Shri Sonak learned Advocate has also relied on a decision of the Apex Court in the matter ofByram Pestonji Gariwala v. Union Bank of India and Ors. particularly on paras 41,
42 and 43 thereof to contend that it is well settled that a consent decree is as binding upon the parties thereto as a decree passed by invitum. The compromise having been found not to be vitiated by fraud, misrepresentation, misunderstanding or mistake, the decree passed thereon has the binding force of res judicata. The Apex Court in the said Judgment, while relying on its earlier decisions, has observed that a Judgment by consent or default is as effective an estoppel between the parties as a judgment whereby the court exercises its mind in a contested case. This authority has also been relied to support the proposition that such judgment would also operate as res judicata in spite of the fact that it was made pursuant to the consent of parties.
14. In other words, Shri Sonak, learned Advocate contends that it is not open to the applicants to prefer application for relief which is not based on any of the terms of the consent decree, on the principles of estoppel and res judicata. 1
Bombay High Court
State Of Goa vs Placido Braganza on 10 May, 2001
Equivalent citations: 2001 (4) BomCR 395, 2002 (1) MhLj 370
Bench: A Khanwilkar
1. All these applications involve common question and are, therefore, being disposed of together by consent of the parties.
2. The question that arises in the present applications is whether the Court can pass any order which would have the effect of modifying/substituting/altering the consent decree unless parties agree for the same. The consequential question is whether in the present case the relief prayed for by the applicants for refund of the principal amount with interest can be granted.
3. Briefly stated the applicants commenced acquisition proceedings in respect of lands owned by the respondents herein. The said acquisition proceedings culminated in the award passed by the Special Land Acquisition Officer against which reference was made under Section 18 of the Land Acquisition Act in which the District Court enhanced the compensation amount in favour of the respondents. Against the said awards, the applicants herein filed First Appeals against the respective respondents. During the pendency of the said appeals, panics agreed to go before the "Lok Adalat" for settlement. It is not in dispute that parties accordingly came to a settlement in the "Lok Adalat" held on March 7, 1998 in the premises of the High Court and the Minutes of the Compromise was duly drawn and signed by the parties and their respective Advocates. The said Minutes were taken on record by this Court on the same day i.e. March 7, 1998 and the appeals were disposed of in view of the settlement arrived at between the parties by modifying the Judgment and Decree of the District Court in terms of the settlement. At this stage, it would be appropriate to reproduce the terms of compromise which were arrived at by the parties, which read thus -
MAY IT PLEASE YOUR HONOUR
Dispute in brief is that District Court enhanced the compensation as under -
(i) Rs. 76,800/- for 12,000-00 sq. mts. for double crop paddy field @ Rs. 6.40 per sq. mtr. (ii) Rs. 47.800/- for 11,950-00 sq. mts. for single crop paddy field @ Rs. 47- per sq. mts. (iii) Rs. 3,49,410-00 for 1,16,420-00 sq. mts. for bharad land @ Rs. 3/- per sq. mtr. (iv) Rs. 16,000/- for 4,200-00 sq. mts. for tank area @ Rs. 4/- per sq. mts. (v) Rs. 11,700/- for 11,700 sq. mts. for nallah area @ Rs. 1/- per sq. mts. (vi) Rs. 36,500/- for 7,300-00 sq. mts. for areacanut garden @ Rs. 5/- per sq. mtr. Being aggrieved with the above + costs granted, present appeal filed state.
We, that is Shri ................. Appellant and Shri ................ Opposite Party/Parties and the ................ Authorised Insurer/ Concerned Controlling Authority in the above said matter have arrived at the compromise to settle the matter as follows -
TERMS OF COMPROMISE
A. Rate to be reduced as under -
(i). Double Crop Paddy Land @ Rs. 3.20 per sq. mtr. (ii). Single Crop Paddy Land @ Rs. 2.00 per sq. mtr. (iii). Bharad Land @ Rs. 1.50 per sq. mtr.
(iv) Tank area @ Rs. 2.00 per sq. mtr.
(v) Nallah area @ Rs. 0.50 per sq. mtr.
(vi) Areacanut garden @ Rs. 2.50 per sq. mtr.
B. The compensation shall be payable as l/4th to the applicant Filomena Braganza, 1/4th to her husband i.e. Leandro Braganza and the remaining half to Placido Braganza.
C. Costs deleted.
D. Statutory benefits maintained.
E. No costs in the present Appeals.
We have arrived at the compromise terms willingly before the "Lok Adalat" held on Saturday, 7th March, 1998, at Panaji, without any kind of coercion, threat or undue influence, allurement or misrepresentation. We request the Honourable Bench of "Lok Adalat" of the High Court to record the compromise today only and pass appropriate award and the aforesaid matter may be marked as settled accordingly.
DATED THIS 7TH DAY OF THE MONTH OF MARCH
THE YEAR NINETEEN HUNDRED NINETY EIGHT.
PLACE: PANAJI.
4. "The above said Minutes of Compromise was tendered before this Court in the respective appeals and the appeals were disposed of as aforesaid. This Court while disposing of the appeals observed thus :--
JUDGMENT
Parties to this Appeal came to a settlement in the Lok Adalat today in the premises of the High Court and the Minutes of the compromise have been signed by the parties and their respective advocates and the minutes are taken on record and marked as Exhibit 'X' and will form part of this judgment.
In view of the settlement arrived at between the parties as aforesaid, the judgment and decree of the lower court stand modified in terms of the settlement.
The Appeal is disposed of as above.
5. It is also not in dispute that when the aforesaid appeals were admitted by this Court, the applicants were directed to deposit the decretal amount and thereafter the respondents in the respective appeals were permitted to withdraw the said amount by furnishing a Bank Guarantee. It is stated that the respondents accordingly withdrew the amount on November 10, 1994. Since the appeals stood disposed of, the applicants filed application before this Court praying for similar relief. However, later on withdrew the same on the ground that necessary particulars were not furnished. Now, fresh applications have been filed before this Court praying that the principal amount withdrawn by the respondents be directed to be refunded with interest, by permitting the applicants to encash the Bank Guarantee furnished by the respondents at the time of withdrawal. The applicants have furnished statement regarding refund of money which is prepared mainly on the assumption that the applicants are entitled to claim interest on the principal amount of Rs. 10.51.353/- along with interest thereon at the rate of 15% from 22nd November, 1997 to 5th June, 2000 and further interest till the date of payment. This application was heard on different dates when this Court by an order dated 9th February, 2001 directed that since there was no dispute with regard to the principal amount, it would be open to the applicants to encash the Bank Guarantee for a sum of Rs. 10,51,353/- and insofar as the question of interest was concerned the same was to be examined at a later date. Subsequently, the said order dated 9th February, 2001 was modified by this Court on 31st March, 2001 only to the extent that the applicants would encash the Bank Guarantee No. 6/94 for a sum of Rs. 10,15,979/-. There is no dispute that the applicants have accordingly withdrawn the said amount. However, according to the' applicants, they have still not recovered the entire principal amount inasmuch as the principal amount is actually Rs. 10,51,353A whereas what has been withdrawn by the applicants pursuant to the liberty granted by this Court is only Rs. 10,15,979/-. According to the applicants, besides the sum towards balance principal amount the applicants are also entitled to interest on the entire principal amount as mentioned in the applications.
6. On the other hand, Shri M. S. Sonak, learned Advocate appearing for the respondents in all the applications contends that the order passed by this Court disposing of the First Appeals on March 7, 1998, even assuming is a decree passed by this Court, but since the same has been passed on the basis of compromise arrived at between the parties, it is not open for the Court to entertain any request on behalf of the applicants outside the terms of settlement. According to him, the claim for interest set up by the applicants is totally misplaced. Shri Sonak submits that the applicants were fully aware that they should claim interest on the principal amount which was paid in excess to the respondents, but no condition in that behalf has been provided for in terms of the compromise. It is, therefore, not open to the applicants to ask for such a relief by the present applications. He submits that assuming that the application is one filed under Section 144 of the Code of Civil Procedure, even then the Court cannot issue directions against, the respondents for payment of interest as it would in-effect amount to modulating, modifying, altering and substituting the terms of compromise. According to him, the understanding arrived at by the parties while recording terms of compromise was a complete package and the respondents had consciously forgone the claim available under the order passed by the District Court, almost to the extent of 50% of the enhanced compensation, taking into account all the attending circumstances including the benefit derived by the respondents by way of interest on the principal amount. He placed reliance on the Affidavit filmed by the respondents which indicates, that the respondents had incurred substantial expenses towards furnishing of Bank Guarantee by way of Bank Commission and yet the respondents did not press for the said amount. In other words, it is contended that the terms of compromise was a complete package and it is not open for the applicants to claim interest at such a belated stage, inasmuch as if the applicants were to insist for interest, when the parties arrived at compromise, it is quite possible that the respondents would not have agreed to settle the matter on this terms as they were to suffer substantial loss. Insofar as the stand taken by the respondents in the Affidavit on the previous application whereby the respondents acknowledged the liability to pay interest amount to the applicants at the rate which is given to the respondents by the Bank, he submits that the said statement cannot invest jurisdiction in this Court to alter the decree passed on the basis of compromise unless both the parties agreed thereto. He submits that in any case, the said statement was made in the previous affidavit without prejudice to the right of the respondents to raise point of jurisdiction. Moreover, since the earlier application was withdrawn by the applicants therefore, the contents of the affidavit filed therein cannot be used against the respondents specially when the respondents were seriously raising question of jurisdiction of this Court.
7. Both sides have relied on decisions to support their respective stand. Shri V. P. Thali, learned Additional Advocate General has relied on decisions of the Apex Court in the matter of Kavita Trehan and Anr. v. Balsara Hygiene Products Ltd. . In
paras 16, 19 and 20 of the said decision, the Apex Court dealt with the principle regarding law of restitution. According to him, this Court was duty bound to pass appropriate orders on the present applications in exercise of powers under Section 144 of the Code. He then relied on another decision of the Apex Court in the matter of Kumar Sudhendu Narain Deb v. Renuka Biswas and Ors. and
more particularly paras 8 and 9 thereof to contend that although the order passed by this Court is on the basis of compromise between the parties, yet the same is a decree and has the same binding force just as one which could be passed on contest, therefore, this Court can pass appropriate order in exercise of power under Section 144 of the Code.
8. There can be no serious quarrel on the proposition that the order passed by this Court while disposing of the appeals as aforesaid, is in the nature of decree and has same binding effect on the parties as if it was passed on contest. However, the question that arises in the present case is whether decree passed on the basis of compromise can be modified or altered in any manner whatsoever by the Court in exercise of the powers under Section 144 of the Code.
9. The Authorities cited by Shri Thali, learned Additional Advocate General merely state the general principle of Section 144 of the code but are not authorities on the proposition that the Court in exercise of powers under Section 144 of the Code can modify or alter the consent decree. Reliance was also placed in the matter of Union Carbide Corporation v. Union of India and more
particularly in paras 75 and 76 thereof. Even the said decision merely states the principle about the powers under Section 144 of the Code, but does not deal with the issue that arises for our consideration. Reliance was also placed on another decision in the matter of Kartar Singh @ Naranjan Singh and Ors. v. State of Punjab reported in 1995(2) Current Civil Cases 11 and more particularly head note thereof to contend that the Court was under obligation to award interest by way of restitution in exercise of powers under Section 144 of the Code on the principle analogous to unjust enrichment by the respondents.
10. As aforesaid none of the authorities deal with the proposition that arises for consideration in the present case. However, with a view to get over the principle enunciated by the Apex Court, which has been relied upon by Shri Sonak, Shri Thali contends that the relief that is sought in the present application is neither modification, substitution or alteration of the decree as such but merely prays for relief that the excess principal amount towards compensation be refunded along with interest thereon to the applicants. This submission is totally misconceived inasmuch as any such direction would surely be in the nature of calling upon the respondents to return amount to the applicants in excess of the amount which has been agreed upon under terms of compromise. Reliance was placed on Clause (d) of the compromise to contend that there was clear understanding between the parties that statutory benefits are maintained, which presupposes that any amount in excess of statutory benefits was required to be refunded to the applicants along with interest. Accepting this submission, would, in my view, amount to rewriting the terms of compromise. Inasmuch as this Court will have to insert an additional clause in the compromise that the respondents shall pay the excess amount along with interest. In the present case the obligation of the respondents to repay excess amount arises because of Clause (A) r/w (D), but these clauses cannot be invoked to mean that the respondents are also liable to pay interest, as prayed. In absence of express provision in the compromise regarding payment of interest by the respondents, it is not possible to burden the respondents with such liability unless they agree for the same. A fortiori, it is not possible to accept the stand taken by the applicants that by granting relief as prayed for by the present applications would not amount to any modulation or modification of the consent decree and in particular affect the position of the respondents in any manner. In the circumstances, the argument advanced by the applicants is totally misplaced.
11. On the omer hand, Shri Sonak has rightly placed reliance on a decision of the Apex Court in the matter of Gupta Steel Industries v. Jolly Steel Industries Pvt. Ltd. and Anr.
and more particularly para 6 thereof wherein the Apex Court has observed that as principle of law, the High Court was obviously wrong in interfering with and modifying the consent decree unless parties agree for the same. In other words, the Apex Court has observed that the Court has no jurisdiction to deal in any manner with the consent decree, unless the party agree therefor. This principle has been reiterated by the Apex Court in a decision in Suvaran Rajaram Bandekar and Ors. v. Narayan R. Bandekar and Ors.
where the Apex Court has observed that in a consent decree the High Court would be loath to interfere with the terms thereof by way of modification unless both parties give consent thereto.
12. In the present case, since the respondents have resisted the present applications on the ground that the Court has no jurisdiction to interfere with or modify with the consent decree, it is not possible for this Court to entertain the prayer of the applicants for direction against the respondents to pay interest on the principal amount.
13. Shri Sonak learned Advocate has also relied on a decision of the Apex Court in the matter ofByram Pestonji Gariwala v. Union Bank of India and Ors. particularly on paras 41,
42 and 43 thereof to contend that it is well settled that a consent decree is as binding upon the parties thereto as a decree passed by invitum. The compromise having been found not to be vitiated by fraud, misrepresentation, misunderstanding or mistake, the decree passed thereon has the binding force of res judicata. The Apex Court in the said Judgment, while relying on its earlier decisions, has observed that a Judgment by consent or default is as effective an estoppel between the parties as a judgment whereby the court exercises its mind in a contested case. This authority has also been relied to support the proposition that such judgment would also operate as res judicata in spite of the fact that it was made pursuant to the consent of parties.
14. In other words, Shri Sonak, learned Advocate contends that it is not open to the applicants to prefer application for relief which is not based on any of the terms of the consent decree, on the principles of estoppel and res judicata. He further submits that by virtue of provisions contained in Section 96, Sub-section (3) of the Code, which expressly provides that no appeal shall lie from a decree passed by the Court with the consent of the parties, it was not open to the applicants to assail the correctness of the decree by filing appeal. A fortiori, the applicants cannot take a stand or seek relief which is not based on any of the terms of compromise or outside the terms of compromise, and, in substance, aspire to get much more than what is provided for in the consent decree, for it would result in enabling the applicants to indirectly question the correctness or otherwise of the consent decree in the guise of application under Section 144 of the Code. I find force in the submission of Shri Sonak, learned Advocate, as the same is supported by decisions of the Apex Court. Reliance has been placed by Shri Sonak, learned Advocate in Katikara Chintatnani Dora and Ors. v. Guntreddi Annamanaidu and Ors. and more particularly paras 59 and 62 thereof in support of the aforesaid proposition.
15. Shri Sonak, learned Advocate has rightly relied upon a decision of the Patna High Court in Rabindra Narain Lall v. Nirmala Sinha and Ors. which has lucidly stated the legal
position regarding the compromise decree. The relevant observations of the Patna High Court read thus :--
"......... that a compromise decree was a creature of the agreement on which it was based and was subject to all the incidents of agreement and it was a contract with the command of a Judge superadded to it. In construing its provisions, the fundamental principles governing the construction of contracts were applicable. One of the cardinal principles in the construction of contracts was that the entire contract must be taken as constituting an organic synthesis embodying provisions, which balance in the sum of reciprocal rights and obligations. It was through the prism of that principle that the terms of the compromise decree had to be analysed. On perusal of the terms contained in the said compromise petition, it is evident that parties to the compromise clearly intended that on default having been committed by defendant No. 2, in making the payments of instalments on fixed dates, the plaintiffs shall be entitled to be awarded a decree for their entire claim as made in the suit...........
......... When the final decree was gut into execution, the executing court under the circumstances in my view, had no jurisdiction to go behind the decree under Section 47 of the Code .........."
16. Reliance has also been placed on a decision of the Gujarat High Court in the matter of Kaluram Bheruji v. Bai Parvati to contend that Court was not competent to alter the terms of the compromise decree unless the other party agrees thereto; and decree made on such altered term could not be executed inasmuch as such the act would be without jurisdiction and non est in the eyes of law.
17. Applying the law ennunciated in the abovesaid decisions, I have no hesitation in accepting the objection raised on behalf of the respondents regarding authority of this Court to pass any order, unless the respondents agree, in terms of the relief claimed under the applications which will have the inevitable effect of modulating, altering, interfering or otherwise with the consent decree. Moreover, in view of the law laid down by the Apex Court, the applicants are in any case precluded from maintaining any application for relief which travels beyond the compromise decree on the principles of estoppel and res judicata. Merely because the respondents in the previous affidavit had taken a stand that the applicants were entitled for interest on the principal amount that by itself cannot invest power in the Court to pass orders in terms of Section 144 of the Code so as to direct the respondents to pay interest unless the respondents consent for the same.
18. In the circumstances, the applications preferred by the State praying for the relief of interest on the principal amount are totally misconceived and the same deserve to be dismissed being not maintainable and devoid of merits.
19. It is made clear that the Corporation Bank shall discharge the existing Bank Guarantees of the respondents except for a total sum of Rs. 35,374/- (Rupees Thirty Five Thousand Three Hundred,Seventy Four only), which amount shall be paid to the applicants towards the balance principal amount.
20. Accordingly, the surviving relief of payment of interest on the principal amount in all the three applications is dismissed with costs quantified at Rs. 5000/- in each application, payable to the respective respondents.
21. At this stage, Shri Thali prays for stay of this order. The operation of this order is stayed until end of July, 2001.
22. Applications dismissed.
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