M/S Shree Vijaya Fabrics vs United Apparels India & Ors.
2009 Latest Caselaw 545 Del

*          IN THE HIGH COURT OF DELHI AT NEW DELHI


                                               Date of Reserve: November 21, 2008
                                                Date of Order: February 16, 2009

+ CM(M) 784/2004
%
                                                                           16.02.2009
        M/s Shree Vijaya Fabrics                                        ...Petitioner
        Through: Mr. S.K. Pruthi, Advocate

        Versus

        United Apparels India & Ors.                      ...Respondents
        Through: Mr. R.K. Dhawan, Mr. Rahul Gaur, Advocates for R-3.


        JUSTICE SHIV NARAYAN DHINGRA

1.      Whether reporters of local papers may be allowed to see the
        judgment?                                           Yes.

2.      To be referred to the reporter or not?                               Yes.

3.      Whether judgment should be reported in Digest?                       Yes.


        JUDGMENT

1. By way of instant petition under Article 227 of the Constitution of India,

the petitioner has assailed the order dated 20th February 2004 whereby the

Executing Court refused to issue warrants of attachment for recovery of the

decreetal amount.

2. Brief facts relevant for the purpose of deciding this petition are that an

award was passed in favour of the decree holder which became final since no

objections were filed against the award. This award was for a sum of

Rs.16,37,118.35 inclusive of interest up to date of the passing of the award.

The future interest was also awarded. As the award became final, the decree

holder filed an execution petition for execution of the award. During

execution, the Judgment Debtor approached the Decree Holder and offered to

settle the matter. The parties negotiated a settlement and the decree holder

agreed to settle the matter for Rs.6.25 lac in lieu of decree in case the

CM(M) 784/04 M/s Shree Vijaya Fabrics vs.United Apparels India & Ors. Page 1 Of 4 payment was made as per the schedule agreed between the parties. Four

post dated cheques were issued by the Judgment Debtor in the following

manner:

     Cheque No.       Dated                         Amount              Drawn
                                                                           on
1    677235           8.10.2002                     1,75,000            C.B.I. Ram
                                                                        Tirath Nagar,
                                                                        New Delhi.
2    677233           30.11.2002                    1,50,000                   -do-

3    677234           30.12.2002                    1,50,000                 -do-

4    677234           30.01.2003                    1,50,000                 -do-

3. The statement of Shri Gurminder Singh, Partner of JD firm was

recorded wherein he gave following undertaking:

"......In terms of the settlement I have handed over the four cheques of the total value of Rs.6.25 lakh all drawn on Central Bank of India Ram Tirath Nagar New Delhi in full and final settlement of the decreetal amount. It is further agreed that in case any of the cheques given today in the court is dishonoured and or is not paid on the due date, the Decree Holder shall be entitled to recover the balance decreetal amount in lump sum and the concession granted to JD shall not be available to them. Photocopies of the cheques are annexed with the compromise Ex.'C."

4. The statement of decree holder was also recorded and he made the

following statement:

"....In terms of the compromise I have today received in court the four cheques from the JDs in full and final settlement of the decree which are of the total value of Rs.6.25 lakh. In case of any dishonor of any of cheque the DH shall be entitled to recover the balance decreetal

CM(M) 784/04 M/s Shree Vijaya Fabrics vs.United Apparels India & Ors. Page 2 Of 4 amount in lump sum and the concession granted by the DH to JD shall not be available. I undertake to withdraw the complaint under Section 138 of the NI Act filed against the JD on payment/ realization of entire cheque amount givne by the JD today in the court, which is pending in the Court of Shri Rakesh Kapoor, ADJ. On payment of the amount of cheque, all dispute with regard to the present decree stands settled."

5. It is apparent from the record that the cheques issued by the JD got

dishonoured and the undertaking given by the JD in the Court was not fulfilled

by the JD. As per the compromise, the full amount of decreetal amount

became payable to the decree holder, less the amount already paid to the

decree holder. The decree holder had obligation to withdraw the complaint

under Section 138 of the NI Act filed against the JD only after the entire

amount of the above cheques were realized. The Decree Holder had no

obligation to withdraw the complaint under Section 138 unless and until the

amount against above cheques was realized.

6. On dishonor of cheque of JD, the Decree Holder approached the Court

for execution of the decree. The learned Additional District Judge (executing

Court) expressed his helplessness in executing the decree observing inter alia

that the Court cannot come to the rescue of the decree holder for issuance of

warrants of attachment of property of JD and directed the decree holder to

approach the Court of Metropolitan Magistrate where proceedings under

Section 138 of the NI Act were pending seeking the payment of the amount

towards dishonored cheque on making appropriate statement so that the

matter could be got settled. By the impugned order, the learned Executing

Court of Additional District Judge refused to issue warrants of attachment for

the remaining decreetal amount after adjustment of the amount already

received from the Judgment Debtor.

CM(M) 784/04 M/s Shree Vijaya Fabrics vs.United Apparels India & Ors. Page 3 Of 4

7. I consider that the learned executing court acted totally contrary to

law. There is no doubt that during pendency of the execution, parties can

enter into an agreement for satisfaction of the decree and the bring such an

agreement on record. However, where the judgment debtor issued cheques

and gave an undertaking before the Court that none of the cheques would be

dishonoured and if any of the cheques gets dishonoured, the decree holder

shall be entitled to recover the entire decreetal amount less the amount

already paid through cheques and this compromise entered into between the

parties was taken on record by the Court, this can be got implemented in its

true spirit through the Court and the compromise itself becomes the decree

executable before the Court. The Court cannot refuse to execute a decree on

the ground that parties had entered into a compromise. The learned

executing court was obliged to execute the decree as it originally stood since

the JD had not fulfilled the conditions of compromise and the cheque issued

by the JD in the Court had got dishonoured.

8. In view of the foregoing facts, I allow this petition under Article 227 of

the Constitution of India. The impugned order passed by the executing court is

hereby set aside. The executing court is directed to execute the decree /award

as it stood originally. The amount already paid by the JD under the

compromise shall be adjusted against the decreetal amount.

9. The petition stands disposed of.

February 16, 2009                                     SHIV NARAYAN DHINGRA J.
rd




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