:1: :1: :1: IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL CIVIL CIVIL APPELLATE JURISDICTION APPELLATE JURISDICTION APPELLATE JURISDICTION WRIT WRIT WRIT PETITION NO. 6590 OF 2007 PETITION NO. 6590 OF 2007 PETITION NO. 6590 OF 2007 ALONGWITH ALONGWITH ALONGWITH WRIT WRIT WRIT PETITION NO. 7597 OF 2007 PETITION NO. 7597 OF 2007 PETITION NO. 7597 OF 2007 Vijay Kumar Devraj Mehta ....Petitioners Versus Vinod Kumar Shah ....Respondents --------- Mr.G.S.Godbole i/by. Mr.Pankaj Das for the petitioner. Mr.S.M.Gorwadkar, Adv. for the Respondent. CORAM: S.C.DHARMADHIKARI, J. DATED: 12th February, 2008 P.C. P.C. P.C. : : : 1. These petitions were heard and on 12.2.2008 I had dismissed them. 2. The reasons leading to their dismissal are set out hereinafter. :2: :2: :2: 3. These petitions under Article 227 of the Constitution of India are by Original Judgement Debtor. He is aggrieved in the first petition by two Orders dated 5.01.2007 rejecting an Application Exhibit-241 in Sp. Darkhast No.61 of 1997 and an order dated 11.7.2007 rejecting an Application Exhibit-227. 4. The Respondent before me is the Original Decree Holder who has initiated the Execution proceedings. 5. It is the case of the petitioner that the Respondent filed Sp.Civil Suit No.1005 of 1996 in the court of Civil Judge Senior Division, Pune for recovery of an amount of Rs.20,50,000/-. The suit was allowed, inasmuch as the Consent Terms were drawn on 7.2.1997 and they were filed in the court. However, the petitioner challenged the Consent Terms and the Decree passed thereon by filing Sp.Civil Suit No.31 of 1999, therefore, the Consent Decree cannot be executed and enforced by the Decree-Holder. :3: :3: :3: 6. The Consent Terms provided that the petitioner-judgment Debtor should pay to the Respondent a sum of Rs.22 lacs in full and final settlement of the Decree Holder’s claim. The Judgement Debtor issued 23 post-dated cheques each of Rs.1 lacs, with the first cheque dated 7.4.1997 and the last one dated 7.2.1999. Clause-4 of the Consent Terms provided that the Judgement Debtor to pay costs of the Suit and future interest at the rate of 24% p.a. 7. Reliance is placed upon Clause-5 of the Consent Terms and it is urged that reading Clause-4 and 5 together, it is clear that the Decree Holder agreed to receive a sum of Rs.23 lacs from the Petitioner inclusive of the claim of interest at 24% p.a. It is specifically urged in para-9 of Writ Petition No.6590 of 2007 that the terms provided that the dishonour of any cheques would result in the entire amount becoming payable forthwith and the Decree would then become executable. Upon dishonour of the cheque, the Decree Holder is entitled to :4: :4: :4: receive only the entire amount forthwith which was inclusive of interest agreed at 24% p.a. There is no provision for any additional interest on any amount. 8. It is urged that the Respondent initiated the Execution proceedings by filing Sp.Darkhast No.61 of 1997. It is contended that the Judgment Debtor issued instructions for Stop Payment, as the petitioner had already handed over post dated cheques to the Respondent Decree Holder. The Respondent did not deposit the cheque due on 7.4.1997 on the due date. The Respondent filed Darkhast Application on 9.4.1997 without depositing the Cheque and delayed depositing the cheque till May, 2007. The respondent misled the executing court. 9. It is stated by the petitioner that as per the Chart (Exhibit-F) in Writ Petition No.6590 of 2007, a total sum of Rs.31,08,000/- has been paid in instalments. The amounts have been withdrawn unconditionally and it is nowhere urged by the :5: :5: :5: Decree holder that he has accepted the amounts without prejudice to his rights and contentions. The Execution Application was sought to be amended. Then, a reference is made to an Order dated 7.11.2001 of the Learned Civil Judge Senior Division, Pune holding that the Respondent was entitled to claim simple interest at the rate of 24% p.a. on the cheque which was allegedly dishonoured calculating the date of due date of the cheque. The statement was accordingly directed to be prepared and filed. It is urged that the Respondent did not challenge the Order dated 7.11.2001 in its entirety. The order was challenged by filing Writ Petition No.2448 of 2003 by the Decree Holder. He challenged para-22 of the order dated 7.11.2001 only. That Writ Petition was disposed off by consent and on 29.06.2005 this court observed that the Judgement Debtor shall make an Application before the Executing court claiming that he has not only paid the decreetal sum but something in excess thereof and if such an Application is filed, that would be decided after hearing both sides. In pursuance of the order of this court, the Judgement Debtor filed :6: :6: :6: an Application, Exhibit-241 and the Learned Judge after giving an opportunity to the Decree Holder to file a reply/objection and hearing parties on 8.10.2006 directed the Nazir of the court to file a statement of the calculations. The Nazir filed a statement showing the calculation and he certified that the petitioner is required to pay to the respondent a sum of Rs.63,227/-. The petitioners state that the Nazir’s Report deserves to be accepted as final and conclusive. However, the Respondent-Decree Holder filed two statements. Prior thereto, Writ petition No.3870 of 2005 was filed by the Decree Holder challenging an Order dated 8.2.2006 of the Executing court but the said Writ Petition was withdrawn in view of the Order dated 5.01.2007 passed by the Learned Civil Judge, Senior Division, Pune. 10. The order dated 5.01.2007 which was passed below Exhibit-241 rejects the Application of the petitioner-judgment Debtor for refund of excess amount and proceeds to hold that as on 13.10.2006 a sum of Rs.43,15,085/- is due and payable by the :7: :7: :7: judgment Debtor to the Decree Holder. 11. The petitioner sought review of this order by filing Exhibit-227. That Review Application is also rejected on 11.7.2007 and therefore this Writ Petition. 12. It is urged that the Civil Judge was in error in issuing the above directions and refusing to modify or recall the same in review. It is urged that the Judgment Debtor did not commit any breach of the Terms but issued "Stop Payment" in instructions since the Darkhast Application was filed illegally. The Nazir’s Report should have been accepted and the matter should have been treated as closed. By passing further orders, now the Executing Court has enriched the Decree Holder and the petitioner has been directed to pay exorbitant sums. This has resulted in miscarriage of justice. That apart, Clause-4 and 5 of the Consent Terms directs that interest at the rate of 24% p.a. is due and payable on the balance outstanding sum, then due. That is admittedly paid :8: :8: :8: and therefore the direction to pay an amount of Rs.43,15,085/- was totally erroneous and deserves to be quashed and set aside. 13. In Writ Petition No.7597 of 2007 what is under challenge is the order dated 27.9.2007 refusing to stay the execution proceedings. 14. This petition is filed on the basis that the petitioner has filed Writ petition No.6590 of 2007 to challenge the Order dated 11.7.2007 and therefore the Execution proceedings be kept in abeyance. The petitioner showed his bonafides by depositing a sum of Rs.7,58,039/- in the Executing Court. On the other hand, the Decree Holder applied for withdrawal of the sum of Rs.7,58,039/- This request was opposed. However, the petitioner’s Applications were rejected and the Respondents Application to withdraw the sum of Rs.7,58,039/- was allowed. These developments are subject matter of Writ Petition No. 7597 of 2007. 15. It would be necessary to make a reference to :9: :9: :9: certain developments after the matters were placed before me. On 28.11.2007 the matter was placed before me and minutes of the order were filed. It was agreed by consent that the Chartered Accountants would be appointed to prepare the Statement of Account as per the Consent Terms dated 7.2.1997 and that would evidence the claim, all payments made till date and outstanding sum due and payable. The Chartered Accountants which were appointed by the Minutes of the order were directed to give their Report within four weeks. During the time that the Reports from the Chartered Accountant were forwarded, the proceedings in the Special Darkhast were stayed. 16. Thereafter, the Chartered Accountants forwarded their Reports. Mr.Kolhatkar, the Chartered Account has filed his Report attached to a Certificate and stated that he has adopted the following method:- "(a) Any Receipt has been first adjusted to the interest and the balance if any has been adjusted to the principal as per normal banking practice. :10: :10: :10: (b) Although received late by the Respondent, the Date of C.No. has been considered as the date of receipt and on that basis the days have been worked out for the calculation of the interest. Similarly, for the direct payments, the Date of Cheque has been considered as the date of receipt. (c) The Principal Amount has been taken as Rs.22,00,000/- being the Decreed Amount. (d) Simple Interest has been calculated at the rate of 24% on day basis by applying the formula as 24 (Rate of Interest) divided by 365 (No.of Days) = 0.0657535 Rate per day. (e) The Interest so calculated has been added to the principle amount but whenever the total amount has exceeded Rs.22,00,000/-, the interest has been calculated on Rs.22,00,000/- only (Interest for the completed month has been restricted to Rs.44,000/-). 17. It is stated by him that the Decree Holder has received directly or through court a sum of Rs.35,41,050/- while the amount of interest works out to Rs.51,34,039/-. 18 The Report of the Chartered Account whO has been appointed by the Judgment Debtor is also forwarded and his name is Mr.Suhas Bora. He has stated that the principal amount is Rs.22 lacs and that amount with interest is cleared, inasmuch as, :11: :11: :11: the total sum paid is Rs.38,68,050/-. Now, the principal sum of Rs.61,689.05/- and interest of Rs.4948.64/- is outstanding. 19. The Chartered Accountants appointed by the Decree Holder/Respondent Mr.Kolhatkar has filed his Affidavit and disputed and challenged the above calculation. The petitioners power of Attorney Holder has filed one Affidavit and has urged that the Respondent’s calculation is incorrect as he has not taken into account several payments which have been made in the year 2000-2003. 20. After these Affidavits were filed, I have heard leaned Counsel appearing for both sides. Since there was no settlement possible and no agreed figure could be arrived at, at the conclusion of the argument I have proceeded to pass the orders. 21. It is undisputed that the Consent Decree in this case is executable and enforceable. It is acted upon is also not in dispute. The calculations that have been made by the Decree Holder are in :12: :12: :12: consonance with the Consent Terms. The Consent Terms are annexed and it is stated that the Judgement Debtor admits the claim of the Decree Holder. The Judgment Debtor agreed to pay to the Decree Holder, Rs.22 lacs in full and final settlement of the claim. Clause-2 sets out the details of the post-dated cheques. Clause-3 has recorded the agreement between the parties that the Judgement Debtor having issued the cheques has assured that every cheque will be honoured on the due date. The Judgment Debtor agreed to pay costs of the suit and future interest at the rate of 24% p.a. Clause-5 and 6 of the Consent Terms read thus :- "5. That the Plaintiff has given a concession to the Defendant by accepting Rs.1,00,000/- together with interest at the above rate in due date instalment on post dated cheques, if any cheques will be dishonoured, the entire amount with costs and interest will be due and payable by the Defendant to the plaintiff and in that event the plaintiff entitled to recover the amount by executing this Decree. 6. The Defendant agree that a charge is created on the properties valued hereunder is Commercial shops adjacent to each other bearing No.16, 17, 18 and 19 on Upper Ground Floor level of AMBA COMMERCIAL COMPLEX, :13: :13: :13: admeasuring each 113.14 sq.fts totally admeasuring 452.56 sq.mts, with common rights to use toilets and parking, located and situated at M.G.Road, Pune-411 011 on Survey/Plot No. of land shop No.16, 17, 18 AMBA COMPLEX. 320, 320A, 321, M.G.Road, Pune. That the Defendant has assured that all the shops are vacant and in the possession of the Defendant. The Defendant has further assured the plaintiff that he has legal rights to transfer these shops and he has not entered into any Agreement for transferring the said shops either orally or writing with any person/persons. The plaintiff is relying on the assurances and Undertaking of the Defendant and on the basis of the said assurances and Undertaking, the Plaintiff is entering into compromise with the Defendant." 22. A perusal of the same would indicate that a concession was given to the Judgment Debtor by accepting Rs.1 lacs together with interest on the clear understanding that the amount specified in the Clause 1 of the terms would be accepted in full and final settlement if the post dated cheques are honoured. If the post dated cheques are dishonoured then the entire amount with costs and interest will be due and payable. In that event, the plaintiff is entitled to recover the amount by executing the Decree. It is clear that a charge was created on :14: :14: :14: the immovable properties to enable the Decree Holder to recover the amount in case there is a default. 23.It is in such circumstances, that I do not find any merit in the submission of Mr.Godbole, that the Petitioner Judgement Debtor is not liable to pay the amounts as directed or computed by the Chartered Accountant, appointed by the Decree Holder. The Chartered Accountant has proceeded on the basis that the principal sum of Rs.22 lacs is the decreed amount. Simple Interest has been calculated at the rate of 24% p.a. on day basis with the clarification that has been issued in the Certificate. All payments made directly or through court were verified and the amount has been computed by him. 24. In the order passed by the Trial Court on 5.01.2007 rejecting the Application of the petitioner, all these aspects have been referred to. Further, Manager, Adinath Cooperative Bank was appointed earlier for preparing statement of Accounts and the Learned Judge referred to the :15: :15: :15: earlier orders passed by the executing court. However, he refers to the order passed by this court in the Writ Petition No. 2448 of 2003. 25. The contention of the petitioner was that he has made excess payment and he filed Statement of Accounts on 24.7.2004. The Respondent filed his reply and another Statement of Account to which once again the petitioner objected. The learned Judge was right in concluding that merely disputing the entries in the Accounts Statement submitted by the Decree Holder, is not enough and the petitioner will have to demonstrate as how these entries are not correct, taking into consideration the Consent Terms. The Learned Judge has observed that the Statement of Accounts filed by the petitioner is very vague. After taking into consideration both the Statement of Accounts, the learned Judge held that the Statement filed by the Respondent-Decree Holder is in consonance with the Clauses of the consent terms more particularly reproduced above. The execution proceedings are filed on 9.4.2007 whereas the Consent Terms are dated 12.2.1997. The :16: :16: :16: concession referred to is also clear. The learned Judge has rightly observed that the Revised Statement of Account (Exhibit-269/1) shows that the Decree Holder has calculated interest on the principal amount of Rs.22 lacs and that is in consonance with the Decree and the principle laid down by the Hon’ble Supreme Court in the case of M/s.Industrial M/s.Industrial M/s.Industrial and Development Syndicate, now called and Development Syndicate, now called and Development Syndicate, now called ICDS ICDS ICDS Ltd V/s. Smt.Smithaben H. Patel and Ors. Ltd V/s. Smt.Smithaben H. Patel and Ors. Ltd V/s. Smt.Smithaben H. Patel and Ors. reported reported reported in AIR 1999 S.C. 1036. in AIR 1999 S.C. 1036. in AIR 1999 S.C. 1036. 26. It is in such circumstances, that I do not find that there is an error apparent or perversity committed by the Executing Court in accepting the Revised statement submitted by the Decree Holder and directing payment of the sum stipulated in his order. 27. The order passed on 5.1.2007 was sought to be reviewed and the Executing Court has rightly observed that it is not permissible to entertain the Review Petition. :17: :17: :17: 28. In my view, the parties have settled their dispute and tendered consent Terms. Order 23 Rule 3 of the Code of Civil Procedure is clear. That permits withdrawal and adjustments of Suits. Order 23 Rule 3 provides for compromise of Suit. The same reads thus :- "3. Compromise of suit- Where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by any lawful agreement or compromise [in writing and signed by parties], or where the defendant satisfies the plaintiff in respect of the whole or any part of he subject matter of the suit, the Court shall order such agreement, compromise or satisfaction to be recorded, and shall pass a decree in accordance therewith [so far as it relates to the parties to the suit, whether or not the subject matter of the agreement, compromise or satisfaction is the same as the subject matter of the suit]: [Provided that where it is alleged by one party and denied by the other that an adjustment or satisfaction has been arrived at, the Court shall decide the question; but no adjournment shall be granted for the purpose of deciding the question, unless the court, for reasons to be recorded, thinks fit to grant such adjournment.] [Explanation-An agreement or compromise, which is void or voidable under the Indian Contract Act, 1872 (9 of 1872), shall not be deemed to be lawful within the meaning of this rule.] :18: :18: :18: 29. Once there is a compromise of suit in terms of a lawful agreement, inasmuch as, the Consent Terms are not challenged and further when the court has passed a Decree in terms of the compromise, then, it was expected from the petitioner that he would abide by his obligations thereunder. Once, the cheques have not been honoured on the due dates, then, the petitioner was liable to pay the sums in accordance with the compromise terms. The Clauses in the Compromise Terms are clear and both sides do not dispute their respective obligations. Once the Judgment Debtor does not dispute his obligation to pay the sum if there is a default, so also, accepts the position that a concession was given to him, then, he cannot turn around and question the right of the Decree Holder to recover the sums in accordance therewith. 30. In my opinion, this is a clear case where despite several opportunities, the petitioner-Judgment Debtor failed to abide by his assurance and obligation. He is repeatedly making :19: :19: :19: attempts to delay the execution proceedings after he committed default in compliance with the terms. Before this court also, adjournments were sought. After both sides agreed to produce Reports from Chartered Accountants of their choice, also, the attempt was not to pay the sums but to delay and defeat the execution proceedings. Every attempt was made to seek further concessions from the court. On serval occasions, I suggested to both sides that they must put an end to this dispute amicably. However, the entries in the Statement of Accounts on record of the executing court being disputed, opportunities were given to bring further material. The Chartered Accountant of the Decree Holder has submitted a Report and clarified the matter on Affidavit, whereas, the Judgment Debtors’ calculations have not been supported by independent material in the form of Affidavit of the Chartered Accountant or otherwise. The accounting principles also appear to be just, fair and proper, insofar as the Decree Holder is concerned. 31. In my view, now the attempt to seek further :20: :20: :20: concessions cannot be countenanced. The Decree Holder has awaited long enough. The compromise terms are of 1997 and the Execution proceedings are pending for 11 years. In such circumstances, and considering the conduct of the Judgment Debtor I am of the view that this is not a fit case for interference under Article 227 of the Constitution of India. This is not a court of Appeal where correctness of the figures and statements can be gone into and the dispute can be resolved on that basis. Once, the Executing Court has taken a view after assessing all materials and carefully scrutinising the Statement of Accounts, then, the same requires no interference, in the extra-ordinary, equitable and descritionary jurisdiction of this court. 32. For the above reasons, both Writ Petitions are dismissed. However, there shall be no order as to costs. sd/- **********