Bombay High Court
1)Indian Oil Corporation Limited ... vs Mr. Manoj Pransukhlal Sagar on 2 September, 2016
Bench: Anoop V. Mohta
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
Civil Application NO. 2433 OF 2015
AND
First Appeal NO. 780 OF 2009
Mr. Manoj Pransukhlal Sagar )
Aged about 55 years, Occ. Business )
R/o. Queen's Diamond Apartments, 5th Floor, )
5 New Queens Road, Mumbai-400004. )...Applicant
ig (Original Plaintiff)
Respondent in First
Appeal)
versus
1.Indian Oil Corporation Ltd. Through Senior )
Administrative Manager, Administration Dept., )
Western Region, 254-C, Dr.Annie Besant Road, )
Prabhadevi, Mumbai-400025, India, Concern R/o.)
W-72, for Additional MIDC proprietor Sau.Sunita )
Satish Bakshi. )
2.The Indian Oil corporation Ltd. through the )
Secretary having office at G-9, Ali Yavar Jung )
Marg, Bandra (East), Mumbai-400051. )...Respondents (Original
Defendants)
(Appellants in First
Appeal)
Mr.D.J.Khambata, Senior Counsel with Ms.Anita A.Agarwal and Mr.Ashish
Agarwal, for the Applicant in Civil Appln.No.2433/15.
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Mr.V.A.Thorat, Senior Counsel with Mr.S.S.Kanetkar & Mr.V.A.Sugdare, for
the Respondents in Civil Appln.No.2433/15.
.....
CORAM :
ANOOP V
. MOHTA &
G.S.KULKARNI, JJ.
Reserved on : 19th August,2016.
Pronounced on : 02nd September,2016.
Judgment: (Per G.S.Kulkarni,J.)
1. The Applicant is the original Plaintiff in Special Civil Suit
No.133 of 2004 filed against the Respondents-original defendants. The suit
came to be decreed by the learned Civil Judge, Senior Division, Satara (the
Trial Court) by judgment and order dated 7 April 2009 against which the
Respondents in this application (original defendants) have filed the above
First Appeal. The First Appeal is pending final hearing. In this first appeal
the Applicant (Plaintiff) has filed the present Civil Application on 10 July
2015 under Order 23 Rule 3 of the Code of Civil Procedure inter alia for
the following prayers:-
"(a) this Hon'ble Court be pleased to record the
Compromise at Exhibit "C" and to pass a decree in
accordance with the Compromise in Special Civil Suit
No.133 of 2004 and in First Appeal No.780 of 2009;
(b) this Hon'ble Court be pleased to pass such orders
and directions as are necessary for disposal of the Special
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Civil Suit No.133 of 2004 and First Appeal No.780 of
2009 in view of the Compromise and decree;"
We refer to the parties as they stand in the Civil Application.
2. The factual antecedents are as under:-
The Applicant is the owner of a residential bungalow (suit
premises) situated at Mahabaleshwar which stands on a plot of land leased
by the Government of Maharashtra.
3. The Respondents-Indian Oil Corporation was in occupation of
the suit premises as a licensee under a leave and licence agreement. The
case of the Applicant was that though the Respondents agreed to vacate the
premises on termination of the licence and/or licence coming to an end by
efflux of time, the Respondents failed to vacate and continued to
wrongfully withhold the suit premises. The Applicant therefore filed a civil
suit seeking a decree of possession of the suit premises alongwith mesne
profit. The Respondents contested the suit. By a judgment and order dated
7 April 2009 the trial Court decreed the Applicant's suit in the following
terms:-
"1. The suit of the plaintiff is decreed with costs.
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2. Defendant Nos.1 and 2 shall and do hand over
vacant and peaceful possession of the property in dispute
more particularly described in para 1 of the plaint, to the
plaintiff within a period of two months from the date of
this order, failing which plaintiff is at liberty to recover the
possession by following due process of law.
3. Interim reliefs granted, if any, in favour of the
plaintiff shall accordingly stands confirmed.
4. Separately inquiry be made in respect of mesne
profits.
5. Decree be drawn accordingly."
4. The Respondents being aggrieved by the judgment and decree
have preferred the above First Appeal, which has been admitted by an
order dated 8 July 2009. The Respondents also filed a Civil Application
No.2213 of 2009 seeking a stay on the execution of the decree pending the
hearing of the First Appeal. By an order dated 15 July 2009 passed on the
said Civil Application, a statement on behalf of the Respondents-judgment
debtors was recorded that the Respondents are ready and willing to deposit
an amount of Rs.1,00,000/- per month from April,2009 in the trial Court.
It was further directed that the arrears for the period from April to
July,2009 shall be deposited within four weeks and for the month of
August,2009 onwards, an amount of Rs.1,00,000/- shall be deposited with
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the trial Court on or before 15 th day of each month. It was directed that
the trial Court shall invest the amount so received in fixed deposit in a
nationalised bank, initially for a period of three years and thereafter for the
like period, during the pendency of the appeal. On these conditions, the
Civil Application was allowed in terms of prayer clause (a). It is not in
dispute that in pursuance of the orders passed by this Court, the amounts
were deposited by the Respondents and so far it is not withdrawn by the
Applicant though the Applicant had desired to withdraw the same and
orders in that regard were passed.
5. The case of the Applicant in this application is that during the
pendency of the above First Appeal, the parties decided to resolve the
dispute and accordingly a meeting was held between the parties on 8
November 2011 which was attended by four senior officers of the
Respondents and the Applicant. An agreement was arrived at between the
parties. The parties recorded the agreement in a document titled as
"Minutes of the meeting held between IOC and Shri.Manoj Sagar (Owner of
the property on which officers Holiday Home at Mahabaleshwar is located),
on 8 November 2011 at Western Regional Office." (for short "the minutes")
As the relief in this application is for recording of a compromise under the
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provisions of Order 23 Rule 3 of the Code of Civil Procedure, in terms of
this document, it would be appropriate to extract the contents of the said
minutes of the meeting which reads thus:-
" Minutes
of the meeting held between IOC and Shri.Manoj Sagar
(Owner of the property on which officers Holiday Home at
Mahabaleshwar is located), on 8 November 2011 at Western
Regional Office.
In order to sort out the issue of vacation of the property belonging to
Shri.Manoj Sagar on which IOCL is operating the Officers Holiday
Home leading to litigations, a joint meeting was organized consisting
of IOCL officers and Shri.Manoj Sagar at Western Regional Office of
IOCL. The following were presetn :-
IOCL
1. Shri.M.K.Mukherjee - DGP(M&T), WR
2. Shri.S.K.Maity-CFM, WR
3. Shri.A.P.Khakras - Ch. A&W Manager, WR
4. Shri.K.M.Reddy, Manager (Law), WR
and
Shri.Manoj Sagar, Owner of the property on which Officers Holiday
Home at Mahabaleshwar is located at Mount Unique Bungalow, CTS
No.98, Near Tehsil Office, Mahabaleshwar.
The committee extended a warm welcome to Shri.Manoj Sagar and
informed that the property of Officers Holiday Home at
Mahabaleshwar situated at Mount Unique Bungalow was with IOCL
for a very long time and that IOCL was willing to find out an
amicable and lasting solution that will be acceptable to both the
parties. Shri.Manoj Sagar also reciprocated and expressed his desire
to have an amicable settlement on the whole issue that has been
pending for a long time. He also expressed his desire to stay in the
said property that he had purchased.
After detailed discussions, where the viewpoints of both the sides
were considered in details, the following points were arrived at as
agreed by all.
1. Both,Shri.Manoj Sagar as well as IOCL shall
withdraw the litigations and file the consent terms in the
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Court.
2. Shri.Manoj Sagar agreed to extend the lease period
for the said property at Mahabaleshwar for a further period
of three years w.e.f. 01.01.2012.
3. Lease rental for the subject property was agreed at
Rs.90,000/- per month w.e.f. 01.04.2009 and will remain
the same till the end of extended lease period.
4. Rupees one lakh per month being deposited by IOCL
in lower court at Satara will be adjusted against the
mutually agreed lease rental from 01.04.2009.
5. It was mutually agreed that within the extended lease
period of three years, IOCL will search and try to finalize an
alternate property at Mahabaleshwar for its Holiday Home.
If IOCL is able to finalize the new Holiday Home property
before the expiry of the contract period of three years IOCL
will handover the existing property to Shri.Manoj Sagar, even
before the expiry of extended lease period of three years.
6. After the expiry of extended lease period, in case,
IOCL is unable to finalise an alternate property for its
Holiday Home, then, any further extension / Renewal of the
contract for the Holiday Home will be at the sole discretion of
Shri.Manoj Sagar, who is the owner of the property.
7. In such case, if the situation warrants, and if
Shri.Manoj Sagar agrees to further extend the lease of the
property to IOCL, the rates of the lease will have to be
renegotiated, considering the prevailing market rates.
8. During the extended period of lease of three years as
mentioned above, IOCL will have no objection in case
Shri.Manoj Sagar desires to renovate the outhouse property
adjacent to the main bungalow.
The meeting ended with a vote of thanks from Shri.A.P.Dhakras.
Sd/- sd/- sd/ sd/-
(M.K.Mukherjee) (S.K.Maity) (A.P.Dhakras) (K.M.Reddy)
DGM(M&I), WR CFM, WR Ch, & W Mgr,WR Mgr (Law),WR
IOCL IOCL IOCL IOCL
SD/
(Shri.Manoj Sagar)
Owner of
Officers Holiday Home,
Mahabaleshwar."
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6. Mr.Khambata, learned Senior Counsel appearing for the
Applicant (original Plaintiff) contends that a perusal of the minutes of the
meeting, clearly indicate that the parties expressly recorded their desire for
an amicable settlement and the terms thereof, which pertain to the
vacating the suit premises. It is submitted that the document clearly
records an agreement between the parties. An emphasis is to the following
wordings as contained in the minutes "After detailed discussions, where the
viewpoints of both the sides were considered in detail, the following points
were arrived at as agreed by all." It is submitted that this is an agreement in
writing. The agreement is that the parties shall withdraw the litigation and
file consent terms in the Court. It is submitted that the applicant on these
terms had agreed to extend the lease period for the said property for a
further period of three years with effect from 1 January 2012. A lease
rental for the said property was also fixed at Rs.90,000/- per month with
effect from 1 April 2009 for the extended lease period. An amount of
Rs.1,00,000/- per month being deposited by the Respondents - IOCL
before the trial Court, was to be adjusted against the mutually agreed lease
rental from 1 April 2009. Mr.Khambata submits that the clauses of the
agreement, were clear, that the parties mutually agreed, that within the
extended lease period of three years, the Respondent will search and try to
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finalize an alternate property at Mahabaleshwar for its holiday home. He
submits that the parties therefore also agreed that if the Respondents were
able to finalize the new holiday home property before the expiry of the
contract period of three years, the Respondents in that case would hand
over the existing property to the Applicant, even before the expiry of the
extended lease period of three years. He submits that the further clauses of
the agreement are significant namely that after the expiry of the extended
lease period, in the event the Respondents were unable to finalize an
alternate property for its holiday home, then, any further extension/
renewal of the contract for the holiday home was agreed to be at the sole
discretion of the Applicant who is the owner of the property, and in such a
situation, if only the Applicant agreed to a further extension of lease of the
property to the Respondents, the rates of the lease were required to be
renegotiated considering the prevailing market rate. Our attention is also
drawn to a further clause that during the extended period of lease of three
years, the IOCL- Respondents would have no objection in case the
Applicant wants to renovate the outhouse property adjacent to the main
bungalow.
7. Mr.Khambata submits that the document/Minutes, containing
the said agreement has been signed by four senior officers of the
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Respondents as also Applicant and this is not disputed by the Respondents.
It is further submitted that further the parties have completely acted upon
this document. To demonstrate this, the learned Senior Counsel has
placed reliance on the tender bearing
No.WR/HR/ADMN/MAHABALESHWAR/PT-03/11-12 ("Exhibit F" to the
Civil Application (page 60)) issued by the the Respondents seeking
alternative accommodation on lease/outright purchase, for Officers
Holiday Home at Mahabaleshwar. It is further submitted that acting under
this agreement, the Applicant by his letter dated 25 December 2013
addressed to the Respondents had requested to hand over the possession of
the outhouse for starting of renovation work. This was replied by the
Respondents by letter dated 8 January 2014, informing the Applicant that
instructions in that regard to enable the Applicant to undertake the
renovation, were issued to the caretaker of the holiday home and that an
endorsement was made on the said letter by the higher officials that the
vacant and peaceful possession of the outhouse be given to the Applicant
on 22 January 2014 as per the instructions of the Respondents - DGM I/C
(HR), WR - Mr.Dilip Hari.
8. Mr.Khambata for the Applicant has thereafter has placed
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reliance on the letter dated 12 June 2014 addressed by the Applicant to the
Executive Director (Regional Services) of the Respondents, requesting the
Respondents to surrender the possession of the suit premises as agreed in
the said minutes/agreement. In this letter the Applicant recorded that the
Applicant had undergone a angioplasty by implanting stents and that as per
Doctor's advice he intends to permanently reside at Mahabaleshwar and,
therefore, the Applicant desired to have vacant and peaceful possession of
the suit premises on 31 December 2014 as agreed between the parties. It
was also recorded that as agreed between the parties, the Respondents
should instruct their lawyers to withdraw the pending litigations and
initiate the process of filing consent terms in the High Court and inform the
further steps to be taken in that regard in the mutual interest of the parties.
Mr.Khambata has also drawn our attention to the Respondents' letter dated
4 July 2014 addressed to the Applicant informing the Applicant that the
Respondents were making efforts to identify alternate property for their
use, however, they could not succeed in that regard. The Respondents also
recorded that as regards the request of the Applicant for withdrawal of the
litigation, it was stated that since the legal action was initiated by the
Applicant, the responsibility of withdrawing the case vested with the
Applicant and that the Respondents were willing to co-operate in that
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regard. Mr.Khambata would further rely on the correspondence between
the parties to show that the Applicant himself, had helped the Respondents
to locate the alternate properties. On the basis of this correspondence it is
submitted that there is not a iota of doubt that the parties acted upon the
agreement on each of the aspects recorded therein.
9. Mr.Khambata also relies on the consent terms which came to
be forwarded by the Applicant to the Respondents in pursuance of the
agreement as contained in the said minutes dated 8 November 2011. He
submits that by an E-mail of the Respondents dated 11 December 2014 the
Applicant was for the first time informed, that based on the management's
approval and legal opinion, the following changes would be incorporated
in the consent terms:- "(i) Vacation of premises will be on finalising a
suitable property, (ii) Amendments will be made by our advocate for
protecting IOC interest." The Respondents in this e-mail also recorded that
a final draft of the consent terms once approved by the Respondents'
management, would be forwarded to the Applicant at the earliest.
10. Mr.Khambata, therefore, submits that the Respondents never
disputed the agreement as contained in the minutes dated 8 November
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2011 which in fact was completely acted upon between the parties. It is
submitted that on the terms as agreed therein, extension of three years was
granted to the Respondents. He submits that there is no dispute on this. It
is submitted that during this period of three years, the Respondents had
also taken all the steps to find out an alternate accommodation, as also
appropriate consent terms were prepared and they were forwarded to the
Respondents. Mr.Khambata submits that the only defence which is now for
the first time raised in the affidavit in reply as filed on behalf of the
Respondents is that the minutes do not contemplate an agreement as
consent terms were to be filed in the Court. He submits that this is not a
defence taken anywhere in the correspondence exchanged between the
parties. It is submitted that only because the parties agreed in clause (1)
that consent terms between the parties would be filed, is no good, to
contend that there is no agreement in the said document/minutes of the
meeting. It is submitted that the consent terms to be filed in pursuance of
the agreement, is only a consequence of the basic agreement as entered
between the parties and that the agreement cannot be denied. To support
this submission, Mr.Khambata placed reliance on the decision of the
Supreme Court in the case of "Kollipara Sriramulu (Dead) by His Legal
representatives Vs. T.Aswatha Narayana (Dead) by His Legal
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Representatives & Ors.1. Mr.Khambata therefore, submits that the prayers
as made in the application that a compromise be recorded in terms of the
minutes dated 8 November 2011 and a decree to be drawn in accordance
with the compromise are the reliefs entitled to the Applicant.
11. Per contra Mr.Thorat, learned Senior Counsel appearing for the
Respondents has opposed the application. In support of his submission he
placed reliance on the three affidavits as filed on behalf of the
Respondents, and the further affidavit filed by Mr.B.Ashok, the Chairman of
the Respondents filed in pursuance of the directions of this Court in its
order dated 9 October 2015 and 17 December 2015. Mr.Thorat, learned
Senior Counsel for the Respondents has made the following submission in
opposing the application:-
(I) That the minutes dated 8 November 2011 which records the
agreement between the parties are not signed on behalf of the
Respondents-Indian Oil Corporation Limited which a legal entity but it is
signed by the Officers and/or whom no powers were vested by any
resolution of the Board of Directors and, therefore, there is no concluded
agreement the parties. It is submitted that the authority to enter into such
an agreement would lie with the Board of Directors. To support this
1 AIR 1968 SC 1028
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submission, reliance is placed on a document tendered across the Bar titled
as "Deleasing of Immovable Properties Committee"
(II) The said minutes of the meeting did not constitute an agreement as
the contents are merely negotiations. In any case there is no concluded
agreement between the parties as the consent terms were required to be
prepared between the parties and to be filed in the Court. Clauses (6) and
(7) of the agreement as contained in the minutes indicate that the
agreement was on optimistic basis as the contents therein are completely
foreign to the dispute between the parties.
(III) The prayer as made by the Applicant is barred by limitation in view
of Article 137 of the Limitation Act as Article 137 provides for a limitation
of three years for 'any other application' to be filed for which no period of
limitation is provided elsewhere, and which would begin to run from when
the right accrues.
(IV) Sufficient material is not available for recording a compromise in
terms of the minutes dated 8 November 2011.
Mr.Thorat, learned Senior Counsel therefore, submits that the
application deserves to be rejected.
12. We have heard the learned Senior Counsel appearing for the
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parties. With their assistance, we have also gone through the relevant
documents as placed in the paper book. The parties have advanced
submission on the basis of the pleadings of this application. The parties did
not lead any oral evidence.
13. At the outset, we may observe that the Respondents have not
disputed the minutes dated 8 November 2011 and consequently the
agreement contained therein. We first examine the submission of the
Respondents as made across the bar that four officers who signed the said
minutes/agreement on behalf of the Respondents had no authority.
Admittedly there is no specific plea in this regard in the four reply
affidavits as filed on behalf of the Respondents. Mr.Thorat, learned Senior
Counsel appearing for the Respondents has supported this submission
relying on the document tendered during the course of his arguments,
titled as "Deleasing of Immovable Properties Committee". The contents of
which read as under:-
"DELEASING OF IMMOVABLE PROPERTIES COMMITTEE
SCOPE To approve de-leasing of Company leased
flats/ buildings/ premises and land leased
from Govt. Agencies/ statutory bodies and
private parties of Marketing Division.
CONSTITUENTS As approved by the Board from time to time
CHAIRMAN OF THE As approved by the Board from time to time
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COMMITTEE
QUORUM As approved by the Board from time to time
POWERS:
To consider the requests for de-leasing of company leased flats, buildings,
premises and land leased from Govt. Agencies/ Statutory bodies and private
parties in line with the approved policy guidelines for deleasing of Ros.
(Premises leased by the Corporation (1) for the residential use of specific
employees and (2) Transit camp or Guest House on completion of lease
period or when corporation owned facilities are ready before expiry of such
lease are not required to be considered by De-leasing Committee and would
be approved by the respective Divisional Director).
14. The contention on the basis of this document is that any act
contrary to these instructions would not be binding on the Respondent-
Company. Mr.Thorat, however, has not been able to show as to what is the
nature of this document, whether it is a part of the Articles of Association
or a part of any resolution, and how it would be applicable qua the
Applicant. Thus, there is much substance in the contention as urged on
behalf of the Applicant that this document being not placed on record in
the four affidavits filed on behalf of the Respondents, ought not be
considered. The Applicant would submit that the said document as it
stands, also does not support the case of the Respondents as it only
pertains to 'Deleasing of Immovable Properties Committee.' Nothing is
reflected which would show that the four officers who had signed the said
Minutes of the Meeting had no authority. Considering the said document
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we feel that there is much substance in the Applicant's contention.
Admittedly, the case of lack of authority in these four officers to sign the
minutes of the meeting is not pleaded in the four substantive affidavits as
filed on behalf of the Respondents including the affidavit filed on behalf of
the Chairman of the Respondents. We may thus observe that this defence
of lack of authority as urged on behalf of the Respondents appears to be
clearly an afterthought and totally unsubstantiated. In any event what is
most significant that in the entire correspondence between the parties right
from 8 November 2011 (date of the Minutes of the meeting/agreement)
there is no whisper in this regard. In fact the entire conduct of the
Respondents is completely otherwise, the Court surely cannot be unmindful
of this factual position to record any contrary finding. In the absence of any
basic pleadings in that regard in the replies as filed on behalf of the
Respondents, such plea remains only a lame defence. We, therefore, reject
this submission as urged on behalf of the Respondents.
16. We are also surprised at the stand of the Respondents and
significantly when the Respondent is a public body. We cannot be
unmindful of the fact that four officers who have signed the minutes of the
meeting in question would do so without any authority and if at all they
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have undertaken this act as a mistake or unauthorised act, then we do not
find anything which would in any manner indicate that the management of
the Respondents has considered such an act as a mistake and it intended to
rectify the same. There is not an iota of material in this regard and, thus
the oral stand in this regard, as taken by the Respondents is, in our
opinion, absolutely to unreal and sham. Interestingly on this background
the Chairman of the Respondents has taken a completely contradictory
stand. In para 8 of his affidavit, he for the first time, after three affidavits
are already filed, contends that the said minutes of the meeting were based
on a "without prejudice" discussion, and those minutes were drawn for
further steps to be taken by both parties as the final decision in regard to
the suit premises would rest with the Board of Directors. Having
considered the earlier three affidavits which were filed by the senior
officers namely two affidavits by Mr.M.S.Ghai, the Chief A&W Manager,
Western Region and one affidavit Mr.Dilip Hari, General Manager (Human
Resource) and which form part of the record and not withdrawn by the
Respondents, we are of the clear opinion that in raising a "without
prejudice plea" by the Chairman of the Respondents in paragraph 8 of his
affidavit is completely an afterthought. Moreover, the 'without prejudice
plea' is not substantiated by any document. It is for this reason that all the
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three earlier affidavits do not make a whisper on this issue. On what basis
the Chairman of the Respondent is making this averment is completely
unknown apart from being contradictory to the pleas in the earlier
affidavits filed on behalf of the Respondents. As regards the Chairman's
next contention that "the final decision in regards the suit premises" would
rest with the Board of Directors is also not substantiated. There is no
material placed on record to show that everything what had happened with
the suit premises was only on a decision of the Board of Directors and not
otherwise. The Chairman on one hand is accepting in totality the said
minutes of the meeting which contained the agreement between the
Respondents. The Chairman does not dispute the authority of the four
officers to sign the Minutes. If this be the position, then the contentions
that the final decision would be with the Board of Directors in respect of
the suit premises, cannot be accepted.
17. Now coming to the next aspect as to whether the minutes
dated 8 November 2011 would be an agreement and as to whether the
parties intended to act upon the same. The answer to this would be in
affirmative inasmuch as a perusal of the minutes dated 8 November 2011
clearly indicates that it is an agreement between the parties and the same
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pertains to the suit premises. The Agreement specifically records the terms
which are agreed between the parties and noted by us above. It also
appears to be indisputed that the parties have acted upon the agreement as
recorded in the minutes. This can be clearly seen from the following facts:-
(i) The Respondents issued a tender to search for an alternate property.
(ii) It is recorded in the various letters that a search for alternate
accommodation is undertaken, however, it could not bear fruits.
(iii) The Applicant also assisted the Respondents in searching alternate
properties.
(iv) The Applicant forwarded the consent terms to be filed in the Court.
The Respondents having received the consent terms by their letter
addressed to the Applicant dated 11 December 2014 stated that changes
would be made in the consent terms in respect of vacating of the premises
on finalizing a suitable property and that amendments would be made by
the Advocate for protecting the interest of the Respondents.
18. Thus, a perusal of the minutes dated 8 November 2011 leaves
no manner of doubt that there is an agreement between the parties.
Moreover, the above facts clearly demonstrate that the Respondents at all
material times were conscious of the agreement and further took steps and
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acted upon the same. It however appears that only because the
Respondents could not locate an alternate property and when it came to
surrendering the possession of the suit premises as agreed in the said
minutes/agreement dated 8 November 2011, the Respondents changed
their stand by its letter dated 11 December 2014 addressed to the
Applicant by taking a position contrary to the agreement to record that
based on the management's approval and legal opinion, changes would be
incorporated in the consent terms as also the vacating of the premises will
be only on finalizing suitable property and that amendment would be made
by the Advocate for the Respondents for protecting IOC interest. This
stand on behalf of the Respondents clearly indicates a turn around on the
part of the Respondents. In fact when the Respondents say this, they
overlook that there is a placit acceptance of the agreement as contained in
the minutes. Also the submission on lack of authority on the part of the
officers who signed the minutes falls to the ground. Considering these
facts, we cannot countenance the submission made on behalf of the
Respondents that there is no agreement between the parties as recorded in
the minutes dated 8 November 2011 and that the same pertains to the suit
premises being subject matter of the present pending appeal.
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19. We do not find any material on record which would indicate
that the Respondents had at any point of time disputed this agreement as
contained in the minutes. It is also clear that the Respondents' submission
as regards the lack of authority to the four officers who have signed the
agreement, the same is unsuccessfully defended as noted by us above. The
learned Senior Counsel for the Applicant, would thus be correct in
contending that the Applicant was never put to notice of lack of authority
of these officers who have signed the minutes, and that if such lack of
authority was to be pleaded, then, in that case the Applicant would have
asserted its case on different issues including the principles and the
doctrine of indoor management and that in the absence of such pleadings,
there can be no other influence that the officers who have signed the
minutes of the meeting / agreement had authority in that regard and that
the said document was binding on the Respondents.
20. The next contention as urged on behalf of the Respondents is
that the minutes cannot be accepted to be compromise inasmuch as the
parties were to undertake a further act of filing consent terms and
therefore, the agreement as contained in the minutes cannot be regarded
as a conclusive agreement. We do not agree. It cannot be accepted that
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only because the parties were required to file consent terms, the basic
agreement as contained in the minutes of the meeting can be disregarded.
The filing of the consent terms was only consequence of the agreement
entered between the parties. The agreement as contained in the minutes
however remains intact and undisturbed. Its existence is surely not
dependent on the consent terms which the parties decided to file so as to
give a formal burial to the disputes. What we observe is that the
agreement was intended to ultimately end the litigation. The parties
accordingly acted upon the terms as contained in the agreement. Thus as a
consequence of all these actions as also some other understanding not
necessarily touching the dispute the parties agreeing to file consent terms
is no fetter. There is nothing wrong in this approach. The basic agreement
which is the foundation of the subsequent actions of the parties cannot be
denied by the parties. The law in this regard is well settled. The reliance in
this context on behalf of the Applicant to the decision of the Supreme Court
in the case Kollipara Sriramulu (supra) is apposite. The Supreme Court
has observed that a mere reference to a future formal contract will not
prevent a binding bargain between the parties. The observations of the
Supreme Court in paragraph 3 read thus:-
"3. We proceed to consider the next question raised in these
appeals, namely whether the oral agreement was ineffective
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because the parties contemplated the execution of a formal
document or because the mode of payment of the purchase
money was not actually agreed upon. It was submitted on
behalf of the appellant that there was no contract because the
sale was conditional upon a regular agreement being executed
and no such agreement was executed We do not accept this
argument as correct. It is well-established that a mere reference
to a future formal contract will not prevent a binding bargain
between the parties. The fact that the parties refer to the
preparation of an agreement by which the terms agreed upon
are to be put in a more formal shape does not prevent the
existence of a binding contract. There are. however, cases where
the reference to a future contract is made in such terms as to
show that the parties did not intend to be bound. until a formal
contract is signed. The question depends upon the intention of
the parties and the special circumstances of each particular
case. As observed by the Lord Chancellor (Lord Cranworth) in
Ridgway v. Wharton (1) the fact of a subsequent agreement
being prepared may be evidence that the previous negotiations
did not amount to a concluded agreement, but the mere fact
that persons wish to have a formal agreement drawn up does
not establish the proposition that they cannot be bound by a
previous agreement In Von Hatzfeldt-Wildenburg v.
Alexander(1) it was stated by Parker, J. as follows :
"It appears to be well settled by the authorities that if the
documents or letters relied on as constituting a contract
contemplate the execution of a further con- tract between
the parties, it is a question of construction whether the
execution of the further contact is a condition or term of
the bargain or whether it is a mere expression of the
desire of the parties as to the manner in which the
transaction already agreed to will in fact go through. In
the former case there is no enforceable contract either
because the condition is unfulfilled or because the law
does not recognize a contract to enter into a contract. In
the latter case there is a binding contract and the
reference to the more formal document may be ignored."
(emphasis supplied)
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21. As regards the contention of the Respondents on limitation, we
may observe that the issue of limitation is not pleaded in any of the reply
affidavits. The oral plea is on the basis of the Article 137 of the Limitation
Act which provides for a limitation of three years for 'any other application'
to be filed for which no period of limitation is provided elsewhere, and
which would begin to run from when the right accrues. In our opinion, the
plea that the prayers in the application are barred by limitation as urged on
behalf of the Respondents, cannot be sustained. Admittedly the
Respondents have failed to vacate the suit premises on the expiry of three
years of the extended lease period (i.e. on or before 31 December 2014).
The cause of action to seek enforcement of the agreement as contained in
the minutes would arise with effect from 31 December 2014. In the fact
situation, there is no need to relate back the cause of action to the date on
which the agreement in the said minutes (i.e. 8 November 2011) came to
be executed. The right to sue has accrued to the Applicant only when the
Respondents refused to vacate i.e. after the expiry of the three years on 31
December 2014. This application was filed on 10 July 2015. The
application is therefore fully within limitation from applying Article 137 of
the Limitation Act.
22. Reliance on behalf of the Applicant on the decisions of the
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Supreme Court in the case of "M/s.Silver Screen Enterprises Vs. Devki
Nandan Nagpal"2 and in the case of "K.Venkata Seshiah Vs. Kanduru
Ramasubbamma (Dead) by LRS"3 is appropriate. The Supreme Court in
the case of M/s.Silver Screen Enterprises (supra), has held that it is open
to a party to a suit to approach the Court even in an appeal on the basis of
the compromise and seek a relief of a decree in accordance with the
compromise. Their Lordships in paragraph 3 have observed as under:-
"3. The compromise in question specifically says that
the parties thereto have compromised all their disputes
mentioned therein including the two matters referred to
earlier. On the basis of that compromise both the
appellant and the respondent were required to withdraw
all the pending proceedings excepting the one mentioned
earlier. There is no dispute that one of the matters
compromised is that relating to the appeal with which we
are concerned herein. Once a dispute is validly settled out
of Court, it is open to a party to a litigation to move the
Court to pass a decree in accordance with the compromise.
Rule 3 of Order XXIII of Code of Civil Procedure provides
that where it is proved to the satisfaction of the Court that
a suit (which expression includes an appeal) has been
settled wholly or in part by any lawful agreement, the
Court shall order such agreement, compromise or
2 1970(3) SCC 878
3 (1991)3 SCC 338
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satisfaction to be recorded and shall pass a decree in
accordance therewith so far as it relates to that suit. This
is a mandatory provision. It is some-what surprising that
the High Court should have felt itself helpless under the
circumstances of the case to do justice between the parties.
Clause 12 of the compromise provides that if the
respondent does not carry out the terms of the
compromise, he shall be held responsible for all the losses
that the appellant may suffer because of its breach. This
clause does not preclude the appellant from putting
forward the compromise and asking the Court to dismiss
the appeal in accordance with its terms. Both the factum
and the validity of the compromise are not in dispute.
Hence, the appellate court was bound to accept the same.
That Court acted in accordacne with law in dismissing the
appeal. Hence, the Court was clearly wrong in interfering
with the judgment of the appellate court."
The Supreme Court in the case of K.Venkata Seshiah (supra) has held that
once a compromise is genuine and lawful, same is required to be acted
upon.
23. On the conspectus of the above facts and the position in law,
we are of the clear opinion that the minutes dated 8 November 2011 is an
agreement /compromise between the parties pertaining to the subject
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matter of the dispute namely the suit premises. It is duly signed by the
respective parties. As noted above there is nothing on record that the
agreement is not lawful. The compromise clearly records that the parties
intended to completely put an end to the dispute pending in this appeal.
The Minutes of the Meeting/agreement is not disputed by the Respondents
as noted above. Thus, we have no hesitation to observe that the Applicant
proves that the parties intended to compromise the dispute pending in the
appeal under the minutes of the meeting / agreement dated 8 November
2011. It is thus in the interest of justice that we record the compromise
and proceed to decree the suit in terms of the compromise contained in the
minutes of the meeting dated 8 November 2011. We accordingly pass the
following order:-
ORDER
(i) Special Civil Suit No.133 of 2004 is decreed in terms of the
compromise between the parties as contained in the Minutes of the
meeting dated 8 November 2011. The decree passed by the Trial Court
dated 7 April 2009 accordingly stands modified.
(ii) First Appeal No.780 of 2009 stands disposed of in terms of
clause (i) above.
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iii) Applicants are permitted to withdraw the amount which
stand deposited in the Trial Court.
(iv) In view of disposal of First Appeal No.780 of 2009, pending
Civil Application Nos..755 of 2015 and 4203 of 2015 do not survive and
are accordingly disposed of.
(v) Parties to bear their own cost.
At this stage learned counsel for the respondent seeks
continuation of the interim order dated 15/7/2009 for a period of six
weeks. The prayer is opposed by Mr. Agarwal for the applicants. As the
interim order dated 15/7/2009 is in operation till date, it is in the interest
of justice that the said interim order be continued for a period of six weeks
from today. Decree be drawn up accordingly. Civil Application No.2433 of
2015 is allowed in these terms.
(G.S.Kulkarni, J.) (Anoop V. Mohta, J.)
