A settlement agreement during mediation requires court approval to be enforceable.

1. The petitioner has challenged order dated 11.11.2024 passed by learned 4th Additional District Judge, Srinagar, whereby, in an application filed under O.12 R.6 CPC filed by him, a direction has been issued to the petitioner to make payment of Rs.10.00 lacs to the respondents in terms of compromise deed dated 31.07.2024 and to pay a further amount of Rs.86,50,000 / to the respondents in terms of the said compromise.

2. It appears that the petitioner has filed a suit before the learned trial court seeking a perpetual injunction restraining the defendants (respondents herein) from causing any interference, annoyance and harassment to him by making illegal demand for refund of part consideration.

3. As per case of the plaintiff before the trial court, he had executed an agreement to sell on 8th October, 2022, with defendant No.1, whereby he had agreed to sell immovable property situated at Rawalpora for a sale consideration of Rs.2.19 crores, out of which an amount of Rs.55.00 lacs was paid by defendant No.1 to the plaintiff at the time execution of the said agreement and that the remaining sale consideration of Rs.1.64 crores was promised to be paid by defendant No.1 upto 31st March, 2023. It was alleged that defendant No.1 has paid only Rs.94.00 lacs to the plaintiff and he has failed to pay the balance sale consideration. The agreement to sell is stated to have been novated by another agreement dated 5th May, 2023, whereby defendant No.1 undertook to pay the balance sale consideration of Rs.1.25 crores upto 15th May, 2023.

4. According to the plaintiff, defendant No.1 failed to make payment of balance consideration in pursuance of agreement dated 5th May, 2023, whereafter a fresh agreement was executed on 26th July, 2023, whereby defendant No.1 agreed to pay a penalty of Rs.10.00 lacs in addition to the balance consideration of Rs.1.25 crores. On the basis of aforesaid averments, the plaintiff claimed that defendant No.1 has forfeited the amount which he has paid to him and is not entitled to seek refund of the same.

5. The defendants filed a joint written statement in which execution of the agreements between the parties has been admitted by them. However, it has been submitted that the plaintiff, after receiving payment of Rs.96.50 lacs, started making excuses and avoided the execution of sale deed in favour of defendant No.1. It has been averred in the written statement that defendant No.1 had availed loan facility to the tune of Rs.90.00 lacs from State Bank of India with a view to pay balance consideration to the plaintiff but he refused to receive the same, as a result of which, defendant No.1 has to pay a huge interest on the loan amount. The defendants have also submitted that an amount of Rs.15.00 lacs was also transferred to the account of the plaintiff but he refused to receive the same and when defendant No.1 requested the plaintiff to return the amount which he had received, he refused to do so.

6. Defendant No.1, after filing of written statement, filed a counter claim, in which he sought mandatory injunction against the plaintiff commanding him to execute the sale deed in respect of the suit property in his favour or, in the alternative, to pay an amount of Rs.96.50 lacs to him. A further mandatory injunction commanding the plaintiff to hand over possession of the suit property to defendant No.1, was also sought.

7. It appears that on 07.05.2024, a composite order came to be passed by the learned trial court, whereby application of plaintiff for grant of interim relief and the application of defendant No.1 for grant of interim relief, were disposed of. Vide the said order, the followi