pvr 1 a166-08 IN THE HIGH COURT JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL NO.166 OF 2008 IN CHAMBER SUMMONS NO.231 OF 2006 IN EXECUTION APPLICATION NO. OF 2007 (LODGING NO.100 OF 2006) IN SUIT NO.567 OF 2005 1.Akruti Nirman Ltd. & Ors. ...Appellants vs. 1.Lallubhai Amichand Ltd. & Ors. ...Respondents --- Mr.P.K.Dhakepalkar, Sr.Advocate i/b. P.P.Kulkarni, for Appellants. Mr.Sanjay Jain with Prakash Shinde i/b. M/s.Dhruve & Co., for Respondent no.1. Ms.Asha Bhambwani i/b. Ms.Kiran Bagalia, for MMRDA. --- pvr 2 a166-08 CORAM: D.K.DESHMUKH & ANOOP V.MOHTA, JJ. DATED: 22nd March,2011 P.C.: 1. By this appeal, the appellants challenge order dated 31.1.2008 passed by the learned Single Judge of this Court in Chamber summons no. 231 of 2006. The facts that are relevant and material for deciding this appeal are that a chamber summons was taken out by the original plaintiff in Suit no.567 of 2005. That suit was filed by the plaintiff for declaration that the contract entered into between the plaintiff and defendant no.1 is valid, subsisting and binding upon defendant nos. 1 to 5. The defendant nos.2 to 5 are individuals. Defendant no.6 is the Mumbai Metropolitan Regional Development Authority (MMRDA). Defendant no.7 is the Union Bank of India. Defendant no.8 is the Bombay Municipal Corporation. The plaintiff and pvr 3 a166-08 defendant nos. 1 to 3 filed consent terms before the Court in Suit no.567 of 2005. The terms of that consent terms which are relevant for the present purpose are that by Clause 4 a money decree in favour of the plaintiff and against defendant no.1 was passed for Rs.2,00,00,000/- (Rupees Two crores only) in full and final settlement of the claim of the plaintiff in the suit. By clause 6 of the consent terms, the plaintiff and its two Directors gave Undertaking to the Court to surrender and/or hand over the amenity and additional recreation ground area to Defendant no.8-Corporation. It appears that this area was to be handed over by Defendant nos.1 to 3 under the Letter of Intent dated 10.9.2003 to the Corporation. By Clause 7 of the Consent Terms, on the plaintiff producing proof that he has handed over possession of that area before the Escrow Agent, the Escrow Agent was to release the amount of Rs.2,00,00,000/- which the defendant no.1 were to deposit with the Escrow Agent. The plaintiff was granted liberty to seek pvr 4 a166-08 extension of time from the Court for performance of its obligation. It appears that the consent terms were filed before the Court on 7.7.2005. On that day the consent terms were taken on record by the Court. The Court accepted the undertakings that were given by the parties in the consent terms. Defendant nos.6, 7 and 8 i.e. M.M.R.D.A., Bank and the Corporation were directed to provide all the co-operation possible to enable the plaintiff and defendant nos. 1 to 3 to implement and act in pursuance of the decree passed in terms of the consent terms and the matter was directed to be placed before the Court for further direction on 11.7.2005. On 11.7.2005 a statement was made on behalf of defendant no.6 MMRDA that it shall hand over to the plaintiff possession of the land which was described in the consent terms and which was also described in the possession receipt dated 11.8.2004 to the plaintiff within a period of two weeks from 11.7.2005. This undertaking was accepted by the Court. It appears that at the time when the pvr 5 a166-08 decree was passed the land was in possession of MMRDA, therefore, an undertaking was given by MMRDA that it will hand over possession of the land to the plaintiff within two weeks from 11.7.2005, so that plaintiff becomes able to perform his obligation under the decree and act pursuant to the undertaking given to the Court of handing over possession of that land to the Corporation. It appears that there was correspondence between the parties thereafter. Ultimately, the plaintiff took out Chamber summons no.231 of 2008, basically claiming a declaration that the consent decree that was passed by the Court had been adjusted and/or varied and/or modified and that the plaintiff has performed his obligation under the decree, of handing over possession of the land to MMRDA or the Corporation and therefore, has become entitled to receive the amount of Rs.2 crores from the Escrow Agent. This chamber summons was opposed by defendant nos. 1 to 3. The Corporation also filed an affidavit before the learned Single pvr 6 a166-08 Judge. The learned Single Judge by order dated 31.1.2008 has granted chamber summons in terms of prayer clauses (a), (b), (c), (d), g(i) and (h). The learned Single Judge has, in short, accepted the case of the plaintiff that he has performed his obligation under the consent decree and therefore, he is entitled to receive the amount of Rs.2,00,00,000/- i.e. the decreetal amount from the Escrow Agent. 2. We have heard the learned Counsel appearing for appellants. The submission of the learned Counsel is that by Chamber summons the plaintiff was claiming that the decree has been modified and/or varied and/or has been adjusted. According to the learned Counsel, though it is a consent decree that decree can be said to be varied or modified only when the Court makes an order varying or modifying the decree. The parties cannot, without reference to the Court, modify or vary the decree passed by the Court. The learned Counsel further submits, so far as pvr 7 a166-08 the adjustment of the decree is concerned, though the decree was based on the consent terms between the plaintiff and defendant nos. 1 to 3 and a money decree against defendant no.1 was passed real beneficiary of the decree was defendant no.8 Corporation who was to receive possession of the land from the plaintiff, and to facilitate this, undertakings were given by the MMRDA and the plaintiff to the Court. According to the learned Counsel, therefore, without consent of the Corporation who was the beneficiary of the decree, there cannot be any adjustment of the decree by any alleged agreement between plaintiff and defendant nos.1 to 3. The learned Counsel, therefore, submits that the order passed by the learned Single Judge holding that the decree stands adjusted because an agreement is arrived at between plaintiff and defendant nos.1 to 3 for modification of the decree to the effect that allowing the MMRDA to retain possession of the land would entitle the plaintiff to receive the decreetal amount. The pvr 8 a166-08 learned Counsel submits that till this date the plaintiff has not applied to the Court for being relieved of the undertaking that was given to the Court. The learned Counsel submits that by an agreement arrived at between plaintiff and defendant nos.1 to 3, the plaintiff does not get automatically relieved of the undertaking given to the Court which has been accepted by the Court. The learned Counsel submits that similar is the case in relation to the undertaking given by the MMRDA to hand over possession of the land to the plaintiff. The learned Counsel submits that the learned Single Judge has nowhere considered in his order what is the effect of the undertakings given by the plaintiff and the MMRDA to the Court and what is the effect of both the plaintiff and defendant nos.1 to 3 not abiding by the undertakings given to the Court. The learned Counsel appearing for plaintiff basically submits that the consequence of possession of the land being given to the Corporation was that the plaintiff becomes entitled to receive an amount pvr 9 a166-08 of Rs.2,00,00,000/-. According to the learned Counsel, once defendant nos.1 to 3 agreed that allowing MMRDA to retain possession of the land amounts to compliance by the plaintiff of its obligation under the decree, it makes the plaintiff entitled to receive the amount of decree which is kept with Escrow agent. The learned Counsel took us through the correspondence between the parties to contend that defendant nos. 1 to 3 had agreed that allowing MMRDA to continue in possession of the land amounts to satisfaction of the decree. 3. We have examined the record in the light of these rival submission. For the purpose of deciding this appeal, Term nos.4, 6 and 7 are relevant. They read as under:- 4. Defendant No.1 is ordered and Decreed to pay to the Plaintiff an amount of Rs.2,00,00,000/- (Rupees Two crores only) in full and final settlement of its claim in the Suit. pvr 10 a166-08 6. The Plaintiff and its Directors Mr.Paresh Shah and Mr.Sunil Shah undertakes to this Hon ble Court to surrender and/or hand over the amenity and additional recreation ground area to Defendant No.8 as contemplated under Condition No.5 of the Letter of Intent dated 10th September,2003 issued by Defendant No.6 and to furnish proof on or before 31st December,2005 of having handed over possession thereof to Defendant no.8. This undertaking shall come into effect upon compliance by Defendant Nos.1 to 3 of the deposit required under clause 5. 7. In the event, the Plaintiff commits default in producing receipt of Defendant no.8 having received possession of amenities space and additional recreational ground to M/s.Pandya & Poonawala then M/s.Pandya & Poonawala, Advocates will refund the amount of Rs. 2,00,00,000/- to Defendant no.1 after expiry of a period of 4 weeks from the time stipulated for performance pvr 11 a166-08 under clause No.6 or within the extended time as set out hereunder and the Decree for the amount of Rs. 2,00,00,000/- shall stand cancelled. However all the other clauses of these consent terms shall continue to apply and bind the parties. The Plaintiff shall be at liberty to apply to the Court for extension of time by making out an appropriate case and in that event the time for performance of the obligation will be as stipulated by this Hon ble Court. It is clarified that Defendants no.1 to 3 will be entitled to oppose such application for extension of time. By term no.4, a money decree is passed in favour of the plaintiff and against defendant no.1 in the amount of Rs.2,00,00,000/-. By term no.6, the plaintiff and its two Directors viz. Mr.Paresh Shah and Mr.Sunil Shah have given undertaking to this Court to surrender and/or hand over possession of the land to the Corporation. This they have agreed to do in order to comply with condition no.5 of the Letter of pvr 12 a166-08 Intent dated 10.9.2003. That letter of Intent was issued by MMRDA. That letter of intent is dated 10.9.2003. In that letter of Intent, defendant no.1 is described as Developer and Condition no.5 of that letter of Intent reads as under:- 5.That the Developers shall hand over 7.5% amenity plot and 10% additional RG plot, as per layout, to MCGM. Thus, by the letter of intent a right was created in favour of the Corporation to be in possession of the land and an obligation was cast on defendant no.1 to place the Corporation in possession of the land. Thus, Condition no.6 was incorporated to enable the defendant no.1 to perform its obligation under the letter of intent. For that purpose, undertaking was given by the plaintiff to the Court to hand over possession of the land to the Corporation. The Undertaking given by the plaintiff in the consent terms was accepted by the Court by its order pvr 13 a166-08 dated 7.7.2005. By clause 7 of the Consent terms, on the plaintiff performing his obligation of handing over possession of the land to the Corporation, the plaintiff becomes entitled to receive the decreetal amount. To make such orders as may be necessary to enable the plaintiff to receive the possession of the land from MMRDA, the Court adjourned the proceedings on 7.7.2005 to 11.7.2005. On 11.7.2005 the Court recorded acceptance of statement made on behalf of the MMRDA that it will hand over possession of the land to the plaintiff within two weeks from 11.7.2005. The relevant portion of the order reads as under:- The matter was adjourned on 7-7-2005 to today i.e. 11-7-2005 at the instance of the Defendant No.6. The learned Counsel appearing for Defendant no.6, after taking instructions, states that Defendant no.6 shall hand over to the Plaintiff possession of area out of the larger property described in the possession pvr 14 a166-08 receipt dated 11-8-2004, which is in its possession, save and except the property which is conveyed to it under the conveyance dated 28th July, 2004 and described in Exh.M to the plaint. The possession to be handed over within a period of two weeks from today. Statement is accepted. In our opinion, condition no.6 of the consent terms and the order dated 11.7.2005 have to be read together because they are in one scheme. By order dated 11.7.2005, the MMRDA is obliged to hand over possession of the land to the plaintiff and by Condition no.6, the plaintiff is obliged to hand over possession of that land to the Corporation. The undertakings given by the MMRDA and the plaintiff have been accepted by the Court. Admittedly, to this date the MMRDA has neither handed over possession of the land to the plaintiff nor the MMRDA moved the Court at any point of time for relieving it of the Undertaking given by it to the Court, which has been accepted pvr 15 a166-08 by the Court. Similarly, the plaintiff has also not moved the Court till this date for being relieved of its undertaking to hand over possession of the land to the Corporation. Even accepting the arguments made on behalf of the plaintiff that defendant nos.1 to 3 had agreed that the plaintiff can allow MMRDA to be in possession of the land, in our opinion that argument will not relieve the plaintiff from its undertaking given to the Court and despite the alleged agreement the plaintiff would not be entitled to receive decreetal amount unless and until the plaintiff approaches the Court and the Court relieves the plaintiff of the undertaking given by it to the Court. In our opinion, when the parties give undertakings to the Court which are accepted by the Court and the parties act on the basis of such accepted undertakings, such undertakings have be to taken seriously and the Court has to see that such undertakings are abided by. The parties cannot be allowed to disregard the undertakings which have been given pvr 16 a166-08 by them to the Court. 4. It appears from the correspondence between plaintiff and defendant nos.1 to 3 that defendant nos.1 to 3 did agree that the plaintiff may hand over possession either to the Corporation or to MMRDA. However, we have not been shown anything which would even indicate that defendant nos.1 to 3 agreed that the possession should not be handed over or need not be handed over to the Corporation. In our opinion, therefore, as even after exchanging of correspondence between the parties, the Corporation continued to be entitled to receive possession of the land, the undertaking given by the plaintiff to the Court obliges the plaintiff to hand over possession of the land to the Corporation. It is nobody s case that as a result of the correspondence between the parties, the Corporation was no longer entitled to receive possession of the land. Even after exchange of the correspondence, the Corporation continued to pvr 17 a166-08 be entitled to receive possession of the land and because of the undertaking given to the Court the plaintiff continued to be liable to hand over possession to the Corporation. In our opinion, therefore, the plaintiff would become entitled to receive the decreetal amount of Rs.2,00,00,000/- only on producing proof before the Escrow Agent that the possession of the land has been handed over to the Corporation and not otherwise. In the chamber summons, the original plaintiff has prayed for the following reliefs:- a)That this Hon ble Court be pleased to declare that the Decree dated 7th July,2005 and 11th July,2005 passed in Suit No.567 of 2005 has been adjusted and/or varied and/or modified to the extent that: i) the Plaintiff is required to surrender and/or hand over the Amenity land and Additional Recreation Ground area to Defendant no.6 or Defendant no.8; ii)that such surrender or handing over of possession has to be done on or before 25th February 2005 or such other date as this Hon ble Court may decide and iii) the Respondent has to pvr 18 a166-08 pay the amount of Rs.2,00,00,000/- to the Plaintiff upon proof of possession of the Amenity space and Additional Recreation Ground; b) that the adjustment and/or modification and/or variation of the Decree dated 7th July,2005 and 11th July,2005 as per prayer (a) above or to such extent as may be declared by this Hon ble Court be certified on Decree dated 7th July,2005 and 11th July,2005 passed in Suit No.567 of 2005; c) that this Hon ble Court be pleased to declare that the Plaintiff has complied with his obligation under Clause No.6 and 8 of the Consent Terms dated 7th July,2005 as adjusted and/or modified and/or varied; d) that this Hon ble Court be pleased to direct the Respondent/Garnishee Defendant no.1 to 3 or any one or more of there to pay to the Plaintiff the amount of Rs.2,00,00,000/- alongwith accretions pvr 19 a166-08 thereto from 1st January 2006 and such other date as this Hon ble Court may deem fit and proper. Perusal of prayer clause (a) of the chamber summons shows that even according to the plaintiff the land is yet to be surrendered or handed over and that it is to be handed over either before 25.2.2006 or such other date as the Court may decide. From the chamber summons it appears that it is not the case of the plaintiff that the land is to be surrendered now only to defendant no.6 and not to defendant no.8. Even according to the plaintiff the question  whether the possession of the land is to be handed over to defendant no.6 or to defendant no.8 is still open, then in view of the undertaking given by defendant no.6 to hand over possession of the land to the plaintiff and the undertaking of the plaintiff that the plaintiff will hand over possession of the land to defendant no.8- Corporation, there is no question of the Court making any other order than the one which has pvr 20 a166-08 already made by the decree passed by the Court. What is further pertinent to be noted is that the defendant no.6, to this date, has not made any application for being relieved of its undertaking to the Court to hand over possession of the land to the plaintiff. There is also no application made to this date by the plaintiff for being relieved of its undertaking to hand over possession of that land to the Corporation after receiving possession from defendant no.6. It appears from the record that the plaintiff, for the reasons best known to the plaintiff, did not abide by the requirements of the decree and still wants payment of the decreetal amount. 5. It was submitted before us that permitting MMRDA to continue in possession of the land amounts to surrender of the land to MMRDA, and therefore, the plaintiff has performed its obligation under the decree. This submission cannot be accepted because it is contrary to the terms of the decree and the conduct of the pvr 21 a166-08 plaintiff also shows that the plaintiff did not understand that merely permitting MMRDA to continue in possession of the land amounts to surrender of the land. The plaintiff itself had taken out Chamber Summons no.27 of 2005 in the month of December,2005 praying for an order in the following terms:- that this Hon ble Court be pleased to extent the time by further period of 8 weeks to surrender and/or hand over the land to defendant no.6 or 8. This chamber summons was moved for order before the learned Single Judge of this Court on 30.12.2005. The learned Single Judge refused to pass any order on the chamber summons. In paragraph 2, the learned Single Judge has observed thus:- 2.In the consent terms there is a solemn undertaking given by the Plaintiffs to hand over the amenity and additional recreation ground area pvr 22 a166-08 to the Defendant no.8 on or before 31st December,2005. The prayer in the Chamber Summons is for extension of time. There are hardly any satisfactory averments in the Affidavit in support of Chamber summons for making out a case for extension of time. Therefore, without giving any opportunity to file reply to the Respondent no.8, time cannot be extended. Instead of pursuing this chamber summons, the plaintiff allowed that chamber summons to be dismissed for default. Had it been the case of the plaintiff that permitting the MMRDA to be in possession of the land in view of the agreement between plaintiff and defendant nos. 1 to 3 amounts to satisfaction of the decree, then it is for the plaintiff to explain  why the chamber summons was taken out seeking extension of time to surrender the land? Taking overall view of the matter,therefore, in our opinion, the learned Single Judge was not justified in holding that the consent decree stands adjusted by an pvr 23 a166-08 agreement between plaintiff and defendant nos. 1 to 3. The learned Single Judge, in our opinion, should have considered the affidavit filed on behalf of the Corporation dated 5.1.2007. That affidavit shows that the Corporation continues to be entitled to develop that land and therefore, continues to be entitled to the possession of the land. Though there is a proposal submitted by MMRDA to the Government which, if sanctioned, will entitle MMRDA to develop the land. It is, thus clear that no useful purpose would have been served by permitting the MMRDA to remain in possession of the land. 6. Taking overall view of the matter therefore, in our opinion, this appeal will have to be allowed. It is accordingly allowed. The order passed by the learned Single Judge dated 31.1.2008 is set aside. Chamber summons no.231 of 2006 is dismissed. At the request of the learned Counsel appearing for plaintiff, it is directed that defendant nos. 1 to 3 will not pvr 24 a166-08 claim refund of the amount from the Escrow Agent for a period of six weeks from today. It goes without saying that before expiry of that period no suitable order is received, the Escrow Agent shall be within its right to release the amount to defendant nos. 1 to 3. (D.K.DESHMUKH,J.) (ANOOP V.MOHTA,J.)