The main legal point established in the judgment is the validity and enforceability of a compromise settlement in a specific performance suit.

Vibhu Bakhru, J.

IA Nos.1541/2005, 843/2006 & 4476/2014

1. IA no.1541/2005 is an application filed under Order XXIII Rule 3 of the Code of Civil Procedure, 1908 (hereafter ‘the CPC’) by the plaintiff, defendant no.1 and defendant no.3 praying that a decree be passed in terms of the compromise arrived at between the said parties.

2. The above captioned suit has been filed by the plaintiff for a decree of specific performance of an agreement to sell dated 24.12.2003 directing Mr. Som Nath Vij, Mrs. Anjali Sarin, Mrs. Ambica Vij being defendant nos.1 to 3 and Mr. Ashwani Kapoor (original defendant no.4, since deceased and now represented by his legal heirs), respectively to perform their obligations under the said agreement and execute a registered sale deed in favour of the plaintiff with respect to the defendants’ undivided 72% share in property bearing no. 32, Golf Links, New Delhi (hereafter ‘the suit property’).

3. It is stated that late Smt. Kailash Kapoor - the mother of defendant nos. 2 and 3, late Ashwani Kapoor (original defendant no.4) and Mr. Ashok Kapoor - was the owner of the suit property. Smt. Kailash Kapoor expired on 31.10.1992 leaving behind a Will wherein, the suit property was bequeathed to Mr. Ashok Kapoor and original defendant no.4, late Ashwani Kapoor. However, a family settlement was arrived at whereby original defendant no.4 (late Ashwani Kapoor), Mr. Ashok Kapoor and Mr. Y.P.R. Kapoor (father of defendant nos.2 and 3, original defendant no.4 and Mr. Ashok Kapoor), were given 1/3rd share each in the suit property.

4. Mr. Y.P.R. Kapoor expired on 01.03.1993. Thereafter, defendant no.3 filed a suit (CS(OS) 2187/1993) challenging the family settlement and for partition of the suit property. Defendant no.2 was also a party to the said suit. During the pendency of the partition suit, defendant nos.2 and 3, original defendant no.4 as well as Mr. Ashok Kapoor entered into an arbitration agreement and appointed defendant no.1 as an arbitrator to decide their respective shares in the suit property and also authorised him to sell the suit property and distribute the sale proceeds amongst them.

5. Defendant no.1 rendered an award dated 28.10.2002, wherein it was held that the suit property cannot be divided by metes and bounds and the share in the suit property was determined as follows :-

6. Thereafter, defendant nos.2 and 3 and original defendant no.4 along with Mr. Ashok Kapoor entered into a memo of agreement dated 10.12.2002 wherein they empowered defendant no.1 to act as per the terms of the arbitral award. An application under Order XXIII Rule 3 of the CPC was also filed in the Court (in CS(OS) 2187/1993) to take the compromise on record. The decree sheet dated 13.12.2002 was drawn accordingly.

7. In the meanwhile, Mr. Ashok Kapoor entered into an agreement dated 02.07.2002 with the plaintiff to sell his 1/3rd share in the suit property for a sum of Rs.1.25 crores. The entire consideration was paid by the plaintiff towards such sale. On being aware of the arbitral award and the decree passed in CS(OS) 2187/1993, the plaintiff filed a suit (CS(OS) 254/2003) for specific performance of the agreement dated 02.07.2002. In the said suit, defendant nos.1 and 3 and Mr. Ashok Kapoor relied upon the terms of the decree dated 13.12.2002 passed in CS(OS) 2187/1993 and the arbitral award dated 28.10.2002.

8. Thereafter, the plaintiff entered into an agreement to sell dated 24.12.2003 with defendant no.1 for sale of 72% share of defendant nos.2 and 3 and original defendant no.4 in the suit property for a sum of Rs.3.21 crores. The agreement dated 24.12.2003 was also signed by Mr. Ashok Kapoor as a confirming party since it was agreed between him and the plaint