Bombay High Court
Klt Automotive And Tubular ... vs K. Amishkumar Trading Pvt Ltd on 31 October, 2023
Bench: Abhay Ahuja
2023:BHC-OS:12946
IAL 12115-23 in COMSS 193-16.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INTERIM APPLICATION (L) NO. 12115 OF 2023
IN
COMMERCIAL SUMMARY SUIT NO.193 OF 2016
K. Amishkumar Trading Pvt. Ltd. ... Applicant
V/s.
KLT Automotive & Tabular Products Ltd. ... Respondent
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Mr. Chetan Kapadia, Sr. Advocate, a/w Mr. Rohan Agarwal, Mr. Sujit
Lahoti, Ms. Shrushti Relekar, Ms. Tejasvi Kudtarkar i/b Sujit Lahoti and
Associates, Advocates for the Applicant/Original Defendant.
Mr. Shyam Kapadia with Ms. Manorma Mohanty, Mr. Mallikaarjun i/b
S.R. Srivastav & Co., Advocates for the Respondent/Original Plaintiff.
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CORAM : ABHAY AHUJA, J.
DATE : 31st OCTOBER, 2023
PC:
1. This Interim Application filed by the Defendant in the
aforementioned Commercial Summary Suit seeks extension of the time
lines prescribed in the Consent Terms dated 18 th December, 2016 on such
terms as this Court deems fit and appropriate.
2. The Respondent-Plaintiff had earlier filed the aforementioned Suit
against the Applicant-Defendant for order and decree for a sum of Rs.
26,10,41,443.67 together with further interest on Rs. 19,91,93,877.67 at
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the rate of 18% per annum or at such other rates as this Court may deem
appropriate from the date of the Suit till realization.
3. The parties had arrived at a settlement pursuant to which a deed of
settlement dated 22nd September, 2016 was executed between the parties
and the then Managing Director of the Defendant company whereby the
Defendant had agreed to pay to the Plaintiff a sum of Rs. 21 Cr. in full and
final settlement of Plaintiff's claim on terms and conditions contained
therein.
4. However, since Defendant paid only Rs. 12,50,00,000/- against the
agreed sum of Rs. 21 Cr. under the deed of settlement dated 22 nd
September, 2016, and the Defendant had not paid the entire sum of Rs. 21
Cr. and the Plaintiff was entitled to proceed with the Suit to recover the
entire amount, by Consent Terms dated 18 th December, 2018 (the
"Consent Terms") the parties once again negotiated and settled the Suit
on inter alia, the following terms and conditions:-
"5. The parties have once again negotiated and have
settled the above Suit on the following terms and
conditions :-
i) Agreed and declared that the Defendants are
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bound and liable to pay to the Plaintiffs a sum of
Rs.13,60,41,443.67/- (Rupees Thirteen Crores Sixty
Lakhs Forty One Thousand Four Hundred Forty Three
and Paise Sixty Seven Only) together with interest
thereon @ 18% per annum from 01/12/2018;
(ii) The Defendants have agreed to pay and the
Plaintiffs have agreed to accept a sum of
Rs.7,50,00,000/- (Rupees Seven Crores Fifty Lakhs
Only) in full and final settlement of the Plaintiffs' claim
in the above Suit provided the Defendants make the
payment of the said sum of Rs.7,50,00,000/- (Rupees
Seven Crore Fifty Lakhs Only) as provided hereunder
and on the following terms and conditions:-
Sr No. Date Amount
1. On execution of these Consent 50 Lakhs
Terms (vide Pay Order
No.785628 dated 17/12/2018
issued by HDFC bank in favour
of Plaintiff)
2. On or before 22/01/2019 1 Crore
3. On or before 22/02/2019 1 Crore
4. On or before 22/03/2019 1 Crore
5. On or before 22/04/2019 1 Crore
6. On or before 22/05/2019 1 Crore
7. On or before 22/06/2019 1 Crore
8. On or before 22/07/2019 1 Crore
6. It is hereby agreed and declared that the
Defendants shall be allowed a grace period of 15 days
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after each due date. An installment shall be treated as a
"Default", if the same is not paid within the said grace
period of 15 days by the Defendants to the Plaintiffs. In
the event of a Default, a Decree in favour of the
Plaintiffs and against the Defendants for the amount of
Rs.13,60,41,443.67/- (Rupees Thirteen Crores Sixty
Lakhs Forty One Thousand Four Hundred Forty Three
and Paise Sixty Seven Only) mentioned in Clause
No.5(i) above (less the amount paid by the Defendants
under Clause 5(ii) above) together with interest thereon
@ 18% per annum from 01/12/2018;
7. The Defendants undertake to this Hon'ble Court
to make the payment to the Plaintiffs as mentioned in
Clause No.5(ii) hereinabove;
8. The Plaintiffs shall forthwith simultaneously upon
execution of these Consent Terms, return to the
Defendants all the post dated cheques given by Mr.
Bhavin K. Thakkar pursuant to the Deed of Settlement
dated 22/09/2016. The details of the post dated
cheques issued by the said Mr. Bhavin K. Thakkar are
enlisted herein below:
Sr No. Cheque No. Amount in Crore Date
Rs.
1) 013847 1.00 30.09.2016
2) 013848 1.00 15.10.2016
3) 013907 0.50 31.10.2016
4) 013908 0.50 30.11.2016
5) 013909 0.50 30.12.2016
6) 013910 0.50 30.01.2017
7) 013911 1.00 28.02.2017
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8) 013912 1.00 31.03.2017
9) 013913 1.25 30.04.2017
10) 013914 1.25 31.05.2017
11) 013915 1.25 30.06.2017
12) 013916 1.25 31.07.2017
13) 013917 1.25 31.08.2017
14) 013918 1.25 30.09.2017
15) 013919 1.25 31.10.2017
16) 013920 1.25 30.11.2017
17) 013921 1.50 31.12.2017
18) 013922 1.50 31.01.2017
19) 013923 1.50 28.02.2017
9. On payment of the amounts mentioned in the
Clause No.5(ii) above, the Plaintiffs undertake to
withdraw the Complaint dated 31/03/2016 filed by the
Plaintiffs before the Economic Offences Wing (EOW),
Mumbai;
10. It is further agreed, declared and confirmed by
and between the parties that upon payment of the
amounts as provided in Clause No.5(ii) above, either
party shall have no claims against each other
whatsoever and all other proceedings filed by the
Plaintiffs against the Defendants shall stand withdrawn"
(emphasis supplied)
5. Accordingly, the parties decided to settle their disputes, whereby
the Applicant/Defendant agreed to pay to the Respondent/Plaintiff Rs.
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7,50,00,000/- in full and final settlement of the claim of the Respondent
in the Suit.
6. On execution of the said Consent Terms, the applicant paid Rs. 50
lakhs out of the total amount of Rs. 7,50,00,000/- to the Respondent and
vide order dated 21st December, 2018, this Court passed a decree (the
"Consent Decree") in terms of the Consent Terms to dispose of the Suit.
7. It is the case of the Applicant/Defendant, which is not disputed by
the Plaintiff-Respondent that pursuant to the aforesaid Consent Terms, the
Applicant has totally paid a sum of Rs. 4,02,00,000/- to the Respondent as
under:-
Sr.No Dates Amount
1 19-12-2018 50,00,000.00/-
2 05-02-2019 1,00,00,000.00/-
3 08-03-2019 1,00,00,000.00/-
4 05-04-2019 1,00,00,000.00/-
5 10-05-2019 2,00,000.00/-
6 10-05-2019 50,00,000.00/-
Total 4,02,00,000.00/-
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8. The Applicant submits that therefore it has to pay a balance amount
of Rs. 3,48,00,000/- towards discharge of its obligations under the
Consent Terms. This application has been filed for extension of the time
period mentioned in paragraph 5 (ii) of the Consent Terms dated 18 th
December, 2018 and in particular the time lines with respect to item no. 5
with respect to the balance amount of Rs. 48,00,000/- and with respect to
items 6, 7 and 8 for an amount of Rs. 1 Cr. each totaling to Rs. 3,
48,00,000/-.
9. Mr. Chetan Kapadia, learned Senior Counsel for Interim Applicant
would submit that the payments with respect to item no. 1 in accordance
with the Consent Terms was made on the execution of the Consent Terms;
with respect to items 2, 3 and 4, the payments were made within the
grace period provided in paragraph 6 of the Consent Terms; and with
respect to item 5 the part payment of 52 lakhs was also made within the
grace period. Learned Counsel would submit that it is only with respect to
the balance amount of Rs. 3,48,00,000/- that extension of time line is
being sought. He would submit that the Applicant is willing to not only
pay the balance amount of Rs. 3,48,00,000/- but also an additional
amount of Rs. 1 Cr. as interest towards the compliance of the Consent
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Terms. Mr. Kapadia submits that the Applicant is willing to make an
upfront payment of Rs. 50 lakhs and the balance amount of Rs.
3,98,00,000/- within a period of six months, in six equal monthly
installments.
10. Learned Counsel relies upon the decision of the Hon'ble Supreme
Court in the case of Periyakkal and Others Vs. Smt Dakshyani 1 to submit
that this Court has jurisdiction to extend the time to make a deposit in a
compromise entered into between the parties to prevent manifest
injustice.
11. Learned Senior Counsel submits that this Court would have
jurisdiction under Section 148 of the Code of Civil Procedure, 1908 ( the
"CPC") to enlarge the period fixed or granted by the Court, even though
the period originally fixed or granted may have expired. Learned Senior
Counsel relies upon the decision of this Court in the case of Marketing and
Advertising Associates Pvt. Ltd. Vs. Telerad Private Ltd. 2 to submit that
Section 148 would also apply to Consent orders. Referring to the decision
of the Hon'ble Supreme Court in the case of Chinna Markathian Alias
1 (1983) 2 SCC 127
2 1969 SCC OnLine Bom 47
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Muthu Gounder and Anr Vs. Ayyavoo Alias Periana Gounder and Ors. 3
learned Senior Counsel would submit that it is a well accepted principle of
statutory interpretation recognized in Section 148 of the CPC that where
the period is fixed or granted by the Court for doing any act prescribed or
allowed by the CPC, the Court may in its discretion from time to time
enlarge such period even though the period originally fixed or granted
may have expired. If a Court in exercise of jurisdiction can grant time to
do a thing, in the absence of a specific provision to the contrary curtailing,
denying or withholding such jurisdiction, the jurisdiction to grant time
would inhere in its ambit, the jurisdiction to extend time initially fixed by
it. The principle of equity is that when some circumstances are to be taken
into account for fixing a length of time within which a certain action is to
be taken, the Court retains to itself the jurisdiction to reexamine the
alteration or modification of circumstances which may necessitate
extension of time. If the Court by its own act denies itself the jurisdiction
to do so, it would be denying to itself the jurisdiction, which in the
absence of the negative provision, it undoubtedly enjoys.
12. Mr. Kapadia, would submit that the Applicant/Defendant has shown
3 (1982) 1 SCC 159
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its bona fides by willing to pay the outstanding amount and would subject
itself to any terms and conditions as this Court would deem appropriate
including by way of an undertaking to this Court, post dated cheques to
the Plaintiff, etc. Mr. Kapadia has also drawn the attention of this Court to
Order 20 Rule 11 of the CPC to submit that this Court in the facts and
circumstances of this case permit that the decreed amount be made by
installments with or without interest.
13. On the other hand, Mr. Shyam Kapadia, learned Counsel for the
Plaintiff/Respondent vehemently opposes the application submitting that
firstly this Court has no jurisdiction to modify the Consent Decree as is
sought to be done by the Interim Application. Learned Counsel refers to
the Consent Terms and submits that pursuant to paragraph 6 thereof, in
the event of a default, the Plaintiff should be entitled to a decree in favour
of the Plaintiff and against Defendant is an amount of Rs. 13,60,41,443.67
as mentioned in Clause 5 (i) less the amount paid by the Defendant under
Clause 5 (ii) together with interest at the rate of 18% per annum from 1 st
December, 2018. Learned Counsel would submit that extending any
timeline referred to in table in paragraph 5 (ii) of the Consent Terms
would amount to modifying the Consent Terms without the consent of the
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Plaintiff and that cannot be permitted. Learned Counsel refers to the
decision of the Hon'ble Supreme Court in the case of Ajanta LLP Vs. Casio
Keisanki Kabushiki Kaisha D/B/A Casio Computer Company Ltd. and Anr. 4
and submits that a Consent Decree creates estoppel by judgment against
the parties and cannot be interfered with unless the decree is vitiated by
fraud, misrepresentation or a patent or obvious mistake and therefore, this
Court has no jurisdiction to pass the orders as prayed for in the Interim
Application as there is neither any fraud or misrepresentation or a patent
or an obvious mistake. Learned Counsel would submit that otherwise
there would be danger that every Consent Decree would be sought to be
altered on this ground by a party to the Consent Decree.
14. I have heard Mr. Chetan Kapadia, learned Senior Counsel for the
Applicant as well as Mr. Shyam Kapadia, learned Counsel for the
Respondent and have considered the rival contentions.
15. The facts as above are not disputed. What the Applicant is seeking
to do is not only to extend the time period granted in the Consent Decree
for making the payments at items 5,6,7 and 8 but also seeking to modify
the said Consent Decree. The payment thus far made under the Consent
4 (2022) 5 SCC 449
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Decree is Rs. 4,02,00,000/-. It is clearly mentioned in Clause 6 of the
Consent Decree that in the event of a default there would be a decree in
favour of the Plaintiff against the Defendant for Rs. 13,60,41,443.67 less
the amount of Rs. 4,02,00,000/-, i.e. Rs.9,58,41,443.67 together with
interest at the rate of 18% per annum from 1 st December, 2018. What the
Applicant is offering to the Plaintiff by way of the Interim Application is
only Rs. 4,48,00,000/-, which offer has been categorically rejected by the
Plaintiff.
16. The decisions in the cases of Periyakkal and Others Vs. Smt
Dakshyani (supra) and Marketing and Advertising Associates Pvt. Ltd. Vs.
Telerad Private Ltd. (supra) as well as Chinna Markathian Alias Muthu
Gounder and Anor Vs. Ayyavoo Alias Periana Gounder and Ors.(supra) ,
lay down settled principles of law, which cannot be disputed and no doubt
this court has jurisdiction under Section 148 of the CPC to enlarge the
time, which would also apply to Consent Decrees. However, this is not an
application merely seeking enlargement of time under the Consent Decree,
but an extension of time resulting in modifying paragraph 6 of the
Consent Terms/Consent Decree as explained above and that in my view
cannot be done without the consent of the Plaintiff or the Judgment
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Creditor. In fact doing so would result in manifest injustice rather than
preventing it. True also that Consent Decrees create estoppel against the
parties to the Consent Terms but as held in the case of Ajanta LLP Vs.
Casio Keisanki Kabushiki Kaisha D/B/A Casio Computer Company Ltd and
Anr.(supra), and cannot be interfered with unless the decree is vitiated by
fraud, misrepresentation or patent or obvious mistake, which is not the
case here.
17. Mr. Chetan Kapadia, learned Senior Counsel has heavily relied upon
the decision of this Court in the case of Marketing and Advertising
Associates Pvt. Ltd. Vs. Telerad Private Ltd. (supra) to submit that this
Court has jurisdiction under Section 148 to enlarge the time in respect to
consent order as well. As mentioned above, there is not and cannot be
any quarrel with the said proposition as that is settled law. However, as
mentioned above, this is not a case of mere enlargement of time; it is a
case, where enlargement of time will result in rendering paragraph 6 of
the Consent Decree otiose, which cannot be the intent or object of Section
148 or Section 151 of the CPC. Any such variation of the terms of the
Consent Decree in my view can only be done with the consent of the
parities to the Consent Decree and not otherwise.
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18. In this view of the matter, the interim application stands dismissed.
Parties to bear their own costs.
(ABHAY AHUJA, J.)
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Signed by: Nikita Gadgil
Designation: PA To Honourable Judge
Date: 01/11/2023 21:30:51
