2017 (5) TMI 437 - HC - Indian Laws

Compromise decree - settlement formed - Held that - In the instant case, the salient feature is that the original owner agreed to sale the tea garden to AGR Plantations Pvt. Ltd., the nominee of the decree holder for a consideration of ₹ 63,00,000/- out of which ₹ 1,00,000/- was already paid and a further sum of ₹ 6,00,000/- and ₹ 4,00,000/- are required to be paid on the date of the acceptance of the terms and conditions while decreeing the suit and within 60 days from the date of such decree. The balance consideration was agreed to be paid simultaneously with the execution and registration of the proposed Deed of Conveyance. The liability of the Vijaya Bank and the other liabilities including the provident fund of the said tea estate were to be borne by the said nominee and such Deed of Conveyance was agreed to be executed within 90 days from the date of the decree or within such extended period as may be mutually agreed. The decree further provides that so long the Deed of Conveyance is not executed the decree holder shall continue to pay a monthly rent or a lease rent at the rate of ₹ 50,000/- per month without any deductions and / or abatement. The other term which could be seen from the said settlement is that the said decree holder would provide all assistance in getting the necessary clearance required under the Income Tax Act, 1961 and also from the Deputy Collector of the Jalpaiguri. It is not in dispute that the objection was raised by the judgment debtor when an application seeking permission from the Deputy Collector of Jalpaiguri was filed under his signage yet the judgment debtor accepted the monthly rent in respect thereof. The sum and substance of the said settlement is that the judgment debtor would sale the property to the decree holder upon acceptance of the consideration money and in order to facilitate such sale would assist the judgment debtor in obtaining the necessary permission. The reciprocal obligation, which could be seen therefrom is that the payment of the sum within the time indicated therein which had in fact been paid by the decree holder. It is also not in dispute that the decree holder continued to pay the monthly rent till the time the judgment debtor with his associates illegally and forcibly took the possession of the tea estate and deprived the decree holder to enjoy the usufructs therefrom. It is manifest from the aforesaid facts that the decree holder all along performed his part of an obligation and none of the terms and conditions would be said to be reciprocal that such performance is dependant upon the performance of the other being so intertwined and / or interrelated that it cannot be separated and / or segregated therefrom. This Court therefore does not find that the objections of the petitioner that terms and conditions are reciprocal in nature and dependent upon the performance of the other. The application is thus dismissed.

Summary

Issues Involved:
1. Whether a consent/compromise decree is capable of being executed under the provision of law.
2. Whether the terms of settlement resulting in a compromise decree need to be stamped under the Indian Stamp Act.
3. Whether the transferee pendente lite without prior permission invalidates the compromise decree.
4. Whether the executing court can consider the rights of the parties based on post-decretal facts.

Issue-wise Detailed Analysis:

1. Whether a consent/compromise decree is capable of being executed under the provision of law:
The court examined whether a compromise decree is merely a recording of an agreement or a decree capable of execution. The earlier judgment, affirmed by the Division Bench and the Supreme Court, ruled that a compromise decree is executable. The court reiterated that once a settlement is accepted and culminated into a decree, its nature for reciprocal performance can be examined by the executing court, which may refuse execution if necessary.

2. Whether the terms of settlement resulting in a compromise decree need to be stamped under the Indian Stamp Act:
The issue of whether the terms of settlement require stamping under the Indian Stamp Act was not elaborated in the judgment, implying that it was not a primary point of contention in this case.

3. Whether the transferee pendente lite without prior permission invalidates the compromise decree:
The court did not find the need to delve into this issue extensively, as the primary focus was on the reciprocal obligations and performance under the compromise decree rather than the validity of the transfer without prior permission.

4. Whether the executing court can consider the rights of the parties based on post-decretal facts:
The court acknowledged that the executing court could examine whether parties discharged their reciprocal obligations. The Division Bench and the Supreme Court had left it open for parties to raise contentions on reciprocal obligations during the execution proceedings. The court analyzed whether the decree holder (AGR Plantations Pvt. Ltd.) and the judgment debtor (original owner) performed their respective obligations. It was found that the decree holder had paid the required amounts and continued to pay the monthly rent until forcibly dispossessed. The judgment debtor's objections and actions, including raising objections with the Collector and taking possession of the tea estate, were noted. The court concluded that the decree holder performed their obligations and that the terms were not reciprocal to the extent that non-performance by one party would bar the other's performance.

Conclusion:
The court dismissed the application, finding that the decree holder performed their obligations under the compromise decree and that the terms were not so reciprocal or interdependent to render the decree inexecutable. The objections raised by the petitioner were not upheld, and the execution case was allowed to proceed.