Bombay High Court
Vinod K. Chawla vs Shree Shiv Bhakti Films on 29 October, 2013
Bench: R.D. Dhanuka
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY.
ORDINARY ORIGINAL CIVIL JURISDICTION
CHAMBER SUMMONS NO.1756 OF 2011
WITH
CHAMBER SUMMONS NO.1143 OF 2011
IN
SUIT NO.2011 OF 2002
1. Vinod K. Chawla
of Delhi, Indian Inhabitant,
carrying on business in the firm
name and style of Wings Electronics
as Sole Proprietor thereof at 309,
Lajpat Rai Market,
Delhi 110 006. .... (Applicant in chamber
summons No.1143 of 2011)
2. Vinod K. Chawla (HUF)
having its office at E-526, Greater
Kailash II, New Delhi - 110 048
3. Rajni V. Chawla
of Delhi, Indian Inhabitant, having her
Office at E-526, Greater Kailash
II, New Delhi - 110 048
4. Life Electronics Pvt. Ltd.,
a Private Limited Company carrying
on Business at 309, Lajpat Rai Market,
Delhi 110 006
5. PAR Excellence Leasing &
Financial Services Pvt. Ltd.
a Private Ltd Company carrying
on business at E-1/19, Vasant Vihar,
New Delhi 110 057 ... Plaintiffs.
V/s.
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1. Shree Shiv Bhakti Films
a firm carrying on business at 48,
Vithal Nagar, 13th Road, J.V. P.D. Scheme,
Mumbai - 400 049
2(a) Jatin Kumar )
Indian Inhabitant residing at 48, )
Vithal Nagar, 13th Road, J.V.P.D. Scheme, )
Mumbai - 400 049 )
)
2(b) Henna Nathani )
Indian Inhabitant, 48, Vithal Nagar, )
13th Road, J.V.P.D. Scheme,
Mumbai - 400 049 ig ... (Applicants in chamber
summons No.1756/11)
3. Gemini Industries & Imaging Ltd.
a Company incorporated under
Provisions of the Companies Act, 1956
and having its office at 2, Vembuli
Amma Koli Street, Virugambakkam,
Chennai 600 078. ... Defendants.
Mr V.Y.Sanglikar a/w M. S. Oberai, Ms Vaishali Ugle for the plaintiffs and
applicant in Chamber summons No.1143 of 2011.
Mr S. H. Doctor, Sr. Advocate with Mr V.M.Singh i/b Prashant Phanse for
defendant Nos.2(a) and 2(b) and applicants in chamber summons No.1756 of
2011.
CORAM : R.D.DHANUKA J.
JUDGMENT RESERVED ON AUGUST 29, 2013
JUDGMENT PRONOUNCED ON : OCTOBER 29, 2013
JUDGMENT :
By consent of parties, both these chamber summons were heard
together and are disposed of by common order.
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2. Chamber summons No. 1756 of 2011 is filed by defendant Nos.2(a)
and 2(b) for a declaration that agreement contained in the consent terms dated
3rd October 2006 and the decree if any is validly rescinded or in the alternative to
rescind the agreement contained in the consent terms and the decree if any and
seeks injunction against the plaintiffs from the said decree being drawn up on the
basis of consent terms.
3. By chamber summons No. 1143 of 2011 the plaintiffs seek permission
to bring the respondents on record as defendant No.2(a) and 2(b) in place of
defendant No.2 who has expired, permission to execute a decree on the basis of
certified copy of the Judgment pending drawing up of a decree and appointment
of court receiver and for injunction. Some of the relevant facts for the purpose of
deciding these two chamber summons are as under.
4. Plaintiffs had filed a suit (2011 of 2002) against the defendants
interalia praying for an order and decree directing the defendants to pay to the
plaintiffs the principle amount of Rs.3,30,00,000/- and also interest and costs.
Parties to the suit filed consent terms in the said suit on 3 rd October 2006. By an
order dated 3rd October 2006, this Court decreed the said suit in terms of consent
terms. Both the parties agreed, declared and confirmed that the disputes
between the plaintiffs and defendant Nos.1 and 2 were settled for the sum of
Rs.4,00,00,000/- and there shall be decree in favour of the plaintiffs for the said
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sum of Rs.4,00,00,000/- It was also agreed and declared that in full settlement
of the said decreetal amount, defendant Nos.1 and 2 entrust to plaintiff No.1
50% share, right, title and interest in the property bearing plot No.48 Vithalnagar
Co-operative Housing Society Ltd., admeasuring about 638.20 sq. metres
together with the structure standing thereon situate at N.S.Road No.13, Juhu Vile
Parle Development Scheme, Vile Parle (W), Mumbai 400 049 (hereinafter
referred to as 'the said property/plot'), and all benefits attached thereto including
FST, future FSI, TDR and all future benefits available in the said plot. It was
further agreed that the said plot would be redeveloped by the plaintiffs in
consultation with defendant Nos.1 and 2 who shall appoint professionals and
contractors with mutual consent for carrying out such redevelopment between
six months from the date of the said consent terms. Both the parties agreed
that all costs expenses for redevelopment of the plot including payments required
for purchase of TDR, taxes etc. which was estimated at Rs.5 crores shall be borne
equally.
5. Plaintiffs were authorized to settle the claims of Barot and Thakral
upto a maximum of Rs.1 crore. Parties also agreed that until the said sum of
Rs.3,50,00,000/- was paid, the plaintiffs shall have first and paramount charge
and/or lien on two flats of defendant Nos.1 and 2 on 1 st and second floors as and
by way of security for repayment of the said sum of Rs.3,50,00,000/- and
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defendant Nos.1 and 2 shall not sell the said two flats. It was however agreed
that if defendant Nos.1 and 2 failed to pay the said amount within six months
from the date of execution, plaintiffs shall be entitled to sell the said two flats
agreed to be allotted to defendant Nos.1 and 2 and charged to the plaintiffs as
security to recover the said sum of Rs.3,50,00,000/-.
6. It was agreed that the entire re-development of the said plot of land
shall be completed within a period of 18 months from the date of
commencement certificate provided that defendant Nos.1 and 2 co-operate in all
respects and do all the acts, deeds and things including execution of documents
etc. It was agreed that completion certificate shall be procured within a period
of 24 months with 6 months grace. Defendant Nos.1 and 2 and family members
of defendant No.2 agreed to vacate the existing structure within 30 days upon
the plans being duly sanctioned by the competent authority to enable the
plaintiffs to proceed with the development and construction of the said plot.
Both the parties agreed that flats constructed on the said plot shall be divided
equally between the plaintiffs and defendant Nos.1 and 2 in the ratio of 50:50
together with equal number of car parking. Defendant No.2 agreed to locate the
temporary alternate accommodation to be occupied by him during the
transitional period till the time new construction was completed in all respects
and possession of the said flats in the new building was handed over to him after
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obtaining the occupation certificate in respect thereof. Plaintiffs agreed to pay
lump sum compensation of Rs.50,000/- per month for procuring temporary
alternate accommodation to defendant No.2 in advance for 18 months against
the defendant No.2 and his family members and defendant No.1 before vacating
the entire structure.
7. Defendant Nos.1 and 2 agreed to execute Power of Attorney in favour
of plaintiff No.1 for redevelopment and construction of new building on the said
plot as also to enable plaintiff No.1 to sell and dispose of 50% flats which were
allotted to the plaintiffs and appropriate the sale proceeds thereof to themselves
and also execute a separate power of attorney authorizing him to sell the said
two flats of defendant Nos.1 and 2 in the event of defendant Nos.1 and 2 not
been able to make payment of Rs.3,50,00,000/-. Under clause 15 of the said
consent terms, undertaking of defendant Nos.1 and 2 was recorded to vacate the
existing structure within 30 days from the plaintiff's producing the plans duly
sanctioned by the competent authority.
8. Mr S.H.Doctor, learned senior counsel appearing for the applicants in
chamber summons No.1756 of 2011 submits that plaintiffs ought to have
obtained commencement certificate within a period of 24 months from the date
of consent terms. The entire redevelopment was to be concluded within 18
months from the date of commencement certificate which plaintiffs failed and
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neglected to do. Learned senior counsel submits that from the date of filing this
chamber summons, no plans had been sanctioned by the competent authority
and/or produced by the plaintiffs. It was an obligation on the part of the
plaintiffs to produce the plans duly sanctioned. Defendant No.2 was liable to
vacate the existing structure in 30 days only after production of duly sanctioned
plans by the plaintiffs from the competent authority. It is submitted that
defendant No.2 was liable to vacate on payment of Rs.9 lacs after the plaintiffs
obtaining the commencement certificate. Since no commencement certificate
had been obtained by the plaintiffs and did not pay Rs.9,00,000/- to the
defendants towards the alternate accommodation, defendants could not have
shifted from the said plot. No steps have been taken by the plaintiffs for
proceeding with redevelopment.
9. Mr Doctor, learned senior counsel submits that by a letter dated 7 th
October 2011, applicants (original defendant Nos.2(a) and 2(b) had rescinded
the agreement containing consent terms dated 3 rd October 2006 in view of the
breaches and failure on the part of the plaintiffs. There was no reply to the said
letter dated 7th October 2011.
10. Learned senior counsel submits that various rights in immovable
property are created in the consent terms. Under Section 17(b) of the
Registration Act, registration of such document was mandatory. Since the said
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consent decree was not registered, the same is not enforceable. Learned senior
counsel placed reliance on the Judgment of Supreme Court in case Bhoop Singh
Vs. Ram Singh Major reported in 1995 (5) Supreme Court Cases 709 and in
particular paragraphs 16 and 17 which read thus :
16. We have to view the reach of Clause (vi), which is an exception to Sub-
section (1), bearing all the aforesaid in mind. We would think that the exception
engrafted is meant to cover that decree or order of a court, including a decree or order
expressed to be made on a compromise, which declares the pre- existing right and does
not by itself create new right, title or interest in praesenti in immovable property of
the value of Rs. 100 or upwards. Any other view would find the mischief of avoidance
of registration, which requires payment of stamp duty, embedded in the decree or
order.
17. It would, therefore, be the duty of the court to examine in each case
whether the parties have pre-existing right to the immovable property, or whether
under the order or decree of the court one party having right, title or interest therein
agreed or suffered to extinguish the same and created right, title or interest in
praesenti in immovable property of the value of Rs. 100 or upwards in favour of other
party for the first time, either by compromise or pretended consent. If latter be the
position, the document is compulsorily registrable.
11. Learned senior counsel submits that since the said consent decree has
not been drawn up, no right is accrued in favour of the plaintiffs. The said
consent decree is not even stamped. Learned senior counsel submits that
plaintiffs are trying to obtain order for execution of such decree by falsehood.
Plaintiffs never paid any amount to defendant No.2 during his life time including
Rs.9 lacs payable by way of compensation before vacating the premises.
Learned senior counsel submits that today it would not be possible to get any
sufficient alternate accommodation on payment of Rs.50,000/- per month. It
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is submitted that the plaintiffs have committed fraud on Court. Learned senior
counsel placed reliance on the Judgment of Allahabad High Court in case of
Aiaat Husain Vs. Mushtaq Ali reported in AIR 1937 Allahabad 282 in support
of his submission that a decree or an order expressed to be made on compromise
and comprising immovable property other than that which is the subject matter
of the suit or proceeding is compulsorily registrable if it falls within the purview
of any of the clauses to Section 17(1) of the Registration Act. Learned senior
counsel submits that since the suit was for a money decree in which both the
parties entered into an agreement recorded in consent terms which comprises of
immovable property, which was not subject matter of the said suit, such consent
term was compulsorily required to be registered and since not registered
admittedly, it is not an enforceable decree. Relevant portion of the said
Judgment of Allahabad High Court is extracted as under.
".... In my opinion this contention must prevail. Section 17(2)(vi), Registration
Act, as amended by Act 21 of 1929, makes it clear that a decree or order expressed to
be made on a compromise and comprising Immovable property other than that which
is the subject matter of the suit or proceeding is compulsorily remittable, if it falls
within the purview of any of the clauses to Section 17(1). The subject matter of the
suit, as already stated, was a simple claim for money. The compromise transferred
from the defendant to the plaintiff rights in the zamindari which belonged to the
defendant to the extent of half of his share. It is not disputed that the value of half of
the defendant's share, that is one-fourth of the entire property, is far in excess of Rs.
100. There can be no manner of doubt about the compromise and therefore the decree
created or assigned rights in Immovable property of the value of over Rs. 100. It
follows that the decree based on the compromise was compulsorily registrable."
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12. Learned senior counsel submits that since the said consent decree is
not registered in view of Section 49 of the Registration Act, no rights are
transferred and/or accrued in favour of the plaintiffs in the said immovable
property. Plaintiffs thus cannot apply for execution of such decree. Mr Doctor,
learned senior counsel submits that since various false submissions are made by
the plaintiffs in affidavit in reply and the whole case is based on falsehood, this
Court shall reject such defence raised in affidavit in reply and shall allow the
chamber summons filed by the applicants for rescission of consent decree as
prayed.
13 In reply, Mr Sanglikar learned counsel appearing for the plaintiffs
made submissions on the chamber summons filed by defendant Nos.2(a) and
2(b) and also on the chamber summons (1143/11) filed by the plaintiffs. It is
submitted that by an order dated 11th December 2012, this Court had already
granted ad-interim injunction in terms of prayer clause (e) of the chamber
summons 1143/11 filed by the plaintiffs. Plaintiffs have applied for execution
based on certified copy of the Judgment pending drawing up a decree. Mr
Sanglikar submits that this Court passed a decree in terms of consent terms
arrived at between the parties. Defendant No.2 had no money to repay the
debts and had submitted to a decree of this Court by entering into the consent
terms. It is submitted that decree of this Court is not a mere agreement between
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the parties that can be rescinded unilaterally. Learned counsel submits that the
plaintiffs had taken various steps to comply with their obligations under the said
consent decree. Plaintiffs had paid full fees of the Architects. Crores of rupees
have been spent by the plaintiffs to load TDR. It is submitted that the plaintiffs
have got two FSI sanctioned and are in a position to get IOD. Plaintiffs gave a
cheque of Rs.40,00,000/- to be paid to the Mumbai Municipal Corporation. It is
alleged that defendant No.2 did not make any contribution required to be made.
It is submitted that the plaintiffs have paid more than Rs.9,00,000/- at the
instance of defendant No.2. Mr Sanglikar submits that various amounts are paid
by the plaintiffs on behalf of defendant No.2 such as payment of Rs.13 lakhs to
Vithal Nagar CHS Ltd for grant of NOC for redevelopment on 21 st December
2007, amounts paid to various advocates, payments made in connection with
TDR, Rs.5,00,000/- are paid to the Solicitor firm for litigation of defendant No.2,
incurred payment for Architects' fees, Municipal corporation charges and fees,
TDR etc. Mr Sanglikar placed reliance on an undated letter annexed at Exhibit-1
to the affidavit in reply alleged to have been addressed by M/s S. P. Associates,
Architects to plaintiff No.1 in which it is alleged that the Municipal Commissioner
has already approved various concessions that include staircase, lift and lobby
area free of F.S.I. by charging premium on 29 th December 2008. TDR has been
loaded for utilization on the plot on 2 nd February 2010, intimation of disapproval
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is required to be obtained from the Municipal Corporation, various I.O.D
conditions have to be completed and payments towards premium have to be
made to the Municipal corporation to get the commencement certificate to start
the actual work on site.
14. Mr Sanglikar submits that it is clear that defendant Nos.1 and 2 had
admitted the liability of Rs.4,00,00,000/- against the plaintiffs. Learned counsel
submits that obligation of the plaintiffs to obtain commencement certificate was
dependent upon compliance of various obligations on the part of defendant
Nos.1 and 2 and was subject to the defendants' discharging their liabilities. The
cheques issued by defendant Nos.1 and 2 were dishonoured. Learned counsel
submits that the defendants have recovered about Rs.40,00,000/- by taking
advantage of Clause-17 of the consent terms.
15. Mr Sanglikar learned counsel submits that Section 28 of Specific
Relief Act is not at all attracted to the facts of this case. Suit was not for specific
performance. There was no decree passed by this Court for specific performance.
Application for rescission of consent decree under Section 28 is thus, not
maintainable. Learned counsel submits that in any event, Art.59 of Schedule-I to
Limitation Act would be attracted to such application for rescission of consent
decree which provides for 3 years limitation and time to file such proceedings
commences when plaintiff came to know about such decree for the first time. Mr
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Sanglikar submits that since original defendant No.2 during his life time did not
apply for rescission of consent decree, legal heirs of original defendant No.2
cannot apply for rescission. Mr Sanglikar furnished a copy of execution
application filed by the plaintiffs in this Court for perusal of this Court. Learned
counsel placed reliance on the Judgment of this Court in case of Ashok Thapper
Vs. Saral Enterprises and Ors. Reported in 2001 (2) Mh.L.J. 795 in support of
his submission that Art.59 of the Limitation Act will apply for rescission of decree
and if such application is filed beyond the period of 3 years, it would be time
barred. Reliance is placed on paragraphs 7 and 13 of the said Judgment which
read thus :
" 7. As far as the point of registration of consent decree is concerned, there is no dispute
that the suits were money suits and the decree was a money decree. In the compromise
filed by the parties, the flat which stood in the joint name of the husband and wife, the
defendants had given as a security by them to the plaintiff to realise the decretal
amount. A similar situation had arisen in the case before the learned Single Judge of
Orissa High Court in the case of Prafulla Chandra Deo v. Kasinath Misra, relied upon
by Shri Mehta for the plaintiff. The learned Judge has discussed the relevant
provisions of the Registration Act and has observed as under :-
"..... Held that by the said averment the property specified in the
compromise petition was not affected in any manner so as to come within any of the
several clauses in Section 17(1) of the Registration Act and therefore the decree did
not require registration under Section 17. The said averment was made only for the
purpose of facilitating the execution of the decree by supplying advance information
about a properly which was available to be sold for the purpose of realising the
balance of decretal dues, it could not be said that thereby an agreement regarding that
property was made so as to affect that property in any manner. The statement
regarding immovable property in the decree in question was merely a reiteration of
the decree holder's legal right to put the judgment debtor's property to sale. That being
so, it was not necessary for the decree holder to Institute a separate suit to enforce the
terms of the said decree, and the said decree could be executed straightaway in
accordance with law without instituting a separate suit on that decree."
I am in respectful agreement with the said judgment of the learned Judge of the
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Orissa High Court. In our case, by consent the defendants had agreed to give their own
flat as security in case, they fail to make payment of the decretal amount. The
circumstances mentioned in the consent terms are clear enough that if the defendants
fail to make payment of the decretal amount, the plaintiffs would be entitled to sell the
flat under question. The flat was mentioned only as a part of the security for the suit
claim and the decree did not create any right, title or Interest in favour of the plaintiff
in the said flat. The right, title and interest of the defendants are not adversely affected
in the consent terms and if they honour the decree, the flat would be untouched. This
circumstance was not present in any of the judgments cited by the learned Counsel for
the defendants. According to me, therefore, the consent decree did not require
registration under Section 17 of the Registration Act. The result would have been
otherwise, if in the consent decree the flat was offered to the plaintiff in lieu of the
decretal amount in full and final settlement of the suit claim. In such circumstances,
such a decree would surely have required registration before it could be put for
execution. If the parties by consent indicate or mention some immovable properties as
security for the decretal amount, such a decree, according to me, would not require
registration under Section 17 of the Act.
Shri Mehta also cited a Division Bench of the Madras High Court in the case of M.
Pappu Reddiar v. Amaravathi Ammal and Ors., has given broader interpretation of
the words "the subject matter of the suit" in Section 17(2)(vi). The Division Bench has
summarised the entire law on the point in the following two paragraphs which are
reproduced hereinabove for ready reference :-
"Para 5:- Hemanthakumari Debi v. Midnapur Zamindari Co. Ltd., held that
consent decrees did not require registration even if they included immovable property
not the subject matter of the suit. Section 17(2)(vi) of the Indian Registration Act
was, therefore, amended in 1929, so as to confine the exemption from registration to
consent decrees restricted to the subject matter of the suit. After the amendment, a
consent decree comprising of immovable property not the subject matter of the suit or
proceeding requires registration. But the Courts below were of the view, and we think
right, that in the instant case, although the properties in dispute in O. S. No. 76 of
1948, nevertheless, they should be regarded as the subject matter of that suit,
inasmuch as their allotment to one or the other of the plaintiffs in the suit was
inseparable from the other provisions of the compromise decree and constituted part of
the consideration for the compromise. We think that this is a correct view to take. The
words "the subject matter of the suit" in Section 17(2)(vi) cannot be read as subject
matter of the plaint nor even as subject matter in dispute in the suit or proceeding. If
the consent decree or order in the suit or proceeding covered the property, although it
was not in the plaint or in dispute, such property constituting, as it does, an
inseparable part of the consideration for the compromise, may well, in our view, be
regarded as the subject matter of the suit. This is because the decree passed on the
basis of the compromise cannot stand without that property. If by the amendment it
was intended that if the property was not in the plaint schedule, the consent decree
should not be exempted from registration, we are afraid the phraseology actually
employed by Section 17(2)(vi) has failed to achieve the objective. We are aware that
the extended scope we have given to the expression "subject matter of the suit" may
narrow down the scope of the exclusion from exemption from registration under that
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provision. In Govindaswami Mudaliar v. Rasu Mudaliar, there was an attachment
before judgment in a suit to recover money. When the relative application came up for
final disposal, there was a compromise on the basis of which a decree followed. It
provided for payment of the amount claimed in the suit on certain terms and the
decree debt was made a charge over the properties which had been earlier attached.
Venkatasubba Rao. J. held that the property was the subject matter of the proceeding
within the meaning of section 17(2)(vi). We are in respectful agreement with this
view of the scope of the expression "subject matter of the suit or proceeding" in that
section. This view is also justified by the approach in Ramdas Sah v. Jagannath
Prasad, AIR 1960 Pat 179. On that view it follows that the plaintiffs claim based on
want of registration of the compromise decree, fails.
13. Shri Mehta has rightly pointed out that the present chamber summons is
totally misconceived and is not maintainable. According to him. Article 59 of the
Limitation Act would apply for cancellation of the decree. The present chamber
summons is filed beyond the period of three years, therefore, it cannot be entertained.
Similarly Shri Mehta has further relied upon the provisions of Review under Order 47
of the Code of Civil Procedure read with Article 124 of the Limitation Act. The period
to correct the mistake or error in the decree by filing a review petition is 30 days from
the date of decree. Teh present chamber summons is hopelessly time barred. Shri
Mehta has relied upon the following judgements :-
(a) MANU/SC/0368/1977 : [1977]3SCR60 (supra) wherein the scope of interference
by the Executing Court is laid down. It is restricted to the cases of lack of jurisdiction
on the face of it and not by process of investigation. Shri Mehta, has rightly pointed
out that there is no challenge to the consent decree, on the ground of nullity and
therefore, this Executing Court cannot go beyond and behind the decree. It is not
contended on behalf of the defendants that there was lack of jurisdiction in granting
the decree in terms of consent terms.
(b) MANU/SC/0531/1970 : [1971]1SCR66."
16. Mr Sanglikar submits that the said consent decree is yet to be drawn
up and thus cannot be construed as a decree which would require registration.
Registration of Judgment is not necessary. Learned counsel submits that in
chamber summons filed by the plaintiffs, plaintiffs have applied for permission
to execute a decree on a certified copy of the Judgment pending the drawing up
of a decree. Learned counsel placed reliance on the order of this Court dated
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24th September 2010 in suit No.1882 of 1982 filed by New India Assurances Co.
Ltd. against G.N. Sainani. It is submitted that this Court has considered the
provisions of Order XX Rule 6A of the Code of Civil procedure and Rule 314 of
the High Court Rules and has held that one should not wait till obtaining
certified copy of the decree for the purposes of execution. Provisions of Rule 314
confer discretion upon the Chamber Judge to allow execution to commence on
the strength of copy of the Judgment annexed to the execution application.
This Court has directed the office to process the execution application without
insisting upon certified copy of a decree with a direction to lodge the certified
copy of a decree in the office as and when the same is available in the
execution application. Paragraphs 4 to 6 of the said order passed by this Court
read thus :
" 4. I have heard learned Counsel Mr. Sanglikar for the Plaintiffs. He had
drawn my attention to the provisions of Order XX Rule 6A of Code of Civil Procedure
and Rule 314 of the said Rules. According to him, in view of these two Rules read
together, if a copy of the Judgment delivered by the Court on the basis of which decree
is to be prepared is annexed to the Execution Application that is sufficient till such
time the Certified Copy of the decree is received by the Judgment Creditor. He
submitted that if the demand of the Office that the Execution Application should be
accompanied by the Certified Copy of the decree is to be accepted, it would mean that
the Judgment Creditor is prevented from executing the decree though provisions of
Rule 6A of Order XX of C.P.C. and Rule 314 of the said Rules permit the Court to
allow the execution of a decree without Certified Copy of the decree.
5. I am inclined to take the judicial notice of the fact that some time is
taken to seal the decree in original and further time is taken to issue the Certified
Copy of the said decree. If provisions of Order XX Rule 6A of C.P.C. permit filing of an
Appeal without a Certified Copy of the decree on the basis of enclosing a copy of the
Judgment made available by the Court, then, there is no reason as to why one should
wait till obtaining Certified Copy of the decree for the purposes of execution.
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Provisions of Rule 314 confer discretion upon the Chamber Judge to allow execution to
commence on the strength of copy of the Judgment annexed to the Execution
Application.
6. Learned Counsel for the Plaintiffs states that copy of the Judgment on the basis of
which decree is to be prepared in favour of the Plaintiffs is already annexed to the
Execution Application. Statement made by the learned Counsel for the Plaintiffs is
accepted and therefore, I am inclined to direct the Office to process the Execution
Application without insisting upon Certified Copy of the decree. Needless to mention
that as and when the Certified Copy of the decree shall be furnished to the Plaintiffs,
the Plaintiffs will lodge the same in the Office in the Execution Application."
17. In his alternate submission, Mr Sanglikar, learned counsel submits
that since the decree has not yet been drawn up, there is no decree in the eyes of
law and thus, no registration of such order is required. It is submitted that
discretion is vested in this Court to permit the plaintiffs to proceed with
execution without the said decree being drawn up which discretion shall be
exercised weighing the equity. It is submitted that since defendants are
defaulters of decree, no reliefs can be granted in favour of the defendants. It is
submitted that plaintiffs have already filed a suit (1719 of 2001) against Salil
Mystri and defendants in respect of two flats. Learned counsel submits that
since a decree has been passed by this Court under Order XXIII Rule 3, effect
must be given to such decree. In his alternate submission, Mr Sanglikar submits
that even if Section 28 of Specific Relief Act is applied, application is time
barred for which defendants have to be blamed. It is submitted that since the
defendants taken advantage and benefit under such decree, they are estopped
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from seeking rescission thereunder on the ground of alleged default on the part
of the plaintiffs. It is submitted that since decree has become final, defendants
are not entitled to seek any equitable relief.
18. Mr S.H. Doctor, learned senior counsel in rejoinder submits that
Sections 27 and 28 of Specific Reliefs Act apply to the facts of this case and the
defendants are entitled to apply for rescission of consent decree. It is submitted
that Section 28 of the Specific Relief Act would apply to any suit in which decree
for specific performance is passed. It is submitted that by the said consent
decree, both the parties have agreed to jointly develop the property and specific
performance of that agreement without such claim being made in the suit. The
suit was not for specific performance and was only for seeking money claim.
Learned senior counsel placed reliance on the Judgment of this Court in case of
Prithvichand Sablok Vs. S.V.Shinde reported in 1985 (2) Bom.C.R. 200 in
support of his submission that consent decree is a contract arrived at between the
parties. Reliance is placed on paragraph 12 of the said Judgment which reads
thus :
"12. What a consent decree means has been commented upon by this Court as well
as the Supreme Court in several decisions. By way of ready reference one may turn to
Jacob David v. Baldev Phatak , which states as follows :-
"It has been stated times out of number in judicial decision that a consent decree is
a contract between the parties to which is super-added 'the command of the Judge' or
the imprimatur of the Court'. A consent decree is therefore, as the very expression
indicates, a cross-breed between a contract and a decree. It is neither purely a contract
not purely a decree but has some of the characteristics and incident of both".
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In Narendra v. Jothalal MANU/MH/0176/1974 : (1978)80BOMLR196 it was
pointed out that a compromise decree between parties is something more than a
contract. Although certain consequences which may result from a contract might also
result from a consent decree, nevertheless a consent decree passed by a Court on the
basis of a compromise between the parties cannot be equated with a contract but must
be regarded as something more than a contract. The question whether a consent
decree creates a tenancy or a license or whether it creates either of them has also been
considered in Jacob David's case (supra). It has been recognised in that judgement
that a consent decree may create a tenancy or a fresh license cannot be granted by a
consent decree. The question whether a consent decree creates a new tenancy or grants
fresh licence is not matter of authority but is a question which might be decided on
interpretation of the terms of the particular consent decree. Similarly the question
whether a consent decree continues a tenancy must also be decided on the language of
the consent terms.
19.
Mr Doctor, learned senior counsel placed reliance on the Judgment of
Supreme Court in case of Union Carbide vs. Union of India reported in AIR
1992 S.C. 248 and in particular paragraph 53 in support of his submission that
consent decree can be set aside on any ground on which contract can be set
aside. Paragraph 53 of the said Judgment reads thus :
53. The main arguments on invalidity proceed on the premise that the terms
of the settlement and the orders of the court passed pursuant thereto contemplate,
amount to and permit a compounding of non-compoundable offences which is opposed
to public-policy and, therefore, unlawful. The orders of the court based on an
agreement whose or part of whose consideration is unlawful have, it is Urged, no
higher sanctity than the agreement on which it is based. The orders of the court based
on consent of parties do not, so goes the argument, reflect an adjudicative imposition
of the court, but merely set the seal of the court on what is essentially an agreement
between the parties. It is urged that the validity and durability of a consent order are
wholly dependent on the legal validity of the agreement, on which it rests. Such an
order is amenable to be set-aside on any ground which would justify a setting aside of
the agreement itself.
These principles are unexceptionable. Indeed, in Huddersfield Banking
Company Ltd. v. Henry Lister & Son Ltd Vaughan Williams J. said:
...it seems to me that the clear result of the authorities is that, notwithstanding the
consent order has been drawn up and completed, and acted upon to the extent that the
property has been sold and the money has been paid into the hands of the receiver, I
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may now set aside the order and arrangement upon any ground which would justify
me in setting aside an agreement entered into between the parties.
The real truth of the matter is that the order is a mere creature of the
agreement, and to say that the Court can set aside the agreement - and it was not
disputed that this could be done if a common mistake were proved - but that it cannot
set aside an order which was the creature of that agreement, seems to me to be giving
the branch an existence which is independent of the tree.
[emphasis added]
This was affirmed in appeal by Lindley L.J. in the following words:
... the appellants, contend that there is no jurisdiction to set aside the consent order
upon such materials as we have to deal with; and they go so far as to say that a
consent order can only be set aside on the ground of fraud. I dissent from that
proposition entirely. A consent order, I agree, is an order; and so long as it stands I
think it is as good an estoppel as any other order. I have not the slightest doubt on
that; nor have I the slightest doubt that a consent order can be impeached, not only on
the ground of fraud, but upon any grounds which invalidate the agreement it
expresses b a more formal way than usual.
In Great North-West Central Railway Co. and Ors. v. Charlebois and Ors , the Privy
Council stated the proportion thus:
It is quite clear that a company cannot do what is beyond its legal powers by simply
going into court and consenting to a decree which orders that the thing shall be
done... Such a judgment cannot be of more validity than the invalid contract on which
it was founded".
[emphasis added]
It is, indeed, trite proposition that a contract whose object is opposed to
public policy is invalid and it is not any the less so by reason alone of the fact that the
unlawful terms are embodied in a consensual decree. In State of Punjab v. Amar Singh
MANU/SC/0351/1974 : [1974]3SCR152 , this Court said:
After all, by consent or agreement, parties cannot achieve what is
contrary to law and a decree merely based on such agreement cannot furnish a
judicial amulet against statutory violation... The true rule is that the contract of the
parties is not the less a contract, and subject to the incidents of a contract, because
there is super added the command of the Judge.
20. Mr Doctor, learned senior counsel submits that since the plaintiffs
want to prove that they have performed their part of obligation and defendants
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have committed default in complying with their part of obligation or the
plaintiffs could not comply with their part of obligation because of alleged non
compliance of the obligation on the part of the defendants, plaintiffs are required
to prove such allegation by leading oral evidence. Plaintiffs by merely relying
upon a letter alleged to have been addressed by an Architect which is in dispute,
can not prove their case. Learned senior counsel submits that provisions of Order
XXIII Rule 3 of Code of Civil Procedure1908 would not apply to the facts of this
case and a contract arrived at between the parties can be rescinded. Learned
senior counsel placed reliance on the Judgment of Supreme Court in case of
Ruby Sales & Services Vs. State of Maharashtra reported in 1994 (2) Bom.
C.R. 248 and in particular paragraph 12 & 13 in support of his submission that if
interest is claimed in property under a decree, it can not be claimed unless it is
registered. Consent terms or consent decree can be registered. Plaintiffs cannot
claim any right in said consent terms and/or decree without registration. It is
submitted that plaintiffs have not given any explanation as to why plaintiffs
applied for execution after two years and why notice under Order XXI Rule 22 is
not filed. Paragraph 12 & 13 of the said Judgment of Supreme Court in case of
Ruby Sales (supra) read thus :
"12. There is no particular pleasure in merely going by the lebel but what is
decisive is by the terms of the document. It is clear from the terms of the consent
decree that it is also an "instrument" under which title has been passed over to the
appellants/plaintiffs. It is a live document transferring the property in dispute from
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the defendants to the plaintiffs.
13. Thus the position becomes clear that the consent decree falls under the
definitions of "conveyance" as well as "instrument"."
21. As far as issue of limitation raised by Mr Sanglikar, learned counsel
appearing for the plaintiffs is concerned, Mr Doctor, learned senior counsel
submits that Article 59 does not apply to the application for rescission of consent
decree. Defendants have rescinded a decree. If plaintiffs are aggrieved by such
act on the part of the defendants, plaintiffs have to apply for declaration that
plaintiffs are entitled to execution of decree and rescission to decree by
defendants is illegal. Learned senior counsel submits that Art.59 applies to the
suit and not to an application. Art.137 applies to application filed before the
Court. Since the defendants have rescinded a decree, right accrued to the
defendants for filing such chamber summons on the date of rescission of a decree
and time would not commence from the date of passing of such consent decree.
It is submitted that in the matter of defence no limitation applies. Learned
senior counsel placed reliance on the Judgment of Madras High Court in case of
Raja Dorai Vs. Muthu Ramlinga reported in ILR Vol. XXXVIII page 321.
Relevant portion of the said Judgment is extracted as under :
" ... The defendant, though his right to bring a suit for rescission of a contract or a
lease may be barred, might be permitted to defend his possession of properties by
showing that the contract or lease so voidable at his instance has been repudiated by
him. ..
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....A defendant who has properly repudiated a contract or a deed, might well be
allowed to sit tight over his possession and defend his right to such possession by
setting up, by way of plea, such proper repudiation by him, though he might be
barred if he seeks positive relief as plaintiff on the basis of such repudiation. ..
... Is a litigant coming forward as plaintiff for a relief which he cannot get if a
document executed by himself or his predecessor in title is in force on the date of suit,
is such a litigant entitled to the relief of possession after the expiry of the time fixed by
law for the setting aside of that document and simply on his allegation and proof that
he has himself repudiated the document on proper grounds, assuming that the
document is voidable at his instance? If he brings a suit for possession within the
time limited by law for setting aside that document, that suit, of course, might be
taken as brought for both the reliefs of possession and rescission, and there will be
then no difficulty. The difficulty will arise only where the time fixed by law for a suit
to set aside the document has elapsed, but the l imitation for possession of the
immovable property dealt with under the document has not elapsed, and also in cases
where the suit was brought after the expiry of the period fixed by law for the recovery
of the property, if calculated from the date when the plaintiff became entitled to
repudiate the contract, but within such period, if calculated from the date when he
actually repudiated the contract or deed. However, it muse be admitted that there is
no Indian statute expressly laying down that a person who comes in as plaintiff
claiming relief against the effect of a deed voidable at his instance, should have it
judicially rescinded before or at the time of his getting that relief.... "
22. Mr Doctor learned senior counsel invited my attention to the
execution application filed by the plaintiffs. It is pointed out that the plaintiffs
have applied for execution of money decree of Rs.4,00,00,000/- and seek
attachment and sale defendants' share in the property, for execution of the said
money decree. It is submitted that there is no prayer for specific performance
under the said execution application. Mr Doctor submits that without prejudice
to the rights and contentions of the defendants, defendant Nos.2(a) and 2(b) are
ready and willing to pay Rs.4,00,00,000/- in this Court in compliance with the
said money decree claimed by the plaintiffs within one week. It is submitted
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that since plaintiffs have not applied for execution of specific performance of a
decree, no reliefs can be granted in favour of the plaintiffs for attachment of the
said property or otherwise. It is submitted that a decree has to be read in its
entirety. Plaintiffs cannot retain 50% and attach and sell 50 % of the
defendants. It is submitted that on the perusal of execution application, it is
clear that plaintiffs have given up their claim for redevelopment of the property.
23. As far as submission of Mr Sanglikar that defendant Nos.2(a) and 2(b)
have taken benefit under consent terms is concerned, Mr Doctor, learned senior
counsel submits that under Clause 17 of the consent decree, defendant No.2 was
entitled to certain benefits and was part of the deal. There is no question of
ratification or estoppel. It is submitted that in any event, if this Court comes to
the conclusion that defendants are liable to restore the benefit of Rs.40 lacs as
claimed by the plaintiffs, defendant Nos.2(a) and 2(b) are willing to deposit even
the said amount in this Court in full and final settlement of the claim of the
plaintiffs.
24. Mr Doctor, learned senior counsel submits that even if decree is
rescinded, plaintiffs cannot seek specific performance since plaintiffs were not
ready and willing to perform their part of obligation. This Court cannot
supervise the performance of terms and conditions of the consent decree,
compliance of obligation on the part of each party, redevelopment of the
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property and thus, no relief for enforcement of such consent decree can be
granted in favour of the plaintiffs. Plaintiffs have not made any claim for
damages and/or specific performance. Reliance is place on Section 14 and 20 of
Specific Reliefs Act in support of this submission.
25. Mr Sanglikar, learned counsel in rejoinder to the submissions made by
Mr Doctor, learned senior counsel in chamber summons filed by the plaintiffs
submits that Clause-1 of the consent terms has become final. Plaintiffs have
already become 50% owner of the suit property. Execution application is for
securing 50% share of the plaintiffs under the said consent terms. It is submitted
that there is no question of rescinding this part of consent terms. It is submitted
that clause-1 of the consent decree is independent of other clauses. Mr
Sanglikar made an attempt to distinguish Judgment of Supreme Court in case of
Union Carbide (supra) on the ground that the said Judgment has been delivered
by the Supreme Court in criminal proceedings. In so far as Judgment of Supreme
Court in case of Ruby Sales & Sevices (supra) relied upon by Mr Doctor is
concerned, Mr Sanglikar submits that the said Judgment considers the issue as to
how stamp duty is chargeable on consent decree and would not apply to the fact
of this case. As far as offer made by Mr Doctor, learned senior counsel to deposit
Rs.4,00,00,000/- in this Court is concerned, it is submitted that in case of
immovable property, compensation is not adequate. It was not asserted by the
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defendants that defendants contributed any money on redevelopment. It is
submitted that though in the execution application, plaintiffs claimed money
decree of Rs.4,00,00,000/- in affidavit in support of the chamber summons, it is
stated by the plaintiffs that plaintiffs also seek execution of the right of
redevelopment and thus affidavit in support of chamber summons shall be read
along with execution application.
Reasons and conclusions :
26. On perusal of the consent terms which culminated into decree passed
by this court, it is clear that both the parties have agreed that disputes between
plaintiffs and defendant Nos.1 and 2 were settled for a sum of Rs.4 crores and
there shall be decree in favour of the plaintiffs for the said sum of Rs.4 crores.
On perusal of the plaint, it is clear that the plaintiffs had prayed for money
decree against the defendants and had also prayed for declaration that the
plaintiffs have first and paramount lien and charge on the assets of defendant
Nos.1 and 2 described in Exhibit-W to the plaint. Under the said consent terms
arrived at between the parties, it was agreed, declared and ordered that in full
and final settlement of the said decreetal amount, defendant Nos.1 and 2 entrust
to plaintiff No.1 for and on behalf of all the plaintiffs the 50% share, right, title
and interest in the said property together with structures standing thereon
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situate at N. S. road No.13, Juhu Vile Parle Development Scheme, Vile Parle
(West), Mumbai 400 049 and also all benefits attached thereto including
available FSI, future FSI as well as TDR and all future benefits whatsoever. Both
the parties have also agreed that after redevelopment of the plot, each of the
party will be entitled to 50% of the FSI and TDR benefits available on the said
plot. Plaintiffs have agreed to appoint professionals and contractors with mutual
consent for development and construction of building on the said plot. Such
appointment was required to be done within six months from the date of the
consent terms. All costs expenses for redevelopment of the plot including
payments required for purchase of TDR, taxes and other costs was agreed to be
paid jointly by the plaintiffs and defendant Nos.1 and 2. Plaintiffs were
authorized to settle the claims of Barot and Thakral up to maximum sum of
Rs.1,00,00,000/-. Plaintiffs had also first and paramount charge and/or lien on
two flats of defendant Nos.1 and 2 as an by way of security for repayment of the
said sum of Rs.3,50,00,000/-. It was provided that the entire redevelopment of
the said plot shall be completed within a period of 18 months from the date of
commencement certificate provided defendant Nos.1 and 2 had co-operated in all
respects and done all acts, deeds and things including execution of various
documents etc. It was agreed that the flats constructed on the said plot of land
shall be divided equally between the plaintiffs and defendant Nos.1 and 2 in such
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a manner that both the parties shall own in equal ratio together with equal
number of car parking in the basement, podium and open ground or otherwise.
Parties had also agreed to their entitlement to respective flats each under the said
consent terms. Defendant Nos.1 and 2 had agreed to vacate the existing
structure within 30 days from the plaintiffs providing the plans duly sanctioned
by the competent authority. It was also agreed that it would not be the
responsibility of defendant Nos.1 and 2 or their family members to pay any
amount whatsoever to the plaintiffs. Under clause 17 of the consent terms, it
was agreed that in view of those consent terms and the amount to be received by
the plaintiffs from the development and construction of the said property, the
negatives and all other articles and paraphernalia of the suit picture "Champion"
and others directed by Padmakumar will belong to defendant Nos.1 and 2 and
the plaintiffs shall not have any right or claim in respect of the suit picture
and/or negative rights in respect thereof.
27. One of the issue which arises for consideration of this Court in this
proceedings is whether any right, title or interest of any nature is created in
favour of the plaintiffs in respect of the movable property under the said consent
terms arrived at between the parties which culminated into a decree and if any
right is created in such immovable property, whether such consent terms/decree
would be require to be compulsorily registered and stamped and if not
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registered, whether plaintiffs can apply for enforcement of such consent
terms/decree. Question that also arises for consideration of this Court is
whether plaintiffs can apply for execution of decree without the same being
drawn up or unless a decree is drawn up, it would not even amount to a decree.
28. It is also urged by the plaintiffs for consideration of this Court that the
chamber summons filed by defendant Nos.2(a) and 2(b) for a declaration that
rescission of the agreement contained in consent terms and decree dated 3 rd
October 2006is validly rescinded is barred by law of limitation. Plaintiffs have
urged that Sections 27 and 28 of the Specific Reliefs Act would not be applicable
to the application filed by defendant Nos.2(a) and 2(b) for such declaration.
29. It is urged by defendant Nos.2(a) and 2(b) that the plaintiffs have
failed to comply with their part of obligation under the said consent terms and it
would not be possible to execute a decree in view of such default on the part of
the plaintiffs and in view of the subsequent development. This Court cannot
supervise the redevelopment of the plot and also the compliance of respective
obligation on the part of each party to commence and complete the
redevelopment of the plot as agreed in the consent terms. On perusal of the
consent terms, It is clear that defendant Nos.1 and 2 had agreed, declared and
confirmed that there shall be a decree in favour of the plaintiffs and against
defendant Nos.1 and 2 for the sum of Rs.4,00,00,000/- only. The plaintiffs also
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agreed to the said declaration. Both the parties also provided that on full
settlement of the said decreetal amount, defendant Nos.1 and 2 had agreed to
provide 50% share, right, title and interest in the said property to plaintiff No.1
on behalf of the plaintiffs. Both the parties agreed to develop the balance 50%
plot on various terms and conditions recorded therein. Upon redevelopment of
the said property, both the parties had agreed to share 50% flat each in the new
building. Even on perusal of the plaint, it is clear that the plaintiffs had prayed
for a declaration that the plaintiffs had first and paramount lien and charge on
the assets of defendant Nos.1 and 2 described in Exhibit-W to the plaint which
included the said property. In my view, on perusal of the plaint as well as
consent terms arrived at between the parties, it is clear that the defendants had
agreed to create right, title and interest in respect of 50% share of the said
property in view of full and final settlement of such decreetal amount of Rs.4
crore and had created 50% rights in favour of the plaintiffs in respect of the flats
to be constructed by carrying out redevelopment of the property. In view of
Section 17(1)(b) of the Registration Act, such transaction would be subject to
registration compulsorily. Section 49 of the Registration Act provides for effect
of non registration of documents required to be registered. It provides that such
documents which are required to be registered under Section 17 and if not
registered shall affect any immovable property comprises therein or confer any
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power to adopt or be received as evidence on any transaction affecting such
property or conferring such power unless it has been registered. In a suit for
specific performance however, such unregistered document may be received as
evidence of a contract or as evidence of any collateral transaction.
30. Supreme Court in case of Bhoopsingh (supra) has held that if a party
under the order or decree who had right, title or interest therein has agreed to
extinguish the same or has created right, title or interest in prasenti in immovable
property of the value of Rs.100 or upwards in favour of other party for the first
time by pretended consent, the document is compulsorily registrable. I am
respectfully bound by the Judgment of Supreme Court in case of Bhoopsingh
(supra) which applies to the facts of this case.
31. Allahabad High Court in case of of Aiaat Husain (supra) has held that
the decree creating or assigning rights in immovable property of the value of
over Rs.100, the decree based of such compromise is compulsorily registrable.
32. This Court in case of Prithvichand Sablok (supra) adverted to earlier
Judgment of this Court in case of Narendra v. Jothalal ((1978) 80 BOMLR 196)
by which it was held that the compromise decree between parties is something
more than a contract. A consent decree passed by a Court on the basis of a
compromise between the parties cannot be equated with a contract but must be
regarded as something more than a contract. In my view, since both the parties
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had agreed that 50% in the said property which belong to defendant Nos.1 and 2
would go to the plaintiffs in full and final settlement of money decree of Rs.4
crores and remaining 50% would be jointly developed, it created a right and
interest in the said immovable property, value thereof was more than Rs.100/-,
thus required registration compulsorily.
33. This Court has also dealt with the Judgment in case of Jacob David v.
Baldev Phatak in which it has been held that decree is a contract between the
parties to which is super-added 'the command of the Judge' or the imprimatur of
the Court'. A consent decree as the very expression indicates a cross-breed
between a contract and a decree. It is neither purely a contract not purely a
decree but has some of the characteristics and incident of both.
34. Supreme Court in case of Union Carbide (supra) has held that
consent decree can be set aside on any ground on which contract can be set
aside. Supreme Court in case of Ruby Sales & Services (supra) has held that in
an instrument under which title has been passed over to a party, it is a live
document transferring the property in dispute from the defendants to the
plaintiffs and thus consent decree falls under the definitions of "conveyance" as
well as "instrument". I am therefore of the view that plaintiffs cannot apply for
execution of such decree not being registered.
35. I am therefore of the view that though the said consent terms on
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which this Court has put its seal, can be set aside on the ground on which a
contract can be set aside. In my view, when the consent terms duly signed by
the parties were taken on record and the consent decree came to be passed by
this Court in terms of such consent terms, the decree came into effect. I am not
inclined to accept the submission of Mr Sanglikar, learned counsel appearing for
the plaintiffs that till decree was drawn up, it can not be construed as a decree
and would not require any registration. On plain reading of rule 314 of
Bombay High court (O.S.) Rules, it is clear that all execution applications shall be
accompanied by a duly certified copy of the decree or order or by the original or
by minutes of decree or order until the decree or order is drawn up. The Court
or Judge in chamber is empowered for good cause to allow execution before
sealing of the decree or order.
36. As far as submission of Mr Sanglikar, learned counsel appearing for
the plaintiffs that there was no decree for specific performance passed by this
Court and thus application for rescission of consent terms under Section 28 is
not maintainable is concerned, on perusal of the plaint it is clear that the
plaintiffs had not only applied for money decree but it also applied for
declaration that plaintiffs had first and paramount lien and charge on the assets
of defendant Nos.1 and 2 which includes the said property which was agreed to
be developed jointly. On perusal of consent terms, it is clear that in lieu of the
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monetary decree, defendant Nos.1 and 2 had agreed that plaintiffs would be
entitled to 50% of the said property and balance 50% was agreed to be
developed jointly. In my view, even if a party would not have prayed for specific
performance of an agreement in the plaint, by consent of parties, parties could
have agreed to arrive at compromise in respect of the property which was not
subject matter of such suit for the first time and can agree for specific
performance. It is not in dispute that decree was passed in terms of such
consent terms duly singed by both the parties.
37. This Court in case of Ashok Thapper (supra) has adverted to the
Judgment of Division Bench of Madras High Court in case of M. Pappu Reddiar v.
Amaravathi Ammal & Ors. and has held that if the consent decree or order in the
suit or proceeding covered the property, although it was not in the plaint or in
dispute, such property constituting, as it does, an inseparable part of the
consideration for the compromise, may be regarded as the subject matter of the
suit because the decree passed on the basis of the compromise cannot stand
without that property. It is held that if by the amendment, it was intended that
if the property was not in the plaint schedule, the consent decree should not be
exempted from registration, the phraseology actually employed by Section 17(2)
(vi) has failed to achieve the objective. I am in respectful agreement with the
view taken by the Division Bench of Madras High Court in case of M. Pappu
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Reddiyar (supra). Since both the parties had agreed that plaintiffs shall become
entitled to 50% of the said property towards satisfaction of a money decree and
the balance 50% was to be developed jointly and this Court having passed a
decree in terms of such agreement recorded in the consent terms, in my view, it
cannot be said that there was no decree passed for transfer of immovable
property or no decree was passed for specific performance. In my view, the
entire consent terms which has culminated into decree, has to be read as a
whole. On perusal of Section 28 of the Specific Reliefs Act, in my view, consent
decree can be rescinded on satisfaction of the conditions provided in Section 28.
I am thus, not inclined to accept the submission of Mr Saglikar, learned counsel
for the plaintiffs that Section 28 of Specific Reliefs Act is not applicable to the
facts of this case.
38. As far as submission of Mr Sanglikar that the decree passed by this
Court based on such consent terms, cannot be rescinded unilaterally by the
defendants is concerned, since the parties arrived at an agreement regarding the
development of the property and created an interest in the property in favour of
the plaintiffs on the terms and conditions recorded therein, any party to such
agreement which culminated into a consent decree can apply for rescission
thereof in accordance with law. It cannot be said that the said consent terms
which were culminated into a decree cannot be rescinded unilaterally even if
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conditions under Section 28 of the Specific Relief Act are satisfied.
39. It is the case of the defendants that plaintiffs did not comply with their
obligation under the consent decree, whereas allegation of the plaintiffs is that
defendants did not comply with their obligation under the said consent decree.
It is the case of the plaintiffs that plaintiffs took various steps to commence
construction on the said property and have made various payments on behalf of
the defendants to various parties and has spent substantial amount for purchase
of TDR, payments made to various professionals, municipal corporation etc. It is
the case of the defendants that plaintiffs did not get the plan sanctioned within
time prescribed nor has produced such copy of sanctioned plan for perusal of
defendants or this Court. Defendants have also disputed the payments alleged to
have been made by the plaintiffs on behalf of the defendants or alleged to have
been incurred for obtaining various sanctions and purchase of TDR etc. Though
at the time of oral arguments, this Court inquired from the learned counsel
appearing for the plaintiffs whether in view of such dispute raised by the
defendants on the factual aspect regarding compliance of the obligation on the
part of the plaintiffs or not whether plaintiffs seek to lead any oral evidence in
support of such allegations, learned counsel appearing for the plaintiffs did not
propose to lead any oral evidence and chose to argue the matter on the basis of
documents on record. It must be placed on record that defendants had disputed
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all such payments alleged to have been made by the plaintiffs to various parties.
In support of the submission of Mr Sanglikar that plaintiffs had taken steps to
commence development on the plot and plans were already sanctioned by the
municipal corporation, reliance was placed by the plaintiffs on an undated letter
addressed by M/s S.P. Associates/Architects to plaintiff No.1 alleging that
municipal commissioner had already approved various concessions including
staircase, lift and lobby area free of F.S.I by charging premium on 29 th December
2008, that TDR has been loaded for utilization on the plot on 2 nd February 2010.
This undated letter which was annexed to the affidavit in reply, has been
seriously disputed by the defendants. Plaintiffs did not choose to lead any
evidence to place on record whether any such plan was ever submitted by the
plaintiffs and/or approved by the municipal corporation for carrying out
development on the said property. It is not in dispute that it was an obligation
on the part of the plaintiffs to get the plan sanctioned in respect of the suit
property. The obligation of the defendants to hand over vacant possession of the
structures in their possession and to vacate the said portion to enable the
plaintiffs to commence the construction was subject to the plaintiffs producing
copy of the sanctioned plan, commencement certificate and on payment of
compensation for making an alternate arrangement by the defendants. I am
inclined to accept the submission made by Mr Doctor, learned senior counsel for
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the defendants that plaintiffs could not produce copy of the sanctioned plan or
any commencement certificate on production of which the defendants were liable
to vacate from the portion of the said property in their possession.
40. As far as payment of compensation to defendants in the sum of
Rs.50,000/- per month is concerned, it is the case of the plaintiffs that the
plaintiffs had made various payments on behalf of the defendants to third parties
and thus, there was compliance on the part of the plaintiffs in so far as payment
of such compensation is concerned. In my view, plaintiffs could not prove any
payment alleged to have been made by the plaintiffs to the defendants or on their
behalf to third parties. In my view, Mr Doctor, learned senior counsel is right in
his submission that in any event, at this stage, such alternate accommodation
cannot be acquired by the defendants on the same terms and conditions. This
Court cannot supervise all these obligations on the part of both the parties at this
stage and no decree for specific performance can be enforced at this stage. Since
plans are not sanctioned, question of any development on the property did not
arise. In my view, Mr Doctor, learned senior counsel is right in placing reliance
on Sections 14 and 20 of the Specific Relief Act in support of his submission that
the consent terms of this nature by which parties had agreed to develop the
properties on certain terms and conditions and if it is not possible to comply with
such terms and conditions at this stage or at any stage thereafter, and which
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would require continuous supervision of this Court, no specific performance can
be possible or in this case, nor execution of such decree can be possible and thus
rescission of such decree is the only remedy available to the parties.
41. As far as issue of limitation raised by Mr Sanglikar, learned counsel for
the plaintiffs is concerned, on perusal of Art.59 of the schedule to Limitation Act,
it is clear that said Article applies to suit for seeking cancellation and setting
aside an instrument or decree or for the rescission of the contract. It is not in
dispute that defendants have rescinded the consent decree by letter dated 7 th
October 2011. On perusal of the chamber summons filed by defendant Nos.2(a)
and 2(b), it is clear that the defendants seek a declaration that rescission of
agreement containing the consent terms and decree is validly rescinded. This
prayer of the defendants in the chamber summons is opposed by the plaintiffs.
Defendant Nos.2(a) and 2(b) have not filed a suit for cancellation of the consent
decree. In alternate to prayer (a), defendants have prayed for rescission of the
agreement containing the consent terms. It is the case of the plaintiffs on the
other hand that the said consent terms are valid, subsisting and are in existence.
It is defence of the defendants that no such consent terms are subsisting as on
today and the same are already rescinded by the defendants. In my view, Mr
Doctor is right in his submission that Art.137 applies to the chamber
summons/application filed by the defendants for rescission of decree since
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defendants have rescinded the consent decree. If the plaintiffs are aggrieved by
such notice of the defendants rescinding the consent terms, plaintiffs would have
applied for a declaration that plaintiffs are entitled to execute a decree and
rescission by defendants is illegal. In my view, for defending the claim of the
plaintiffs, no limitation applies. In my view Art.59 of schedule to the Limitation
Act, thus would not be attracted to the facts of this case. Art.137 of the
Limitation Act would apply to the chamber summons filed by the defendants.
Art.137 provides for three years period for filing an application for which no
period of limitation is provided elsewhere in the schedule which time would
commence when the right to apply accrues. In this case, the defendants had
rescinded the consent decree by letter dated 7 th October 2011 whereas chamber
summons is filed by defendant No.2(a) and 2(b) in this Court on 15 th November
2011. I am therefore of the view that chamber summons is within time and is
not barred by law of limitation.
42. As far as Judgment of this Court in case of Ashok Thapper (supra)
relied upon by Mr Sanglikar is concerned, the said Judgment is of no assistance
to the plaintiffs on the issue of limitation as the chamber summons is filed by
defendant Nos.2(a) and 2(b) after defendant Nos.2(a) and 2(b) themselves have
rescinded the consent decree.
43. In so far as submission of Mr Sanglikar that since original defendant
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No.2 did not rescind the consent decree during his life time and thus his legal
heirs could not have rescinded the consent decree is concerned, in my view, there
is no merit in this submission of the learned counsel. If consent decree would be
rescinded by the party to the consent terms, same rights can be exercised by his
legal heirs on demise of such party. Legal heirs of such party would step into the
shoes of such party.
44 As far as chamber summons filed by the plaintiffs is concerned, it is
the case of the plaintiffs that since decree has not been drawn up, there is no
decree in the eyes of law and thus, no registration of such order is required and
the plaintiffs be permitted to proceed with execution without the said decree
being drawn up is concerned, in my view, merely because decree is not drawn
up, it cannot be contended that there was no decree passed by this Court. Under
Rule 314 of the High Court (O.S.) Rules, Court has discretionary powers to
permit execution of decree without the decree being drawn up in appropriate
cases. Merely because drawn up decree has to be annexed would not mean that
there was no decree in existence. In my view, there is no merit in submission of
Mr Sanglikar that since the decree was not drawn up, plaintiffs could not have
applied for execution earlier. No notice under Order-XXI Rule 22 has been filed
by the plaintiffs for delay of two years for filing application for execution of
decree.
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45. On perusal of execution application filed by the plaintiffs, it is clear
that plaintiffs have applied for execution only for a money decree and have not
sought to execute the decree for redevelopment of the suit property. On perusal
of the execution application, it emerges that in so far as immovable property is
concerned, the plaintiffs have sought attachment of defendants' 50% share in the
said property so as to recover the said amount of Rs.4,00,00,000/- Mr Doctor,
learned senior counsel submits that since there is no application for execution of
decree for enforcement of right to re-develop the property, no order can be
passed by this Court in respect of the specific performance of right to re-develop
the property. Mr Sanglikar, learned counsel submits that though there is no
relief for redevelopment applied in the application for execution, plaintiffs have
stated so in the affidavit in support of the chamber summons. In my view,
executing Court can consider the application for execution of decree which
admittedly does not include any relief for specific performance to redevelop the
property. In my view, learned senior counsel is right in his submission that no
relief in respect of such immovable properties can be granted in favour of the
plaintiffs. In any event, such decree not having been registered cannot be
existed.
46. Mr Sanglikar submits that even if 50% of the property cannot be
redeveloped for any reasons whatsoever, as far as other 50% of the said property
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owned by defendant Nos.1 and 2 was concerned, such portion of property
already stood conveyed to the plaintiffs towards payment of money decree and
thus no objection can be raised by the defendants in so far as such 50% share in
the property. In my view, entire agreement recorded in consent terms has to be
read and construed as a whole and harmoniously. Agreement arrived at by
parties is such that it can be said that part of the consent terms can be enforced
and remaining part, even if not enforced, the part which can be enforced, shall
be permitted to be enforced. In my view, there is no merit in this submission of
Mr Sanglikar. The obligations of both the parties have to be read together
which are in respect of the entire property and some of the clauses of the consent
terms cannot be read in isolation to the exclusion of other. In my view, the
defendants have made out a case for rescission of the entire consent decree.
47. Mr Doctor, learned senior counsel on instructions, submits that
without prejudice to the rights and contentions of the defendants, defendants are
ready and willing to deposit Rs.4,00,00,000/- in this Court towards full and final
satisfaction of such money decree within such time as this court directs the
defendants to deposit. Learned senior counsel also submits that as far as
grievance of the plaintiffs that defendants have been benefited of implementing
clause-17 of the consent terms to the tune of Rs.40,00,000/- is concerned,
without prejudice to their rights and contentions, defendants are ready and
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willing to deposit even the said amount in this Court towards compliance of
money decree in favour of the plaintiffs. In my view, without prejudice to the
rights and contention of defendants, if the defendants are directed to deposit the
sum of Rs.4,00,00,000/- towards money decree and Rs.40,00,000/- which
according to plaintiffs, the defendants have been benefited, no prejudice would
be caused to the plaintiffs. I am of the view that defendants have rightly
rescinded the consent decree by letter dated 7th October 2011.
48.
Under Sections 28 and 30 of the Specific Reliefs Act, on adjudging the
rescission of a contract, the court may require the party to whom such relief is
granted to restore, so far as may be, any benefit which he may have received
from other party and to make any compensation to him which justice may
require. In my view interest of justice would be met with if defendants are
directed to deposit Rs.4,00,00,000/- towards money claim and Rs.40,00,000/-
which according to plaintiffs, defendants have been benefited, in this Court. I
accordingly pass the following order :
a) Chamber summons No.1756 of 2011 is made absolute in terms of
prayer clauses (a), (c ) and (d). Suit is restored to file.
b) Defendant Nos.2(a) and 2(b) are directed to deposit sum of
Rs.4,40,00,000/- in this Court within four weeks from the date of this
order without prejudice to the rights and contention of the
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defendants.
c) Upon depositing the said amount in this Court, plaintiffs would be at
liberty to withdraw the said amount on furnishing bank guarantee of
a nationalized bank in favour of the Prothonotary & Senior Master
initially for a period of two years and to be extended for like period
after obtaining further orders from this Court.
d) By an order dated 10th October 2011 this Court has allowed prayer (a)
of Chamber summons No.1143/11 filed by the plaintiffs. Rest of the
prayers of chamber summons are rejected. Ad-interim order passed
by this Court in Chamber Summons No.1143 of 2011 is vacated.
e) No order as to costs.
f) Place the matter on board for further directions on 11th December
2013.
( R.D.DHANUKA, J.)
49. Mr Sanglikar, learned counsel appearing for the plaintiffs seeks
continuation of ad-interim order passed by this Court in chamber summons
No.1143 of 2011 and seeks stay of operative part of this Court for a period of six
weeks.
50. On oral application of the learned counsel appearing for the plaintiffs,
ad-interim order passed by this Court in chamber summons No.1143 of 2011 to
continue for a period of six weeks from today. Operation of this order is also
stayed for a period of six weeks from today.
( R.D.DHANUKA, J.)
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