Tilak Raj vs Satyapal And Ors.
2012 Latest Caselaw 5500 Del

         *         IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                      Judgment delivered on : 13.09.2012

+        CS(OS) No. 2850/1987

TILAK RAJ                                            ..... Plaintiff
                                  Through:   Mr. C.M. Oberoi, Advocate
                         versus


SATYAPAL AND ORS.                                  ..... Defendant
                                  Through:   Mr. B.K. Sood, Mr. Puneet Kumar
                                             Agarwal, Mr. Manik Sood,
                                             Advocates for defendant no.1.
                                             Mr. S.C. Singhal, Adv. For D-2
         CORAM:
         HON'BLE MR. JUSTICE V.K. JAIN

                                  JUDGMENT

V.K.JAIN, J. (ORAL)

IA No.11339/2012 (under Order 23 Rule 3 CPC)

1. This is a suit for partition of the property bearing number 39, Rama Road, Industrial Area Scheme, Najafgarh Road, New Delhi. The plaintiff is the brother of the defendants no.2 and 3. A Memorandum of Agreement was executed between Mr. Tilak Raj and Prithvi Manaktala, who are plaintiff and defendant no.2 respectively in this suit. The salient terms of the aforesaid Memorandum of Agreement/ Settlement are as under:

"4. Certain disputes and differences had arisen amongst the Co-owners concerning the said property

No.39, Rama Road, Najafgarh Road Industrial Area resulting in TR seeking partition of the said property and TR filing a Suit in the High Court of Delhi for partition of the said property being Suit No.2850 of 1987 which suit is pending.

5. PM has also filed a suit in the High Court of Delhi being Suit No.2530 of 1995 claiming his share of damages for use and occupation in respect of his share in the said property against Shri Satya Pal, the Company, and others.

7. As a result of mutual discussions, TR and PM have arrived at certain agreements and understandings concerning the re-structuring of the said Companies as also with regard to the Management thereof and readjustment of their and their relatives/ friends shares holding therein.

8. With a view to settle various matters inter se including in relation to their rights and interests in Property No.39, Rama Road, Najafgarh Road Industrial Area, New Delhi TR and PM have come to understanding(s)/ agreement(s) herein after recorded and it has been agreed that PM shall assign, transfer, convey and/or relinquish his 1/3rd share in the said Property No.39, Rama Road, Najafgarh Road Industrial Area, New Delhi in favour of TR.

1(a) In consideration of settlement of various matters regarding their business relationships and interests in said Property No.39, Rama Road, Najafgarh Road Industrial Area, New Delhi and the payments hereinafter specified PM has agreed to assign, transfer and convey and/or release and relinquish all his rights and interests in respect of his 1/3rd share in the said Property No.39, Rama Road, Najafgarh Road Industrial Area, New Delhi in favour of TR and/or his nominee(s).

3. PM has represented to and assured TR that he has not entered into any Agreement/ Understanding/ Arrangement concerning his 1/3rd rights and interests in the said property with any other person or persons and has assured and undertaken not to do so at any time hereafter. This Agreement shall not be revoked by PM at any time, for ensuring its due implementation PM has offered to grant an irrevocable General Power of Attorney in favour of TR and/or his nominee(s).

6. It is understood and agreed that in respect of any Settlement Proposal pertaining to Compromise or Settlement of the subject matter of Suit No.2850 of 1987 or Suit No.2530 of 1995 TR shall be entitled to take a decision and any decision so taken shall be accepted by PM and PM hereby expressly consents to

TR being authorized and empowered to agree upon any compromise or settlement on the subject matter of the Suit including PM's 1/3rd interest in the said Property No.39, Rama Road, Najafgarh Road Industrial Area, New Delhi.

7. In the event of any failure or default on the part of PR in fulfilment of the Understandings/ Agreements herein recorded and/or failure or default in completion of the assignment, transfer, conveyance and/or release and relinquishment of whatever rights and interests PM has, TR shall have the right to specifically enforce this Agreement/ Understanding in addition to his other rights.

8. It has been agreed between the parties that whatever extent of rights in relation to the said property are determined as the Share of PM shall be deemed to form the subject matter of assignment and transfer by PM to TR in pursuance of the understandings herein recorded for the aforesaid consideration.

10. It is also mutually agreed and understood that in the event of the subject matter of Suit No.2850 of 1987 or of Suit No.2530 of 1995 being settled mutually or otherwise amongst the parties, PM shall be bound by whatever Settlement proposal is accepted by or acceptable to TR and shall neither have nor raise any

question concerning such settlement as may be worked out and agreed to by TR with the other parties to the Suit, and hereby consents and agrees that TR shall have full authority to agree to any compromise or settlement or reference of the dispute to arbitration. PM shall not claim any entitlement to any amount except the balance of the consideration hereby agreed to be paid provided the same remains unpaid."

2. An irrevocable Power of Attorney was executed by defendant No. 2 for consideration, thereby divesting him of his rights in relation to the suit property as well as shares in a company, namely, Goralmal Hariram Private Ltd.

3. It would be seen from a perusal of the aforesaid terms and recitals contained in the above Memorandum of Agreement executed between the plaintiff and defendant no.2, that defendant no.2 thereby agreed to relinquish all his rights, title and interest in Property No.39, Rama Road, Najafgarh Road Industrial Area, New Delhi, which is the subject matter of the present suit in favour of Shri Tilak Raj ( plaintiff in this suit) for consideration of Rs.30 lac. Not only that, he also authorized plaintiff to take any decision with respect to any settlement or proposal pertaining to compromise of the present suit and such decision taken by the plaintiff was agreed to be binding upon defendant no.2, as far as his share in the suit property is concerned. Having authorized the plaintiff to enter into any settlement in the present suit, defendant no.2 cannot dispute the settlement entered into between plaintiff and other defendants. The only right which is now available to defendant no.2 is to receive a sum of

Rs.29 lac from the plaintiff on execution of the document such as relinquishment deed in his favour, a sum of Rs.1 lac having already been received by him at the time of execution of the Memorandum of Agreement.

4. Order 23 Rule 3 of Civil Procedure Code, to the extent it is relevant, provides that where it is proved to the satisfaction of the Court that a suit has been adjusted, wholly or in part, by any lawful agreement or compromise in writing and signed by the parties or where the defendant satisfies the plaintiff in respect of the whole or any part of the subject-matter of the suit, the Court shall order such agreement, compromise or satisfaction to be recorded, and shall pass a decree is accordance therewith so far as it relates to the parties to the suit. If further provides that where it is alleged by one party and denied by the other that an adjustment or satisfaction has been arrived at, the Court shall decide the question.

5. The contention of Mr. S.C. Singhal, learned counsel for the defendant no.2 Prithvi Manaktala is that the compromise application IANo.11339/2012 (under Order 23 Rule 3 CPC) is not signed by defendant no.2 and, therefore, the compromise does not bind him. In my view, this contention is misconceived for the simple reason that under the Memorandum of Agreement, defendant no.2 has fully authorized the plaintiff to enter into any settlement with respect to the present suit and such agreements as and when entered into by the plaintiff is binding upon him. Since the application has been duly signed by the plaintiff, who has been duly authorized in this regard under the Memorandum of

Agreement, it binds not only him, but also defendant no.2 Shri Prithvi Manaktala.

6. The learned counsel for the plaintiff states that the pay order for Rs.29 lac was offered to defendant no.2 before the Hon'ble Company Court, but Shri Prithvi Manaktala (defendant no.2) refused to accept the same. It would be pertinent to note here that another Memorandum of Settlement was executed between the plaintiff and defendant no.2 with respect to their respective shareholding in a company called M/s. Gora Mal Hari Ram Private Limited. Pursuant to the said settlement, Company Application No.882/2012 was thereafter filed by defendant no.2 seeking to place on record the revocation deed dated 19.4.2012, whereby he revoked the General Power of Attorney executed by him in favour of the plaintiff and his son. He also requested the Court not to take cognizance of any compromise executed between the other parties without his consent. The Hon'ble Company Court noted that a Power of Attorney had been executed by defendant no.2 and that the Power of Attorney was irrevocable, in view of the provisions contained in Section 202 of the Contract Act. The Court, on considering the two Memorandum of Agreements executed between the plaintiff and defendant no.2, held that the only right which survived in favour of the defendant no.2 was to receive the balance consideration of Rs.24 lac under the Memorandum of Agreement with regard to the shares as well as Rs.29 lac under the Memorandum of Agreement/ Settlement with regard to property at 39, Rama Road, Najafgarh Industrial Area, New Delhi. The Court accordingly held that Memorandum of Agreement was lawful and could not have been unilaterally revoked by defendant no.2. The Company Application was accordingly dismissed. I am informed that an appeal has

been filed against the order dated 24.5.2012 passed by the Hon'ble Company Court and that appeal is pending.

7. Independently of the view taken by the Company Court, I am satisfied that the compromise entered into between the plaintiff and defendants, other than defendant no.2, is lawful. I am also satisfied that this compromise, in view of the authority given by defendant no.2 to the plaintiff under the Memorandum of Agreement, is binding on defendant no.2 as well. Therefore, there is no legal impediment in passing a decree in terms of the compromise contained in IANo.11339/2012.

8. For the reasons stated hereinabove, the suit is disposed of by passing a decree in terms of the compromise contained in IANo.11339/2012 and its annexures, which shall form part of the decree. Decree sheet be drawn accordingly. All the pending IAs also stand disposed of. In the facts and circumstances of the case, there shall be no orders as to costs.

V.K. JAIN, J.

SEPTEMBER 13, 2012/rd//