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2017 Supreme(Bom) 2251

IN THE HIGH COURT OF BOMBAY
S. B. Shukre, J.
SURESH s/o DAULATRAO WIRULKAR - Appellant
Vs.
GANESH s/o RAJARAM BODKHE - Respondent
Civil Rev. Appln. No. 86 of 2017
Decided On : 13-09-2017

Advocates Appeared:
For the Appellant : S. S. Sitani
For the Respondent: U. A. Gosavi

The compromise agreement was found to be accompanied by consideration as defined in the Indian Contract Act, and therefore, the objection was rejected.

Headnote:

Compromise Agreement - Indian Contract Act - Section 10, Section 25, Section 2(d) - Order XXIII, Rule 3 - Legal Services Authorities Act, Section 21

Fact of the Case:

The applicant challenged the legality of a compromise decree regarding specific performance of a contract, claiming it was void due to lack of consideration. The executing Court rejected the objection, citing the finality of the decree passed by Lok Adalat under the Legal Services Authorities Act.

Finding of the Court:

The Court found that the compromise agreement was accompanied by consideration as defined in the Indian Contract Act, and therefore, the objection was rejected. The impugned order was deemed legal and without material irregularities.

Issues: Legality of compromise decree, validity of consideration in the compromise agreement, applicability of Order XXIII, Rule 3, Section 10 and Section 25 of the Indian Contract Act, and the finality of the decree passed by Lok Adalat under the Legal Services Authorities Act.

Ratio Decidendi: The compromise agreement was found to be accompanied by consideration as defined in the Indian Contract Act, and therefore, the objection was rejected. The provisions of Order XXIII, Rule 3, Section 10 and Section 25 of the Indian Contract Act were deemed not to be attracted in the present case.

Final Decision: The application was rejected, and the parties were ordered to bear their own costs. The revision was dismissed.

JUDGMENT :

Rule. Rule made returnable forthwith.

2. Heard finally by consent.

3. By this revision application, the legality and the correctness of the order dated 6-4-2017, passed on objection application (Exh.36) filed by the applicant-judgment debtor has been questioned.

4. According to the applicant, the compromise decree regarding specific performance of contract passed in Special Civil Suit No. 303/2008 between the applicant, the judgment debtor and the non-applicant, the decree holder is illegal as the compromise agreement between the parties being devoid of any consideration was void in terms of section 10 and section 25 of the Indian Contract Act and therefore, was hit by the explanation given to Order XXIII, Rule 3 of the Code of Civil Procedure. The objection application has been rejected by the executing Court, the Court of Civil Judge, Senior Division, Nagpur on the ground that the decree passed by Lok Adalat on the basis of mutual settlement between the parties is final in terms of section 21 of the Legal Services Authorities Act and therefore, it is not amenable to any such challenge as raised in the objection application. The executing Court was also of the view that there is a distinction between an agreement devoid of consideration, which is void in law and the compromise arrived at between the disputing parties in a pending civil suit and that to a compromise agreement between the parties, the rigors of valid agreement between the parties would not apply.

5. Learned counsel for the applicant submits that a bare perusal of the compromises application jointly filed by both the parties would show that there is not even a whisper about the price of the agricultural field, the suit property, being paid by the decree holder and therefore, one has to say that this compromise application executed by both the parties is not accompanied by any consideration and as such void in law.

6. Learned counsel for the non-applicant disagrees. He submits that the consideration between the parties is implicit in this agreement.

7. Section 2(d) of the Indian Contract Act, 1872 defines consideration. It is something done or promised to be done or something not done or something promised not to be done by the promisee at the desire of the promiser. This definition clearly shows that the consideration could be monetary as well as in kind or in the nature of some sacrifice made by the promisee at the desire of the promiser. Having understood the concept of consideration under the Indian Contract Act, now we would have to take a look at the compromise application signed and executed by the parties.

8. It is seen from the compromise application that even though there is no mention in it about payment of price of the suit properly, the deficiency is made up by what is stated in its paragraph 3(1). Contents of this para disclose that the defendant (applicant-judgment debtor) has shown his readiness to execute the sale-deed in respect of 1/4th share out of his 1/3rd share from the property bearing Khasra No. 81/2, P.H. No. 46 situated at mouza Isasani. So, this is an act promised to be done by the defendant or the applicant who is the promisee in the instant case. The respondent or the decree holder is the promiser in this case and as seen from the prayer clause, has expressed a desire that in lieu of the promise so given by the promisee, the Court be pleased to grant a compromise judgment and decree as per the terms and conditions mentioned in the application. These mutual acts performed or promised to be performed by both parties from the consideration for what each of the parties to the compromise application has agreed to do in the present case. Therefore, this is not a case wherein one can surely say that the compromise application was devoid of any consideration, as the term is defined in law.

9. In the case of Namdeo Hambira Babar and others vs. Gajanan Bhauso Babar and others, reported in 2015 (1) Mh.L.J. 932, relied upon by the learned coun





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