2005 Supreme(SC) 1610

2005(8) Supreme 516
Supreme Court of India
(From Delhi High Court)
S.B. Sinha & P.K. Balasubramanyan, JJ.
N.K. Rajgarhia —Appellant
versus
M/s. Mahavir Plantation Ltd. & Ors. —Respondents
Civil Appeal No. 7535 of 2005
[Special Leave Petition (C) No. 17920 of 2005]
Decided on 16-12-2005
Counsel for the Parties :
For the Appellant : C. Mukund, Ashok Jain, Pankaj Jain, Mrs. Neeraj Anand and Bijoy Kumar Jain, Advocates.
For the Respondents : C.N. Sree Kumar and Ms. Deepa S., Advocates.

Important point
Though provisions of Order XXIII CPC are not applicable to an execution proceedings, parties may enter into a settlement even in execution proceedings.

Headnote:Civil Procedure Code, 1908—Order 23 Rule 4—Provisions though not applicable to an execution proceedings, parties may enter into a settlement even in an execution proceedings —Suit for recovery of Rs. 75 lakhs filed by appellant resulted in consent decree for Rs. 41,69,110/- where for nine cheques were issued—Plaintiff waived his remaining claim on premise that respondent had agreed to settle disputes—Compromise term provided that in event any of the cheque was dishonoured, balance amount shall become payable at one time in which event decree holder would be entitled to execute the decree for realisation of remaining balance amount plus interest calculated at 15% p.a.—On dishonour of cheque, appellant filed execution—Parties again entered into a settlement and execution was disposed of—Respondent again became defaulter and appellant again filed the execution—Respondent prayed for extention of time which Court granted—Division Bench disposed of appeal without notice to respondent—Appeal —Judgment debtor had paid entire amount together with interest in terms of consent order passed in execution—Question for consideration was interpretation of words “balance decree” occurring in consent decree—Appellant’s contention that on default, appellant was entitled to execute balance decree entitled appellant to further sum of Rs. 41 lakhs which was waived by him was without merit—Sum waived by appellant did not form part of consent decree —Appeal was without merits.

       Held : The suit was filed for recovery of a sum of Rs. 75 lakhs. The consent decree passed by the court shows that a decree for a sum of Rs. 41,69,110/- became payable wherefor nine cheques were issued. It is also not in dispute that the plaintiff waived his remaining claim on the premise that the Respondent had agreed to settle the disputes. Clause (b) of the Compromise Petition filed by the parties merely shows that in the event, any of the cheque is dishonoured or returned unpaid, the entire remaining balance amount shall become payable at one time in which event, the decree holder would be entitled to execute the decree for realization of the entire remaining balance amount plus interest calculated at the rate of 15% per annum. Order XXIII, Rule 4 of the Code of Civil Procedure states that other provisions thereof are not applicable to an execution proceedings. But, despite the same, it is now well-settled that the parties may enter into a settlement even in a execution proceedings. (Paras 12 and 13)

       There cannot, thus, be any doubt that the compromise entered into by and between the parties hereto in the execution proceedings was valid in law. The Appellant moreover does not say that the same was not acted upon. Admittedly, he received the entire amount thereunder, albeit belatedly; but even therefor the Respondent applied for and obtained extension of time to pay the same. Rightly or wrongly, the learned Single Judge of the Delhi High Court by an order dated 28.8.2002 extended the time to the Respondent herein for paying the decretal amount with interest upto 23.7.2002. The Appellant herein had accepted such amount and that order was not questioned and, thus, the same had attained finality. What was questioned was the liability incurred by the Respondent not being able to adhere to the terms thereof. If the orders of extension have validly been passed, the order of the court stood complied with. It may be true that the order dated 1.4.2002 was not questioned by the Respondent before this Court but then no direction was issued therein. No judgment was passed. The said order was passed without issuing any notice to the Respondents. The appeal was disposed of as having become infructuous. It was, thus, not final. Thereby, merely a liberty had been granted to the Appellant to agitate his grievances before the learned Single Judge for execution as well as for contempt. By reason of the said order, alone the Appellant could not put forth his claim. The Appellant thus, cannot take any benefit thereof. (Paras 16 to 18)

       The contention of the learned counsel appearing on behalf of the Appellant is that once a default is committed by the Respondent, the Appellant in terms thereof, would be entitled to execute the balance decree immediately which would mean he would be entitled to a further sum of about Rs. 41 lakhs, which was waived by him. We do not agree. The word decree’ after the word ‘balance’, in our opinion, has been used loosely. The matter might have been different if the amount payable under the compromise entered into by the parties in the execution case would have been less than the amount paid by the Respondent to the Appellant in terms of the consent decree passed originally. It is not so. Whereas under the original decree, a sum of Rs. 41,69,110/- was payable, in terms of the consent order passed in the execution case, a sum of Rs. 42,04,222/- became payable. The sum which was waived by the Appellant did not form part of the consent decree. It was merely a claim. Such a claim never fructified into any decree and in that view of the matter the plea of Respondent being liable to pay the said amount to the Appellant despite the fact that no decree in relation thereto was passed cannot be countenanced. (Para 22)