Delhi High Court

Mr. Sunil Gupta vs M/S Polar Industries Ltd. And Ors. on 6 September, 2010

Author: Mukta Gupta

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+             FAO (OS) No. 658/2009


%                                    Reserved on: 4th August, 2010

                                     Decided on: 6th September, 2010

Mr. Sunil Gupta,
Sole Proprietor of M/s Joy Export and also
Sole Proprietor/Karta of M/s J. K. International,

Having its office at
78, Shradhanand Marg,
Delhi-110 006 and also at 42/78,
Punjabi Bagh West,
New Delhi-110 026.                                   ..... Appellant
                       Through:     Mr. Vinod Tyagi, Mr. Ashok
                                    Rajagopal and Ms. Madhu Tyagi,
                                    Advocates.
                       versus

1.     M/s Polar Industries Ltd.
       through its Managing Director Mr. Anil Kumar
       Agarwal and/ or its any Director/ Principal/
       Authorized Officer

       Having its Regd. Office situated at
       113, Park Street, Poddar Point, Kolkata-700
       016, West Bengal and having E-mail address
       [email protected]

2.     M/s Angelo Brothers Company (India) Ltd.
       through its Director Mr. S.K. Yadav

       Having its Regd. Office at
       118-A, Arjun Nagar, Safdarjung Enclave, New
       Delhi-110 016.
       (Represented by Mr. Vijay Kumar Sehgal,
       Advocate Ch. No. 558, Western Wing, Tis
       Hazari, Delhi-110 054).


3.     Mr. Anil Aggarwal,
       Son of Late Sh. Sajjan Kumar Aggarwal,



FAO (OS) No.658/2009                                              Page 1 of 9
        Resident of A-2, FF, Maharani Bagh,
       New Delhi.
       (Defts. 1 & 2 represented by Ms. Meera
       Mathur, Advocate, 192, Jagriti Enclave, Delhi-
       110 092.
                                                       ..... Respondents
                        Through:    Mr. Harish Malhotra, Sr. Advocate
                                    with Mr. R.K. Modi, Advocate.

Coram:

HON'BLE MR. JUSTICE VIKRAMAJIT SEN
HON'BLE MS. JUSTICE MUKTA GUPTA


1. Whether the Reporters of local papers may
   be allowed to see the judgment?                         Not Necessary

2. To be referred to Reporter or not?                      Yes

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

MUKTA GUPTA, J.

1. The present Appeal arises out of the order dated 10th November,

2009 in CS (OS) No. 2402/2008 directing the Plaintiff/Appellant herein

to pay `13,03,944/- and subject to deposit of the said amount the

decree to be drawn.

2. A brief narration of the relevant facts for the adjudication of the

present Appeal are that the Appellant/Plaintiff brought a Suit under

Order 37 CPC inter alia praying for a decree of `1,38,79,026/-. The Suit

was valued for the amount claimed and the requisite court fee was paid

thereon. However, during the pendency of the Suit Shri Anil Aggarwal,

Chairman and Managing Director of the Respondent No.1/First

Defendant was impleaded as a party and it was stated that the parties

have entered into a fresh agreement settling all their disputes.

3. Two Applications being I.A. Nos. 707/2009 and 7794/2009

requesting for a compromise to be recorded and a decree to be drawn

thereon were moved. The learned Single Judge vide order dated 1st

June, 2009 allowed the Applications in the following terms:

"1. The parties have entered into a compromise agreement dated 13th January, 2009 which has been filed along with IA 707/2009. The agreement is signed by both the parties. The agreement was not recorded earlier as the permission of AAFIR had not been received. The learned counsel for the plaintiff submits that the permission from AAIFR has now been received. Order of the AAIFR has been passed on 27th May, 2009 and, therefore, the compromise dated 13th January, 2009 be recorded.

2. In agreement dated 13th January, 2009, the defendant No.1 agreed to pay a sum of Rs.14.75 crores to the plaintiff along with future interest @14% per annum in the mode and manner mentioned therein. The learned counsel for the defendant submits that the payments and other obligations mentioned in Clause 1(i) to (iv) have already been complied with by the defendant. With respect to the schedule of payment of Rs. 4.5 crores mentioned in Clause 1(v), the first instalment has already been paid and with respect to the remaining payments, the instalments shall start from 1st July, 2009 onwards instead of 1st March, 2009. The learned counsel for the plaintiff agrees to the modification of the schedule of payment mentioned in Clause 1(v) to the aforesaid extent.

3. The agreement dated 13th January, 2009 is signed by all the parties. The application for recording of the compromise shall be supported by the affidavit of all the parties.

4. I am satisfied that the agreement is lawful. The agreement dated 13th January 2009 is, therefore, recorded and the suit is decreed in terms of the compromise. The agreement dated 13th January, 2009 shall form part of the decree. All parties shall remain bound by their respective obligations made under the said agreement.

5. All applications stand disposed of.

6. Copy of this order be given „Dasti‟ to learned counsel for the parties under signature of the court master.


                                                      (J.R. MIDHA)
        JUNE 1, 2009                             VACATION JUDGE"

4. Thereafter, the Registry of this Court sought a clarification as to

the payment of additional court fee of `1,03,3944/- since the decreetal

amount being `14.75 crores with interest was far more than the relief

sought for, that is, a decree of `1,38,79,061/-. The learned Single Judge

held that the Court had power to interfere with the arbitrary violation

to avoid payment of proper court fee and that the provisions of Sections

7 and 11 of the Court Fees Act, 1870 (in short the „Act‟) compelled the

Plaintiff to deposit the entire court fee before execution.

5. It is contended by learned counsel for the Appellant that on a

proper interpretation of Section 7 of the Act, read with Order 23 Rule 3

CPC there was no need for the Appellant to pay the court fee. In

support of this, reliance is placed on Phipson & Co. Ltd. vs. Gayco

Private Ltd., AIR 1977 Delhi 88, Lal Khosla vs. Randhir Khosla and

another, 76 (1998) DLT 953 and Ravinder Kumar Rishi vs. Sushma

Rishi, 102 (2003) DLT 219. It is contended that the Court after the

disposal of the Suit had become functus officio and thus, could not have

passed such a direction. It is urged that once the suit is disposed of,

the preparation of the decree thereon is a ministerial act and cannot be

interdicted by any direction.

6. The learned Single Judge felt itself compelled to pass the

directions for payment of court fees of `13,03,944/- for two important

reasons as stated in para 9 as under:

"9. There are two very important reasons, which seem to have escaped the notice of the Court, which have a crucial bearing on the question of payment of proper court fees. The first is that the provision compelling payment is Section 7 (of the Court Fees Act); it mandates that court fees "shall" be payable according to the calculation required under its provisions. The internal indications in the Act, by way of Section 11 are categorical about the nature of the obligation (to pay court fees); the court has no choice in the matter; even at the stage of execution, an insufficiently stamped decree cannot be proceeded with further, or not entertained. The second important aspect, in the case of compromise decrees is, that Order 23, Rule 3, in substantial particulars, was amended in 1976. The crucial amendment enables a court to direct a decree not only as regards matters and claims before it, but also in relation to other matters. Thus for example, if a person sues for Rs. 20 lakhs, and during the proceeding, is beneficiary of an overall settlement, which enables him to payment of 10 times that amount, the fact that such larger claims are not part of the suit, does not constrain the court from making a decree to effectuate the overall settlement. This provision did not exist earlier. It has been conceived in public interest, to avoid multifariousness, and promote overall resolution of disputes. However, by this, it is possible that the plaintiff‟s original claim, upon which a much smaller amount is paid as court fee, can be enlarged, to entitle him to a decree for a greater amount,

which was not thought of by him, and for which court fees was not paid. Had the plaintiff, in such cases not received the benefit of the amended Order 23, he would have well been compelled to file a separate suit, to recover the larger amount, and naturally, have paid the court fees. The amendment procedurally enables parties to give effect to an overall settlement. This aspect did not engage the attention and notice of the Court when it delivered judgments, in the three cases, cited by the plaintiff."

7. There is no denial to these important aspects of the matter. The

Appellant/Plaintiff is bound to pay the court fees. However, the issue

before us is, which is the appropriate Court to compel it to make the

said payment, the Court which disposed of the suit and is now functus

officio or the executing Court.

8. The issue as to whether after disposal of a Suit the Trial Court

either suo motu or on an Application moved can pass effective

directions which are not corrections of clerical or arithmetical mistakes

in the judgments, decrees or orders or errors arising therein from any

accidental slip or omission in terms of Section 152 CPC is no longer res

integra. The Hon‟ble Supreme Court in Dwarka Das vs. State of

Madhya Pradesh, AIR 1999 SC 1031 held:

"6. Section 152, C.P.C. provides for correction of clerical or arithmetical mistakes in judgments, decrees or orders or errors arising therein from any accidental slip or omission. The exercise of this power contemplates the correction of mistakes by the Court of its ministerial actions and does not contemplate of passing effective judicial orders after the judgment, decree or order. The settled position of law is that after the passing of the judgment, decree or order, court or the tribunal becomes

functus officio and thus being not entitled to vary the terms of the judgments, decrees and orders earlier passed. The correction contemplated are of correcting only accidental omission or mistakes and not all omissions and mistakes which might have been committed by the Court while passing the judgment, decree or order. The omission sought to be corrected which goes to the merits of the case is beyond the scope of Section 152 for which the proper remedy for the aggrieved party is to file appeal or review application. It implies that the Section cannot be pressed into service to correct an omission which is intentional, how erroneous that may be. It has been noticed that the courts below have been liberally construing and applying the province of Sections 151 and 152 of the CPC can under the cover of the aforesaid sections modify, alter or add to the terms of its original judgment, decree or order. In the instant case, the trial Court had specifically held the respondents-State liable to pay future interest only despite the prayer of the appellant for grant of interest with effect from the date of alleged breach which impliedly meant that the Court had rejected the claim of the appellant in so far as pendente lite interest was concerned. The omission in not granting the pendente lite interest could not be held to be accidental omission or mistake as was wrongly done by the trial Court vide order dated 30th November, 1973. The High Court was, therefore, justified in setting aside the aforesaid order by accepting the revision petition filed by the State."

9. Section 11 of the Court Fee Act, 1870 states as under: -

"11. Procedure in suits for mesne profits or account when amount decreed exceeds amount claimed - In suits for mesne profits or for immovable property and mesne profits, or for an account, if the profits or amount decreed are or is in excess of the profits claimed or the amount at which the plaintiff valued the relief sought, the decree shall not be executed until the difference between the fee actually paid and the fee which would have been payable had the suit comprised the whole of the profits or mount so decreed shall have been paid to the proper officer.

Where the amount of mesne profits is left to be ascertained in the course of the execution of the decree, if the profits so ascertained exceed the profits claimed, the further execution of the decree shall be stayed until the difference between the fee actually paid and the fee which would have been payable had the suit comprised the whole of the profits so ascertained is paid. If the additional fee is not paid within such time as the Court shall fix, the suit shall be dismissed."

Thus, even if the decree was drawn it could not have been

executed without payment of additional court fee in view of Section 11

of the Act. Order 23 Rule 3 CPC and Section 11 of the Act furnish an

exception to the rule that the Plaintiff is only entitled to the amount

claimed by him in plaint.

10. This issue came up for adjudication before the Division Bench of

this Court in G.C. Kumar and others vs. Ashok Kumar and others, AIR

2001 Delhi 338, wherein this Court held that once the judgment is

delivered and signed there is no option left to the Court except to draw

the decree in terms of the judgment. Drawing up of a decree cannot be

postponed and while allowing the Appeal it was directed that the

decree be drawn in terms of the judgment of the Court, however, the