Smt Bharti Jinendrakumar Diwakar vs Smt. Kalpana Kapurchand Barlota ...
2017 Latest Caselaw 1800 Bom

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             IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                    CIVIL APPELLATE JURISDICTION

                  APPEAL FROM ORDER NO. 276 OF 2016
                                  WITH
                    CIVIL APPLICATION NO. 564 OF 2016
                                    IN
                  APPEAL FROM ORDER NO. 276 OF 2016

        Smt. Kalpana Kapurchand Barlota (Jain) ..          Appellant
             vs.
        Smt. Bharati Jinendrakumar
        Diwakar & Anr.                         ..          Respondents

        Mr. Bhavin Gada I/b. Mr. I. S. Yadav for Appellant.
        Mr. Shirish Joshi with Ms Bhakti Jogal and Mr. Swapan
        Samdani i/b. for Respondents.

                               CORAM : M. S. SONAK, J.

Date of Reserving the Judgment : 06 April 2017 Date of Pronouncing the Judgment : 18 April 2017

JUDGMENT :-

1] Heard Mr. Gada for the appellant and Mr. Joshi for the

respondents.

2] With the consent and at the request of learned counsel for

the parties, the appeal is taken up for final disposal.

3] The appellant, who is original defendant in suit no. 721 of

1996 challenges the order dated 12 December 2015, by which,

learned trial Judge has taken on record the consent terms

signed by the parties and disposed of the suit in accordance

thereof.

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        4]      Mr.     Gada, learned counsel for the appellant, has made

the following submissions in support of this Appeal :

(A) The impugned order is in breach of Order XXIII

Rule 3 of the CPC, in as much as there was no material

on record to record satisfaction that the suit has been

adjusted wholly or in part. He submits that the dispute

between the parties also includes certain shop no. 2,

which however, finds no reference in the consent terms,

on basis of which the impugned order has been made;

(B ) The consent terms on basis of which the impugned

order has been made were signed by the parties on 13

November 2009. On this date, the status quo order

issued by this Court in writ petition no. 7716 of 2003 was

very much in operation. The very signing and execution

of the consent terms by the appellant, was in breach of

such status quo order. The consent terms in such a

situation, could not have been regarded 'lawful'. The

term of 'lawful' as it appears in Order XXIII Rule 3 of the

CPC is required to be widely construed. Any agreement

or compromise, which is in defiance of a status quo

order made by this Court, could never have been

regarded as a lawful agreement or compromise. In as

much as, this aspect has not been appreciated by the

learned trial Judge, the impugned order taking on record

such consent terms disposing of the suit on the basis

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thereof is clearly illegal and warrants interference. In

this regard, reliance was placed upon the decision of the

Anand Mahadeo Godbole vs. Achut Ganesh Godbole

& Ors.1, Jethalal C. Thakkar vs. Lalbhai Hiralal

Shah2 and Arjan Singh vs. Punit Ahluwalia & Ors.3 ;

( C) The consent terms referred to and concerned a

third party i.e. Mr. Diwakar Dwivedi. Such consent terms

could not have been taken on record without impleading

the said Dwivedi. It was submitted that in the consent

terms, which affected the rights of third parties can

never be accepted and the decree made on the basis

thereof. Reliance was placed upon the decision of

Calcutta High Court in the case of Dooly Chand

and the Bombay

High Court in Re: Kelly and Henderson P. Ltd. L. Jai

Kulbir Singh & Anr. vs. Kelly and Henderson Pvt.

Ltd.5

(D) The evidence on record bears out that disputes

have broken out between Dwivedi, who was supposed to

be the assignee of the respondent - plaintiff and the

respondent. There is some material on record which

suggests that even the cheques issued have since been

dishonoured. In these circumstances, it is submitted that 1 AIR 1981 Bom. 357 2 LXXXVI The Bombay Law Reporter 10 3 (2008) 8 SCC 348 4 AIR 1924 Cal. 722 5 [1980]50 Company Cases 646 (Bom)

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the consent terms should not have been taken on record

and acted upon. In any case, it is submitted that

consequent decree will be either inexecutable or in any

case, will not adjust or settle either wholly or part the

disputes between the parties. He submitted that there is

yet another suit instituted by the appellant seeking for

certain declarations and cancellation in respect of the

original agreement, which is the genesis for the present

suit, which has since been disposed of by the impugned

order. All this, according to the learned counsel, is

sufficient to conclude that there is no genuine

settlement, adjustment or compromise between the

parties.

(E ) The consent terms work out serious injustice to the

appellant/ defendant. The appellant/ defendant has

received only an amount of Rs.12 Lakhs in pursuance of

the consent terms, whereas, the price of the suit flat,

which is now required to be made over to the

respondents or to the respondents assignees, is

substantially high. He submits that it is the duty of the

Court to ensure that the consent terms do not work out

grave injustice to any one party and if that do work out

injustice, then, not to accept such consent terms and

dispose of the suit on basis thereof. It is submitted that

the Court not only has inherent power to go into the

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issue as to whether the consent terms are just and

equitable or not but further, there is a duty enjoined

upon the court to go into this aspect, before, such

consent terms are taken on record and acted upon.

5] Mr. Joshi, the learned Counsel for the respondent -

original plaintiff in the suit, submits that the present appeal is a

clear abuse of the judicial process. He submits that the

appellant, on the basis of consent terms dated 13/11/2009, has

not only received and retained an amount of Rs.12 Lakhs, but

further, has continued in occupation of the suit premises for the

last 8 years, despite having consented to convey and part

possession of the same to the respondents. He submits that the

appellant signed the consent terms quite willingly and there is

not even any allegation of coercion, undue influence, fraud,

mistake or misrepresentation. Upon realisation that there was

a status-quo order in operation, the consent terms were not

even presented to the Court. It is only the status-quo order was

vacated on 21/03/2011 that a motion was taken up to take on

record the consent terms some time in April, 2012. At the

stage when the consent terms tendered and ultimately

accepted, there was no status-quo order in operation, which

disabled any of the parties from requesting the learned Trial

Judge to act on basis of such consent terms. Mr. Joshi further

points out that the dispute in suit no.721/1996 has no nexus

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whatsoever with the dispute in respect of shop no.2. He points

out that Dwivedi is not bound to do anything under the consent

terms and, therefore, there was no question of his

impleadment. He points out that due to the conduct of the

appellant, it is the respondent, who suffered and is suffering

injustice. For all these reasons, he submits that this petition

may be dismissed with exemplary costs.

6] The rival contentions now fall for determination.

7] The dispute between the parties concerns suit flat no. 2,

Ground Floor, Plot No.311, Sher-E-Punjab, Shobhana

Cooperative Housing Society, Mahakali Caves Road, Andheri

(West), Mumbai-400 093(suit premises). The respondents -

plaintiffs have alleged that the suit premises were divided in

two parts by temporary wooden partition. One part was in

occupation of the licensee of the appellant i.e. Kamladevi Jain

and the other part was in occupation of the respondent. In the

plaint it is alleged that the appellant trespassed into the

portion of the suit premises occupied by the respondents by

illegally breaking the locks of the door. On this basis, the

respondents instituted suit no. 721 of 1996 seeking restoration

of possession and other consequential reliefs.

        8]      There was a parallel dispute between the appellant and







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Smt. Kamladevi Jain in respect of the half portion of the suit

premises. This resulted in institution of writ petition no. 7716

of 2003 by Kamladevi's son Shri Prakash Jain. On 1 March

2004, this Court ordered 'status quo' in respect of the portion of

the suit premises, which formed the subject matter of the said

writ petition. On or about 30 October 2009, settlement was

recorded between the appellant and Prem Prakash Jain, in

terms of which , the appellant undertook to pay an amount of

Rs.1,30,000/- to said Mr. Jain. An amount of Rs.1 lakh was

actually paid to Mr. Jain and the balance was to be paid upon

Mr. Jain withdrawing the writ petition. There was some delay in

payment of the balance amount and consequently withdrawal of

the writ petition no. 7716 of 2003.

9] In the meanwhile, on 13 November 2009 i.e. after a

period of hardly 13 days from the date the appellant settled the

dispute with Mr. Jain, the appellant and the respondent signed

minutes of consent, on basis of which, they proposed that Suit

No. 721 of 1996 could be disposed of. Such consent terms, have

been signed by not only the appellant and the respondents but

also their respective Advocates. It is pertinent to note that it is

not even the case of the appellant that such consent terms were

signed by the appellant unwillingly or without understanding

their scope and import. There is not even any allegation that

said consent terms were signed by the appellant whilst reeling

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under any misrepresentation, undue influence, coercion ,

mistake or any such matter.

10] Although, the consent terms were signed by the parties

and their Advocates on 13 November 2009, the same were not

immediately presented to the court for issuance of the consent

decree on the basis of the same. There is merit in the

submission of Mr. Joshi, learned counsel for the respondent that

this was not done precisely because the status quo order issued

by this Court on 1 March 2004 in writ petition no. 7716 of 2003

instituted by the Jains against the appellant, was still in

operation. From the material on record, it is clear that the

consent terms were signed and executed on 13 November

2009, since, hardly 13 days earlier i.e. on 30 October 2009, the

appellant, had virtually settled the dispute with Mr. Jain and all

that remained to be done was payment of balance settlement

amount of Rs.30,000/- by the appellant and the withdrawal of

writ petition no. 7716 of 2003 by Mr. Jain. Ultimately, writ

petition no. 7716 of 2003 was disposed of by this court on 21

March 2011. The status quo order made on 1 March 2004 was

specifically vacated by the said order.

11] Upon vacation of the status quo order, the respondent -

plaintiff, in April 2012, took out a notice of motion, enclosing

along with the consent terms dated 13 November 2009 and

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applied for the issue of consent decree on the basis of the same.

In the meanwhile on account of changes in pecuniary

jurisdiction, the matter was transferred to the City Civil Court,

Mumbai. Initially, the appellant, in the replies filed to the notice

of motion did not raise any of the objections, which are now

raised in the present appeal. However, in installments, such

objections were raised. Considerable time was spent in leading

evidence, mostly upon irrelevant matters. The City Civil Court

by order dated 27 October 2014 however dismissed the

respondents notice of motion. Against such dismissal, the

respondents filed writ petition no. 502 of 2015, which was

converted into civil revision application no. 583 of 2015. By

order dated 16 October 2015, the order made by the City Civil

Court was set aside and the matter was remanded to the City

Civil Court for fresh disposal of the notice of motion having

regard to the provisions of Order XXIII Rule 3 of CPC. The City

Civil Court, upon consideration of the matter afresh, has made

the impugned order dated 12 December 2015, taking on record

the consent terms and issuing a consent decree in terms

thereof.

12] Now we are only concerned with the suit premises i.e. flat

no.2. The suit and the appeal have no nexus with the disputes,

if any, concerning shop no.2. Therefore, there is no merit in the

first contention of Mr. Gada that the disputes between the

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parties, have not been adjusted wholly and, therefore, the

consent terms ought not to have been taken on record.

Incidentally, Order XXIII, Rule 3 of C.P.C. contemplates

adjustment in a suit either wholly or in part as well.

13] From the material on record, it does appear that the

dispute in W.P.No.7716/2003 between Jains and the appellant

was almost settled on 30/10/2009. The terms of settlement

required the appellant to pay to Jain, a sum of Rs.1,30,000/-,

pursuant to which, Jain had undertaken to withdraw the Writ

Petition, which would naturally lead to dissolution of the status-

quo order dated 01/03/2004. The appellant did pay a sum of

Rs.1,00,000/- to Jain. It appears that there was some delay in

payment of the balance amount of Rs.30,000/-, as a result of

which, the W.P.No.7716/2003 was disposed of only on

21/03/2011. The order specifically records that the status-quo

order dated 01/03/2004, stands vacated.

14] The consent terms between the appellant and respondent

were signed and executed on 13/11/2009, obviously, in

anticipation that W.P.No.7716/2003 would be soon withdrawn

the status-quo order dated 01/03/2004, soon dissolve.

However, upon realisation that the status-quo order is in

operation, the parties refrained from presenting the consent

terms to the learned Trial Judge for passing of the consent

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decree on the basis thereof. It is only after the status-quo order

was dissolved on 21/03/2011, that the notice of motion was

taken up some time in April, 2012, to take the consent terms on

record and make a consent decree on basis thereof. In these

circumstances, there is really no merit in the second contention

of Mr. Gada that the consent terms were "unlawful', since the

same were in defiance of the status-quo order.

15] Godbole (supra) and Jethalal (supra) take the view that

expression "not lawful" have a wide connotation and include

cases, where the compromise suffers from want of authority or

the exceeding of authority. As on the date of presentation of

the consent terms before the learned Trial Judge, or on the date

when the consent terms acted upon by the learned Trial Judge,

there was no status-quo order in operation. This means that

there was no illegality of whatsoever nature, which was

attached to the consent terms. Therefore, even upon a wide

connotation to the expression "not lawful" as it appears in

Order XXIII, Rule 3 of C.P.C., it is not possible to accept the

second contention of Mr. Gada. Arjan Singh (supra) was a

case, where the Trial Court had accepted the terms during the

subsistence of a restraint order by a Judicial Authority. Since

such are not the facts in the present case, the decision in the

case of Arjan Singh (supra) is clearly distinguishable. Further

it is to be noted that acceptance of Mr. Gada's second

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contention, would virtually amount to award of a premium to

the appellant for what the appellant terms as his own unlawful

act. The appellant, in this case, is bent upon indulging into the

approbation and reprobation. The appellant has been far from

candid to the judicial process. These are only an additional

grounds to reject Mr. Gada's second contention in support of

this appeal.

16] There is no merit in the third contention raised by Mr.

Gada as well. From the perusal of the consent terms, it is clear

that the suit flat had to be conveyed by the appellant to either

the respondent or the respondent's assignee- Dwivedi. This is

not a case where Dwivedi was required to do something under

the consent terms. This was also not a case where the rights, if

any, of Dwivedi, were proposed to be affected even in the

slightest manner. In such a situation, there was no necessity to

implead Dwivedi in the suit, before its disposal on basis of the

consent terms. In Dooly Chand (supra), and in Re: Kelly and

Henderson P. Ltd. (supra), the consent terms had affected the

rights of the third parties and it is in this context that it was

held that the consent terms, which affected the right of third

parties, could not have been accepted, without impleadment of

such third parties.

        17]     The so called subsequent disputes between Dwivedi and








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the respondent, have no nexus with the issue of legality of the

consent decree. Such disputes are quite irrelevant to such

determination. In any case, the objections raised by Mr. Gada,

on behalf of Dwivedi, are really objections, which may arise in

the course of actual execution of the decree. Such objections,

do not in any manner, affect the legality of the consent decree.

Accordingly, there is no merit in the fourth contention of Mr.

Gada.

18] This is certainly not a case, where the consent terms and

the consent decree in pursuance thereof work out to some

serious injustice to the appellant. The appellant, in the year

2009, signed and executed the consent terms quite willingly

and in pursuance thereof, even accepted the amount of Rs.12

Lakhs. This is not a case where there is any inequality of

bargaining power between the parties to the consent terms.

This is purely a commercial transaction, which, both the parties

had entered into, with their open eyes. The terms entered into

between the parties, are by no means unconscionable. These

are routine commercial terms in matters of this nature. As

noted earlier, the appellant, even after accepting the amount of

Rs.12 Lakhs under the consent terms, has resisted for all these

years handing over of possession of the suit premises to the

respondent. In such circumstances, the appellant, can hardly

complain of any injustice. In fact, the record, to some extent,

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bears out that it is the appellant, who has himself, acted

unjustly in the matter. Accordingly, there is no merit in the fifth

contention of Mr. Gada.

19] For the aforesaid reasons, this appeal is required to be

dismissed and the same is hereby dismissed. The appellant, in

the year 2009, settled the matter as evidenced by the consent

terms. For reasons attributable to the appellant, the consent

terms could not be filed on record until 2012. Thereafter, the

appellant raised one objection after the other in instalments.

The objections have been found to be meritless. On the basis of

such objections, however, the appellant not only retained the

amount of Rs.12 Lakhs received by her under the consent

terms, but further, the appellant continued with the possession

of the suit premises as well for all these years. In such a

situation, the conduct of the appellant does sound in the arena

of abuse of judicial process. This appeal is accordingly,

required to be dismissed with exemplary costs, which are

determined at Rs.50,000/-.

20] Accordingly, this appeal is dismissed with costs of

Rs.50,000/-. The amount of costs to be paid or deposited by the

appellant in this Court, within a period of four weeks from

today. The interim relief, if any, is hereby vacated.

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        21]      Civil Application No.564/2016 does not survive and is

        accordingly disposed of.



                                                   (M. S. SONAK, J.)


        22]     At this stage, Mr. Yadav applies for continuation of interim

relief, which was in operation until the pronouncement of this

judgment and order, for a further period of eight weeks from

today. Since the interim relief was already in operation, the

same is continued for a period of eight weeks from today.

However, the appellant is also directed to maintain status-quo

in respect of the suit premises and refrain from creating any

third party rights or parting with the possession of the suit

premises.

(M. S. SONAK, J.) Chandka/SMA