Citation : 2003 Latest Caselaw 578 Bom
Judgement Date : 2 May, 2003
JUDGMENT
D.K. Deshmukh, J.
1. By this Appeal, the original Defendants Nos. 1 to 4 challenge the order passed by the learned single Judge of this Court in Notice of Motion No. 3194 of 1997 dismissing the said Notice of Motion. That Notice of Motion was taken out by Defendants Nos. 1 to 4.
2. The facts that are material and relevant for deciding this Appeal are, the present Respondents Nos. 1 to 4 filed Civil Suit No. 589 of 1980 principally claiming a decree of declaration that Defendant No. 15 by name Khanderao Balkrishna Dandekar is not the signatory to the deed of mortgage dated 23rd August, 1973 and further charges dated 10th September, 1974 executed by the deceased Madhav V. Dandekar and Defendant No. 15 in favour of Defendants Nos. 1 to 4 creating the mortgage on the suit land are void and ineffective. The Plaintiffs also claimed a decree of damages against the Defendant No. 5 and Defendants Nos. 5A to 5E. It may be pointed out here that Defendant No. 5 is a partnership firm of which Defendants Nos. 5A to 5E are the partners. It appears that during the pendency of this suit a consent order was passed by this Court in Notice of Motion No. 620 of 1980. Defendant No. 5 made available to the Plaintiffs a flat admeasuring 330 sq.ft. (built up), which is flat No. 305, 3rd floor, in C-2 Wing, at Yogi Nagar, Eksar, Borivali (West), Mumbai. It appears that there was complaint filed by the Plaintiffs against the advocate appearing for Defendant Nos. 1 to 4. That complaint was made to the Bar Counsel. Ultimately, when that complaint was pending and was being heard by the Bar Council of India, at the intervention of the Board of Disciplinary Committee of the Bar Council of India a settlement was arrived at between the Plaintiffs and Defendants Nos. 1 to 4. Perusal of the minutes of the Bar Council of India dated 30-6-1995 shows that the counsel for the Plaintiffs filed draft compromise likely to be effected between the parties. In view of this draft compromise, the proceedings in the Bar Council were adjourned. A copy of that draft is at Exh.C to the affidavit filed in support of the Notice of Motion No. 3194 of 1997. It further appears that a meeting of the Disciplinary Committee of the Bar Council of India was held on 6th April, 1996. A compromise was arrived at between the parties for settlement of the suit pending in this Court. The terms of the compromise were recorded in the minutes of the meeting. A copy of those minutes is to be found at Exh.D to the affidavit filed in support of that Notice of Motion. Perusal of those minutes shows that Defendants Nos. 1 to 4 agreed to provide to the Plaintiffs a flat of an area of 750 sq.ft. (Built Up) on ownership basis in Borivali area situated up to 3rd floor within a period of six months from the date of the meeting i.e. 6-4-1996. Minutes also provided that the complainant before the Bar Council of India, her mother and brothers will give an indemnity Bond stating that the property in the present suit in so far as they are concerned, is free from all encumbrances and that the title of the said property is clear. It was also agreed that when the Plaintiffs receive possession of this flat, they will return flat No. 305-C, which was given by Defendants No. 5 to them. It appears that, thereafter, the Plaintiffs approved flat No. 602, in Wing-I of the Building, at Gokul Nagari at Gokul Residency Building, Samta Nagar, Kandivli (East), Mumbai -400104. According to Defendants Nos. 1 to 4, after the flat was approved by the Plaintiffs and the draft agreement for purchase of that flat was also approved. Defendants Nos. 1 to 4 paid an amount of Rs. 57,000/- for securing that flat. According to Defendants Nos. 1 to 4 there were certain developments is between, therefore, variations in the consent terms were necessary. According to Defendants Nos. 1 to 4 they agreed to pay an amount of Rs. 1 lac to the Plaintiffs to reimburse the expenses of litigation. On 7-3-1997, according to Defendants Nos. 1 to 4 the advocate appearing for Plaintiffs wrote in his own hand the terms of the settlement. According to Defendants Nos. 1 to 4 they paid this amount of Rs. 1 lac to the advocate of the Plaintiffs. The hand-written consent terms were then typed out and were filed before the Committee of the Bar Council on 8th March, 1997. A copy of the hand-written consent terms is at Exh.E to the affidavit filed in support of that motion. Whereas, typed copy is at Exh.F. Perusal of those consent terms shows that Defendants Nos. 1 to 4 in terms of the agreement dated 6th April, 1996 were to give a flat admeasuring 750 sq.ft. (built up) to the Plaintiffs and the Plaintiffs were to return flat No. 305C, Yogi Nagar, Borivali (west) on receipt of this flat. Criminal complaints and the complaint to the Bar Council against the Defendants Nos. 1 to 4 were to be withdrawn. The parties also agreed to file consent terms in this suit on or before 15th April, 1997. The Defendants Nos. 1 to 4 also agreed that if they fail to hand over possession of the flat by 15th April, 1997, they undertake to pay damages at the rate of Rs. 25,000/- per month to the Plaintiffs. These consent terms were signed on behalf of the Plaintiffs by their advocate Shri Berarwala and by Plaintiff No. 2, who was the complainant before the Bar Council. According to Defendants Nos. 1 to 4 on 7th April, 1997 the draft of the consent terms was approved by the advocate for the Plaintiffs. A copy of that draft duly approved by the advocate for the Plaintiffs has been annexed to the affidavit filed in support of the Motion at Exh.G. Perusal of the consent terms at Exh.G shows that the clause in the earlier settlement for payment of Rs. 25,000/- per month, if possession is not given by 15th April, 1997 is deleted, however, the indemnity clause is present. According to Defendant Nos. 1 to 4, Plaintiff No. 2 signed the agreement for purchase of the flat and the defendants Nos. 1 to 4 made all the necessary payments for securing that flat. According to Defendants Nos. 1 to 4 consent terms for being filed before this Court were prepared and they were duly approved by the Plaintiffs on 24th April, 1997. According to Plaintiffs, after the agreement was signed by the Plaintiff No. 2 on 10th April, 1997, the Defendants Nos. 1 to 4 have paid all the necessary charges and have obtained possession of the flat and they were ready to deliver possession of the flat to the Plaintiffs. According to Defendants Nos. 1 to 4, thus they were ready to hand over possession of the flat to the Plaintiffs by 15th April, 1997. According to Defendants Nos. 1 to 4 on 13th April, 1997, advocate for the Plaintiffs confirmed that the consent terms were to be filed before this Court on 23rd April, 1997. It is further stated by Defendants Nos. 1 to 4 that it was agreed between the parties that as soon as the consent terms are filed in the Court, possession of the flat would be handed over to the Plaintiffs. According to Defendants Nos. 1 to 4, the Plaintiffs, however, resiled from this compromise and refused to file the same and therefore a statement to that effect was made before this Court on 29th April, 1997.
3. Defendants Nos. 1 to 4, in these circumstances, have taken out Notice of Motion No. 3194 of 1997 for an order from this Court for passing a decree in the suit in terms of the consent terms at Exh. "D", "E" and "G" to the affidavit filed in support of the motion. This Notice of Motion is opposed only by the Plaintiffs. So far as Defendant No. 5 is concerned, Defendant No. 5 does not oppose grant of an order in terms of prayer clauses of the Notice of Motion. It may be pointed out here that on behalf of the advocate appearing for Defendant No. 5, it was stated that some of the partners of Defendant No. 5/firm who are joined as Defendants Nos. 5A to 5D have expired. He, however, stated that in view of the fact that the Defendant No. 5 is shown as Defendant in the suit, it is not necessary to bring the legal representatives of the deceased partners on record. On behalf of the Plaintiffs, it was stated that Defendant No. 15 has died during the pendency of these proceedings and that the Plaintiffs are the only legal representatives.
By order dated 13th February, 1998, the learned single Judge dismissed the Notice of Motion. Hence, this appeal.
4. When, this appeal was being heard, it was disclosed by the Plaintiffs that they are not in possession of the flat No. 305-C, Yogi Nagar, Borivali. The Appellants, therefore, took out Notice of Motion No. 1019 of 2003 for appointment of the Receiver on that flat and for taking possession of the flat. By an ad-interim order we appointed a Receiver on this flat, but directed the Receiver not to disturb the possession of the person found in possession of the flat. Notice of Motion No. 991 of 2003 was, thereafter, taken out by Mrs. Neeta Bipin Vora, who is in possession of Flat No. 305, Yogi Nagar for vacation of the order passed by this Court appointing Receiver claiming that she is bonafide purchaser of that flat.
5. Notice of Motion No. 3194 of 1997 as observed above was contested only on behalf of the Plaintiffs. According to the Plaintiffs they were compelled by the Defendants Nos. 1 to 4 to accept the settlement and to sign the same. It is also their case that the Plaintiffs were forced to accept the terms, which according to the Plaintiffs, are unconscionable. It is also claimed that the Defendants Nos. 1 to 4 were trying to force the condition of indemnity which was not agreed to in the settlement dated 7th March, 1997. In the alternative the Plaintiffs have prayed for recording the settlement dated 7th March, 1997 at Exh.F to the affidavit filed in support of the motion and they have also prayed for payment being made as per Clause (viii) of that settlement.
6. The learned Counsel appearing for the Defendants Nos. 1 to 4 submits that in their affidavit filed in this Court, the Plaintiffs do not dispute that they have signed the settlement. According to learned Counsel, perusal of various settlements shows that there were four main conditions of settlement; (i) the Plaintiffs were to be provided by Defendants Nos. 1 to 4 a flat of 750 sq.ft.; (ii) the flat was to be provided by 15th April, 1997, failing which the Defendants Nos. 1 to 4 were to pay compensation at the rate of Rs. 25,000/- per month; (iii) the Plaintiffs were to indemnify the Defendants against any claims in relation to the suit property made in future; (iv) the Plaintiffs were to hand over possession of flat No. 305-C, Yogi Nagar to the Defendant No. 5 on the Plaintiffs getting possession of the new flat.
7. The learned Counsel appearing for the Defendants Nos. 1 to 4 submits that it is clear from the material on record that not only these terms were accepted by the Plaintiffs, but they have acted pursuant to these terms. It is submitted that the Plaintiffs inspected various flats and selected a flat for being allotted to them. Thereafter, the Defendants Nos. 1 to 4 made payment and secured the flat. The agreement for purchase of that flat was entered into on 10th April, 1997 and it has admittedly been signed by the Plaintiff No. 2. Therefore, the consent terms were not only arrived at between the parties, but they were also acted upon. It is submitted that so far as the term regarding obligation on the Plaintiffs to return flat No. 305-C is concerned, in view of the subsequent developments it is clear that the Plaintiffs are not in physical possession of that flat and the Defendants Nos. 1 to 4, therefore, do not insist on enforcing the condition about return of that flat by the Plaintiffs to the Defendant No. 5. The learned Counsel for the Defendant No. 5 also agreed that the Plaintiffs can be relieved of their obligation to return possession of flat No. 305-C, Yogi Nagar pursuant to a decree passed in this suit and the Defendant No. 5 should be left to pursue his own remedy for getting back the possession of that flat. So far as the condition for payment of compensation for failure to hand over possession of the new flat to the Plaintiffs by 15th April, 1997 is concerned, it is submitted that the Plaintiff No. 2 herself signed the agreement for purchase of the flat on 10th April, 1997, whereby she agreed to purchase flat No. 602, in the Building Gokul Nagari for consideration of Rs. 8,07,500/-, which was to be paid by Defendants Nos. 1 to 4, out of which an amount of Rs. 57,500/- was paid by Defendants Nos. 1 to 4. It is further pointed out that Defendants Nos. 1 to 4 also paid stamp duty in the amount of Rs. 89,250/- for execution of the agreement. According to learned Counsel, thereafter, the balance amount of consideration was also paid by Defendants Nos. 1 to 4 and in paragraph 21 of the affidavit in support of the Motion, it is stated that on 22nd April, 1997 the builder handed over possession of the said flat to Defendants Nos. 1 to 4 in the presence of Plaintiff No. 4, Defendants Nos. 1 to 4 placed lock on that flat and handed over keys to their advocate. The learned Counsel submits that the keys were to be handed over by the advocate for the Defendants Nos. 1 to 4 to the Plaintiffs on consent terms being presented to this Court and order in that regard being passed by the Court. Thus, according to the learned Counsel, Defendants Nos. 1 to 4 were ready to hand over possession of the flat to the Plaintiffs on 22nd April, 1997, therefore, there is no question of Defendants being liable to pay any compensation for their failure to hand over possession of the flat on or before 15th April, 1997. It is for this reason that in the consent terms at Exh.G, there is no mention of the liability of the Defendants Nos. 1 to 4 to pay any compensation. The learned Counsel submits that Defendants Nos. 1 to 4 were in a position to hand over possession of the flat, but the Plaintiffs could not get possession because of the peculiar stand taken by them. In so far as indemnity clause is concerned, it is submitted that in the consent terms at Exh.G, indemnity clause is included. It is further submitted that even in the draft of the settlement filed before the Bar Council at Exh. "C" there is a provision for indemnity clause. It is, therefore, submitted that the Plaintiffs are not justified in saying that the indemnity clause was being forced on the Plaintiffs. The learned Counsel also submitted that if the indemnity clause is the only objectionable part of the consent terms, the Defendants Nos. 1 to 4 are also willing to give up the indemnity clause. The learned Counsel relying on the judgment of the Supreme Court in the case of Byram Pestonji Gariwala v. Union Bank of India and Ors. submits that the consent terms are throughout being signed by the Plaintiff No. 2, who has been acting on behalf of all the Plaintiffs as well as the their advocate. According to learned Counsel, an advocate is entitled to sign the consent terms on behalf of his client.
8. On the other hand, the learned Counsel appearing for the Plaintiffs relying on the following judgments.
(i) , Anant Mahadeo Godbole v. Achut Ganesh Godbole and Ors;
(ii) 1984 Mh.L.J. page 439, Deorao Patilbuwa Raut v. Devkinandan Bhojraj Chandak:
(iii) , Rajeet Ram Singh and Anr. v. Vth A.D.J. Kanpur Dehat and Ors.
Submits that the present Appeal against the order refusing to record the compromise is not maintainable. He further submits that the Plaintiffs were forced to sign the compromise because of the dilatory tactics adopted by Defendants Nos. 1 to 4. He submits that because of the dilatory tactics employed by Defendants Nos. 1 to 4, the Plaintiffs have been denied enjoyment of their property. Even the flat, which according to Defendants Nos. 1 to 4 has been purchased by them for the Plaintiffs has not been given in possession of the Plaintiffs by the Defendants Nos. 1 to 4. The learned Counsel also submitted that it is the Defendants Nos. 1 to 4 who were avoiding the consent terms to be implemented in order to harass the Plaintiffs. The main argument of the learned Counsel appearing for the Plaintiffs is that this appeal is not maintainable against the order refusing to record the compromise.
9. Perusal of the record in the light of the rival submissions shows that the compromise was reached between the parties and the terms of the compromise were recorded at various stages. The fact that the compromise was reached between the parties and that it was recorded at various stages is not disputed by the Plaintiffs. The Plaintiffs do not dispute that minutes of the consent order at Exh. "C" to the affidavit. Perusal of those minutes shows that Defendants Nos. 1 to 4 had agreed to give a residential flat admeasuring 750 sq.ft. to the Plaintiffs and Defendants Nos. 1 to 4 had also agreed to pay Rs. 25,000/- per month, in case the possession of that flat is not handed over. Perusal of these consent terms also shows that Plaintiffs were to indemnify the Defendants Nos. 1 to 4. There is no dispute between the parties that the consent terms which are recorded by the Bar Council of India, copy of which is at Exh. D, were also arrived at between the parties. The Defendants Nos. 1 to 4 do not dispute that hand written consent terms at Exh. E and the typed copy of which is at Exh.P. It is further clear that not only the consent terms were arrived at between the parties, but the parties have also acted pursuant to those consent terms, in as much as, the Plaintiffs have not only approved the flat which was to be secured for them by Defendants Nos. 1 to 4, but the Plaintiffs have also entered into the agreement with the builder for the purchase of that flat. The agreement is dated 10th April, 1997. The Plaintiffs also do not dispute that on 22nd April, 1997, in the presence of Plaintiff No. 4, actual possession of the flat was taken by Defendants Nos. 1 to 4 from the builder. Relevant averments from paragraph 21 of the affidavit reads as under:-
"On 22nd April, 1997 in view of the total settlement, balance payment was made, the agreement for purchase of flat was got executed by builders and the possession of the said flat was taken in the presence of Plaintiff No. 4 and was locked in his presence and they key thereof was deposited with our advocate. On 23rd April, 1997, it was agreed between Mr. Gandhi and Mr. Berarwalla our respective Advocates that the possession of the said flat would be exchanged between the parties at the site and the documents would be executed by the remaining parties except Plaintiff No. 2 and exchanged between the parties at the said flat and immediately thereafter Plaintiff No. 2 will lodge the documents that is the agreement for purchase of the flat for registration with the Bandra Sub-Registrar.
These averments have not been disputed by the plaintiffs. Thus, it is clear that the consent terms not only were agreed upon between the parties, but they were also acted upon by the parties. It is also clear from these averments that Defendants Nos. 1 to 4 had secured possession of the flat on 22nd April, 1997 and they were in a position to hand over possession of that flat to the Plaintiffs, had the Plaintiffs performed their part of the contract. In our opinion, therefore, Defendants Nos. 1 to 4 can not be held liable to pay any damages or compensation for their alleged failure to hand over possession of the flat to the Plaintiffs by 15th April, 1997.
10. In so far as the second aspect of the matter which is contested by the Plaintiffs about the indemnity clause is concerned, as observed above the indemnity clause is to be found in the draft consent terms at Exh. "C", which was filed before the Bar Council of India. the indemnity clause is also to be found in the consent terms dated 6-4-1996 at Exh. "O". Therefore, it can not be said that the indemnity clause was some thing which was being introduced by the Defendants Nos. 1 to 4 for the first time. In paragraph 21 of the affidavit, the Defendants Nos. 1 to 4 have stated thus:
"At 5.00 p.m. on 24th April, 1997 our Advocate attended the office of Mr. Berarwalla to finally check the documents so as to obviate any dispute at the time of completion. Our advocate was then informed by Mr. Berarwalla that all the documents were signed and would be kept ready in all manner. To the surprise of Mr. Ghandhi, even though the draft consent terms were dully approved by the Plaintiffs and their Advocate Mr. Berarwalla for the first time indicated that they were not agreed to Clause 4 of the said consent terms in so far as it relates to the Plaintiffs giving an indemnity."
This statement is also not denied by the Plaintiffs. Thus, it is clear that for the first time an objection to the indemnity clause was raised on 24th April, 1997 by which date not only the flat was secured for the Plaintiffs by the Defendants Nos. 1 to 4, but payments for securing that flat were also made and possession of the flat was also taken. In these circumstances, therefore, it can not be said that the Plaintiffs were justified in resiling from the consent terms on the ground that there was indemnity clause in the consent terms. Perusal of the affidavit filed on behalf of the Plaintiffs shows that the Plaintiffs are taking contradictory stands. Though, the Plaintiffs do not deny that they have signed the consent terms, that they have selected the flat to be given pursuant to the consent terms. In paragraph 6 of the affidavit the Plaintiffs state that "The Defendants having forced a settlement on their terms which are unconscionable and depriving the Plaintiffs of their considerable valuable assets and property worth several crores are fraudulently attempting to now trying to enforce upon the Plaintiffs the second round of litigation wherein they want to keep playing upon faulting and thereby delaying the implementation of the settlement reached between us." Thus, in the same breath the Plaintiffs are saying that there is settlement reached between the parties and that the settlement is unconscionable. The Plaintiffs further state "The said Defendants are ex-facie delaying as usual implementation of the said last settlement dated 7th March, 1997 fraudulently and vexatiously by adding a condition of indemnity of title which was not agreed upon by the Plaintiffs." In paragraph 9, the same Plaintiffs say that "I say and submit that the settlement dated 7th March, 1997 apart from being unconscionable has been deliberately breached/ not implemented and inordinately delayed/abandoned by the said defendants and the same is not enforceable and/or binding and the Court be pleased to strike down." Perusal of the affidavit further shows that the alternate case of the Plaintiffs is that they claim that this Court should record the settlement dated 7th March, 1997 at Exh.F to the affidavit and direct the Defendants Nos. 1 to 4 to pay to the Plaintiffs compensation as per Clause (8) of that settlement. Thus contradictory stands have been taken by the Plaintiffs. However, it can be said that the Plaintiffs are agreeable for enforcement of the settlement dated 7th March, 1997 which is at Exh.F to the affidavit filed by the Defendants Nos. 1 to 4. Perusal of that settlement shows that following are the main conditions of that settlement:-
(i) Defendants Nos. 1 to 4 provide a flat admeasuring 750 sq.ft. to the Plaintiffs.
(ii) Plaintiffs to return Flat No. 305-C, Yogi Nagar on getting possession of the new flat.
(iii) In case the Defendants Nos. 1 to 4 fail to give possession of the new flat by 15th April, 1997, they pay compensation at the rate of Rs. 25,000/- per month to the Plaintiffs.
By these terms as already pointed out above. the term about return of Flat No. 305-C is not insisted upon. The Defendants Nos. 1 to 4 are ready to give new flat in relation to which agreement has already been entered into, and so far as payment of compensation for failure to give possession of the flat by 15th April, 1997, as already pointed out above on 22nd April, 1997 Defendants Nos. 1 to 4 were in possession of the flat and they had handed over the keys to their advocate which were to be handed over to the Plaintiffs on presentation of the consent terms to the Court and therefore, this condition about payment of compensation was deleted from further settlement. Thus, so far as merits of the matter are concerned, it is clear to our mind that the Plaintiffs do not, in substance, dispute the settlement or the terms thereof. They insist on payment of compensation to which they are not entitled as indicated above and their objection is to the indemnity clause, which now the Defendants Nos. 1 to 4 are willing to forego. It is, thus, clear that in substance the matter is settled between the parties. The parties have not only agreed to the terms, but they have acted pursuant to it and therefore, in our opinion, Defendants Nos. 1 to 4 are entitled to have a decree in their favour passed in terms of the settlement reached between the parties.
11. It may be pointed out here that though the learned Counsel appearing for the Defendants Nos. 1 to 4 relied on the judgments of the Supreme Court in the case of Byram Pestonji Gariwala in support of their contentions that advocate is entitled to enter into the compromise on behalf of his client, at no point of time it was argued before us that all the Plaintiffs have not signed the consent terms or that the consent terms on their behalf by their advocate is not binding on the Plaintiffs. Therefore, really speaking, there is no occasion to deal with the law laid down by the Supreme Court in its judgment in Byram Gariwala's case.
12. Now, so far as the principal submission that was made on behalf of the Plaintiffs regarding maintainability of the appeal is concerned, all the judgments referred to above on the basis submissions are made, are dealing with maintainability of the appeal under Order 43 of the Civil Procedure Code. They do not deal with the maintainability of an appeal under Clause 15 of the Letters Patent against an order refusing to record a compromise. Perusal of the judgment of the Supreme Court in the case of Shah Babulal Khimji v. Jayaben D. Kania, , shows that the Supreme Court has laid down criteria for deciding which order amounts to a judgment for the purpose of Clause 15 of the Letters Patent and applying those criteria an order refusing to record a compromise would amount to a judgment within the meaning of Clause 15 of the Letters Patent and therefore, an appeal against that order would be maintainable under Clause 15 of the Letters Patent. Perusal of paragraph 120 of the judgment of the Supreme Court in the case of Shah Khimji shows that according to the Supreme Court an order rejecting an application for judgment on admission under Order XII Rule 6 of Civil Procedure Code amounts to judgment so as to be appealable under Clause 15 of the Letters Patent. In our opinion, therefore, an order refusing to pass a decree in terms of the compromise reached between the parties would also amount to a judgment and therefore an appeal under Clause 15 of the Letters Patent would the maintainable.
13. In this view of the matter, therefore, the order of the learned single Judge impugned in the appeal is set aside. Notice of Motion No. 3194 of 1997 is made absolute in terms of prayer Clause (a). It is, however, clarified that the Plaintiffs will not be liable to hand over physical possession of Flat No. 305, Yog Deep, Yogi Nagar-Complex, Eksar, Borivali (West), Mumbai - 400 092 pursuant to this order. It is also clarified that in view of the statement made on behalf of the Defendants Nos. 1 to 4, the indemnity clause contained in the consent terms at Exh.G shall not be binding on the Plaintiffs.
In so far as Notice of Motion No. 1019 of 2003 and Notice of Motion No. 991 of 2003 are concerned, the order appointing the Receiver on Flat No. 305, Yogi Nagar, Borivali is vacated.
Defendant No. 5 shall be entitled in pursue its remedy against anybody who may be in possession of the flat in accordance with law.
Both the Notices of motion are disposed of.
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