1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE NO.1541 OF 2006 IN EXECUTION APPLICATION NO.454 OF 1983 Smt.Nematbai R. Kagalwalla and Ors. .. Plaintiffs Versus Smt.Laxmibai V. Sule & Ors. .. Defendants Mr.Y.Divekar for plaintiff No.3 and defendant Nos. 4 to 9 Mr.Parikh i/b. Hetal Patel for defendant No.3 Mr.S.Diwan with Mr.Jaydeep Mitra i/b. Vinod B. Singh for respondents Mr.Biren Saraf with Mr.Sanjay Jain i/b. L.C.Tolat for defendant No.10 CORAM : S.C.DHARMADHIKARI, J. DATE : 9th February 2009. P.C. . This is a Notice under Order XXI Rule 22 of C.P.C. which is moved by Defendant No.10 to the suit and it is directed against plaintiff Nos. 2 and 3 and Defendant Nos. 4 to 9. 2 2. It calls upon them to show cause as to why Consent Decree passed against them on 17th February 1994 be not executed. This notice is moved on 28th November 2006 but sealed on 1st December 2006. The Consent Decree is passed by this Court after taking the consent terms on record. The order dated 17th February 1994 reads thus:- "P.C.:- Decree as per minutes of order marked "X-1" undertaking as recorded in the consent terms accepted. Half refund to the plaintiff. Court Receiver to act on the copy of minutes authenticated by the Associate. Certified copy be expedited." 3. The basis on which this relief is sought is that the subject suit was filed in this Court for several reliefs, including that there was a Deed of Partnership and the parties to the suit 3 were carrying on business in partnership. If they were so carrying on, then, on the basis that the provisions of Indian partnership Act, 1932 are attracted. Hence, the Firm may be dissolved and directions be issued so as to distribute the assets, after meeting the liabilities, in terms of statutory provisions. 4. During the pendency of the suit, parties have arrived at some terms. The consent terms were filed in this Court on 16th February 1994 as is evident by order passed on 17th February 1994. 5. Reliance is placed upon the minutes of the order which record that the Court Receiver will stand discharged as Receiver without rendition of accounts but subject to his costs, charges and expenses being paid. Plaintiff Nos. 1 to 3 undertook to forthwith hand over possession of a Cinema Theatre to the Receiver who was to 4 hand over the same to defendant No.10 in turn for running and managing the same in accordance with of the Terms. 6. The consent terms record that the suit firm was constituted under the Deed of Partnership dated 1st November 1978. The same is dissolved on the date of institution of the suit i.e. with effect from 5th March 1983. The Assets and liabilities on 15th November 1982 in the Balance sheet Available of that date, should be taken as the basis. That all liabilities of the firm incurred from 15th November 1982 till 5th March 1983 have been fully paid and discharged and none of them is outstanding or unpaid. There are no other liabilities and if, there is any other liability the plaintiff and defendant Nos. 1 to 3 agreed to discharge the same in equal proportions. They further agreed 5 and undertook that they will make payment of a claim of one Mr.Raj Kishore. They will also settle all claims of workers, contractors. They will also settle and pay Government dues. As far as permanent employees of theatre is concerned, they will also make payment to 14 permanent Employees in case they are retrenched due to closure of Cinema. It is stated that the firm has not carried on any business on and from the date of institution of suit and appointment of Receiver. The parties authorised the Receiver to pay out of the amounts lying with him a sum of Rs.2,50,000/- to a Coop.Bank more particularly mentioned in clause 4 of the Consent Terms and in the manner set out therein. 7. After stating this much about the debts which were outstanding, the parties proceeded to take stock of the property. They stated that plaintiff No.1 and defendant Nos. 1 to 3 have agreed to bring on record defendant No.4 to 9 in 6 the suit as parties because of the shares that they were entitled to through their predecessors in title. Similar is the case with defendant Nos. 4 to 9 as the parties recognise their rights in Mohammedan Law. Thereafter, family settlement is recorded in clause 6 and the shares of the plaintiffs and defendants 4 to 9 in respective proportions have been recorded in clause 6. There is also a share recorded of defendant No.3. 8. Thereafter, the parties acknowledge that the partnership business/ firm was the owner of an immovable property situated at Station Road, Kurla, Mumbai 400 070. That Cinema theatre is known as Bharat Chitra Mandir. The term records that the firm was in exclusive possession and was entitled to, therefore, deal with its business and property as joint owner in terms of the shares recorded in clause 6. 7 9. Clauses 9, 10 and 11 are relevant for the purpose of present proceedings and they read as under:- "9. The plaintiffs and defendant Nos. 1, 2 and 4 to 9 (hereinafter briefly collectively referred to as "the said sellers") hereby agree to sell transfer grant convey assign and assure unto the defendant No.10 and/or his nominee/s as he may specify their respective undivided shares in the said property at or for the lumpsum price mentioned against their respective names below viz., (lakhs) Plaintiff No.1 3.80%, Rs.2.63 Plaintiff No.2 14% Rs.9.80, Plaintiff No.3 14% Rs.9.80, Plaintiff No.1 6% Rs.4.20, Plaintiff No.2 6% Rs.4.20, Plaintiff No.4 2.60% Rs.1.82, Defendant No.5 2.60% Rs.1.82, Defendant No.6 2.60% Rs.1.82, Defendant No.7 2.60% Rs.1.82, Defendant 8 No.8 5.20% Rs.3.67, Defendant No.9 2.60% Rs.1.82 "10. Recorded and confirmed that at or before the signing of these consent terms, the defendant No.10 has paid to the Sellers the amounts mentioned against their respective names below being 10% of the sale price payable to them under the foregoing clause (and the Sellers admit and acknowledge receipt of the same) viz., Plaintiff No.1 Rs.26,300/- Plaintiff No.2 Rs.98,000/- Plaintiff No.3 Rs.98,000/- Defendant No.1 Rs.42,000/- Defendant No.2 Rs.42,000/- Defendant No.4 Rs.18,200/- Defendant No.5 Rs.18,200/- Defendant No.6 Rs.18,200/- Defendant No.7 9 Rs.18,200/- Defendant No.8 Rs.36,700/- Defendant No.9 Rs.18,200/- "11. The Defendant No.10 agrees and covenants with the Sellers, and undertakes to this Hon’ble Court, that he shall and will pay and discharge the balance sale price due and payable by him to the Sellers at the end of six months or earlier from the date hereto on all of them simultaneously making and executing appropriate Sale Deeds/ Conveyances/ Assignments and other appropriate deeds documents and writings as may reasonably be required by the Defendant No.10 in favour of himself and/or his nominee/s as he may specify to evidence the grant, transfer conveyance and assignment of their respective undivided shares in the said property to him/her, them and 10 admitting execution of such documents at the sub-Registry, after producing their respective Certificates under section 230-A of the Income-Tax required for registration of such documents under the Registration Act, 1908. "11A. The plaintiffs undertake to the Hon’ble Court to remove and/or cease to run Pop Corn and Ice Cream stall in the Cinema compound and further undertake to the Hon’ble Court to hand over vacant and peaceful possession of the shed in their occupation on the property described in the second schedule hereunder written simultaneously with the completion of sale." 10. Since reliance is placed on clauses 17 and 21, it would be convenient to reproduce them also. 11 "17. By consent, Court Receiver, High Court, Bombay is appointed as Receiver of the Cinema Theatre building known as Bharat Chitra Mandir at Station Road, Kurla, Bombay 400 070 belonging to the partnership pursuant to the interim order dated 11th March 1983 in the suit be discharged without passing accounts and the Receiver to forthwith handover possession of the suit Cinema Theatre building together with all plant, machinery, equipment, furniture, fittings, fixtures and all other moveable articles and things lying therein to the defendant No.10 and defendant No.10 is hereby authorised and permitted by all the parties hereto to conduct the said business on the strength of the existing licences held by the said business till such time as may be agreed between him 12 and the defendant No.3, or till completion of sale by the Sellers of their respective undivided shares in the said property to the defendant No.10 by execution of the relevant deeds against payment of the balance price and sanctioning of building plans and arrival of the stage for demolition of the existing structure for purposes of reconstruction, after receipt of I.O.D., C.C. and all other clearances. The defendant No.10 is at liberty to run and/or conduct the business of the said Theatre by himself and/or through any conductor or Agent including Defendant No.3." 11. It is not in dispute before me that defendant Nos. 3 and 10 have at an understanding which is recorded in these terms. On the basis of these terms and clauses and the order passed 13 by this Court, Mr.Saraf submits that these are not just terms recorded between parties or an agreement between them. These are the terms recorded during the course of the proceedings viz., pendency of suit and they were filed in Court. After they were filed in Court and taken on record so also an order made in terms thereof, the consent terms have on them a seal of approval of this Court. Thus, a decree is passed in terms of these consent terms and consent decree is also executable in law. If it is so executable in law, an execution application can be filed under Order XXI Rule 11 of C.P.C. If it is so filed but execution is commenced beyond the period specified in Order XXI Rule 22 so also other conditions therein being attracted a notice under that provision can be issued by the Court calling upon the judgement debtors to show cause as to why the decree should not be executed and enforced against them. 14 12. Mr.Saraf submits that it is not the case of any parties before this Court that defendant No.10 could not have filed any execution application nor move the instant notice. If the terms confer distinct advantage and creates rights in favour of the defendant No.10 and he being specifically made party to the proceedings, then, it is open to him to urge that the decree be enforced and executed by this Court. Precisely, this is sought to be done by filing instant notice. 13. As far as the chamber summons is concerned, his argument is that the respondents were inducted in the suit property by defendant No.10. On the basis of the principle laid down in Section 146 read with Order XXII Rule 10 of C.P.C. so also by applying mandate of section 52 of Transfer of Property Act, 1981, the respondent can be impleaded as party to the execution application. He is a person claiming through the 15 judgement debtor. If he is claiming through one of the parties/ judgement debtors, then, he is bound by the judgement and decree. If he is so bound, then, his impleadment is necessary. Such being the case, he should be impleaded as party respondent and appropriate orders and directions be issued so that he does not alienate or encumber the property further and that is how reliefs claimed in the chamber summons proceed. 14. Mr.Saraf has relied upon the abovementioned statutory provisions and the following decisions in support of his submissions:- (i) A.I.R. 1957 Bom.117 (Narayan Laxman Ayarkar and Ors. Vs. Vishnu Waman Dhawale and Anr.) (ii) (2004) 2 S.C.C. 601 (Raj Kumar Vs. Sardari Lal and Ors); 16 (iii) A.I.R. 1973 Bom.342 (Babu Rama Chaugule Vs. The Goodwill Bank Ltd., Miraj) 14. As far as the chamber summons is concerned, Mr.Diwan appearing for respondents contended that the chamber summons is not maintainable. He submits that the execution application is sought to be amended to implead the respondent as a judgement debtor and, thereafter, carry out Amendments to the execution application. Apart from the fact that the rights of a stranger to the decree are being sought to be introduced by amending the execution application, yet, assuming and without admitting that the chamber summons is maintainable, still, the respondents cannot be added as party. He submits that the defendant No.10 has moved this chamber summons claiming to be a decree holder. The decree confers certain rights but without 17 fulfilling the obligations, the applicant defendant No.10 cannot exercise the same. Mr.Diwan has invited my attention to the affidavits filed in reply and rejoinder so also the relevant terms and clauses of the consent terms and submits that the defendant No.10 is in breach of an undertaking given to this Court. Admittedly, he has not paid the sums as required and undertaken within the period specified in the consent terms. He has also defaulted in payment of other sums. He has not done anything from 1994 till 2005 and when his alleged rights were put an end to and the property was transferred to respondent by other judgement debtors that defendant No.10 has now instituted these proceedings. For all these reasons no relief can be granted in the chamber summons. 16. Mr.Divekar and Mr.Parekh, learned Counsel appearing for judgement debtors contended that the notice under Order XXI Rule 22 is issued 18 calling upon the judgement debtors to show cause as to why the decree should not be executed against them. By its very nature the provisions and notice in this case postulates that the Court must be satisfied that the decree is executable and enforceable at the instance of defendant No.10. If it is not so enforceable and executable, then, no orders can be passed, much less, making the notice absolute. They have also relied upon the very clauses which have been high lighted by Mr.Diwan to urge that the decree is not executable and, therefore, both notice and the chamber summons be dismissed. 17. At the outset, it must be clarified that all observations made in this order are prima facie and tentative. They shall not affect the right of defendant No.10 to adopt independent and substantive proceedings seeking enforcement of the obligations of the parties to the terms. He may also seek 19 damages or compensation for the breaches alleged. It is necessary to record prima farcie observations because it was strenuously contended that defendant No.10 has complied with all obligations and there is no default. However, prima facie, that is not the position. Hence, defendant No.10 cannot execute the terms as a decree as he is prima facie in default. 18. For properly appreciating the rival contentions, a reference to the relevant clauses of the consent terms is necessary. They are already reproduced above. If the clauses are perused, it is apparent that the plaintiffs and defendant Nos. 1, 2 and 4 to 9 agreed to sell, transfer, grant, convey, assign and assure unto the defendant No.10 and/or his nominee(s) as he may specify, their respective undivided shares in the property for a lumpsum price mentioned against their respective names in clause 9. It is recorded by clause 10 that some of the amounts 20 have been received which may be 10% of the sale price. Clause 11 records an undertaking by defendant No.10 to the Court so also an agreement between the parties that he shall and will pay and discharge balance sale price due and payable by him to the sellers at the end of six months or earlier from the date of the terms on all of them simultaneously making and executing appropriate sale deeds/ conveyances, assignments and other appropriate deeds, documents and writings. In this context, a reference to the chamber summons would indicate that the respondent has raised certain specific pleas. In the affidavit in support of this chamber summons, defendant No.10 has relied upon the deed of transfer which was executed in favour of the respondent by plaintiff No.3 and defendant Nos. 4 to 9. It has been contended by the defendant No.10 in the affidavit in support that the consent terms and decree passed discharges the Court Receiver and puts defendant No.10 in possession of the property 21 being a Theatre. He was running the same. The third defendant took forcible possession thereof. He states that the transfer is illegal and not binding upon him. He has in para 15 of the affidavit in support urged that the consent decree has been acted upon and plaintiff No.3 and defendant Nos. 4 to 9 have accepted the payment made by defendant No.10. It is stated that monthly payments, inter alia, of Rs.20,000/- have been revised to Rs.30,000/- and have been admittedly paid. It is in such circumstances and when the decree passed in pursuance of the terms is enforceable in law, the relief claimed by him in the chamber summons be granted. 19. An affidavit in reply has been filed by the respondent and he has raised specific plea as observed by me above. He states that the defendant No.10 has failed to abide by the terms and obligations that have been cast on him. He has not abided by the undertaking given to the 22 Court. Reliance is placed on clause 21 and the learned Counsel states that the same was not part and parcel of the balance consideration of Rs.39.06 lakhs which was due and payable. In response to these facts, a rejoinder affidavit has been filed and in the rejoinder affidavit in paras 4 to 6 the defendant No.10 states that he is the only person entitled to run the Theatre, either by himself or by appointing defendant No.3 or any other person. Defendant No.3 has committed breach and illegally dispossessed him. The specific case is that he has right to execute the consent decree. However, defendant No.10 in his rejoinder states that even assuming without admitting that the allegations that the decree cannot be executed against respondent is true, yet, payment of Rs.21,000/- and Rs.1,000/- by cheques by plaintiffs and defendants are undisputed. Receipts are of 9th January 2003 and 19th April 2005. Thereafter, he relies upon clause 21 and contends that he has duly paid the 23 plaintiffs and other defendants or their heirs, all monies. However, he claims that he has paid additional sum of Rs.9000/- on account of part consideration payable by him from time to time by cheques and, therefore, he pleads adjustments insofar as these alleged additional payment. In para 6 however, it is stated that a sum of Rs.10,86,700 has been paid and received under the deed of transfer in favour of respondents. However, as far as the defendant No.10 is concerned, under the consent decree, he has agreed to pay total consideration of Rs.47,74,000/- for acquisition of 62% undivided share in the theatre. He claims that he has acquired 6% share of defendant No.2 from his legal heirs. He claims that he has acquired the rights thus, and, therefore, respondent cannot claim to have acquired the same in the year 2006 for consideration of Rs.10,86,700/-. Defendant No.10 states that under clause 21 of the consent decree, payment has been made but the same is not 24 part and parcel of balance consideration of Rs.39.06 lakhs. Para 18 of the affidavit in rejoinder reads thus:- "18. With reference to para 12 of the said affidavit in reply, I say that attachment however referred to in it is irrelevant and made only with a view raise unnecessary controversy and to mislead this Hon’ble Court. I deny the allegations made in it and I submit that as a result of the consent terms/ consent decree the rights of the plaintiff No.3 and others were duly transferred or vested in me and I have in fact enjoyed the said theatre without any interference objections or dispute from plaintiff No.3 and others till the month of July 2005 when for the first time the defendant No.3 made attempts as aforesaid." 25 20. Once, there is no dispute raised with regard to the obligations of defendant No.10 to pay the sale price within a period of six months from the date of execution of the terms and from 1994 till 2005, no attempt is made to show compliance with these terms and when only upon execution of the deed of transfer in favour of respondents that all these proceedings have been instituted, that would go to show that defendant No.10 failed to satisfy the Court, prima farcie, that he has abided by this undertaking. Merely because the defendant No.10 claims that Rs.10,86,700 was the balance amount due and payable and that is the price at which the plaintiffs and defendant Nos.4 to 9 have transferred their right, title and interest in the property in favour of respondents, does not mean that the payment has been made under this clause and in terms thereof by defendant No.10. There is a serious dispute, inasmuch as, the plaintiffs and defendant Nos. 4 to 9 do not 26 admit receipt of the balance sale price. In such circumstances and from 1994 till 2005, no attempt has been made by the defendant No.10 to assert the rights conferred by the consent terms and the decree in pursuance thereof, would go to show that the decree is not enforceable and executable at his instance against the others. More so, when rights of strangers to the decree have intervened. Any larger controversy need not be addressed inasmuch as I am proceeding on the assumption that the defendant No.10 was entitled to move this application for execution of the decree and apply for leave under Order XXI Rule 22 of C.P.C. so also apply for impleading respondent as party to the execution application. 21. The decisions relied upon by Mr.Saraf need not be referred to inasmuch as section 52 of the Transfer of Property Act as it is applicable in State of Maharashtra and Gujarat, would require that a lis pendens has to be Registered 27 and after registration thereof, the other provisions including the explanation would apply. The purpose of all this is not to defeat and frustrate a decree so also enable the Court to retain control over the proceedings until the same is executed and enforced. Ultimately, the decree is of a Court and it must retain control, irrespective of what parties do during the pendency of the proceedings, is the object and purpose which is sought to be achieved. That is the principle enshrined in section 146 by Mr.Saraf. I need not go into this larger issue because I am assuming for the purpose of present proceedings that defendant No.10 can apply for execution of the decree. However, on facts when I find that there are distinct obligations cast upon by two terms, one of which is a specific undertaking to the Court and the same having not been abided and complied by defendant No.10, then, no assistance and aid can be given to such a party to enforce and execute the decree. In 28 addition, the party who is sleeping over his rights for all this time cannot now turn around and question the acts of the others, who are parties to the decree. Once he has been found in default, then, in the execution application, no aid or assistance can be given to him. If this was a clear case of all compliances by defendant No.10 of the terms and obligations cast on him, then, there was no occasion to refer to clauses 21 and 11. At the same time, contending that there is no dispute that payment under clause 21 is not part and parcel of the balance consideration. In these circumstances, the notice and chamber summons are misconceived