Full Text
HIGH COURT OF DELHI
Date of Decision: 16th November, 2021
SALAHUDDIN MIRZA ..... Petitioner
Through: Ms. Isha Aggarwal, Advocate.
(M: 9810793583)
Through: Mr. Rashil Gandhi, Advocate (M-9643484400)
JUDGMENT
1. This hearing has been done through hybrid mode.
2. The present revision petition arises out of impugned order dated 9th September, 2020, passed by the ld. Civil Judge-08 (Central), Tis Hazari Courts, New Delhi (hereinafter, “Executing Court”), by which the execution petition filed by the Petitioner has been dismissed.
3. The brief background to the dispute is that a Collaboration Agreement, dated 30th August 2018, was entered into between the Petitioner/ Plaintiff: Mr. Salahuddin Mirza (Mr. S.D. Mirza) and five individuals: Mohd. Anwar, Mohd. Zafar, Mohd. Qamar, Mohd. Aslam and Mohd. Aziz Ahmed. The Respondents in the present petition/ Defendant in the suit are legal heirs of Mohd. Qamar, and are the only contesting parties. The said Collaboration Agreement was in relation to the property bearing No. 3738, area measuring 70 Sq. Yds., approx., situated at Gali Masjid Wali, Shah Ganj Chowk, Ajmeri Gate, Delhi-110006 (hereinafter, “suit property”). A 2021:DHC:3694 suit, bearing Suit No. 3145/19, came to be filed in respect of the said Collaboration Agreement by the Plaintiff/Petitioner herein, in which the parties entered into a settlement vide the MoU dated 18th January, 2020. The said MoU (also termed as a Compromise Deed) was placed before the Trial Court and statement of the Plaintiff was recorded on 23rd January, 2020 to the following effect: “……………………… I am the plaintiff in the present case. I have settled the present matter with the Lrs of defendant No.1. The settlement has been reduced into writing and photocopy of the same is Ex.P1(OSR). Therefore, in view of the compromise deed Ex.P[1], I pray that present suit may be disposed of as withdrawn as settled.”
4. On the same date, ld. counsels for both the parties appeared before the Trial Court. Even the Defendant appeared in person. The following order was passed by the Trial Court: “ It is jointly submitted that the matter has been settled between the parties and the terms of settlement have been reduced into writing. Photocopy of compromise deed is placed on record. Same is Ex. P[1] (OSR). In view of compromise deed Ex. P[1], ld. Counsel for plaintiff prays that the present suit may be disposed of as withdrawn as settled. Heard. Let statement of plaintiff be recorded. Separate statement of plaintiff to this effect recorded. In view of the statement of plaintiff, present suit is disposed of as withdrawn as settled in terms of compromise deed Ex. P[1].”
5. It is the case of the Plaintiff that in terms of the said settlement the possession of the 1st and 2nd floor has been handed over to the Defendants. The said fact is not disputed. It is further the case of the Plaintiff that a sum of Rs. 1 Lakh has also been paid to the Defendant, which is however disputed by the Defendants. However, according to the Plaintiffs, none of the remaining steps in terms of the said MoU were taken.
6. Since, various other terms of the MoU were not given effect to by the Defendants, the Plaintiff filed an execution petition, in which the impugned order has been passed, dismissing the said petition.
7. Ms. Isha Aggarwal, ld. Counsel appearing for the Plaintiff submits that the MoU/ Compromise Deed is not disputed between the parties. She further submits that the Respondent has also accepted and assumed possession of the 1st and the 2nd Floor of the suit property, pursuant to the said MoU. Accordingly, in her submission, though a formal decree was not drawn up by the Trial Court, for whatever reasons, the Execution Petition could not have been dismissed merely on the ground of no such formal decree having been drawn by the Trial Court. She submits that the judgment of the Supreme Court in Sir Sobha Singh and Sons Pvt. Limited v. Shashi Mohan Kapoor (deceased) (2019) 9 SCALE 369, clearly supports her case, as in the said judgment, the Supreme Court has held that an execution petition can be preferred, even if a formal decree is not drawn by the Trial Court.
8. On the other hand, ld. Counsel for the Defendants raises a completely new plea before the court to the effect that under Section 14 of the Specific Relief Act, 1963, post the amendment in 2018, any contract, the performance of which involves the continuous duty which the court cannot supervise, cannot be specifically imposed upon the parties. He relies upon the judgment of the Supreme Court in B. Santoshamma and Anr. v. D. Sarala and Anr. (2020) SCC Online SC 756 and the judgment of the Bombay High Court in Bhanumati Jaisukhbhai Bhuta v. Ivory Properties and Hotels Private Limited and Anr. (2020) SCC Online Bom 157 to canvass this proposition. He further submits that since the construction itself has not taken place, no execution, in respect thereof, could have been entertained by the executing court, and hence the impugned order is liable to be upheld.
9. Heard ld. Counsel for the parties and perused the record.
10. The order of the Trial Court dated 23rd January 2020 clearly notes that the parties were present in present in person before the Trial Court. The MoU/Compromise Deed was presented to the Trial Court and has been exhibited as Ex. P[1]. However, the Trial Court for inexplicable reasons, has not recorded the statements of the Defendants who had appeared before the Court on the said date, and whose appearance was marked in the said order. The statements of the Defendant in respect of the MoU/Compromise Deed ought to have been recorded by the Trial Court.
11. Further, the MoU/Compromise Deed has been exhibited as Ex. P[1], however, the suit has been disposed of as dismissed as withdrawn as settled. This is not the correct course of action that is required to be followed by the Trial Courts under Order XXIII Rule 3 of CPC.
12. A perusal of the order passed by the Trial Court, taking on record the settlement vide the MoU/ Compromise Deed dated 18th January 2020, and disposing of the suit filed by the Plaintiff, shows that the same was fraught with errors.
13. Order XXIII Rule 3 CPC reads as under: “ORDER XXIII Withdrawal and Adjustment of Suits ….
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 satisfied the plaintiff in respect to 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), shall not be deemed to be lawful within the meaning of this rule.”
14. In terms of the said provision, the Trial Court is mandated to pass a decree recording the agreement or compromise, and its satisfaction in respect thereof. The said principle has been settled by the Supreme Court in Katikara Chintamani Dora and ors. v. Guntreddi Annamanaidu and ors. (1974) 1 SCC 567, where the Supreme Court observed:
15. Even in the decision of the Supreme Court in Sir Sobha Singh (supra), it has clearly been held that a decree being passed in accordance with the compromise is necessary. The Supreme Court held:
16. The said position of law has been recently reiterated by the Supreme Court in R. Janakiammal v. S.K.Kumarasamy (Deceased) through Legal Representatives and ors. (Civil Appeal No. 1537/2016, decided on 30th June 2021), where the Supreme Court has observed:
17. Accordingly, whenever a settlement is presented before a court, the court, after satisfying itself as to the legality and validity of the said settlement and after recording the statements of parties identified by their respective Counsels, has to take on record the compromise or the settlement and pass a decree in terms thereof. This course of action has clearly not been followed by the Trial Court in this case. The said error can at best be attributed to the Court itself and not to the parties to the proceedings.
18 Insofar as the parties and their ld. Counsels are concerned, they were all present before the Trial Court, as is expected to be done in such a case, and the MoU/Compromise Deed was also presented to the court. The phrase used by the Trial Court in the order: “disposed of as withdrawn as settled”, is contrary to the scheme of Order XXIII Rule 3. The MoU/Compromise Deed ought to have been taken on record and exhibited, as has been done by the Trial Court, and a decree in terms of the said Compromise Deed ought to have been drawn.
19. Having said so, a perusal of the order dated 23rd January 2020 passed by the Trial Court leaves no doubt in the mind of this court that there was a proper settlement that was entered into the parties. The Defendants have in fact benefitted from the settlement and have received the possession of the 1st and 2nd floor, as has been confirmed by the ld. Counsel for the Defendants today on a specific query put from the court in respect thereof.
20. The Defendants, having benefitted from the settlement on the one hand and having been holding possession of the property, cannot argue that the said settlement is not specifically enforceable.
21. Moreover, the Executing Court also had a duty to ensure that the MoU/Compromise Deed was duly given effect to between the parties, and any party which seems to be resiling from a duly executed MoU/ Compromise Deed before a court of law, ought not to have been given such a benefit by dismissing the execution petition in relation thereto.
22. The MoU/Compromise Deed, dated 18th January, which was entered into between the parties is legal and valid and the same has taken on record by the Trial Court. The suit has also been decreed in terms of the settlement. The mere act of not drawing a formal decree in respect of the settlement would not deprive the parties of the benefits of the settlement entered into before a court of law. The same is liable to be executed. The said position of law has also clearly been enunciated in the judgment of the Supreme Court in Sir Sobha Singh (supra), where the Supreme Court held: