Bombay High Court
Rizvi Nagar Co-Op. Hsg. Sty. Ltd. vs The Municipal Corporation Of Gr. Bombay ... on 19 October, 1992
Equivalent citations: 1993(1)BOMCR495
JUDGMENT S.M. Jhunjhunuwala, J.
1. In the suit for declaration that auction sale conducted by 1st defendants on 25th October, 1989 in favour of 3rd defendant was illegal, invalid, null and void and not binding on the plaintiffs, Consent Terms were filed and Consent Decree in terms of the said Consent Terms was passed on 11th March, 1992. The plaintiffs agreed to pay to 3rd defendant the sum of - Rs. 7,35,000/- with interest thereon at the rate of 18% per annum from 20th October, 1989 till date of payment in the manner provided for in the said Consent Terms. Clauses 1, 2, 3, 4 and 5, which are relevant for the purposes of this Chamber Summons, read as follows :
1. The plaintiffs to pay to the 3rd defendant a sum of Rs. 7,35,000/- (Rupees seven lakhs thirty five thousand only) with interest thereon at the rate of 18% from 20th October 1989 till the date of payment as follows :
(a) A sum of Rs. 4,00,000/- (Rupees four lakhs) on or before 15th March 1992.
(b) The balance of the amount of - Rs. 3,35,000/- (Rupees three lakhs thirty five thousand) on or before 15th May 1992.
2. In case of default in payment of any of the above instalments as mentioned above, auction sale will stand automatically confirmed in favour of defendant No. 3 and suit shall stand dismissed without any further order. Time is of essence for payment of the above amounts.
3. It is further ordered that interest on the amounts mentioned in Clause (2) and (b) above will be paid in three equal instalments of Rs. 1,10,000/- each. First of such instalment shall be paid by the plaintiffs to the 3rd defendant on 15-6-1992 and further two instalments on or before 15-7-1992 and 15-8-1992. Time is also of essence of payment of the interest.
4. In the event of default on the part of plaintiffs in payment of any two instalments of interest on or before due date, the suit shall be dismissed without any further order and sale shall stand confirmed;
5. In the event of plaintiffs paying the amount as stated in Clauses 1(a), 1(b) and 3 above, auction sale of the suit property will be set aside without any further order".
2. The plaintiffs have paid the sum of Rs. 7,35,000/- to the 3rd defendant in terms of Clause 1 of the said Consent Terms. The plaintiffs have also paid interest amounts payable to 3rd defendant on 15th June, 1992 and 15th July, 1992 in terms of Clause 3 of the said Consent Terms. There is no dispute by and between plaintiffs and 3rd defendant in respect of these payments made by plaintiffs to 3rd defendant. However, though the plaintiffs had admittedly tendered the balance interest amount of Rs. 1,10,000/- to 3rd defendant by cheque dated 19th July, 1992 on 12th August 1992, in payment of last instalment of interest payable under the said consent decree, the 3rd defendant did not get payment thereof on or before 15th August, 1992 in terms of said Clause 4 as the said cheque when presented for realisation was dishonoured in the circumstances stated in the affidavit of one Abdul Khalique affirmed in support of the Chamber Summons. The plaintiffs, have, therefore, taken out this Chamber Summons for condonation of delay caused in payment of the said sum of Rs. 1,10,000/- to 3rd defendant and for other reliefs prayed for therein.
3. According to the plaintiffs, the plaintiffs have two accounts with Syndicate Bank, Santacruz (West), Branch, Bombay one of which pertains to maintenance expenses of plaintiffs' Society and as such, all municipal taxes and outgoings are defrayed therefrom. The other account was specifically opened to make payment to 3rd defendant under the said Consent Decree. The said cheque dated 12th July, 1992 for Rs. 1,10,000/- was issued from this second account which but for unintentional mistake on the part of accountant of plaintiffs' Society would have been realised. The accountant of plaintiffs' Society instead of depositing the amount of - Rs. 1,10,000/- in this account of plaintiffs' Society to get the said cheque cleared, by mistake and due to inadvertance, deposited the same in the said other account pertaining to meet maintenance expenses of plaintiffs' Society. Consequently, the said cheque dated 12th July, 1992 was dishonoured. Alongwith their advocate's letter dated 24th August, 1992 addressed to the advocate for 3rd defendant, the plaintiffs, while putting the said facts on record, forwarded Pay Order dated 19th August, 1992 for the said sum of Rs. 1,10,000/- to 3rd defendant in payment of the said amount under the said Consent Decree, which was not accepted and returned by 3rd defendant.
4. The plaintiffs have deposited the said sum of Rs. 1,10,000/- in this Court in pursuance of ad-interim Order passed by this Court on 14th September, 1992 on this Chamber Summons. The 3rd defendant has filed his affidavit to oppose grant of any relief to the plaintiffs.
5. Mr. Parekh, learned Counsel appearing for plaintiffs, has submitted that delay in payment of the last instalment of interest has been unintentionally caused due to inadvertance and/or bona fide mistake on the part of the accountant of plaintiffs' Society and in the facts of the case, this Court in exercise of its discretion under section 148 of the Code of Civil Procedure, 1908, should enlarge the time for payment to 3rd defendant to prevent manifest injustice to the plaintiffs. Mr. Parekh has further submitted that under Clause 4 of the said Consent Terms, the suit is to stand dismissed and auction sale in favour of 3rd defendant is to stand confirmed in the event of default on the part of plaintiffs in payment of any two instalments of interest provided for in Clause 3 thereof on their respective due dates and since no two defaults have been committed by the plaintiffs, neither the suit has stood dismissed nor the auction sale has stood confirmed in favour of 3rd defendant. Mr. Parekh has also submitted that Clause 4 in the said Consent Terms is in nature of penalty or a forfeiture and this Court having jurisdiction to give relief against penalty or forfeiture should make the Chamber Summons absolute.
6. Mr. Soni, the learned Counsel appearing for 3rd defendant, has submitted that the Court has no power to enlarge time for payment of instalment amount by plaintiffs to 3rd defendant under the Consent Decree passed on 11th March, 1992 and section 148 of the Code has, in the facts of the case, no application. Mr. Soni has further submitted that since the time for payment of instalment amount by plaintiffs can not be enlarged, the question of consideration of circumstances in which the payment was not made by plaintiffs does not arise. Mr. Soni has also submitted that the said Consent Decree providing for consequences of plaintiffs committing any two defaults in payment of interest amount should be construed in a manner so as to include payment of last instalment of interest payable on 15th August, 1992 and as such, on plaintiffs committing default in payment of last instalment of interest amount on 15th August, 1992, the consequences provided for in Clause 4 of the said Consent Terms became operative and the suit has stood dismissed and auction sale in favour of 3rd defendant has stood confirmed.
7. Section 148 of the Code reads as follows :
"Where any period is fixed or granted by the Court for the doing of any act prescribed or allowed by this Code, the Court may, in its discretion, from time to time, enlarge such period, even though the period originally fixed or granted may have expired."
The section empowers the Court to extend the time fixed by it even after the expiry of the period originally fixed. The power is discretionary and the Court is, therefore, entitled to consider the conduct of the party applying for extension.
8. The plaintiffs and 3rd defendant entered into a compromise evidenced by the said Consent Terms and invited the Court to pass a decree in term thereof which the Court did and as such, the time for payment of Rs. 7,35,000/- and interest stipulated by the plaintiffs and 3rd defendant in the said Consent Terms because the time allowed by the Court and this gives this Court the jurisdiction to extend time to grant relief against forfeiture and prevent manifest injustice. Under section 148 of the Code though Mr. Soni has strenuously submitted that in a final compromise decree, the Court has no jurisdiction to enlarge time for payment.
9. In the case of Smt. Periyakkai & others v. Smt. Dakshyani, on which reliance has been placed by Mr. Parekh in support of his submission that under section 148 of the Code, this Court has power to enlarge time for payment of last instalment of interest amount to 3rd defendant, the Supreme Court distinguishing the facts before it in the case of Hukumchand v. Bansilal, earlier decided by the Supreme Court has held "In the case before us, the situation is totally different. Unlike the case of Hukumchand v. Bansilal, , where there was a statutory compulsion to confirm the sale on the dismissal of the application under Order XXI, Rule 90 and, therefore, postponement and further postponement of the confirmation of the sale could only be by the consent of the parties in the case before us, there was no statutory compulsion to dismiss the application under Order XXI, Rule 90 in the absence of an agreement between the parties. The Court would have then decided the appeal arising out of the application on the merits. The 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 provent manifest injustice. True, the Court would not rewrite a contract between the parties but the Court would relieve against a forfeiture clause; And, 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 ourtailed. Nothing said in Hukumchand's case militates against this view."
10. In the judgment of this Court in the case of Durga Mohan Joshi v. International Metal Industries and others, , or which reliance has been placed by Mr. Soni, the case of Periyakkal v. Dakshyani (supra) came for consideration. Smt. Sujata V. Manohar, J., while distinguishing the facts of the case before her from that in the case before the Supreme Court, has observed as under :
"This was a case of an order passed under Order XXI, Rule 90 of the C.P.C. and the Supreme Court held that the time could be granted in order to prevent manifest injustice and to give relief against forfeiture. The case before the Supreme Court was in respect of a consent order in execution preceedings--- not a final decree. The Court intervened to relieve the judgment-debtor from forfeiture under the consent order and granted an extension of time for payment. The ratio of this decision cannot apply to the present case which is governed by Order XX, R. 11."
Further, while holding that section 148 applies only to orders passed by a Court while it still retains control ever the matter, Smt. Manohar, J., has also hold that "the only instance where a decree can be altered by the Court on grounds of equity are instances where relief is sought, against penalty or forfeiture".
11. Both Mr. Parekh and Mr. Soni have put reliance on the case of Daxa N. Gandhi & another v. Indira Maruti Varadkar & another, wherein H. Suresh, J., has held that on broad principle it can be said that if the clause concerned is in the nature of penalty or a forfeiture, the Court is always competent to give relief against it. H. Suresh, J., has further held "The test is whether by allowing the decree-holder to enforce the default clause, would be get more than what he deserves? If the Court in its conscience considers that he would unjustly enrich himself by holding on to the default clause, it would interfere, be it a consent decree or otherwise, for example, in the present case, if the decree was for cancellation of the agreement on the defendants paying a certain amount within a certain time, failing which the entire property more to pass an to the plaintiffs, and if the defendants were to apply for extension of time on facts mentioned herein, the Court would not hesitate to grant such a relief".
12. Mr. Soni has also put reliance on the case of Pioneer Engineering Co. v. DH Machine Tools, reported in A.I.R. 1986 Delhi 165 wherein Sultan Singh, J., of Delhi High Court has held that section 148 of the Code applies only where the time is fixed for doing of an act prescribed or allowed by the Code including the Rules and by invoking section 148, Court can not extend the time fixed for the performance of an obligation under the compromise decree. This was, however, not the case where the consent decree contained provision for penalty or forfeiture in the event of the judgment Debtor committing any default and as such, on the facts of the present case, the ratio of the judgment has no applicability.
13. Mr. Soni has also relied upon the case of Prithichand Rameshchand Sablok v. S.Y. Shinde, , where it has been held that whether a consent decree creates a new tenancy or continues the old tenancy was to be decided on the language of the decree itself. Jahagirdhar, J., while stating the law relating to interpretation of a consent decree therein, however, reiterated the well settled principle that the Court in exercise of its equitable jurisdiction is not precluded from granting relief against forfeiture of a term contained in the consent decree.
14. In the instant case, the plaintiffs and 3rd defendant had fixed by consent time for payment of the said sum of Rs. 7,35,000/- and interest as provided in the said consent terms. There is no doubt that as a result of non-payment of the last instalment of interest amount on or before 15th August, 1992, the time fixed by consent of plaintiffs and 3rd defendant, the plaintiffs were losing a valuable right in respect of the immovable property mentioned therein. Accordingly, Clause 4 of the said consent terms is in nature of forfeiture, the relief against forfeiture is available to the plaintiffs. No statutory restriction on time so fixed by consent of parties has been laid down. As on the expiry of the time so fixed, the question of forfeiture arose, I hold that the Court has ample power to grant relief against forfeiture even without consent of the parties.
15. In the facts of the case, there was no intentional delay caused by plaintiffs in payment of the last instalment of interest amount. It was due to bona fide mistake or inadvertance on the part of the accountant of plaintiffs Society that some delay in payment has been caused. Immediately on dishonourment of the cheque for Rs. 1,10,000/-, the plaintiffs forwarded the Pay Order for Rs. 1,10,000/- to 3rd defendant but the 3rd defendant declined to accept the same. It is one of these rare cases where to prevent manifest injustice to the plaintiffs and to grant relief against forfeiture, the time for payment of the said sum of Rs. 1,10,000/- by plaintiffs to 3rd defendant should be extended.
16. The Court would not rewrite the contract between the plaintiffs and 3rd defendant by incorporating the default clause in the said Consent Terms which the parties thereto did not intend to incorporate. As per Clause 4 of the said consent terms, in the event of default on the part of plaintiffs in payment of any two instalments of interest on or before due dates mentioned in Clause 3 thereof, the suit is to stand dismissed and auction sale be stand confirmed. The plaintiffs and 3rd defendant had not agreed that even in the event of plaintiffs committing default in payment of last instalment of interest amount on or before 15th August, 1992, the suit is to stand dismissed and auction sale to stand confirmed. The said consent terms are unambiguous and do not warrant for incorporation of an agreement therein which the parties thereto while entering into the said compromise did not intend. It is, therefore, not possible to interpret the said consent terms with incorporation of words 'or in payment of last instalment' after the words 'any two instalments of interest on or before due date' and before the words 'the suit shall be dismissed without any further order and the sale shall stand confirmed' in Clause 4 thereof as suggested by Mr. Soni.
17. In the result, the Chamber Summons is made absolute in terms of prayers (a), (c) and (e) thereof. The Prethonotary to pay to 3rd defendant the sum of Rs. 1,10,000/- deposited in this Court by the plaintiffs in pursuance of ad-interim order passed on 14th September, 1992 on this Chamber Summons in full satisfaction of the amount payable by plaintiffs to 3rd defendant under the Consent Decree dated 11th March, 1992. There shall, however, be no order as to costs of the Chamber Summons.
The Prothonotary to act on the minutes.
Issuance of certified copy of the minutes is expedited.