Calcutta High Court
L & T Finance Limited vs Venkatesh Logistics Private Limited & ... on 5 September, 2018
Author: Soumen Sen
Bench: Soumen Sen
O-204
ORDER SHEET
GA 1679 OF 2018
WITH
EC 435 OF 2016
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
L & T FINANCE LIMITED
Versus
VENKATESH LOGISTICS PRIVATE LIMITED & ANR.
BEFORE:
The Hon'ble JUSTICE SOUMEN SEN
Date : 5th September, 2018.
Appearance:
Mr. Paritosh Sinha, Advocate
Ms. S. Das, Advocate
Ms. T. Roy, Advocate
...For the decree holder
Mr. R. Ghosh, Advocate
...For the judgment debtor
The Court : This is an application for recalling of an order dated 2nd
November, 2018 by which the execution application was disposed of by recording
complete satisfaction of the award. The order reads as follows:
"During the pendency of this execution application, the parties have settled their
disputes and the agreed settled amount has been received by the decree-holder
in complete satisfaction of its claim under the award.
Under such circumstances, EC No. 435 of 2016 stands disposed of by recording
satisfaction of the award.
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However, the amount deposited by CHN Industrial (India) Private Limited,
formerly known as New Holland Fiat (India) Pvt. Ltd., for a sum of Rs.1 lakh
with the Registrar, High Court, Original Side, shall be returned to the judgment-
debtor with accrued interest after deduction of costs, charges and expenses by
the Registrar, High Court, Original Side, within a week from the date of
communication of this order".
This application is filed on 4th July, 2018 for recalling of the order dated
2nd November, 2017 on the ground that on the date when the order was passed
the entire settled amount was tendered by way of post dated cheques but not
fully paid. It is stated in the petition that the learned Advocate appearing on
behalf of the award-holder has inadvertently submitted that the entire settled
amount has been received by the award-holder whereas the award-holder in fact
had only received a sum of Rs.5 lakhs and it ought to have been submitted that
for the remaining balance amount the application either may be adjourned or
disposed of with liberty to file afresh in the event cheques were dishonoured. Mr.
Sinha, learned Advocate appearing on behalf of the award-holder has referred to
a communication dated 23rd September, 2017 addressed to the judgment-debtor
company by which the award-holder agreed to accept Rs.75 lakh in full and final
settlement of its claim under the award provided the payment is made in the
following manner:-
Rs.5 Lakh by 30th September, 2017.
Rs.35 lakhs by 31st December, 2017.
Rs.35 Lakhs by 31st March, 2018.
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The said communication also records three post-dated cheques issued by
the judgment-debtor in discharge of its debt. The said letter forms a settlement
between the parties as it would appear that the terms contained in the said letter
was accepted by the parties. In fact, one of the directors of the judgment-debtor
has signed the said letter on behalf of the judgment-debtor company. The said
document also records that the judgment-debtor has acknowledged and accepted
the terms and conditions as mentioned in the said letter towards the settlement
of its dues under the hypothecation agreement. On the date, when the order was
passed the initial cheque for Rs.5 lakhs was honoured and the two subsequent
cheques were due for payment. In this application, the petitioner has disclosed
the bank's advises by which the said cheques were returned dishonoured upon
presentation. A preliminary objection has been taken by Mr. Ghosh, learned
Advocate appearing on behalf of the judgment-debtor that once the Court has
recorded satisfaction of award, the Court becomes functus officio and for
realization of the balance amount the award holder would be required to take
appropriate steps in accordance with law.
Mr. Ghosh, learned Advocate appearing on behalf of the judgment-debtor
has relied upon decision of the Hon'ble Supreme Court in Lakshmi Narayanan
vs. S. S. Pandian reported in (2000) 7 SCC 240 paragraph 14. In the said
decision, the landlord obtained an ex parte decree of eviction against the tenant
on 2nd May, 1990 thereafter, he filed an execution application in this Small
Causes Court on 7th November, 1990. During the pendency of the application
the parties executed to a compromise agreement under which the respondent
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surrendered the front portion of the suit premises; as to the back portion the parties entered into an agreement for a period of three years at the same rate of rent as under the original tenancy. It was in the compromise that if the respondent did not vacate the premises at the expiry of three years, the appellant would be entitled to have the decree executed against him. The memo of compromise was filed in Court and the execution application was dismissed as not pressed. As the respondent failed to hand over possession of the premises at the end of the three years period, pursuant to the written notice the appellant filed a fresh execution application for execution of the decree. The executing Court ordered delivery of possession on 16th November, 1993. The respondent then filed an application seeking withdrawal of the order dated 16th November, 1993 and dismissal of the execution application. Before the Supreme Court, the appellant contended :
(I) the compromise had not resulted in extinguishing the decree;
(II) it had only postponed its execution;
(III) that on failure of the respondent to vacate the premises at the end of the three-year period , the appellant was entitled to have the decree executed.
The respondent contended that the decree had been extinguished by the compromise and the execution of a new lease deed; the respondent by reason of execution of a fresh lease deed was entitled to the Protection of Rent Act and so could not be evicted under the existing decree. The Hon'ble Supreme Court held 5 that in paragraph 14 of the decision on which the reliance has been placed by Mr. Ghosh has recorded that :
"In a case where parties compromise after the decree in a case has been passed, the effect of the compromise on the executability of the decree depends upon the intention of the parties, which is a mixed question of law and fact and has to be determined by the executing court on an application under Section 47 CPC on interpretation of the decree and the compromise in the light of the facts and circumstances of each case. If on such determination it is gathered that the intention of the parties is to extinguish the decree and either the decree-holder or the judgement-debtor got the compromise recorded under Rule 2 of Order 21 CPC by the Court whose duty it is to execute the decree, the execution of the decree cannot be proceeded with by the executing court. But if the intention of the parties is to keep the decree alive and to give effect to it in the manner agreed upon between the parties in the compromise, the decree will be given effect to accordingly or executed as it is depending upon whether the compromise is recorded by the court as aforementioned or not.´ In the aforesaid case, the Supreme Court noticed that the execution petition was dismissed as not pressed and thus no recording of the compromise as contemplated in Rule 2 of Order 21 and, therefore, the Court cannot recognize a compromise having regard to language of sub-rule(3). It was further held that :
"On a plain reading of the decree, the memo of compromise and on the facts of this case, there is no doubt that the existing decree is not extinguished. The parties agreed upon the mode and time of the enforcement of the decree 6 by satisfying the decree in part and postponing the execution of the decree in respect of the remaining part by three years. The executing court has simply dismissed the earlier EP as not pressed. It did not record the compromise between the parties. For this reason alone the compromise cannot be pleaded to bar the execution of the decree in view of the provisions of Rule 2(3) of Order 21 CPC."
In the instance case, the intention of the parties was to pay off the decretal dues in terms of the agreement recorded in the letter dated 23rd September, 2017. The judgment-debtor has acted on the basis of the said letter by issuing three post- dated cheques. The intention of the judgment-debtor was that upon realization of the said three cheques, the award would stand satisfied. It appears to be an obvious mistake and/or lack of understanding on the part of the learned Advocate appearing on behalf of the award-holder. The existence of the letter dated 23rd September, 2017 is not in dispute. It is not in dispute that out of three cheques one cheque has been encashed and the balance cheques were dishonoured on presentation. The judgment-debtor apparently did not ask for return of the said two cheques after the order dated 2nd November, 2017. Since it appears that the said submission was made on the assumption that the decree would stand satisfied on the basis of the settlement arrived at between the parties on 23rd September, 2017 the phrase "agreed settled amount has been received" would mean that the three cheques issued by the judgment-debtor in discharge of its debts have been received and accepted and would be honoured on presentation in view of undertaking given by the judgment-debtor No. 1 as appears from the letter dated 23rd September, 2017.
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In view thereof, the order dated 23rd September, 2017 stands recalled. GA No. 1679 of 2018 is allowed. Liberty is given to the award-holder to file a fresh execution application for realization of its balance dues.
(SOUMEN SEN, J.) A.Dey