The Delhi High Court upheld a settlement recorded by authorized counsels in an execution petition and directed auction of judgment debtors' property for non-payment of the agreed sum.
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EX.P. 336/2014 HIGH COURT OF DELHI Date of Decision: 28th May, 2019.
EX.P. 336/2014 SURINDER KUMAR AGGARWAL ..... Decree Holder Through: Mr. S.K. Singh, Mr. Rameezuddin Raja & Mr. Shakti Verma, Advocates (M-9899347995)
VERSUS
MOTI GUPTA JAGDISH KUMAR GUPTA & ANR ..... Judgement Debtors Through: Mr. Arjun Dev, Proxy counsel (M- 9873045000) Mr. Jawahar Chawla, Advocate for Mr. Mridul Gupta.
CORAM:
JUSTICE PRATHIBA M. SINGH Prathiba M. Singh, J. (Oral)
JUDGMENT
1. The present execution petition was disposed of vide order dated 31st July, 2018 after recording the settlement between the parties. The said order reads as under:
“1. Amended memo of parties is taken on record. This is an execution petition seeking to execute the judgment and decree dated 15th December, 2013 passed by the Commercial Plenary Court in Dubai. The case of the decree holder who was the Plaintiff in the said Court is that the Plaintiff lent a sum of AED 1,500,000/- (AED one million and five hundred thousand) to the Defendant No.2. In acknowledgment of the said loan, Defendant No.2 had executed an acknowledgment and
2019:DHC:2897 she had also handed over a cheque No.001001dated 26th May, 2013, for a sum of 1.[5] million AED by Habib Bank AG Zurich signed by her husband- Defendant No.1. The counsel for the Defendant does not dispute the signatures of his client on the said acknowledgment or on the cheque. Admittedly, the cheque was dishonored which led to the filing of the suit by the Petitioner /Decree Holder.
2. In the present execution petition, vide order dated 16th March, 2018, this Court had directed the Judgment Debtors to file an affidavit of assets within two weeks. The said affidavits have been placed on record both by Mr. Moti Gupta @ Mr. Jagdish Gupta and Mrs. Neeta Gupta. The residential property H.No.42-B & 43, Ashoka Park, Main Rohtak Road, Delhi is where the family is living. The Judgment Debtors have stated that the said house is in the name of their son Mr. Mridul Gupta. Upon enquiry, counsel for the Judgment Debtors submits that the said house was in the name Mrs. Neeta Gupta and was transferred by registered gift deed dated 27th May, 2015 in favour of her son Mr. Mridul Gupta. Clearly, the said gift deed has been executed after the passing of the decree which is sought to be executed in the present petition.
3. On the last date, an interim injunction was granted restraining the Judgment Debtors from alienating, transferring or creating any third-party interest on House No.42B & 43, Ashoka Park, Main Rohtak Road, Delhi. The Judgment Debtors were also directed to seek instructions as to how they can secure the interest of the Petitioner/Decree Holder. Today, the parties have appeared before this Court. Learned counsel for Judgment Debtors submits that his client is ready and willing to pay a sum of Rs.[3] crores as full and final settlement of the decree. Learned counsel for the Decree Holder submits that his client is willing to accept the said amount provided the same is paid expeditiously. Learned counsel for Judgment Debtors submits that his client is willing to dispose of a part of the property at Ashoka Park, Main Rohtak Road, Delhi in order to pay the Decree Holder.
4. Accordingly, the present execution petition is disposed of, recording the settlement of the parties in the following terms. i) The Judgment Debtors shall pay a lumpsum amount of Rs.[3] crores in full and final settlement of the decree dated 15th December, 2013 passed by the Commercial Plenary Court. ii) The said payment of Rs.[3] crores shall be cleared on or before 31st December, 2018. iii) In order to agree for the modalities of the payment, the matter is placed before the Delhi High Court Mediation and Conciliation Centre.
5. Execution petition is disposed of as settled, however, since the Petitioner/Decree Holder has since expired and is survived by his wife and daughter, who are in need of money, the matter is listed for compliance to report on the mediation proceedings. All the pending I.As. also stand disposed of with the execution petition. In case the amount as agreed is not paid within the stipulated time, the Decree holder is entitled to seek attachment and auction of House No.42B & 43, Ashoka Park, Main Rohtak Road, Delhi. Until the entire payment is made the interim injunction passed on the last date shall continue to operate.
6. List before the Delhi High Court Mediation and Conciliation Centre on 16th August, 2018. Ms. Veena Ralli is appointed as mediator to enable the parties to agree on the terms and modalities of payment.
7. Petition is disposed of. List before Court for reporting compliance on 25th September, 2018.”
2. Despite the above settlement having been entered into, an application was moved seeking recall of the above order. The said application was based on the premise that the parties were not present when the settlement was recorded. Considering the averments in the application, notice was issued to the counsels, who had appeared for the Judgement Debtors on 31st July,
2018. The said counsels appeared before the Court on 8th October, 2018, on which date, after hearing the parties, the following order was passed.
“1. Mr. Alok Sinha, Advocate is present with Mr. Parmendra Ojha, Advocate. They were the counsels who represented the Judgment Debtors on 31st July, 2018. They submit that they are representing the Judgment Debtor No.1 in at least four to five matters. They also categorically submit that for entering into the settlement on 31st July, 2018, Judgment Debtor-1 had given them instructions to settle the matter. Accordingly, the settlement was recorded on the said date. 2. It is also submitted by them that the Judgment Debtor Nos.1 and 2 have also participated in the mediation proceedings on 16th August, 2018. Thereafter, they took away the files from them around 18th August, 2018. Mr. Parmendra Ojha in fact submits that he has messages on his phone which would establish that the Judgment Debtor No.1 had agreed to meet him and even after the first date before the Mediator, Judgment Debtor No.1 had agreed to obtain the valuation of the property. 3. A report was called from the mediation centre as well. Ms. Veena Ralli, learned Mediator, has also confirmed in her report that on 16th August, 2018 both Mr. Moti Gupta and Ms. Neeta Gupta @ Anita were present along with Mr. Alok Sinha and Mr. Parmendra Ojha, learned counsels. Even thereafter when the counsel was changed, Ms. Neeta Gupta @ Anita was present on 20th August, 2018. 4. In this view of the matter, the allegations made against the counsels to the effect that no instructions were given to the counsels to enter into the settlement
is proved to be false. The application presently moved i.e. EX.APPL.(OS) 412/2018 is, therefore, completely bereft of merits and in fact constitutes a false statement made before the Court.
5. Ms. Anju Jain who is present today on behalf of the Judgment Debtors submits that Judgment Debtor No.1 has not come to Court today on the ground that he is not keeping well. She submits that she would not like to make any further submissions in view of the submissions made by the earlier counsels Mr. Alok Sinha and Mr. Parmendra Ojha.
6. Mr. Alok Sinha and Mr. Parmendra Ojha are discharged from this matter. Ms. Neeta Gupta @ Anita is present in Court and submits that the parties were not present on the date when the order was passed. Irrespective of whether the parties were actually present, in view of the statement of the learned counsels, it is clear that, the counsels who were present, were duly instructed. Further, the participation of the Judgment Debtors before the Mediator also establishes that the Judgment Debtors, having entered into a settlement are now attempting to resile from the same, by blaming the counsels. There is no reason to recall the said order dated 31st July,
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2018. The EX.APPL.(OS) 412/2018 is accordingly dismissed.
7. As per paragraph 5 of the order dated 31st July, 2018 if the Judgment Debtors do not make the payment, the Decree Holder is entitled to seek attachment and auction of House No.42-B & 43, Ashoka Park Main, Village Basai Darapur, Rohtak Road, Rampura, New Delhi-110035. Accordingly House No.42-B & 43, Ashoka Park Main, Village Basai Darapur, Rohtak Road, Rampura, New Delhi- 110035 stands attached. The Court Auctioneer is hereby appointed to take proceedings for auctioning the property House No.42-B & 43, Ashoka Park Main, Village Basai Darapur, Rohtak Road, Rampura, New Delhi-110035.
8. Mr. K.C. Talwar, Chartered Engineer (M:9810079212) is appointed as a Valuer to value the suit property on the basis of prevalent circle and market rates and place the same before the Court. The fee of the valuer is a sum of Rs.20,000/-, to be shared by the parties equally.
9. The Judgment Debtor Nos.[1] and 2 shall ensure that they do not part with possession or create any third party interest in the suit property till the next date.
10. List on 20th November, 2018.”
3. From the above order, it is clear that the statement of the Judgement Debtors, that they had not instructed the counsels to enter into the settlement, was false. In fact, after the settlement was entered into, the Judgment Debtors had even appeared before the Ld. Mediator in the Delhi High Court Mediation and Conciliation Centre. As per the order recording the settlement, if the payment of Rs.[3] crores was not made on or before 31st December, 2018, the Decree Holder was given permission to seek attachment/auction of house No.42B-43, Ashoka Park, Main Rohtak Road, Delhi. Accordingly, a Court Valuer was appointed to value the suit property. On 20th November, 2018 fresh counsels appeared on behalf of the Judgement Debtors. The valuer informed the Court that the Judgement Debtors had created obstructions in the smooth conduct of the valuation process. Accordingly, directions were sought by the Decree Holder. Thereafter, however, the valuer completed his process of valuation and filed his report.
4. On 14th March, 2019, the counsels appearing for the Judgment Debtors submitted that they had filed objections to the execution petition. However, the same were not on record even on 21st May, 2019. The report of the valuer was not scanned and the same was called for by the Court and the matter was listed today.
5. Ld. counsel appearing for Mr. Mridul Gupta, son of the Judgment Debtors submits that he has filed his objections. However, the same are not on record. It is submitted by him that the auction ought not to be directed and his objection ought to be considered.
6. Since 31st July, 2018, when the settlement had taken place, the Judgement Debtors have failed to honour and adhere to the settlement. On the said date itself, it was made clear that if the amount of Rs.[3] crores was not paid within the time agreed, the auction of the property would be directed. Since then, the conduct of the Judgement Debtors has been deplorable to say the least. After having undertaken to pay the sum of Rs.[3] crores, they have failed to make any payments. In order to avoid the attachment/auction, the property is sought to be transferred within the family i.e. son/daughter-in-law. Such methods of avoiding execution are completely impermissible. Sufficient opportunity was available to the Objector to bring on record the alleged objections, which are stated to have been filed. However, there are no objections on record till date.
7. The valuation report has been received and the property has been valued at Rs.1.85 crores as the market value. There are no objections on record. The attachment/auction was already directed on 8th October, 2018. The directions for auction having already been passed, there is no reason to stop the same.
8. Accordingly, it is directed that the Court Auctioneer of this Court shall take further steps to auction the said property No.42B-43, Ashoka Park, Main Rohtak Road, Delhi. The reserve price for the property shall be fixed at Rs.1.85 crores. The auction proceeds shall be deposited before this Court. Upon the auction being conducted and the proceeds being received, the same shall be released to the Decree Holder to the extent of Rs.[3] crores. Any excess amount shall be released to the Judgement Debtors. If any amount still remains to be outstanding, after conduct of the auction, the Decree Holder may seek further reliefs. The Petition already stands disposed of.
9. List for receiving the report of the court auctioneer on 15th October,
2019.
PRATHIBA M. SINGH
JUDGE
MAY 28, 2019 dk
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