COMPACK ENTERPRISES INDIA (P) LTD. vs BEANT SINGH

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2021 Supreme(SC) 88

SUPREME COURT OF INDIA
MOHAN M. SHANTANAGOUDAR, VINEET SARAN, JJ.
COMPACK ENTERPRISES INDIA (P) LTD. – APPELLANT
VERSUS
BEANT SINGH – RESPONDENT
SPECIAL LEAVE PETITION (CIVIL) NOS. 2224-2225 OF 2021 (Arising out of SLP(C) Diary No. 38441 of 2019)
Decided on : 17-02-2021

Advocates Appeared:
For the Petitioner(s):E. C. Agrawala, Advocates
For the Respondent(s):Anchal Mullick, Purushottam Sharma Tripathi, Advocates

Headnote:
Constitution of India, 1950 - Article 227 - Code of Civil Procedure, 1908 - Order XII, Rule 6 - Special Leave Petitions - Suit for possession and mesne profits - Respondent, is owner of suit property - He, through M/s Channa Auto Agencies (P) Ltd. Executed a license agreement in respect of a portion of suit property in favour of M/s Compack Enterprises, for a period of 30 months in consideration for a monthly license fee of Rs. 28,000/ - Compack Enterprises merged with Compack Enterprises India (P) Ltd - and 2000 Agreement continued with mutual consent of parties. License arrangement was renewed for another 30 months, with a 10% increase in monthly license fee to Rs.30,800- 2003 Agreement was renewed for last time effective, with a further 10% increase in monthly license fee – Held, Bench would like to register its displeasure at Petitioner’s repeated and persistent efforts to reagitate question of delivery of possession to Respondent, in an attempt to circumvent complying with view taken by High Court in judgment, which has now attained finality - Despite clear direction in that judgment to vacate possession in favour of Respondent, pending any adjudication on separate proceedings for possession and specific enforcement initiated Petitioner handed over possession - Possession has to this date not been handed over to Respondent, who has been dragged to court time and again due to Petitioner’s conduct - This is an instance of blatant disregard for Court’s orders, and an abuse of judicial process - Special Leave Petitions stand disposed of.

Judgement Key Points

A consent decree is a legal agreement between parties that is approved and issued by the court, creating a binding judgment that settles the dispute. It is intended to reflect the true intentions of the parties and to resolve the issues in controversy, often involving terms such as payment of sums, transfer of possession, or other obligations.

Once a consent decree is recorded and approved by the court, it generally creates an estoppel, preventing the parties from re-litigating the same issues. Courts tend to exercise caution before modifying or interfering with the terms of a consent decree, as it embodies the parties' compromise and settlement. However, the court may exercise its inherent jurisdiction to correct or modify the decree if there is a clear and apparent error on the face of the record, or if the decree does not accurately reflect the parties' true intentions.

In the provided document, the court emphasized that consent decrees are intended to create finality and prevent further disputes between the parties. The court will only consider interference in such decrees in exceptional cases where an obvious or glaring mistake is evident. For example, errors in recording the terms, such as the frequency of percentage increases or the scope of possession, may be corrected if they are apparent and do not alter the fundamental agreement of the parties.

In summary, a consent decree is a court-approved agreement that is binding on the parties, and courts are generally reluctant to modify it unless there is a clear, obvious mistake or error that warrants correction to reflect the true intention of the parties.

JUDGMENT :

MOHAN M. SHANTANAGOUDAR, J.

1. These petitions arise out of judgments of the High Court of Delhi (hereinafter ‘High Court’) dated 14.02.2019 and 25.07.2019. By the first impugned judgment dated 14.02.2019, the High Court disposed of the regular first appeal RFA No. 253/2018 filed by the Petitioner against judgment and order of the Ld. Additional District Judge, Rohini (‘Trial Court’) dated 23.09.2017 in Suit No. 58395/2016 filed by the Respondent. Whereas by the second impugned judgment dated 25.7.2019, the High Court disposed of Review Petition No. 177/2019 filed by the Petitioner against the judgment in RFA No. 253/2018.

I. Background Facts

2. These cases concern a suit for possession and mesne profits filed by the Respondent/plaintiff against the Petitioner/defendant, with respect to the ground floor of the property bearing No.B-60, Ground Floor, G.T. Karnal Road, Industrial Area, Delhi-110033, admeasuring 608 sq. yards (or, 5,472 sq. ft.) (hereinafter ‘suit property’).

3. The Respondent, Beant Singh, is the owner of the suit property. He, through M/s Channa Auto Agencies (P) Ltd. (of which he is a Director), executed a license agreement dated 1.11.2000 in respect of a portion of the suit property in favour of M/s Compack Enterprises (the Petitioner’s predecessor), for a period of 30 months in consideration for a monthly license fee of Rs. 28,000/(hereinafter, ‘2000 Agreement’). On 1.04.2003, Compack Enterprises merged with Compack Enterprises India (P) Ltd. (i.e., the Petitioner herein), and the 2000 Agreement continued with mutual consent of parties. The license arrangement was renewed on 1.07.2003 for another 30 months, with a 10% increase in monthly license fee to Rs.30,800/(hereinafter, ‘2003 Agreement’). The 2003 Agreement was renewed for the last time effective from 1.04.2006 and expiring on 30.09.2008, with a further 10% increase in monthly license fee to Rs.33,900/ (hereinafter, ‘2006 Agreement’).

4. However, even after the expiry of the 2006 Agreement on 30.9.2008, and non-renewal of the same, the Petitioner continued to occupy the suit property. Consequently, the Respondent brought O.S. No. 58395/2016 against the Petitioner on 13.02.2009 for recovering possession of the entire suit property and mesne profits thereon from 1.10.2008 till the vacation of the suit property.

Petitioner/Defendant’s Arguments in Original Suit No. 58395/2016

5. On the question of vacating possession, the Petitioner admitted to having been in possession of only a portion of the suit property measuring 2,200 sq. ft., averring that it was only this portion, not the entire suit property admeasuring 5,427 sq. ft., that was licensed to them by the Respondent.

6. Petitioner further contended that its continued possession of this portion of the suit property was lawful, since the Respondent had concealed the material fact of having entered into an agreement dated 11.6.2008 to sell the suit property to one Mr. Ajay Gosain for a sum of Rs. 4 crores, of which the Respondent had already received a sum of Rs. 65 lakhs. The suit property was agreed to be sold to, and was thus in lawful possession of, Mr. Gosain before the expiry of the 2006 Agreement on 30.09.2008. Mr. Gosain is the husband of one of the Petitioner’s Directors, and also the brother of another Director.

7. On the question of mesne profits, Petitioner contended that it had been in possession of only 2,200 sq. ft. of the suit property and had been paying license fee for it till July, 2015 as per the interim order passed by the Trial Court; and that they vacated the premises in July, 2015 and handed over possession to Mr. Gosain, to whom the Respondent had allegedly transferred possession of the suit property pursuant to the agreement to sell. Thus, the Petitioner claims that it is not liable to pay any further sum to the Respondent.

Trial Court’s Judgment dated 23.09.2017

8. On the question of vacating possession, the Trial Court held that the issue had already been decided by the High