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2015 Supreme(P&H) 949
PUNJAB & HARYANA HIGH COURT
Ritu Bahri, J.
Ansal Properties & Industries Pvt. Ltd. and Ors. - Appellant
Versus
Shashi Bhushan and Ors. - Respondent
CM No. 1174-C of 2015 in RSA No. 3049, 3171 and 4846 of 2013 (O&M)
Decided On : 29-05-2015
For the Respondents:M.L. Sarin, Senior Advocate and Nitin Sarin, Advocate
The main legal point established in the judgment is that a compromise agreement, signed by the parties and their counsel, is valid and binding. The Court emphasized the importance of parties' participation in mediation proceedings and their compliance with the terms of the agreement.
Headnote:
Compromise - Specific Performance - Mediation and Conciliation Rules - Indian Oaths Act - Indian Contract Act, 1872 - Order 23 Rule 3-A CPC - Coercion - Fraud - Duress - Compromise Agreement - Encashment of Cheques
Fact of the Case:
The appellant, M/s. Ansal Properties and Industries Pvt. Ltd., filed a regular second appeal against the judgment and decree passed by the Additional District Judge, Gurgaon, decreeing the suit filed by the respondent for specific performance of a contract dated 08.07.1985. The trial Court had dismissed the suit for specific performance but awarded damages. The lower appellate Court decreed the suit for allotment of eight plots. The parties expressed their intention to refer the matter to Mediation and Conciliation Centre, and an agreement was reached. The respondent later filed an application to set aside the agreement, alleging coercion and forceful threats by the appellant. The appellant filed a reply, denying the allegations and arguing that the agreement was valid and binding.
Finding of the Court:
The Court found that the compromise agreement was valid and binding, and the respondent had participated in the mediation proceedings and signed the agreement. The Court noted that the respondent had accepted eight post-dated cheques and encashed seven of them. The Court dismissed the respondent's application to set aside the agreement and directed the appellant to deposit a fresh cheque in lieu of the remaining cheque amount. The regular second appeals were disposed of in terms of the settlement agreement.
Issues: The issues involved coercion, fraud, and duress in the mediation agreement, the validity of the agreement, and the encashment of post-dated cheques.
Ratio Decidendi: The Court held that the compromise agreement, signed by the parties and their counsel, was valid and binding. The Court emphasized that the respondent's participation in the mediation proceedings and the encashment of seven post-dated cheques indicated compliance with the agreement. The Court rejected the respondent's allegations of coercion and forceful threats, noting that the respondent had willingly participated in the mediation and accepted the settlement terms.
Final Decision: The Court dismissed the respondent's application to set aside the agreement, accepted the compromise as having been complied with, and directed the appellant to deposit a fresh cheque in lieu of the remaining cheque amount. The regular second appeals were disposed of in terms of the settlement agreement.
1. This judgment shall dispose of RSA Nos. 3049 of 2013, 3171 of 2013 and 4846 of 2013 as common questions of law and facts are involved in all the appeals being arisen out of same judgment. For reference, facts are being taken from RSA No. 3049 of 2013.
2. M/s. Ansal Properties and Industries Pvt. Ltd.-appellant has come up in regular second appeal against the judgment and decree dated 16.04.2013 passed by the Additional District Judge, Gurgaon, whereby suit filed by plaintiff-Shashi Bhushan (respondent N.1) for specific performance of a contract dated 08.07.1985 (Annexure P-1) has been decreed and the defendants have been directed to deliver vacant possession of 8 plots in favour of the plaintiff after removing the structure, if any, raised upon the said plots at their own costs and expenses.
3. The trial Court vide judgment and decree dated 06.11.2004 had dismissed the suit of the plaintiff for specific performance of the contract dated 08.07.1985. It was held that he was not entitled to decree for recovery of Rs. 7,73,884/-. However, the plaintiff was held entitled to decree for damages of Rs. 15,55,244/- with costs and interest at the rate of 10% per annum. Pursuant to the judgment passed by the trial Court, the appellant- defendant No. 1 had deposited approximately Rs. 38 lacs before the lower Court.
4. The lower appellate Court, in para No. 28 of the judgment, has observed that plot No.B734 of 420 sq. meters did not exist in the layout plan. Hence, no specific performance of this non existing plot could be allowed. Ultimately, the lower appellate Court decreed the suit of the plaintiff for allotment of eight numbers of plots, as the property was identified by way of allotment letter dated 27.10.1986, Ex.P30, where a clear distinction of old numbers and new numbers of the plots of various sizes has been given.
5. On 28.11.2013, the parties to the dispute expressed their intention to refer the matter before Mediation and Conciliation Centre of this Court to expedite the process of amicable settlement. Thereafter, on 26.03.2014, the following order was passed by this Court:-
"In view of the compromise dated 25.03.2014 arrived at between the parties before the Mediation and Conciliation Centre of this Court, an amount of Rs. 7.75 crores has been handed over by the learned counsel for the appellants in the form of Bank Draft amounting to Rs. 25 lakhs and the remaining amount in the form of post dated cheques, as per the details given in para 1 at page 4 of the compromise, to the learned counsel for the respondents, in the Court today
Learned counsel for the parties jointly pray for adjourning the matter till 1st week of January, 2015.
Adjourned to 14.01.2015."
6. Thereafter, applicant-respondent No. 1 filed an application i.e. CM No. 1174-C of 2015, under Order 23 Rule 2 read with Section 151 of the Code of Civil Procedure for setting aside the alleged agreement dated 25.03.2014. In para 20 of the application, it is so stated that the coercive, forceful and threatening method was used by Ansals-appellant against Shashi Bhushan. The representatives of Ansals threatened Shashi Bhushan to face consequences, in case he did not accept the meager amount of interest on the initial deposited amount of Rs. 15,55,244/-. In this regard, a detailed reply (Annexure A-1) was filed by Shashi Bhushan before the Mediation Centre of this Court. As a result of coercive and forceful threats, the agreement/settlement dated 25.03.2014 (Annexure A-2) was entered into between the parties. Therefore, the applicant-respondent No. 1 sought setting aside of the agreement/settlement dated 25.03.2014 on the following grounds:-
(i) that the applicant was a senior citizen of 81 years of age and was coerced into signing the agreement/settlement dated 25.03.2014. This facts are given in detailed affidavit dated 01.02.2015 (Annexure A-3).
(ii) As per clause 4 of the aforesaid agreement/settlement, in case the company refuses to make the balance payment
