Bombay High Court
Ashok S/O. Babulal Agrawal vs Kantilal Sakharam Parekh, And Others on 20 June, 2016
Author: A.S. Chandurkar
Bench: A.S. Chandurkar
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR
Writ Petition No. 5162 of 2015
Ashok son of Babulal Agrawal,
aged 55 years,
occupation - business,
resident of Chikli,
Tq. Chikli, Distt. Buldana. ..... Petitioner.
ig Org. plaintiff
Versus
1. Kantilal Sakharam Parekh,
aged 70 years,
occupation - Business,
2. Neeraj Kantilal Parekh,
aged 42 years,
occupation business,
both residents of PO &
Tq. Deulgaon Raja,
Distt. Buldana.
3. Chikli Urban Co-operative Bank
Ltd., Chikli,
Distt. Buldana,
through its Manager.
4. Rajesh Kashinath Tayade,
aged 38 years,
occupation Agriculturist
and business,
5. Kashinath Haribhau Tayade,
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aged 67 years,
occupation - Agriculturist
and business,
6. Sayyad Javed Sayyad Rauf,
aged 34 years,
occupation - Agriculturist
and business,
7. Ayub Shah Hyder Shah,
aged 46 years,
occupation - Agriculturist
and business,
8. Dattatray Bansi Telang,
aged 33 years,
occupation - Agriculturist
and business,
9. Parmeshwar Narayan Waghmare,
aged 46 years,
occupation - Agriculturist,
10. Ravikumar Parasmal Jain,
aged 38 years,
occupation - Agriculturist
and business,
all residents of Post Deulgaon
Raja, Tq. Deulgaon Raja,
Distt. Buldana.
11. Sub-Registrar,
Deulgaon Raja,
Tq. Deulgaon Raja,
Distt. Buldana. .... Respondents.
*****
Mr. S.R. Deshpande, Adv., for the Petitioner.
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Mr. Rohit Deo, Adv., for respondent nos. 1 and 2 and 4 to 10.
Mr. K. L. Dharmadhikari, Asstt. Govt. Pleader for Respondent No.
11.
*****
CORAM : A.S. CHANDURKAR, J.
Date : 20th June, 2016
ORAL JUDGMENT :
01. Rule. Rule is made returnable forthwith. Learned Adv. Mr. Rohit Deo waives service for respondent nos. 1 and 2, and Respondent Nos. 4 to 10, and learned Asstt. Govt. Pleader, Mr. K.L. Dharmadhikari, for respondent no.11. Heard learned counsel for the rival parties. By consent of rival parties, this Writ Petition is taken up for final hearing.
02. The petitioner, who is the original plaintiff in Special Civil Suit No. 29 of 2011, is aggrieved by the order dated 6th August, 2015, passed by the trial Court below Exh.89, thereby rejecting the application moved by the petitioner in which it was prayed that the compromise recorded between the petitioner and the respondent nos.
1 and 2 was not binding on the petitioner.
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03. The facts, in brief, are that the petitioner had filed Special Civil Suit No. 29 of 2011 seeking a declaration that the defendant Nos.
1 to 3 were intending to defeat the rightful claim of the plaintiff that was based on an agreement of sale dated 27th February, 2007 that was executed for purchasing the suit property. A further relief was prayed that the defendant No.3 should be directed to release the suit property that was shown to have been mortgaged with it so as to enable the plaintiff to recover the possession of the same. During pendency of this suit, the plaintiff and defendant Nos. 1 and 2 entered into a compromise on 16th March, 2012. As per this compromise, it was agreed between the said parties that they would allow the defendant No.3 - Co-operative Bank to sell the suit properties in auction, after which the said Bank would be at liberty to adjust the dues of defendant Nos. 1 and 2. Out of the remaining amount, Rs.50,00,000-00 [rupees fifty lakhs only] were to be paid by the said Bank to the plaintiff towards refund of earnest amount. On 26th September, 2012, the trial Court accepted the compromise, and directed a decree to be drawn in those terms. The suit was directed to proceed against the defendant No.3 alone. The original plaintiff, thereafter, on 10th March, 2014, moved an application below Exh.89, praying that the compromise arrived at between the parties be set aside, on the ground that the terms and conditions agreed were not ::: Uploaded on - 08/07/2016 ::: Downloaded on - 30/07/2016 05:58:52 ::: wp5162.15 5 followed by the defendant Nos. 1 and 2 and hence the terms of compromise were not binding on the plaintiff. By the impugned order, the trial Court held that the question as to whether the subsequent acts of the defendant Nos. 1 and 2 were based on false and fabricated documents was a matter to be considered by adducing evidence. It further observed that the compromise decree was not liable to be set aside on the basis of bare contentions of the plaintiff. The application, therefore, came to be rejected.
04. Mr. S.R. Deshpande, the learned Counsel for the petitioner, submitted that the trial Court was not justified in rejecting the application that was filed below Exh.89. According to him, the trial Court, despite recording a finding that the issues raised by the plaintiff could not be decided without leading evidence, ultimately dismissed the said application without permitting the plaintiff to lead any evidence. According to him, considering the reasons assigned by the trial Court, it should have first recorded evidence and should have then decided the application. He referred to the averments in the application below Exh.89 to substantiate his contention that the defendant Nos. 1 and 2 had breached the terms of compromise. He also submitted that on the basis of fabricated documents executed by defendant Nos. 1 and 2, the legal rights of the plaintiff were sought to ::: Uploaded on - 08/07/2016 ::: Downloaded on - 30/07/2016 05:58:52 ::: wp5162.15 6 be defeated. He, therefore, submitted that the impugned order was liable to be set aside and the compromise, in question, ought to be declared as not binding on the petitioner.
05. On the other hand, Mr. Rohit Deo, the learned Counsel for respondent Nos. 1 and 2, and 4 to 10, supported the impugned order.
According to him, the application filed by the plaintiff below Exh.89 was itself misconceived, inasmuch as the same was based on certain subsequent transactions that had taken place after the suit was compromised. According to him, the remedy available for the plaintiff was to execute the compromise decree against defendant Nos. 1 and 2 and not to apply for setting aside compromise decree. He submitted that it was not the case of the plaintiff that while entering into said compromise, he had been misled, or that the compromise itself was vitiated by fraud. According to him, the observations made by the trial Court in the impugned order with regard to the necessity of recording evidence were, in fact, not required to be made as the application in question itself was not maintainable. He, therefore, submitted that the writ petition deserves to be dismissed.
06. I have given due consideration to the respective submissions and I have gone through the documents filed on record.
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07. It is not in dispute that during pendency of the Civil Suit, the plaintiff and defendant Nos. 1 and 2 entered into a compromise dated 16th March, 2012. As per the said compromise, various steps were required to be taken by the defendant Nos. 1 and 2 in future. The property in question was to be auctioned by the defendant No.3 -
Bank, after which the proceeds therefrom were to be adjusted. On this basis, the trial Court passed a decree in terms of the compromise between the plaintiff and the defendant Nos. 1 and 2. The suit was to proceed only against defendant No.3.
08. It would be necessary to refer to the averments made by the plaintiff in the application below Exh.89. After reproducing the terms of compromise, in para 9 of the application, it has been stated that it was incumbent upon the defendant Nos. 1 and 2 to comply with terms of compromise. In para 10, it has been stated that the parties jointly submitted an application along with the terms of compromise to the defendant No.3 - Bank; but the said Bank did not do anything further.
Thereafter, in Para 13 onwards, it has been pleaded that on 22nd November, 2012 [after passing of the compromise decree], the defendant Nos. 1 and 2, in collusion with their parties, had created some documents to defeat the rights of the plaintiff. It was denied that ::: Uploaded on - 08/07/2016 ::: Downloaded on - 30/07/2016 05:58:52 ::: wp5162.15 8 the plaintiff had ever executed any deed of relinquishment or any consent deed. Thereafter, a reference is made to a sale-deed dated 14th January, 2013, by which the defendant No.1 sold the the suit property to the respondent Nos. 4 to 10. Thereafter, in Para 23, it has been stated that the defendant Nos. 1 and 2 did not abide by the terms of compromise and they sold the suit property. It was, therefore, stated that as the defendant Nos. 1 and 2 did not follow the terms and conditions of the compromise, the same was non-est in law and, therefore, it was liable to be set aside. The prayer made in the application is to set aside the compromise, on the ground that the defendant Nos. 1 and 2 did not follow and fulfill the terms and conditions of the agreement.
09. From the aforesaid averments, it is clear that it is the grievance of the plaintiff that the defendant Nos. 1 and 2, after entering into the compromise, did not act as per the terms and conditions, to which they had agreed. After the compromise decree was passed, the defendant Nos. 1 and 2 allegedly executed some documents and ultimately sold the suit property on 14th January, 2013. It is, therefore, clear that the grievance of the plaintiff is not with regard to the compromise being vitiated on account of any fraud or misrepresentation prior to execution of the compromise deed. The ::: Uploaded on - 08/07/2016 ::: Downloaded on - 30/07/2016 05:58:52 ::: wp5162.15 9 entire foundation for challenging the compromise as non-est is based on the events that have occurred after passing of compromise decree on 26th September, 2012. The question, therefore, is whether on the aforesaid grounds, the compromise decree could be said to be non-est or void for being set aside?
10. As per the provisions of order - XXIII, Rule 3 of the Civil Procedure Code, 1908 [for short "the Code"], a suit can be compromised when it is proved to the satisfaction of the Court that there has been a lawful agreement or compromise in writing and signed by the parties. A suit can also be compromised where the defendant satisfies the plaintiff with regard to the whole or any part of the subject-matter of the suit after which the Court can pass a decree in those terms. As per the proviso to Rule 3, if there is a dispute with regard to any adjustment or satisfaction that has been arrived at, such question shall be decided by the Court.
order - XXIII, Rule 3 of the Code contemplates two modes by which a compromise can be arrived at. By the first mode, the parties may agree to do certain acts in future, on the basis of which the compromise is recorded and a decree is passed. By the latter part, on some adjustment being recorded, which is accepted by the other side, a decree is passed. This distinction between the two parts in Rule 3 ::: Uploaded on - 08/07/2016 ::: Downloaded on - 30/07/2016 05:58:52 ::: wp5162.15 10 has been considered by the Hon'ble Supreme Court in its judgment in the case of Pushpa Devi Bhata (dead) through LR Sadhna Rai Vs. Rajinder Singh & others [ (2006) 5 SCC 566]. The relevant observations in para 19 of the said Judgment read thus:-
"19. What is the difference between the first part and the second part of Rule 3? The first part refers to situations where an agreement or compromise is entered into writing and signed by the parties. The said agreement or compromise is placed before the court. When the court is satisfied that the suit has been adjusted either wholly or in part by such agreement or compromise in writing and signed by the parties and that it is lawful, a decree follows in terms of what is agreed between the parties. The agreement/compromise spells out the agreed terms by which the claim is admitted or adjusted by mutual concessions or promises, so that the parties thereto can be held to their promise(s) in future and performance can be enforced by the execution of the decree to be passed in terms of it. On the other hand, the second part refers to cases where the defendant has satisfied the plaintiff about the claim. This may be by satisfying the plaintiff that his claim cannot be or need not be met or performed. It can also be by discharging or performing the required obligation. Where the defendant so "satisfies" the plaintiff in respect of the subject-matter of the suit, nothing further remains to be done or enforced and there is no question of any "enforcement" or "execution" of the decree to be passed in terms of it. Let us illustrate with reference to a money suit filed for recovery of say a sum of rupees one lakh. Parties may enter into a lawful agreement or compromise in writing and signed by them, agreeing that the defendant will pay the sum of rupees one lakh within a specified period or specified manner or may agree that only a sum of Rs. 75,000 shall be paid by the defendant in full and final settlement of the claim. Such agreement or compromise will fall under the first part and if the defendant does not fulfill the promise, the plaintiff can enforce it by levying execution."::: Uploaded on - 08/07/2016 ::: Downloaded on - 30/07/2016 05:58:52 :::
wp5162.15 11 .......................................................................................... .............................The difference between the two parts is this : where the matter falls under the second part, what is reported is a completed action or settlement out of court putting an end to the dispute, and the resultant decree recording the satisfaction, is not capable of being enforced by levying execution. Where the matter falls under the first part, there is a promise or promises agreed to be performed or executed, and that can be enforced by levying execution. ....."
11. Thus, from the aforesaid, it is clear that the decree passed in the present proceedings falls under the first part of Rule 3 of order -
XXIII of the Code. The only manner, therefore, of enforcing the agreement between the parties is by levying execution. The averments in the application below Exh.89, that have been referred to herein above, leave no manner of doubt that the entire grievance of the plaintiff is with regard to failure on the part of defendant nos. 1 and 2 to abide by the terms and conditions of the compromise dated 16th March, 2012.
12. Thus, from the aforesaid, it has to be concluded that the application filed below Exh.89 was entirely misconceived and the premise, on which the compromise decree was sought to be set aside, could not have been the legal basis for praying so. The prayers made in the application did not deserve to be granted in view of the factual basis on which they were made. The observations of the trial Court ::: Uploaded on - 08/07/2016 ::: Downloaded on - 30/07/2016 05:58:52 ::: wp5162.15 12 that the aspect as to whether the decree was unlawful and invalid could be decided only after leading evidence, are, therefore, without any legal basis. The petitioner is not entitled to rely upon the said observations to contend that the trial Court should have recorded evidence in the matter.
13. In view of aforesaid discussion, the conclusion arrived at by the trial Court of rejecting the application below Exh.89 is upheld but for aforesaid reasons. Needless to state that it is open for the petitioner to exhaust his legal remedies for the grievances made by him in the application below Exh.89. The observations made in this order are only for the purpose of considering the application below Exh.89.
14. Rule stands discharged with no order as to costs.
Judge
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