Mr. Rajesh Gupta vs Naman Fincap Limited
2002 Latest Caselaw 635 Del

JUDGMENT

R.C. Jain, J.

1. This civil revision is directed against the order of the learned Additional District Judge dated 14-8-2001 sitting as an executing court, by which the court has declined to execute an order dated 15-12-1999 passed by the learned trial court simply for the reasons that the said order did not specifically contain a direction for the payment of Rs. 50,000/- by the plaintiff to the defendant No.1 although this was one of the conditions of the compromise contained in the joint compromise application Ex. AW. 1

2. The relevant facts to be noted for the disposal of this revision petition are that the respondent herein filed a suit against the petitioner and defendant No. 2, defendant No. 2 was not represented at the trial and was proceeded ex-parte. The plaintiff and defendant No. 1, during the course of the trial, settled the subject matter of the suit and on 15-12-1999 filed a joint application under Order 23 Rule 3 read with Section 151 CPC, the terms of settlement having been fully detailed in Clauses (a) to (d) of para No. 2 of the said application. The learned trial court entertained the said application, recorded the joint statement of a certain Vijay Kumar Aggarwal, Managing Director of the plaintiff company and Sh. Rajesh Gupta, defendant No. 1 who confirmed the said terms contained in the joint application. The application was marked as Ex. AW.1. for the purpose of identification and it was accepted by the court and the suit was ordered to be disposed of in terms of the compromise. However, in the ultimate paragraph of the order the trial court made certain observations and gave directions to defendant No. 2 for the transfer of 300 shares in favor of the plaintiff on furnishing a fresh transfer deed but other terms of the said compromise more particularly that contained in Clause

(c) of para 2 of the application, no specific direction or order was made on the plaintiff to pay a sum of Rs. 50,000/- to defendant No. 1 on the transfer of the said shares in favor of the plaintiff. Subsequently pursuant to the said compromise and the order of the learned trial court dated 15-12-1999, defendant No. 1 transferred the shares in favor of the plaintiff but the plaintiff did not make the payment of Rs. 50,000/- to defendant No. 1 within the stipulated period of 15 days form the date of such transfer of the shares in terms of Clause (c) of the terms and hence defendant No. 1 filed an execution application for recovery of the said amount form the plaintiff. The application was opposed by the plaintiff primarily on the ground that there existed no decree or order against the plaintiff which was liable to be executed. On a narrow construction of the order of the learned trial court dated 15-12-1999, returned a finding that the execution filed by the defendant No. 1 was not maintainable for the simple reason that the learned trial court order dated 15-12-1999 did not contain any specific direction/order on the plaintiff to pay a sum of Rs. 50,000/-

3. I have heard the learned counsel for the parties. Learned counsel for the petitioner has strongly urged that once the parties had settled their dispute/subject matter of the suit through on certain terms which were duly reflated in the joint application EX. AW.1 which in turn was duly affirmed by the parties before the court and were accepted by the learned trial court there remained no ambiguity with regard to the judgment/decree which ought to have been passed pursuant to the said compromise. To support his contention, he has relied upon a Division Bench decision of this court in the case of Hardit Singh Obra v. Daljit Singh 2nd 1974 Delhi 571 where this court has considered the effect of not drawing up a decree on the disposal of a suit based on compromise and held as under:-

"Under Order XXIII rule 3 Civil Procedure Code the court has to accept the compromise as it is, if it is legal. There is no discretion in the Court to add to or vary the terms. Further, the Court has to pass a decree in accordance with the compromise so far as it relates to the suit.

It is the right of the decree holder that a decree embodying the terms of the compromise shall be drawn up by the Court. It is the duty of the Court to draw such a decree and it is not necessary that he party should make any application to the Court for drawing up such a decree or should pursue the matter in the Court for getting the decree drawn up.1 It is a settled principle that the failure of the Court to do its duty to draw up such a decree will not prejudice the rights of the party to execute such a decree. As soon as the compromise is recorded by the Court, the Court becomes bound to pass a decree in so far as it related to the suit thereon, and the appellant as a decree holder has the right to execute the executable part of the decree, irrespective of the question whether the decree was actually drawn up by the Court or not."

4. Reliance is also placed upon a Single Bench decision of this court in the case of Kerala State Coir Corporation Ltd. v. Delhi International (Hotels) Pvt. Ltd. 49 (1993) Delhi Law Times 699 wherein again the question was whether the withdrawal of the suit pursuant to the settlement reached between the parties, an executable decree could have been passed. The Supreme Court has morefully considered this question in a recent judgment in the case of Salkia Businessmen's Association and Ors. v. Howrah Municipal Corporation and Ors. AIR 2001 SCC 2790 about the efficacy of compromise decree and the attempt of the judgment debtor to wriggle out of it at subsequent stages. Taking serious view of this position the Hon'ble Court held as under:-

"We have carefully considered the submissions of the learned Senior counsel on either side. The learned single Judge as well as the Division Bench of the High Court have not only over simplified the matter but seem to have gone on an errand carried away by some need to balance hypothetical public interest, when the real and only question to be considered was as to whether the respondent authorities are bound by the orders passed by the Court on the basis of the compromise memorandum, and whether the proposed move on their part did not constituted flagrant violation of the order of Court very much binding on both parties. The High Court failed to do justice to its own orders. If Courts are not to honour and implement their own orders and encourage party litigants-be they public authorities to invent methods of their own to short circuit and give a go-bye to the obligations and liabilities incurred by them under orders of the Court- the rule of law will certainly become a causality in the process- a costly consequence to be jealously averred by all and at any rate by the highest Courts in States in the Country. It does not, in court view, require nay extraordinary exercise to hold that the memorandum and terms of the compromise in his case became part of the orders of the High Court itself when the orders of the High Court itself when the earlier writ petition was finally disposed of on 13-2-1991 in the terms notice supra notwithstanding that there was no verbatim reproduction of the same in the order. The orders passed in this regard admits of no doubt or give nay scope for controversy. While so, it is beyond ones comprehension as to how it could have been viewed as a matter of mere contract between parties and under that pretext absolve itself of the responsibility to enforce it, except by doing violence to the terms thereof in letter and spirit. As long as the earlier order dated 13-2-91 stood, it was no permissible to go behind the same to ascertain the substance of it or nature of compliance when the manner, mode and place of compliance had already been stipulated with meticulous care and detail in the order itself. The said decision was also not made to depend upon any contingencies beyond the control of parties in the earlier proceedings."

5. As against the above submissions of the learned counsel for the petitioner, learned counsel for respondent has urged that only the order/direction contained in the order of the learned trial court dated 15-12-1999 could be executed and no decree can be said to have been passed in terms of Clause(c) of para 2 of the compromise application EX. AW.1 In the alternative her submission is that if the petitioner was aggrieved by the order dated 15-12-1999, he could have sought his remedy either by getting the said order corrected or by any other appropriate proceedings.

6. This court having considered the matter in its entirety is of the view that once the parties have settled the subject matter of a suit by means of compromise the terms of which were reduced into writing and the same were duly affirmed by making statement before the court without any exception or reservation, as a trial court without any exception or reservation, as a natural consequence thereof was that the compromise application Ex.AW.1 could alone form valid basis for rendering a judgment and drawing up a decree. Strictly speaking the learned trial court was not called up to issue any orders/judgments and if it was done then the order should have contained all the terms and conditions of the compromise which were binding on the parties. Mere absence of a particular direction or order in the trial courts order did not affect the validity of the compromise and judgment and decree that followed. The executing court though has taken view of the entire facts, circumstances and terms of the compromise as contained in Ex.AW1 but has failed to execute the same on untenable/technical premises. In the opinion of this court the executing court has erred in doing so and refusing to exercise its jurisdiction so far as it related to the execution of the one term of compromise on a wholly untenable/technical view that the trial courts order was silent on that behalf.

7. In the result this civil revision is allowed and the impugned order is hereby set aside. The executing court is directed to proceed with the execution filed by the petition in accordance with law. Parties are directed to appear before the executing court on 10th May, 2002 for receiving further directions in the matter.