CM(M) 784/04 M/s Shree Vijaya Fabrics vs.United Apparels India & Ors. Page 1 Of 4 * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Reserve: November 21, 2008 Date of Order: February 16, 2009 + CM(M) 784/2004 % 16.02.2009 M/s Shree Vijaya Fabrics ...Petitioner Through: Mr. S.K. Pruthi, Advocate Versus United Apparels India & Ors. ...Respondents Through: Mr. R.K. Dhawan, Mr. Rahul Gaur, Advocates for R-3. JUSTICE SHIV NARAYAN DHINGRA 1. Whether reporters of local papers may be allowed to see the judgment? Yes. 2. To be referred to the reporter or not? Yes. 3. Whether judgment should be reported in Digest? Yes. JUDGMENT 1. By way of instant petition under Article 227 of the Constitution of India, the petitioner has assailed the order dated 20th February 2004 whereby the Executing Court refused to issue warrants of attachment for recovery of the decreetal amount. 2. Brief facts relevant for the purpose of deciding this petition are that an award was passed in favour of the decree holder which became final since no objections were filed against the award. This award was for a sum of Rs.16,37,118.35 inclusive of interest up to date of the passing of the award. The future interest was also awarded. As the award became final, the decree holder filed an execution petition for execution of the award. During execution, the Judgment Debtor approached the Decree Holder and offered to settle the matter. The parties negotiated a settlement and the decree holder agreed to settle the matter for Rs.6.25 lac in lieu of decree in case the CM(M) 784/04 M/s Shree Vijaya Fabrics vs.United Apparels India & Ors. Page 2 Of 4 payment was made as per the schedule agreed between the parties. Four post dated cheques were issued by the Judgment Debtor in the following manner: Cheque No. Dated Amount Drawn on 1 677235 8.10.2002 1,75,000 C.B.I. Ram Tirath Nagar, New Delhi. 2 677233 30.11.2002 1,50,000 -do- 3 677234 30.12.2002 1,50,000 -do- 4 677234 30.01.2003 1,50,000 -do- 3. The statement of Shri Gurminder Singh, Partner of JD firm was recorded wherein he gave following undertaking: ”……In terms of the settlement I have handed over the four cheques of the total value of Rs.6.25 lakh all drawn on Central Bank of India Ram Tirath Nagar New Delhi in full and final settlement of the decreetal amount. It is further agreed that in case any of the cheques given today in the court is dishonoured and or is not paid on the due date, the Decree Holder shall be entitled to recover the balance decreetal amount in lump sum and the concession granted to JD shall not be available to them. Photocopies of the cheques are annexed with the compromise Ex.’C.” 4. The statement of decree holder was also recorded and he made the following statement: “….In terms of the compromise I have today received in court the four cheques from the JDs in full and final settlement of the decree which are of the total value of Rs.6.25 lakh. In case of any dishonor of any of cheque the DH shall be entitled to recover the balance decreetal CM(M) 784/04 M/s Shree Vijaya Fabrics vs.United Apparels India & Ors. Page 3 Of 4 amount in lump sum and the concession granted by the DH to JD shall not be available. I undertake to withdraw the complaint under Section 138 of the NI Act filed against the JD on payment/ realization of entire cheque amount givne by the JD today in the court, which is pending in the Court of Shri Rakesh Kapoor, ADJ. On payment of the amount of cheque, all dispute with regard to the present decree stands settled.” 5. It is apparent from the record that the cheques issued by the JD got dishonoured and the undertaking given by the JD in the Court was not fulfilled by the JD. As per the compromise, the full amount of decreetal amount became payable to the decree holder, less the amount already paid to the decree holder. The decree holder had obligation to withdraw the complaint under Section 138 of the NI Act filed against the JD only after the entire amount of the above cheques were realized. The Decree Holder had no obligation to withdraw the complaint under Section 138 unless and until the amount against above cheques was realized. 6. On dishonor of cheque of JD, the Decree Holder approached the Court for execution of the decree. The learned Additional District Judge (executing Court) expressed his helplessness in executing the decree observing inter alia that the Court cannot come to the rescue of the decree holder for issuance of warrants of attachment of property of JD and directed the decree holder to approach the Court of Metropolitan Magistrate where proceedings under Section 138 of the NI Act were pending seeking the payment of the amount towards dishonored cheque on making appropriate statement so that the matter could be got settled. By the impugned order, the learned Executing Court of Additional District Judge refused to issue warrants of attachment for the remaining decreetal amount after adjustment of the amount already received from the Judgment Debtor. CM(M) 784/04 M/s Shree Vijaya Fabrics vs.United Apparels India & Ors. Page 4 Of 4 7. I consider that the learned executing court acted totally contrary to law. There is no doubt that during pendency of the execution, parties can enter into an agreement for satisfaction of the decree and the bring such an agreement on record. However, where the judgment debtor issued cheques and gave an undertaking before the Court that none of the cheques would be dishonoured and if any of the cheques gets dishonoured, the decree holder shall be entitled to recover the entire decreetal amount less the amount already paid through cheques and this compromise entered into between the parties was taken on record by the Court, this can be got implemented in its true spirit through the Court and the compromise itself becomes the decree executable before the Court. The Court cannot refuse to execute a decree on the ground that parties had entered into a compromise. The learned executing court was obliged to execute the decree as it originally stood since the JD had not fulfilled the conditions of compromise and the cheque issued by the JD in the Court had got dishonoured. 8. In view of the foregoing facts, I allow this petition under Article 227 of the Constitution of India. The impugned order passed by the executing court is hereby set aside. The executing court is directed to execute the decree /award as it stood originally. The amount already paid by the JD under the compromise shall be adjusted against the decreetal amount. 9. The petition stands disposed of. February 16, 2009 SHIV NARAYAN DHINGRA J. rd