High Court Of Madhya Pradesh
S. M. N. Raina, J.
NONJIBHAI - Appellant
Versus
RAMKISHAN - Respondents
Misc. (Second) Appeal 337 Of 1974
Decided On : 10/31/1975
COMPROMISE DECREE - EVICTION CLAUSE - PENAL CLAUSE - INTERPRETATION - TIME OF THE ESSENCE - DELAY IN PAYMENT - FORFEITURE OF CONCESSION - EXECUTION OF DECREE.
Fact of the Case:
In a suit for ejectment and arrears of rent, a compromise decree was passed, allowing the appellant to pay the arrears in installments and continue as a tenant on the old rent rate. The decree also stipulated that if the appellant defaulted on any installment or monthly damages, he would deliver possession of the accommodation to the respondents.
Finding of the Court:
The court held that the clause relating to eviction in the decree was not a penal clause, but a concession given to the appellant, and that the appellant had forfeited his right to the concession by failing to make the payments within time.
Issues: 1. Whether the clause relating to eviction in the compromise decree was a penal clause? 2. Whether the appellant was entitled to relief against the breach committed by him? 3. Whether time was of the essence in the decree?
Ratio Decidendi: 1. A penal clause is a provision in a contract that imposes a penalty on a party who breaches the contract. The court held that the clause relating to eviction in the decree was not a penal clause because it was a concession given to the appellant, and not a penalty. 2. The court held that the appellant was not entitled to relief against the breach committed by him because he had not made any sincere effort to pay the 4th installment of Rs. 1,976/- which was due on 30-1-1974 within time. 3. The court held that time was of the essence in the decree because the appellant had agreed to forego something to which he was entitled if he paid the requisite amount on the due date.
Final Decision: The appeal was dismissed with costs.
( 1 ) THIS is an appeal arising out of an execution case.
( 2 ) THE respondents had filed a suit against the appellant for ejectment and arrears of rent. In the said suit a com-promise decree was passed on 1-9-1971under the said decree, the appellant was to pay Rs. 10,596/- to the respondents in instalments as under:
Amount
Date of Payment
1.
Rs . 3,000/-
30-1-1972
2.
Rs . 1,667/-
30-4-1972
3.
Rs . 1,977/-
30-1-1973
4.
Rs . 1,976/-
30-1-1974
Total
Rs . 10,596/-
It was further agreed that from 1-5-1972 the appellant shall pay a sum of rupees 127/- per month to the respondents on account of damages for use and occupation of the accommodation in his occupation and in case he paid the instalments and monthly amount of damages as specified in the decree, he shall be entitled to continue as tenant of the accommodation on the old rate of rent; but if he committed any default in the payment of any of the instalment or the monthly amount of damages, he shall deliver possession of the accommodation to the respondents who shall also be entitled to obtain possession thereof and to recover the balance of the amount due by executing the decree.
( 3 ) IT was not disputed before me that there was no default in the payment of the first three instalments. In respect of the last instalment payable on 30-11974, the appellant deposited in Court a cheque for a sum of Rs. 2,110/inclusive of damages. The cheque was, however, dishonoured by the Bank as there was some alteration which had not been initialled. The appellant filed an application under Section 148 of the Code of Civil Procedure for extension of time for depositing the amount of the fourth instalment; but it was rejected. Thereafter, the decree-holders (respondents) applied for execution of the decree for possession. It was opposed by the appellant mainly on the ground that the clause relating to possession in the compromise decree was in the nature of a penal clause which could not be enforced and it was open to the executing Court to award some compensation to the decree-holders on account of the default in payment of the last instalment. The contention of the appellant was rejected by the executing Court which proceeded to execute the decree. Being aggrieved thereby, the appellant preferred an appeal which was dismissed by the District Judge, Khand-wa. He has, therefore, preferred this second appeal.
( 4 ) SHRI P. C. Naik, learned counsel for the appellant, mainly urged two points before me. His first contention was that the consent decree relating to ejectment may be treated as a nullity because it was made without reference to any of the grounds specified in Section 12 of the M. P. Accommodation Control act, 1961 (hereinafter referred to as 'the Act' ). The second contention was that the stipulation in the decree regarding delivery of possession was in the nature of a penal clause which could not be enforced by the executing Court and decree-holders were merely entitled to some compensation for non-payment of the fourth instalment in time.
( 5 ) SO far as the first contention is concerned, it cannot succeed for the following reasons: while dealing with a consent decree in a suit for ejectment their lordships of the Supreme Court made the following observations in nagindas v. Dalpatram. AIR 1974 SC 471 in para. 29 which are pertinent: "if on the face of it, the decree does not show the existence of such material or jurisdictional fact, the executing Court may look to the original record of the trial Court to ascertain whether there was any material furnishing a foundation for the trial Court's jurisdiction to pass the decree it did. The moment it finds that prima facie such material existed, its task is complete. It is not necessary for it to go further and question the presumed or expressed finding of the trial court on the basis of that material. All that it has to see is whether there was some material on the basis of which the rent Court could have --as disting
AI
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.