M.R.Malhotra & Ors. vs Competent Builders Pvt. Ltd.
2009 Latest Caselaw 2871 Del

*                     IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                   Judgment reserved on: 16.07.2009
                                                Judgment pronounced on: 28.07.2009

                      Ex.P. 95/2003, EX. APPL. (OS) 548/2003

M.R.MALHOTRA & ORS.                                        ..... Decree Holder

       Through: Mr. I.S. Alag with Mr. J.S. Lamba, Advocates.

                                       versus

COMPETENT BUILDERS PVT. LTD.                               ..... Judgment Debtor

       Through: Mr. Anil Sapra with Mr. Rajesh Pathak, Advocates.

CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT

1.

     Whether the Reporters of local papers               Yes
       may be allowed to see the judgment?

2.     To be referred to Reporter or not?                  Yes

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

Hon'ble Mr. Justice S. Ravindra Bhat
%

1. The Decree-holders seek direction to execute a compromise decree passed

by this Court by order dated 21.03.1991. According to the terms of the compromise,

recorded in the form of a decree, the judgment debtor was to deliver possession of

6525 square yards of land being part of Khasra No. 226, Village Tughlakabad, New

Delhi, to the decree holder; the latter were to pay to the judgment a sum of Rs.

11,00,000/- in full and final settlement of their dispute. This court's assistance is

sought by dispossessing the judgment debtors, their agents, servants etc. and all the

persons claiming through them and by putting the decree holders in possession of

the property detailed in the decree.

Ex.P. 95/2003 Page 1

2. The Decree-holders contend having agreed to pay the stipulated amount to

the Judgment-debtors on the delivery of the possession of the aforesaid land. It is

submitted that the Judgment debtor is withholding possession of land and is

enjoying all the monetary benefits arising from it. Further, the Judgment debtor has

failed to deliver the possession of the said land thereby disobeying the decree

passed by this Court.

3. The decree holder had died in the year 2000. He is represented by his legal

representatives; they argue that several times, the judgment debtor was asked to

receive the amount, and hand over possession, but without any result. It is urged

that ultimately, a notice was issued, in response to which the judgment debtor took

untenable position and only stated that without a succession certificate, possession

of the land could not be handed over. It is contended by the decree holder that the

stipulation concerning payment of Rs. 11,00,000/-, within seven days, relates to

immovable property and that in such transactions, time is never deemed of the

essence of the contract. He relied on the judgment of the Supreme Court, reported

as Chand Rani -v- Kamal Rani 1993 (1) SCC 519. It was submitted that even as of

now, the decree holder is willing to deposit, or pay the said amount.

4. The Judgment debtor filed his objections stating that the compromise

agreement categorically stated that the Decree-holders "shall" return the sum of Rs.

11,00,000/- to the Judgment debtors who shall "simultaneously" deliver back the

possession of 6525 sq. yds and shall also not have any interest in the remaining land

measuring 2175 sq. yds. Therefore, in terms of the compromise, an obligation was

cast on the Decree-holders to first return the said sum and simultaneous the said

payment possession was to be delivered by the Judgment debtor and as till date the

Ex.P. 95/2003 Page 2 Decree-holders have not acted upon their part of the compromise, their stand that

the Judgment debtor has defaulted is unfounded. Crucially, the judgment debtor

emphasizes that a time period of "one week" was contemplated for the completion

of the agreed transaction by the parties, that time period was, as per the Judgment

debtor, "essence of the agreement". The said one week period began on 21.03.1991

and ended on 28.03.1991, during which time the amount of Rs. 11 lakhs was neither

offered nor paid. There has been no mutual extension of the said time period.

5. The judgment debtor argues that the petition is also liable to be dismissed in

view of the provisions of section 214 of the Indian Succession Act, as Decree-holders

no. 1 to 4, 7 and 8 (who were plaintiffs in the suit filed against the Judgment debtor

and in favour of whom the decree was passed), have since died and the present

execution has been filed by the legal heirs of the said deceased decree holders,

without obtaining succession certificate; in absence of the same the petition is liable

to be dismissed. It was stated that these legal heirs who have instituted the present

execution are not the only legal heirs of the said decree holders. It was also urged

that the execution is not maintainable as the same is not instituted by a person/s

duly authorized for the purpose.

6. The judgment debtor relies on the decision in Pioneer Engineering Co. v. DH

Machine Tools AIR 1986 Delhi 165, for the argument that when time is fixed for the

performance of something in a compromise decree, and that period has lapsed, the

executing court does not possess the mandate to enlarge the time. It is submitted

that in such cases, the decree is rendered inexecutable. It is urged that the decree

holders never approached the judgment debtor at any time during his life time,

offering to pay the agreed amount; and that in any case, since parties expressly

Ex.P. 95/2003 Page 3 stipulated a time frame for performance of mutual obligations that was not adhered

to by the decree holders, the court should not now alter the terms of the

compromise- which is founded on contract, and seek to execute the decree.

7. The decree in this case, was drawn pursuant to a compromise recorded by

the court, on the parties' statement, on 21-3-1991, in Suit No. 938/1990. The order,

recording the compromise, and directing the drawing up of a decree, reads as

follows:

" ORDER

Parties have settled the matter and have filed a joint application under Order 23 Rule 3 CPC which is Ex. C-1. In terms of this settlement, the plaintiff shall return a sum of Rs. 11,00,000/- to the defendant and simultaneously, the defendant shall deliver back possession of 6,525 sq. yards of land to the plaintiff. Defendant shall not have any interest in the remaining 2175 square yards of land which is with the tenant. The parties shall be bound by the terms of this agreement. Ex. C-1 shall form part of the decree.

Suit is disposed of. Parties are left to bear their own costs. IA 2186/90 is also disposed of."

8. The relevant extract of the compromise application, under Order 23 Rule 3 CPC (IA 2186/1991) reads as follows:

"2. That the parties have agreed to settle the present dispute. The plaintiff shall return the sum of Rs. 11, 00,000/- to the defendant and simultaneously the Defendant shall deliver back possession of 6525 square yards of land to the Plaintiffs. The Defendant shall also not have any interest in the remaining 2175 square yds. of land which is with the tenant as aforesaid running CHANDRALOK Cinemas.

3. That the parties have agreed that the aforesaid transaction shall be completed within one week from today. None of the parties shall thereupon have claim against each other in regard to the aforesaid agreement to sell dated 25-11-1980 and the Agreement shall be treated as a DEAD LETTER."

Ex.P. 95/2003 Page 4

9. The present execution proceeding was filed within the period of twelve years'

limitation. However, the decree holder has not explained what steps were taken, if

ever, for paying the judgment debtor, in accordance with the understanding,

embodied in the compromise application (signed jointly by the parties). There are

vague averments that the decree holder offered to pay amounts, which were not

accepted by the judgment debtor. No dates are mentioned. Equally, compliance with

the terms of the compromise are not spelt out anywhere.

10. The question before this court, in the Pioneer Engineering case was whether

the Court under Section 148 of the Code had jurisdiction to extend time fixed under

a compromise decree for performance of obligation under the decree. This court, by

relying upon earlier decisions held that Court has no jurisdiction under Section 148

of the Code to extend time fixed by the parties under terms of a compromise decree.

The court negatived the contention that such stipulations, about time, in a

compromise are not of the essence.

11. The ratio in Pioneer Engineer was upheld, and affirmed by a Division Bench,

in Somani Marketing Pvt Ltd -v- Subhash C. Raswant AIR 2001 Del 152; it was

emphasized that time can be extended, for performance of an obligation under a

compromise decree, provided the time is stipulated by the court itself. In such an

eventuality, the court has the power to extend the time; however if the agreement is

indicative of a clear time for performance, upon the expiration of such time period,

the decree holder cannot seek the court's indulgence, and have the time for

performance extended.

Ex.P. 95/2003 Page 5

12. The decree holders' argument that time is not of the essence of a contract,

wherever, it is stipulated. No doubt, the five judges' decision in Chand Rani

establishes that in a contract for sale of immovable property, time is not deemed of

the essence of the agreement. However, that decision, in this court's opinion, is not

of any relevance. The proposition would apply when one or the other party seeks

enforcement of the contract, by suing for specific performance. However, here the

parties were categorical, that the mutual obligations were to be complied within a

specified time period; that arrangement became a decree. Now, the power of an

executing court is to enforce the terms of the decree. In the present case, the time

stipulation (payment of Rs. 11 lakhs within one week, to the judgment debtor, by the

decree holder) was not adhered to by the decree holders. No whisper as to when the

money was tendered, or even offered to the judgment debtor has been made in the

execution proceeding. If one were to consider that the decree holders approached

the court at the fag end of the period of limitation (12 years) without any

explanation as to why the amount was not paid in time, or whether the judgment

debtor was responsible for the delay, what is being sought now, if granted, would

lead to highly inequitable results. On the other hand, even if the decree holders'

argument were to be accepted, there is no indication that the money was ever

offered, within reasonable time, after the issuance of the decree.

13. A consent decree is a contract entered into by parties to a litigation, with

the decree of the court superimposed upon it. That it is a decree does not preclude a

challenge to it, on the grounds an agreement can be impugned. Equally, the terms of

that decree have to rest as they are, since they are based on mutuality; in turn, this

implies that the court cannot add, modify or subtract from the express terms of the

Ex.P. 95/2003 Page 6 agreement, though embodied in a decree. Thus, stipulations as to time, voluntarily

agreed to by the parties, and embodied in a compromise decree, cannot be

extended by the court by utilizing its powers under Section 148 CPC; doing so, would

result in the court donning the mantle of a litigant - which is plainly impermissible.

14. In view of the above discussion, the court is of the opinion that the decree

holders are not entitled to execute the compromise decree, in question here. The

Execution Petition No. 95/2003 is therefore, dismissed.

                                                                  (S. RAVINDRA BHAT)
                                                                            JUDGE
JULY 28, 2009




Ex.P. 95/2003                                                                    Page 7