Law Web: Under which circumstances the high court should set aside the order of disposal of Lok Adalat's case?

The Lok Adalat miserably failed to appreciate contents of the compromise and statement of Sh. Sukhpreet Singh Chauhan while ordering the suit to be dismissed as withdrawn merely because of the statement of Sh. Robin Gupta, appears to

be the result of wrong legal advice or actuated by his anxiety to have refund of Court fee but without realizing that he would be entitle to refund of Court fee even if the Lok Adalat passes an award on the basis of settlement.

The question that arises for consideration is, whether the respondent who had back-tracked from his commitment recorded in the compromise and statement made before the Lok Adalat should be allowed to perpetuate his mischief of enjoying the property and huge sum of Rs.3.5 crores by ordering the petitioner to avail alternative remedy for enforcement of agreement because of mistake committed by the Lok Adalat or the order passed by the Lok Adalat should be set aside in exercise of jurisdiction under Article 227.

As per the settled position in law, no one can be allowed to

misuse and abuse the process of law. The petitioner is involved in

litigation despite having agreed to relinquish his rights in respect of ground

and first floor of the property and parting with a huge amount of Rs.3.5

crores in favour of the respondents plus Rs.1 crore in favour of Sh. Dinesh

Singla. In the given circumstances, if the petitioner is directed to initiate

another bout of litigation for enforcement of the compromise/settlement

deed, it would be nothing short of putting premium over mischievous

conduct of the respondents who failed to discharge their unilateral

obligation on the basis of compromise/settlement and statement recorded

before a Court of law. In this view of the matter, in my considered

opinion, the respondents should not be allowed to take undue advantage of

a wrong committed by the Court and improper legal advice to the

petitioner for withdrawal of the suit.

IN THE HIGH COURT OF PUNJAB AND HARYANA

AT CHANDIGARH

(Proceedings conducted through video conferencing)

Date of decision: 23.12.2020

CR No.4701 of 2019(O&M)

Robin Gupta Vs M/s Stratford Educational Management Pvt. Ltd. and others

CORAM: HON’BLE MRS. JUSTICE REKHA MITTAL

This order will dispose of CR No.4701 of 2019 and COCP

No.1810 of 2020 as decision in the Civil Revision would have bearing qua

adjudication of COCP.

Challenge in the present petition has been directed against

order dated 03.12.2016 (Annexure P-1) passed by the Additional Civil

Judge (Senior Division), Panchkula whereby execution application filed by

the petitioner has been dismissed.

A brief backdrop of the case is that the petitioner filed a suit

for specific performance of agreement to sell dated 08.06.2012 in respect

of SCO No.370, Sector 8, Panchkula measuring 1053.42 square meters

built upto triple storey and the plot underneath, agreed to be sold by

respondent No.1 through respondent No.2 for sale consideration of

Rs.9,95,00,000/-. During pendency of the suit, parties arrived at settlement

recorded in the compromise deed marked as Ex.C-1 and C-2. In pursuance

of the settlement, an application was filed for passing consent decree on

the basis of compromise deed dated 09.04.2014. The application was taken

up in the Lok Adalat on 12.04.2014. Statements of parties namely Sh.

Sukhpreet Singh Chauhan- respondent No.2 for himself and on behalf of

respondent No.1, petitioner – Robin Gupta and one Sh. Dinesh Singla –

plaintiff No.2 therein were recorded. On the basis of statements of parties

particularly the last lines of statement of petitioner – Robin Gupta, the suit

was dismissed as withdrawn and Court fee was refunded to the petitioner.

The petitioner filed application for execution claiming that the JDs may be

directed to comply with compromise deed Ex.C-1 and execute and register

the sale deed as per compromise deed Ex.C-1 and statement made on oath

before the Court. In the alternative, a prayer was made that a Clerk of the

Court be deputed to get the sale deed executed and registered in respect of

the suit property as per terms and conditions of compromise deed Ex.C-1

and order dated 12.04.2014 and decree holder be put into possession of the

said property. The executing Court dismissed the execution application

with the observations that neither there is any judgment nor any decree

regarding which the execution has been filed. Since there is no decree, the

execution application is not maintainable and hence dismissed.

Feeling aggrieved against the order passed by the executing

Court, the petitioner initially initiated contempt proceedings by filing

COCP No.82 of 2017 that culminated in order dated 22.07.2019 passed by

this Court. The petitioner was permitted to withdraw the contempt petition

with liberty to have remedies available, in accordance with law.

Thereafter, petitioner filed the instant petition by invoking Article 227 of

the Constitution of India praying for setting aside order dated 03.12.2016.

Counsel for the petitioner would argue that petitioner along

with co-plaintiff Dinesh Singla prayed for possession by way of specific

performance of agreement to sell dated 08.06.2012 in respect of the entire

property comprising triple-storey building of SCO No.370, Sector -8,

Panchkula and payment of sale consideration of Rs.5,41,00,000. Later, the

dispute between the parties was settled by way of compromise Ex.C-1. It

is argued that as per the settlement, petitioner relinquished his claim in

respect of basement and ground floor of the aforesaid SCO and

respondents agreed to execute sale deed of the first and second floor for a

sale consideration of Rs.3.5 crores with liability of the petitioner to refund

Rs.1 crore to his co-plaintiff Dinesh Singla whereby Dinesh Singla agreed

to discharge the respondents of their liability qua Rs.1 crore and against the

suit property. It is further argued that as per the terms and conditions of

settlement, respondents acknowledged the receipt of Rs.3 crore paid vide

cheque and RTGS, reproduced in para 2 of the compromise deed Ex.C-1.

He would further argue that another sum of Rs.50,00,000/- out of Rs.3.5

crores was paid by way of another cheque and the said cheque was

encashed by the respondents. It is argued that it was also one of the terms

of compromise/settlement deed Ex.C-1 that the compromise shall be full

and final and intended to be a final disposition of issues raised and settled

between the parties. The parties further agreed that they would place on

record the settlement/compromise deed before the Court of Sh. Rahul

Bishnoi, Additional Civil Judge (Senior Division), Panchkula and shall

pray for passing of a consent decree on the basis of settlement. It is argued

with vehemence that in pursuance of this settlement, a joint application

was filed by the petitioner and respondents for recording that settlement

and passing a consent decree. In pursuance thereof, the matter was taken

up by the Lok Adalat, recorded statements of Sh. Sukhpreet Singh

Chauhan – respondent No.2, Dinesh Singla co-plaintiff of the petitioner

and of the petitioner – Robin Gupta annexed as Annexure P-7 colly. It is

argued that once respondent No.2 has entered into settlement and made a

statement before the Court that he would execute the sale deed of 50%

share of the demised property namely first and second floor in favour of

the petitioner on or before 30.05.2014, on the basis of compromise Ex.C-1

and C-2 marked as such before the Court below, the executing Court

should have directed respondents No.1 and 2 to discharge their obligation

under the compromise and on the basis of statement made before a Court

of law. It is further argued that the petitioner has not been able to bear

fruits of the compromise till now despite parting with a huge amount of

Rs.3.5 crore and relinquishing his claim in respect of basement and ground floor of the disputed property. He is rather compelled to involve in further

litigation at the cost of waste of energy and expense. It is further argued

that if the respondents are allowed to escape their liability in view of the

compromise or the petitioner is compelled to involve in another bout of

litigation by taking a technical view of the matter, it would be nothing but

travesty of justice and putting premium on the wrong committed by

respondents by failing to come true to the commitment made in the

compromise deed and statement recorded before the Lok Adalat.

Another submission made by counsel is that Lok Adalat is a

fora that can either record the settlement already arrived at between the

parties or can assist the parties in arriving at a settlement. The Lok Adalat

cannot decide the case on merits and making an award by the Lok Adalat

on the basis of settlement between the parties is an administrative act,

therefore, the executing Court should have proceeded with execution in

order to give finality to settlement vide deed Ex.C-1 and C-2. In support of

his contention, he has relied upon judgment of Hon’ble the Supreme Court

State of Punjab and another Vs. Jalour Singh, 2008(1) RCR (Civil)

857, wherein the Court has held in para 8, quoted thus:-

“8. It is evident from the said provisions that Lok Adalats

have no adjudicatory or judicial functions. Their functions

relate purely to conciliation. A Lok Adalat determines a

reference on the basis of a compromise or settlement between

the parties at its instance, and put its seal of confirmation by

making an award in terms of the compromise or settlement.

When the Lok Adalat is not able to arrive at a settlement or

compromise, no award is made and the case record is returned

to the court from which the reference was received, for

disposal in accordance with law. No Lok Adalat has the

power to "hear" parties to adjudicate cases as a court does. It

discusses the subject matter with the parties and persuades

them to arrive at a just settlement. In their conciliatory role,

the Lok Adalats are guided by principles of justice, equity,

fair play. When the LSA Act refers to 'determination' by the

Lok Adalat and 'award' by the Lok Adalat, the said Act does

not contemplate nor require an adjudicatory judicial

determination, but a non-adjudicatory determination based on

a compromise or settlement, arrived at by the parties, with

guidance and assistance from the Lok Adalat. The 'award' of

the Lok Adalat does not mean any independent verdict or

opinion arrived at by any decision making process. The

making of the award is merely an administrative act of

incorporating the terms of settlement or compromise agreed

by parties in the presence of the Lok Adalat, in the form of an

executable order under the signature and seal of the Lok

Adalat.”

He has further relied upon judgments of Hon’ble the Supreme

Court P.T. Thomas Vs. Thomas Job, 2005(2) RCR (Rent) 222; K.N.

Govindan Kutty Menon Vs. C.D. Shaji, 2012(1) RCR (Criminal) 102

and judgment of Bombay High Court M/s Subhash Narasappa Mangrule

Vs. Sidramappa Jagdeveppa Unnad, 2010(5) RCR (Criminal) 763.

The last submission made by counsel is that taking into

consideration the statement of objects and reasons of the Legal Services Authority Act, 1987 (in short ‘the Act’) and provisions of Section 21

thereof dealing with award of Lok Adalat, the impugned order is liable to

be set aside with a direction to the executing Court to proceed with the

execution application.

Counsel for respondents has supported the impugned order by

making three-fold submissions. He has made a preliminary submission that

instant petition filed under Article 227 of the Constitution of India is not

maintainable and appropriate remedy for the petitioner was to invoke the

Revisional jurisdiction of this Court under Section 115 of the Code of Civil

Procedure, 1908 (in short ‘CPC’). It is further argued that petitioner with a

mala fide intention has invoked Article 227 in order to avoid implications

of petition under Section 115 of CPC being barred by limitation as revision

petition under Section 115 CPC could be filed within 90 days from the date

of order passed as back as on 3.12.2016 but the present petition has been

filed after about three years thereafter.

Counsel would argue that the Lok Adalat passed an order with

regard to dismissal of suit as withdrawn on the basis of statement made by

the petitioner. As the Lok Adalat did not make an award under Section 21

of the Act, there is no award akin to a decree of civil Court that could be

executed in the application filed by the petitioner. In support of his

contention, he has relied upon judgments of this Court in Mohan Lal Vs.

Vijay Kumar Gupta and another, CR No.5493 of 2014 decided on 14.-

09.2015, Rajesh Arora through LRs Vs. Dalip Kumar, CR No.8872 of

2015 decided on 07.02.2018, Dharambir and another Vs. Islammuddin,

CR No.890 of 2015 decided on 09.05.2016, Division Bench judgment of

the Delhi High Court Mohd. Amin Vs. Mohd. Iqbal, 2010 (7) RCR

(Civil) 2700 and Single Bench judgment of Delhi High Court Sanjay Goel

Vs. Lions Club International and another, 2013(8) RCR (Civil) 984.

Counsel for the respondents would further argue that The

National Legal Services Authority (Lok Adalats) Regulations, 2009 (in

short ‘Regulations’), were framed in exercise of the powers conferred by

Section 29 of the Act. Regulation 17 of the Regulations deals with award.

It is argued that under sub-regulation (6) of Regulation 17, Members of

Lok Adalat should affix their signatures only in settlement reached before

them and should avoid affixing signatures to settlement reached by the

parties outside the Lok Adalat. It is further argued that Lok Adalat is

obligated to pass an award, specimen whereof is appended to the

Regulations. It is argued with vehemence that since in the instant case, no

award in view of Regulation 17 has been passed, order passed by the

Executing Court dismissing the application cannot be faulted with. In

addition, it is argued that the petitioner in place of taking recourse to

appropriate remedy, if any, for enforcement of agreement/compromise

deed Ex.C-1 is dragging the respondents in litigations before this Court. He

would pray that the petition may be dismissed with compensatory costs.

Counsel for the petitioner, in reply, would argue that in none

of the cases decided by this Court or by the Delhi High Court, the matter

with regard to compromise between the parties was placed before the Lok

Adalat. He would next argue that in view of the peculiar facts and

circumstances of the instant case wherein the settlement/compromise deed

expressly records that the petitioner has already discharged his obligation

of payment of Rs.3.5 Crores and what remained to be done was execution

of sale deed in respect of demised premises and delivery of possession,

respondents should not be allowed to take benefit of technicalities and

perpetuate cheating committed not only with the petitioner but also with

the Court.

I have heard counsel for the parties, perused the paper-book

and original records of Civil Suit No.298/2013, decided on 12.04.2014.

Counsel for respondents has not disputed that even if the

revision petition is filed under Article 227 but the same can be maintained

under Section 115 of the CPC, the Court can treat the same under Section

115 CPC. That being so, the first objection raised by counsel for

respondents qua maintainability of the petition is not tenable.

So far as contention that if the petition is treated under Section

115 CPC, thus, barred by limitation, the same is not meritorious and liable

to be rejected. Firstly, the question of limitation in filing the revision

petition needs liberal construction in view of the intent of legislation and

spirit of provisions of Section 115 CPC that gives ample powers to this

Court to call for record of any case which has been decided by any Court

subordinate to High Court, if such subordinate Court appears to have

exercised jurisdiction not vested in it by law or to have failed to exercise

jurisdiction so vested or to have acted in the exercise of its jurisdiction

illegally or with material irregularity. This apart, after passing of impugned

order by the Executing Court, the petitioner immediately filed petition for

initiating contempt proceedings against respondents. The same was

allowed to be withdrawn vide order dated 22.07.2019 (Annexure P-11).

Without loss of time, the instant petition was filed in July, 2019 itself.

Taking into consideration the aforesaid, it can safely be held that the

petitioner never slept over the matter and remained vigilant and diligent to

pursue enforcement of settlement/compromise deed Ex.C-1. The petitioner,

in the given circumstances, cannot be condemned for his failure to file the

instant petition within the stipulated period of limitation. In view of the

above, the preliminary submission made by counsel for respondents is

bereft of merit and accordingly rejected.

This brings the Court to examine order dated 03.12.2016

(Annexure P-1) passed by the Additional Civil Judge (Senior Division),

Panchkula, as an executing Court. Indisputably, the parties during

pendency of the suit arrived at a settlement recorded outside the Court vide

compromise/settlement deed dated 09.04.2014 marked as Ex.C-1. They

submitted a joint application for passing a consent decree on the basis of

Ex.C-1 as agreed in para 10 of the settlement. The matter was taken up in

the Lok Adalat presided over by the same Judicial Officer, seized of the

civil suit for specific performance of agreement to sell dated 08.06.2012.

Statement of Sh. Sukhpreet Singh Chauhan, respondent No.2, as Director

for and on behalf of M/s Stratform Educational Management Pvt. Ltd. -

respondent No.1 was recorded by the Lok Adalat. Similarly, the Lok

Adalat recorded statement of Dinesh Singla- plaintiff No.2 therein and Sh.

Robin Gupta, plaintiff No.1 (petitioner herein). After recording statements

of the parties, the Lok Adalat passed order dated 12th April, 2014, quoted

thus:-

“File taken up in Lok Adalat on an application for passing

consent decree on the basis of compromise deed dated

09.04.2014. Defendant No.2 Sukhpreet Chauhan has stated

that matter has been compromised as per compromise deed

Ex.C1 and Ex.C2. Plaintiff No.2 Dinesh Singla has also

admitted the compromise deed Ex.C1 and Ex.C2. Plaintiff

no.1 Robin Gupta has also admitted the aforesaid compromise

deed Ex.C1 and Ex.C2 between the parties and further

admitted his liability as per the aforesaid compromise and

stated that he does not want to pursue the present suit and

withdraws the same and further requested for refund of court

fees. Separate statement of the parties recorded to this effect.

Heard. In view of the statement of the plaintiff, the present

suit is, hereby, dismissed as withdrawn and Court fees be

refunded to the plaintiff. Concerned Ahlmad is directed to

issue an Authorization Certificate in this regard in favour of

the plaintiff. File be consigned to the record room after due

compliance.”

A plain reading of the aforesaid extract makes it apparent that

though the Lok Adalat accepted the compromise effected between the

parties vide compromise deed Ex.C-1 and C-2 and even recorded

statements of the parties in this regard but eventually the suit was ordered

to be dismissed as withdrawn. The Lok Adalat did not pass an award on

the basis of compromise deed Ex.C-1 and C-2 or statement of the parties

recorded before the Court, to be treated as a decree of Civil Court and

liable to be executed as such. In the given scenario, I find it difficult to

accept contention of the petitioner that the Court has committed illegality

or material irregularity by dismissing execution application filed by the

petitioner. That being so, the impugned order does not warrant

interference.

Under Article 227 of the Constitution of India, the High Court

has power of superintendence over all Courts/Tribunals in relation to

which it exercises jurisdiction. In exercise of the power, this Court would

now examine, whether the order passed by the Lok Adalat should be

allowed to sustain and the petitioner should be left to his fate by taking

recourse to remedy in law for enforcement of compromise deed Ex.C-1

and C-2.

The Act was enacted to provide legal aid to the litigants. The

Lok Adalats have been set up for settlement of disputes at the pre-litigating

and post litigating stage. The parties are referred to the Lok Adalat to

reconcile their differences and settle their disputes without undergoing

rigmarole of trial. Undenyingly, Lok Adalat cannot decide dispute

between the parties on merits and it can only facilitate settlement of dispute

with its intervention or/and pass an award on the basis of out of Court

settlement. As such, the object and purpose of setting up of Lok Adalats

is to settle the dispute and not to regenerate the dispute already settled

between the parties.

Reverting to the case at hand, admittedly, claim of the

petitioner with regard to specific performance of agreement to sell dated

08.06.2012 in respect of entire property bearing SCO No.370, Sector 8,

Panchkula on payment of balance sale consideration of Rs.5.41 crores was

eventually settled vide compromise/settlement deed marked as Ex.C-1

before the Lok Adalat. In view of the settlement, the petitioner

relinquished his claim in respect of basement and ground floor of the

aforesaid SCO and the respondents agreed to execute the sale deed in

respect of first and second floor of the said SCO in favour of the petitioner on payment of Rs.3.5 crores plus Rs.1 crore to be paid by the petitioner to

his co-plaintiff Sh. Dinesh Singla. The settlement records that the first

party i.e. M/s Stratford Educational Management Pvt. Ltd. through its

Director Mr. Sukhpreet Singh Chauhan (respondents herein) shall keep the

amount of Rs.3 crore (detailed in clause 2 of the compromise) that has

been jointly paid by the second party (Robin Gupta) and the third party

(Mr. Dinesh Singla). Counsel for the respondents, in response to a query,

would fairly concede that cheque of Rs.50 lakhs issued by the petitioner to

discharge his obligation of payment of Rs.3.5 crores towards sale

consideration was encashed by the respondents, as such, the petitioner

discharged his entire liability qua payment of sale consideration of first and

second floors of the SCO. There is nothing on record suggestive of the

fact that any dispute was left between the petitioner and his co-plaintiff Sh.

Dinesh Singla to whom the petitioner agreed to pay Rs.1 crore on behalf of

the respondents.

Sh. Sukhpreet Singh Chauhan – respondent No.2 recorded his

statement dated 12.04.2014 acknowledging the compromise Ex.C-1 and C-

2. A relevant extract therefrom reads as follows:-

“Stated that there has been a compromise with the plaintiff in the

instant case. Compromise are Ex.C-1 and Ex.C-2. As per the

compromise I would get the registry of 50% share of the demised

property in favour of plaintiff No.1 (Robin Gupta) on or before

30.05.2014. As per the compromise the first and second floor of the

demised premises would be transferred in favour of plaintiff No.1

(Robin Gupta). I would retain the ground floor and the basement but

I would be bound to get 50% registered in his favour. There is a

tenant on the second floor of the demised premises, accordingly,

only the symbolic possession of the second floor would be handed

over to the plaintiff No.1 on the day of registry or before that. The

first floor is vacant and the vacant possession of the same would be

handed over to the plaintiff No.1. Plaintiff No.1 Robin Gupta would

give Rs.1 Crore to the plaintiff No.2 Dinesh Singla who had given

the said amount to defendant Nos.1 and 2. Plaintiff No.2 would have

nothing due towards defendant Nos.1 and 2 and in future also the

plaintiff No.2 would have no remaining transaction with the

defendant nos.1 and 2 regarding the demised premises. The copy of

resolution is in my favour is Ex.C-3.”

In para 10 of Ex.C-1, the parties consented to the following

effect:-

“10.That is has also been agreed by all the parties to this

Settlement/Compromise Deed that they shall place on record

the above said Settlement/Compromise Deed before the Court

of Sh. Rahul Bishnoi, Additional Civil Judge, Senior Division,

Panchkula and shall pray for passing of a CONSENT

DECREE on the basis of the present Settlement/Compromise

and consequently, all the parties shall abide by the terms and

conditions of the present compromise/settlement.”

Indisputably, in pursuance of the compromise including para

10 extracted hereinbefore, the parties submitted an application for passing

a consent decree. The opening line of order dated 12.04.2014 passed by

the Lok Adalat makes reference to application for passing consent decree

on the basis of compromise deed dated 09.04.2014. A thorough

examination of compromise/settlement deed marked as Ex.C-1 before the

Lok Adalat, statement of Sh. Sukhpreet Singh Chauhan – respondent No.2

extracted hereinbefore, makes it evident that the petitioner had discharged

his entire obligation making him eligible to get the sale deed executed in

respect of the first and second floor of the SCO in question, agreed to be

executed by respondent No.2 on or before 30.05.2014 with an undertaking

to deliver symbolic possession of the second floor being under tenancy and

vacant possession of first floor. As has already been taken note of but for

the sake of repetition, there is no dispute between petitioner and his coplaintiff

Dinesh Singla in respect of Rs.1 crore which the petitioner agreed

to pay to Sh. Dinesh Singla on behalf of the respondents. The Lok Adalat

miserably failed to appreciate contents of the compromise and statement of

Sh. Sukhpreet Singh Chauhan while ordering the suit to be dismissed as

withdrawn merely because of the statement of Sh. Robin Gupta, appears to

be the result of wrong legal advice or actuated by his anxiety to have

refund of Court fee but without realizing that he would be entitle to refund

of Court fee even if the Lok Adalat passes an award on the basis of

settlement.

The question that arises for consideration is, whether the

respondent who had back-tracked from his commitment recorded in the

compromise and statement made before the Lok Adalat should be allowed

to perpetuate his mischief of enjoying the property and huge sum of Rs.3.5

crores by ordering the petitioner to avail alternative remedy for

enforcement of agreement because of mistake committed by the Lok

Adalat or the order passed by the Lok Adalat should be set aside in

exercise of jurisdiction under Article 227.