Delhi High Court
Sh. Ranbir Singh vs Sh. Satya Narain Sharma And Ors. on 24 September, 2014
Author: Valmiki J. Mehta
Bench: Valmiki J.Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CM(M) No.1138/2012
% 24th September, 2014
SH. RANBIR SINGH ......Petitioner
Through: Mr. S.K. Solanki, Advocate.
VERSUS
SH. SATYA NARAIN SHARMA AND ORS. ...... Respondents
Through: Mr. Manish Kaushik, Advocate for
respondent Nos.1 and 2.
Ms. Kanika Agnihotri, Advocate with
Mr. Vaibhav Agnihotri, Advocate for
respondent No.3.
Mr. G.D. Mishra, Advocate for
respondent No.4.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
C.M. No.16115/2014 (restoration)
1. Costs paid. For the reasons stated in the application, the petition is restored to its original number.
C.M. stands disposed of.
CM(M) No.1138/2012 Page 1 of 6 + C.M.(M) No.1138/2012
2. The challenge by means of this petition under Article 227 of the Constitution of India is by the plaintiff/builder to the impugned order of the trial court dated 30.7.2012 by which the trial court refused to accept the compromise entered into between the parties before the Mediation Centre on the ground that compromise was caused by misrepresentation of the petitioner/plaintiff/builder. In terms of the compromise, collaboration agreement dated 24.09.2008 entered into between the parties was to be cancelled and the respondent Nos.1 and 2/defendant Nos.1 and 2 were to pay a sum of Rs.18 lacs to the plaintiff/builder. It, however, transpired after the entering into of the compromise that the building which was already constructed by the plaintiff/builder viz the ground floor and the first floor, was a construction done by the plaintiff/builder without obtaining any sanction plan whatsoever, and therefore this building after the compromise was entered into was demolished and in fact respondent Nos.1 and 2/defendant Nos.1 and 2/owners were forced even to pay demolition charges to the MCD.
3. Trial court has given the following reasoning for setting aside the compromise directing that now the suit will be tried on merits:- CM(M) No.1138/2012 Page 2 of 6
"Matter was later on settled between the parties on 05.03.2010 before the Mediation Cell. Admittedly the construction carried out by the plaintiff on the property of the defendant was unauthorized and which was liable to be demolished. In my opinion had the defendant been aware the property is unauthorized and is liable to be demolished and notice to this effect had already been issued by the MCD. Then they would not have entered into the settlement under which they were liable to pay Rs.18,00,000/-. It was plaintiff who had carried out construction and it was his responsibility to take care of authorities such as MCD etc and defendants were not supposed to do anything in this regard so it was duty of the plaintiff to obtain sanction plan from the MCD before carrying out the construction which he failed to do so and while setting the matter with the defendants, the defendants were not informed that construction has been booked by the MCD being unauthorized construction which would be demolished. In these circumstances, I am of the opinion that if defendants are directed to perform the agreement which they entered into under some misrepresentation of fact that would not be proper. Even otherwise as per provision of Indian Contract Act it is free consent which should be there at the time of entering into any agreement and if consent has been obtained under misrepresentation contract would be voidable at the option of the party whose consent was so obtained.
Defendants/applicant relied upon one judgment:- Meghmala & Ors. Vs. G. Narasimha Reddy & Ors. 2011(3) Civil Court cases 006 (SC):- Suppression of any material fact/document amounts to a fraud on count-Every court has an inherent power to recall its own order obtained by fraud as the order so obtained is non est. Fraud-in judicial proceedings, once a fraud is proved, all advantages gained by playing fraud can be taken away-In such an eventuality the question of non executing of the statutory remedies or statutory bars like doctrine of res-judicata are not attracted. Fraud-Is proved when it is shown that a false representation has been made (i)knowingly, or (ii) without belief in its truth, or (iii) recklessly, careless whether it be true or false-Suppression of a material also amounts to fraud on court.CM(M) No.1138/2012 Page 3 of 6
Banwari Lal Vs. Chando Devi (Through L.R) & Anr, AIR 1993 SC 1139:- Civil compromise-Order 23 Rule 1 & 3 and Section 151 of CPC, 1908, Indian Contract Act, 1872 and order 23 Rule 1 of CPC (Amendment) Act 1976-Court before which compromise petition is filed and which has recorded compromise has to decide question whether adjustment or satisfaction is arrived on basis of any lawful agreement-Court has to examine whether compromise is valid or voidable under Indian Contract Act-though application for exercise of powers under Order 23 Rule 3 can be labeled under Section 151-power in appropriate cases has to be exercised under Proviso to Rule 3.
If we see the facts of the case. It is the plaintiff who carried out unauthorized construction and in terms of settlement he wants himself to be paid Rs.18,00,000/- towards the cost/part cost of construction and out of that agreement what defendants have got, nothing but a loss of Rs.18,00,000/- and their property is also sealed. In my opinion, plaintiff cannot be allowed to take advantage of his own wrong and rights of defendants cannot be prejudiced in this manner at all.
The settlement between the parties took place on 05.03.2011 & demolition notice was received on 21.03.2011 i.e 16 days after and demolition was carried out on 23.03.2011, all these facts clearly shows that show cause notice must have been issued much prior to 05.03.2011 when plaintiff was carrying out construction in the premises and it can safely be presumed that it was into the knowledge of plaintiff at the time of entering into settlement with defendants. In my opinion had the defendants been aware of any such notice then they would not have entered into such settlement agreement for payment of Rs.18,00,000/- to plaintiff as no reasonable person would ever do such a thing. In these circumstances, I am of the opinion that it would be lawful to set aside the compromise. Ordered accordingly.
To come up for further proceedings on 04.09.2012."
(underlining added) CM(M) No.1138/2012 Page 4 of 6
4. I completely agree with the aforesaid reasoning because as per the proviso to Order XXIII Rule 3 of Code of Civil Procedure, 1908 (CPC) a compromise in writing entered into between the parties, before the same is accepted by the court for the suit to be disposed of in terms of the compromise, has to be a lawful compromise. A compromise is only lawful if the compromise is in accordance with law of the land. As per the Indian Contract Act, 1872, a contract which is entered into on account of misrepresentation is voidable. In this case, the compromise is voidable because the petitioner/builder/plaintiff concealed the facts that he had constructed the building without any sanctioned plan and as a result of which the building was demolished by the local municipal authority and in fact respondent Nos.1 and 2/defendant Nos.1 and 2 were forced to pay the demolition charges to that local authority. Petitioner/plaintiff/builder was to receive the amount of Rs.18 lacs because the respondent Nos.1 and 2/defendant Nos.1 and 2 were to receive a building which was already constructed by the petitioner/plaintiff/builder at the time the compromise was entered into and no further interference was to be done by the petitioner/plaintiff/builder with the construction after the compromise and the collaboration agreement dated 24.9.2008 was cancelled. Once however CM(M) No.1138/2012 Page 5 of 6 the respondent Nos.1 and 2/defendant Nos.1 and 2 got no benefit inasmuch as the building was illegal having been constructed without a sanction plan, and was consequently demolished, there did not arise any entitlement of the petitioner/plaintiff/builder to receive Rs.18 lacs, and which really was being received for construction already made by the petitioner/plaintiff/builder on the plot owned by the respondent Nos.1 and 2/defendant Nos.1 and 2 for which there was a collaboration agreement between the parties on 24.9.2008. I fail to understand as to how the petitioner/builder/plaintiff can claim the amount of Rs.18 lacs once the building was illegal, having been made without a sanctioned plan, and was subsequently demolished. Also, in my opinion, there is no prejudice to the petitioner/plaintiff/builder because now the suit will be contested and disposed of in accordance with law.
5. In view of the above, there is no merit in the petition and the same is therefore dismissed with costs of Rs.15,000/- to each set of contesting respondents. Costs be paid within a period of four weeks from today.
SEPTEMBER 24, 2014 VALMIKI J. MEHTA, J
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CM(M) No.1138/2012 Page 6 of 6