Radha Soami Satsang Beas vs Rajiv Popli & Others
2017 Latest Caselaw 7260 Del

$~OS-26
*    IN THE HIGH COURT OF DELHI AT NEW DELHI


%                                     Date of decision:15.12.2017

+     CS(OS) 4054/2014 and IA Nos. 26394/2014,                  13504/2015,
      18906/2015, 11053/2017, 13299/2017, 14850/2017

      RADHA SOAMI SATSANG BEAS                            ..... Plaintiff
                     Through Mr.Naval Bhatia and Mr.Preet Pal
                             Singh, Adv. for Plaintiff No.2 with
                             plaintiff-2-in-person.
                     versus
      RAJIV POPLI & OTHERS                          ..... Defendants
                     Through Mr.Sanjeev Soni and Mr. Satvik
                             Verma, Advs. for D-1 to 3 with
                             defendant No.3-in-person.

      CORAM:
      HON'BLE MR. JUSTICE JAYANT NATH

JAYANT NATH, J. (ORAL)

1. This suit was originally filed by plaintiff No.1 seeking a decree of partition and seeking its share of 1/10th (10%) in the property being S-396, G.K.-II, New Delhi. It was averred in the plaint that Sh. Krishan Lal Popli was a disciple of plaintiff No.1 Society. He owned an immovable property being S-396, G.K.-II, New Delhi-110048 measuring 298 sq. Yards. The wife of Sh.Krishan Lal Popli predeceased him on 27.06.1991. Sh.Krishan Lal Popli expired on 15.01.1997. It was the case of plaintiff No.1 that prior to his death, on 26.06.1996, Sh.Krishan Lal Popli made his last Will whereby he bequeathed different shares in favour of his heirs and plaintiff No.1 with respect to the aforesaid property. The division of shares between the parties

CS(OS)4054/2014 Page 1 is reproduced herein:-

(i) Defendant No.1 (Rajiv Popli-grandson) 30%

(ii) Defendant No.2 (Son-now plaintiff No.2) 30%

(iii) Defendant No.3(Ms.Kiran Jethi-Daughter) 30%

(iv) Plaintiff No.1 10%

2. On 20.05.2015, this court transposed defendant No.2 as plaintiff No.2.

3. On 31.08.2017, this court recorded a settlement between the parties which was duly signed by the parties. The said settlement recorded in court reads as follows:-

"Learned counsel for plaintiff No. l is also present and he agrees to the settlement detailed herein below between the parties:-

a) that in lieu of the share of Jatinder Kumar Popli - plaintiff No.2, the defendants No.l & 2 shall jointly pay an amount of Rs.3.20 Crore by way of bankers' cheque to plaintiff No.2 in full and final settlement of all his claim against the defendants No. 1 & 2 in respect of the subject property;

b) that out of above amount of Rs.3.20 Crore, the plaintiff No.2 shall pay an amount of Rs.40.00 Lac to plaintiff No. 1 - Radha Soami Satsang Beas towards full and final settlement of all claims of plaintiff No. 1 against the plaintiff No.2 as well as against defendants No.l & 2 in respect of the subject property;

c) that an amount Rs.3.20 Crore shall be paid by defendant No.3, on behalf of defendants No.l & 2 on or before 15.11.2017 before the office of the Sub-Registrar where the plaintiff No.2 shall execute the relinquishment deed relinquishing all his rights/title/interest in the subject property in favour of defendants No. l & 2;

CS(OS)4054/2014 Page 2

d) that an amount of Rs.40.00 Lac shall be payable to Radha Soami Satsang Beas on receipt of above amount of Rs.3.20 Crore by plaintiff No.2 and it shall be the responsibility of plaintiff No.2 to pay the amount of Rs.40.00 Lac to plaintiff No. 1 within two weeks from the date of receipt of the amount of Rs.3.20 Crore;

e) after making the payment of Rs.3.20 Crore to plaintiff No.2, the defendants No.l to 3 shall have no liability to pay any amount to plaintiff No. 1 or to plaintiff No.2 for any alleged share/title/interest in the subject property and that all rights/title/ interest of plaintiffs No.l & 2 in the subject property shall pass on to defendants No.l & 2.

All the parties undertakes to comply with the terms and conditions of above settlement, without fail. In token of acceptance of above settlement, all parties have put their signatures on this order sheet."

4. Unfortunately, the aforesaid settlement dated 31.08.2017 did not bring an end to the family dispute. IA No. 11053/2017 was filed on behalf of defendants No.1 to 3 for modification/correction in the order dated 31.08.2017. Similarly, IA No. 13299/2017 was filed by defendant No.3 for bringing on record subsequent events further to the settlement. IA No. 14850/2017 was filed by plaintiff No.2 under Order 12 Rule 6 CPC seeking a preliminary decree of partition by metes and bounds to the extent of the share of plaintiff No. 2 being 30% and that of the defendants being 70% in view of the admissions of the defendants.

5. Learned counsel for defendant No.3 states that the payment could not be made as per settlement within the stipulated time i.e. by 15.11.2017 to plaintiff No.2 as he did not agree to execute and register the concerned relinquishment deed in favour of defendant No.3.

CS(OS)4054/2014 Page 3

6. Learned counsel for plaintiff No.2 states that the relinquishment deed was to be executed in favour of defendant no. 1 and 2 and not defendant No.3 and that the proposed relinquishment deed is illegal.

7. On 23.11.2017, this court noted the submission of defendant No.3 that he was ready and willing to abide by the settlement dated 31.08.2017. It was also noted that an amount of Rs. 40lakhs which was payable to plaintiff No.1 has been paid and plaintiff No. 1 has now withdrawn from the suit. He stated that the balance payment of Rs.2.80 crores now remains payable to plaintiff No.2 and that he was ready and willing to pay the said amount within two months along with simple interest @ of 7% per annum. He also brought a bankers' cheque of Rs.10 lakhs in favour of the Registrar General of this court to show his bona fide. The said amount is lying deposited with the Registrar General of this court.

8. However, learned counsel for plaintiff No.2, at that stage, submitted that as per the settlement between the parties, the last date of payment to plaintiff No.2 was 15.11.2017. It was urged that the time was the essence of the contract and as the time has lapsed, plaintiff No.2 is not bound to receive the payment from defendant No.3. It was also urged that if defendant No.3 tendered the payment within one week or 10 days, plaintiff No.2 would be ready to carry out the transaction.

9. Today, learned counsel for defendant No.3 submits that the draft deed to be executed by plaintiff No. 2 has already been filed in court yesterday. A copy of the same has been handed over to the learned counsel for plaintiff No.2. Learned counsel also states that the entire amount of Rs.2.80 crores is readily available as he is carrying a bankers' cheque of Rs.2.70 crores in favour of the Registrar General of this Court. Hence he submits that the

CS(OS)4054/2014 Page 4 transaction as per consent order be completed.

Learned counsel appearing for plaintiff No. 2 however states that at best, even in terms of the order dated 23.11.2017, defendant No. 3 had time only up to 4th or 5th December, 2017 to make the payment. As he has defaulted, plaintiff No.2 is not obliged to carry forward the transaction. He states that settlement Agreement dated 31.08.2017 recorded in court now stands frustrated and has to be given a go bye. He presses for a preliminary decree in his favour. He further states that his client lives in UK and has ended up wasting his time only by entering into the settlement.

10. The controversy remains is as to whether this delay of one month in offering the payment by defendant no.3 would result in frustration of the family settlement that was entered between the parties in court on 31.08.2017. The settled legal position in this regard is that in a contract regarding immovable property, it would normally be presumed that the time is not the essence of the contract. In Smt. Chand Rani (dead) by LRs. Vs. Smt. Kamal Rani (dead) by LRs (1993) 1 SCC 519, the Supreme Court held as follows:-

"18. It is a well-accepted principle that in the case of sale of immovable property, time is never regarded as the essence of the contract. In fact, there is a presumption against time being the essence of the contract. This principle is not in any way different from that obtainable in England. Under the law of equity which governs the rights of the parties in the case of specific performance of contract to sell real estate, law looks not at the letter but at the substance of the agreement. It has to be ascertained whether under the terms of the contract the parties named a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. An intention to make time the essence of the contract must be expressed in unequivocal language."

CS(OS)4054/2014 Page 5 To the same effect is the judgment of the Supreme Court in Gomathinayagam Pillai & Ors. vs, Oakabuswanu Nadar, AIR 1967 SC

868.

11. A perusal of the order dated 31.08.2017 shows that there was nothing in the said settlement to show or indicate that the time was the essence of the contract that was entered into and recorded between the parties. Clause (c) of the settlement that was recorded did note that defendant No. 3 would on behalf defendants No. 1 and 2 pay an amount of Rs.3.20 crores by 15.11.2017 before the Sub-Registrar. Other than giving this time limit, there is nothing to show that the time was the essence of the contract between the parties. Defendant no.3 is carrying in court a bankers' cheque for Rs.2.7 Crores in favour of the plaintiff No.2. At best there is a delay of one month in making the payment. Reasons have also been given for the delay i.e. confusion about execution of the relinquishment deed. A sum of Rs. 10 lakhs was deposited in court on 23.11.2017 by defendant No.3 to show his bona fide.

12. I may also note that pursuant to this settlement dated 31.08.2017, defendant No.3 has already paid Rs.40 lakhs to plaintiff No. 1 who have moved out of the suit. Similarly, defendant No.2, namely, the sister has also relinquished her share in favour of defendant No.3. Defendant No.1 is the son of defendant No.3.

13. So what is the status of settlement duly recorded in the court on 31.08.2017 and signed by all the parties on the order sheet. Merely because, there is a delay of one month in tendering the payment by defendant No.3 would it mean the said settlement becomes non-est and non-enforceable. In

CS(OS)4054/2014 Page 6 my opinion, the answer has to be in negative. I may first look at the Order 23 Rule 3 CPC.

14. Order 23 Rule 3 CPC reads as follows:-

"3. Compromise of suit.- 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 in accordance therewith so far as it relates to the parties to the suit, whether or not the subject matter of the agreement, compromise or satisfaction is the same as the subject matter of the suit:

Provided that where it is alleged by one party and denied by the other than an adjustment or satisfaction has been arrived at, the court shall decide the question; but no adjournment shall be granted for the purpose of deciding the question, unless the court, for reasons to be recorded, thinks fit to grant such adjournment."

15. The issue that would arise is whether the settlement as recorded on 31.08.2017 can be termed to be a lawful agreement/compromise in writing and signed by the parties. The Supreme Court in Gurpreet Singh vs. Chatur Bhuj Goel AIR 1988 SC 400, noted as follows:

"8. For a proper appreciation of the contentions advanced, it is necessary to set out the Statement of Objects and Reasons which is in these terms:

Clause 77 (iii). It is provided that an agreement or compromise under Rule 3 should be in writing and signed by the parties. This is with a view to avoiding the setting up of oral agreements or compromises to delay the progress of the suit.

CS(OS)4054/2014 Page 7 The words 'lawful agreement or compromise' in Rule 3 have given rise to a conflict in the matter of interpretation. One view is that agreements which are voidable under Section 19A of the Contract Act are not excluded. While this stand is taken by the High Courts of Allahabad, Calcutta. Madras and Kerala, a contrary view has been expressed by the High Courts of Bombay and Nagpur. An Explanation has, therefore, been added to the rule to clarify the position. A proviso has been added to clarify that no adjournment should ordinarily be granted where a decision is necessary as to whether an adjustment or satisfaction has or has not been arrived at.

In view of the words 'so far as it relates to the suit' in Rule 3, a question arises whether decree which refers to the terms of a compromise in respect of matters beyond the scope of the suit is executable or whether the terms of the decree relating to the matters outside the suit can be enforced only by a separate suit. The amendment seeks to clarify the position.

The provision contained in Order XXIII, Rule 3 of the Code, as amended, provides:

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 in accordance therewith so far as it relates to the parties to the suit, whether or not the subject-matter of the agreement, compromise or satisfaction is the same as the subject- matter of the suit.

Provided 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; but no adjournment shall be granted for the purpose of deciding the question, unless the Court, for reasons to be recorded, thinks fit to grant such adjournment.

Explanation. An agreement or compromise which is void or voidable under the Indian Contract Act, 1872 (9 of 1872),

CS(OS)4054/2014 Page 8 shall not be deemed to be lawful within the meaning of this rule.

10. Under Rule 3 as it now stands, when a claim in suit has been adjusted wholly or in part by any lawful agreement or compromise, the compromise must be in writing and signed by the parties and there must be a completed agreement between them. To constitute an adjustment, the agreement or compromise must itself be capable of being embodied in a decree. When the parties enter into a compromise during the hearing of a suit or appeal, there is no reason why the requirement that the compromise should be reduced in writing in the form of an instrument signed by the parties should be dispensed with. The Court must therefore insist upon the parties to reduce the terms into writing.

11. In our considered opinion, the view to the contrary expressed by the High Court in Manohar Lal and Anr. v. Surjan Singh and Anr. [1983] Pun LJ 402 that the first part relates to a lawful agreement or compromise arrived at by the parties out of Court, does not seem to be correct. Sandhawalia, CJ speaking for himself and' Tewatia, J. observes that the word 'or' makes the two parts disjunctive and they visualise two distinct and separate classes of compromise. According to the learned Judges, the first part relates to a lawful agreement or compromise arrived at by the parties out of Court, while the second is applicable where the defendant satisfies the plaintiff in respect of the whole or any part of the subject matter of the suit. Such a restricted construction is not warranted by the language used in Rule 3. The word 'satisfies' denotes satisfaction of the claim of the plaintiff wholly or in part, and for this there need not he an agreement in writing signed by the parties. It is open to the defendant to prove such satisfaction by the production of a receipt or payment through bank or otherwise. The satisfaction of the claim could also be established by tendering of evidence. It is for the Court to decide the question upon taking evidence or by affidavits as to whether there has in fact been such satisfaction of the claim and pass a decree in accordance with Order XXIII, Rule 3 of the Code."

16. It is manifest that the parties had entered into a lawful agreement and

CS(OS)4054/2014 Page 9 compromise in writing which was duly signed by the parties. In fact the sanctity of the agreement is more as the agreement and compromise was recorded in court and was also duly signed by the parties in court. Subsequent to the agreement, defendant No.3 has partly acted on the basis of the agreement. He has paid plaintiff No. 1 a sum of Rs.40 lakhs on receipt of which plaintiff no.1 has moved out of the suit. To show his bona fade, he has also deposited Rs.10 lakhs with the Registrar General of this court and is today also carrying a demand draft of the balance amount payable to plaintiff No. 2 which is in favour of the Registrar General of this court.

17. Keeping in view the above facts, the settlement is a lawful agreement duly signed by the parties. It is a fit case for this court to pass a decree in terms of the settlement recorded on 31.08.2017. This would be in exercise of powers under Order 23 Rule 3 CPC.

18. I, accordingly, pass a decree in terms of the settlement recorded in court on 31.08.2017. The decree sheet shall incorporate all the terms and conditions of the settlement. The suit and all the pending applications stand disposed of.

19. The sum of Rs.10 lacs lying can be withdrawn by plaintiff No.2 as part payment of the agreed amount.

JAYANT NATH, J.

DECEMBER 15, 2017/rb




CS(OS)4054/2014                                                         Page 10