BOMBAY HIGH COURT
G.S. Patel, J.
Shreyas Alias Ashok Narayan
Pathare and Anr. —Plaintiffs
versus
CVK & Associates and Ors. —Defendants
Notice of Motion No.3734 of 2011 in Suit No.880 of 2010 and Notice of Motion No.920 of 2010 in Suit No.880 of 2010 and Suit No.880 of 2010 and Chamber Summons No.524 of 2010 in Execution Application (L) No.141 of 2008 in Suit No.1626 of 2006 and Chamber Summons No.613 of 2015 in Execution Application (L) No.141 of 2008 in Suit No.1626 of 2006
Decided on 20.4.2018
Result: Civil Miscellaneous Petition allowed.
Certainly. Based on the principles discussed in the provided legal document regarding the nature of compromise decrees and the bar on filing separate suits to challenge their validity, here are relevant legal concepts and case law principles that are often considered:
The doctrine that a compromise decree, once approved by the court, is binding and cannot be challenged through a separate suit on the ground that it was not lawful (!) (!) .
The principle that only a fraud committed upon the court, which influences the court’s decision, can be grounds for challenging a decree in a separate suit; mere allegations of fraud on a party do not suffice (!) (!) .
The understanding that the amendments to civil procedure laws clarify that a suit to set aside a decree on the ground of unlawfulness, such as fraud or lack of jurisdiction, is barred if the decree is a compromise decree, unless the fraud is on the court itself (!) (!) .
The importance of the distinction between a challenge based on a palpable, facial defect in the decree versus a challenge based on allegations of fraud that do not amount to a fraud on the court (!) .
The principle that questions relating to the execution, satisfaction, or discharge of a decree are to be determined within the execution proceedings themselves, and not through a separate suit, unless the challenge falls within specific exceptions such as fraud on the court (!) (!) .
The legal stance that a compromise decree obtained through fraud that is not on the court but on a party can typically be challenged only through an appropriate proceeding within the execution or review process, not through a separate suit (!) .
The procedural clarity that the law now explicitly bars the filing of a separate suit to set aside a compromise decree on the ground that it was not lawful, emphasizing the need to address such issues within the framework of execution proceedings or review (!) (!) .
These principles collectively reinforce the legal stance that challenges to compromise decrees are generally limited to specific procedural avenues, primarily focusing on whether the decree was obtained through fraud on the court or contains a palpable defect. Separate suits for such challenges are largely barred unless they fall within the narrowly defined exceptions.
G.S. Patel, J.—
A. Parties and their Litigations
2. Since there are cross-applications and cross-suits, this is how the parties are arrayed before me. One CVK & Associates, a partnership firm of Chartered Accountants (“CVK”), is the sole Plaintiff in Suit No. 1686 of 2006, filed for specific performance and decreed by consent. The 1st Defendant to that suit is one Shreyas alias Ashok Narayan Pathare (“Pathare”). The 2nd Defendant to CVK’s 2006 suit is Pathare’s sister, and the 3rd Defendant is her husband (“the Shastris”). In its suit, CVK has filed Execution Application (L) No. 141 of 2008. It has filed two Chamber Summonses in that Execution Application. The Sub-Registrar of Assurances (“Sub-Registrar”) is the Respondent to CVK’s Chamber Summons No. 524 of 2010. The Municipal Corporation of Greater Mumbai (“MCGM”) is a Respondent to CVK’s Execution Application and its Chamber Summons No. 613 of 2015. Pathare has filed Suit No. 880 of 2010, to which CVK is the sole Defendant. In that suit, CVK has filed Notice of Motion 3734 of 2011 under Order 7, Rule 11 of the Code of Civil Procedure, 1908 (“CPC”) seeking a rejection of the plaint. In the course of the narrative that follows, there are references to other proceedings, including suits, contempt petitions, writ petitions, appeals and so on. These two suits, and the three applications in them, are the ones before me. I will refer to them in this order as follows:
(a) Suit No. 1686 of 2006: “CVK’s 2006 Suit”;
(b) Suit No. 880 of 2010: “Pathare’s 2010 Suit”;
(c) Execution Application (L) No. 141 of 2008: “CVK’s Execution Application”;
(d) Chamber Summons No. 524 of 2010: “CVK’s 2010 Chamber Summons”;
(e) Notice of Motion No. 3734 of 2011: “CVK’s O7R11 Motion”.
(f) Chamber Summons No. 613 of 2015: “CVK’s 2015 Chamber Summons”;
3. In this order, I propose to dispose of only CVK O7R11 Motion. I have taken up CVK’s 2010 Chamber Summons and CVK’s 2015 Chamber Summons only to pass certain further directions regarding affidavits in each. Neither of those Chamber Summonses are disposed by this order.
4. There is an agreed compilation, and I will be referring to it in the order.
5. Having heard Mr Godbole for CVK and Mr Behramkamdin for Pathare, I am inclined to allow CVK’s O7R11 Motion. My reasons follow.
B. Factual Background
6. The facts are largely undisputed and, indeed, are common to both Chamber Summonses and the Motion. They run like this. On 4th October 2005, Pathare, a promoter of a realty development, accepted an amount of Rs. 3 lakhs as earnest money from CVK for himself and the other co-owners for the sale of Flat Nos. 101, 102 and 103 in a building known as Shreyas at Mogul Lane, Mahim, Mumbai.
7. On 4th February 2006, a Deed of Partition was executed between the various persons named in that document. Compilation, pp. 18 – 33. This is titled as a Partition Deed but seems to have been referred to in the proceedings variously as a Memorandum of Understanding or MoU, and also as a Family Arrangement. I have used the caption or title of the document. Pathare is the second party. The agreement clearly allots Flat Nos. 101, 102 and 103 to the Shastris. The carpet areas of the flats are noted as being 325 sq ft in respect of Flat No. 101 and 992 sq ft for Flat Nos. 102 and 103 together, totalling 1,317 sq ft. The plans of the flats showed a carpet area of 1,317 sq ft.
8. On 16th May 2006, CVK filed Suit No. 1626 of 2006 against Pathare and others for specific performance of the agreement for sale in respect of Flat Nos. 101, 102 and 103, the whole of the first floor. Compilation, pp. 34 – 104. Defendants Nos. 2 and 3 entered written statements. They did not deny the agreement. They also did not deny the correctness of the plans. Pathare filed no written statement at all. 9. There followed a Family Arrangement of 30th October 2007 between Pathare, Sushama Pathare (the mother of Shreyas Pathare and Chhaya Shastri), and the Shastris. Compilation, pp. 122 – 128.
10. On 2
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