of the parties then nothing would prevent the High Court from exercising its revisional jurisdiction in either setting aside the said decree or correcting its jurisdictional errors.
25. In the present case, there is no dispute regarding the principal loan amount which was advanced by the Corporation to the petitioner-company on the basis of the mortgage-deeds dated 11-8-62 and 20-10-66. The only dispute which survives for consideration before this Court is as to what should be the rate of interest payable by the judgment-debtor to the decree-holder? Notwithstanding the fact that a compromise dated 5-9-77 was filed before the learned District Judge, Jaipur on 12-9-77 and the same was verified; and taken on record, but since there were two conflicting terms of the interest in the compromise, the matter was argued before the learned executing Court on 21-9-77 and the said Court while approving the compromise on the basis of which decree was passed, did not agree with the two terms as mentioned in the compromise ;--
(1) With regard to the dale from which enhanced interest was payable.
And (2) The two conflicting terms of interest as mentioned in the compromise.
26. It has not been disputed that the M.I.C. became sick during the period November, 1987 to 20-9-88 and the matter was statutorily referred to B.I.F.R. under Sick Industrial Companies (Special Provisions) Amendment Act, 1985 (12 of 1994) (hereinafter referred as to the Act of 1994), the case was registered as No. 314/87 and the Company was declared sick w.e.f. 28-9-88. It has further not been disputed that the execution proceedings of the impugned decree were stayed under Section 22 of the Act which reads as under:--
Suspension of legal proceedings, contracts, etc.-
(1) Where in respect of an industrial company, an inquiry under Section 16 is pending or any scheme referred to under Section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under Section 25 relating to an industrial company is pending then notwithstanding anything contained in the Companies Act 1956 (1 of 1956) or any other law or the memorandum and articles of association of the industrial company or any other instrument having effect under the said Act or other law no proceedings for the winding-up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof and no suit for the recovery of money or fur the enforcement of any security against the industrial company or of any guarantee in respect of any loans, or advance granted to the industrial company shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the Appellate Authority".
27. Thus it is apparent from the above that since the M.I.C. was declared sick company, it was enjoined upon the trial Court to have stayed the proceedings instead of proceeding with the execution of the decree since no further execution could take place except with the consent of the board or as the case may be the appellate authority as the appeal was also pending before A.A.I.F.R. against the orders of B.I.F.R. Perusal of the record reveals that on 27-9-95, M.I.C, had filed its objections under Section 47 read with 151, C.P.C. before the learned District Judge, Jaipur requesting him to fix the exact-quantum payable as per the decree to enable M.I.C. to pay the same and release their assets from R.F.C. During the course of hearing of the appeal before the A.A.I.F.R., it was brought to the notice of the appellate authority regarding the above application moved before the learned District Judge, Jaipur and the A.A.I.F.R. had consented in view of the Section 22 of the Act, 1994 to get the decretal dues crystallised from the Civil Court on 19-12-95.
28. It is significant to mention the illegality, which has crept in at page 6 of the impugned order which the learned trial Court has clearly admitted : --
"However due to slip a specific mention of condition attached to the rate of interest which applies clearly to either condition be it payable at 5% above the Bank rate prevailing time to time subject to minimum 13.5% P.A. has been mentioned and apparently the learned District Judge has found that there is some thing left."
29. It is under the aforesaid circumstances that the present revision petition has been preferred to this Court. During the course of hearing, it has been brought to the notice of this Court that during the pendency of appeal before A.A.I.F.R., the M.I.C. made several efforts for re-schedulement of the balance of loan amount as per the norms prescribed by the Reserve Bank of India. As per the R.B.I., the total outstanding is to be divided into principal and interest and only the concessional rate of interest is chargeable @ 13.5% and 10.5% for principal and interest separately. Contrary to the statutory guidelines of the R.B.I., the respondent-R.F.C. insisted for the payment of interest computed with half yearly rest, which in my opinion is un-conscionable and not recoverable from the M.I.C. having been declared a sick industrial undertaking under the Act, 1994. Thus only simple interest should be charged from the Company in accordance with the R.B.I. guidelines, I am further of the opinion that since the company has already paid substantial amount to the Corporation, the Corporation should give the adjustment of the amount already paid and the balance amount may be realised on instalments basis as may be agreed to between the parties. Alternatively lump sum amount may also be paid as one time settlement after calculating the interest not on the basis of half yearly rest as that would be unconscionable. The future interest should be calculated w.e.f. 1-1-78 instead of 1-1-77. The aforesaid modification in the impugned decree has become necessary in view of the conflicting terms of interest being insisted upon by the respondent corporation and also keeping in view the fact that the learned executing Court has gone beyond the decree and has acted in a manner as if it was sitting in an appeal against the Order passed by the trial Court. Hence the impugned order and decree dated 22nd September 77 is modified as above. The revision is allowed with the direction that the petitioner-Company is liable to pay the future interest to the Corporation @ 5% above the bank rate prevailing from time to time subject to a minimum of 13.5% as agreed to between the parties in pursuance to the compromise and the corporation is not entitled to charge interest on half yearly rests basis.
30. The impugned order dated 19-12-95 passed by the Executing Court stands ac-cordingly modified as above. The parties are directed to bear their own costs. The record of the trial Court be sent back immediately.