JUDGMENT M. N. Shukla, A.C.J. 1. This writ petition was initially heard by a learned single Judge who referred the following two questions for decision by a larger Bench i (a) Whether a compromise decree which contained a default clause would be invalid to the extent of that clause and the default clause would be unenforceable ? and (b) Whether the executing court could go behind a decree and refuse to execute the decree containing the default clause ? That is how the case has come before us. 2. As the learned single Judge who made the reference has since reverted to the Bar we are of the opinion that in order to avoid further delay in the final hearing of the case it would be expedient that this Bench should dispose of the entire case instead of answering only the question referred to above. The salient facts of the case may first be adverted to. The petitioner was a tenant of the disputed accommodation at a rent of Rs. 12.50 per month. The respondent No. 3 landlord, filed a suit for his ejectment on the basis of default in payment of rent and termination of tenancy. Before the suit could be heard and decided a compromise was entered into between the parties on 22nd January, 1976. It is Annexure 1 to the writ petition. It mentions that the parties had come to terms and the defendant had paid to the plaintiff the costs of the suit and rent due upto 31st July, 1975 The rent from August, 1975 to 31st January, 1976 amounting to Rs. 90/- was to be paid by the defendant to the plaintiff by 31st March, lv76. From 1st August, 1975, the rate of rent was to be enhanced to Rs. 15/- per month. It was further stipulated that in case the defendant did not pay the balance of rent by 31st March, 1976 as agreed, the suit of the plaintiff shall stand decreed. Costs were to be borne by the parties. The compromise was made part of the decree. On the basis of the aforesaid compromise a decree was passed. The defendant did not pay the rent by 31st March, 1976 as agreed. Consequently, the plaintiff filed an application for execution of the compromise decree. 3.
Costs were to be borne by the parties. The compromise was made part of the decree. On the basis of the aforesaid compromise a decree was passed. The defendant did not pay the rent by 31st March, 1976 as agreed. Consequently, the plaintiff filed an application for execution of the compromise decree. 3. The defendant-judgment debtor resisted the execution on the ground that a new tenancy had come into being and on the basis of the same he had a right to remain in possession. His contention was that he could not be evicted under the decree, as the plaintiff had given his consent to the defendant to remain in possession as a tenant at a rent of Rs. 15/- per month under a new tenancy. 4. Both the courts below rejected the objection. The present writ petition was filed challenging those two orders passed in execution. Heard the learned counsel for the parties. On behalf of the petitioner reliance was placed on the case Shivaji Maharaj Gauri Shanker Mahadeoji v. Durga Prasad, AIR 1964 All. 37 and it was argued that the clause of ejectment for non-payment of rent in the compromise was merely as a penalty and the penalty clause could not be enforced. In our opinion the facts of Shivaji Maharaj Gauri Shanker Mahadeoji's case (Supra) were entirely different. In that case the plaintiff landlord had filed a suit for ejectment of the defendant and for recovery of a sum of Rs. 987/8/- as arrears of rent and damages. The suit was decided in terms of a compromise which provided that the suit be decreed for recovery of Rs. 987/8/- but he dismissed so far as it related to the relief of ejectment. It further said that should the defendant fail to pay the amount under decree by 27th July, 1950 the suit would be deemed to have been decreed for ejectment as well. The defendant defaulted in payment of the decretal amount and thereafter an execution application was filed against the defendant by the plaintiff who had obtained a decree for ejectment. The judgment-debtor resisted the execution application on the ground that the decree was not executable as regards ejectment inasmuch as the condition relating to ejectment on default of payment of decretal amount as mentioned in the compromise was in the nature of a penal clause.
The judgment-debtor resisted the execution application on the ground that the decree was not executable as regards ejectment inasmuch as the condition relating to ejectment on default of payment of decretal amount as mentioned in the compromise was in the nature of a penal clause. The objection was upheld and the decree for ejectment was held to be not executable. The same view was affirmed in second appeal decided by this Court. 5. In our opinion the case of Shivaji Maharaj Gauri Shanker Mahadeoji's case (Supra) is clearly distinguishable as in that case no decree for ejectment on the ground of default was passed. In other words, although the decree for ejectment had not been granted in the suit, nevertheless according to the compromise in the event of default of payment of the decretal amount the decree for ejectment was to be treated as having been passed. In these circumstances the stipulation regarding ejectment on account of default was construed as a penalty which rendered the decree for ejectment inexecutable. In the instant case the position is completely different. The compromise arrived at between the parties is reproduced below ; "Sewa Men Niwedan Hai Ki Muqadma Unwan Bala Hai. Vaham Fariqin Aapes Men fasfiya Ho Gaya Hai. Prativadi Ne Wadi Ko kharcha wa Kiraya 31 July 1975 Tak Ka Aur Bebak Kar Diaya Hai. August 17, 1975 Se 31 January 1976 Ke Mublik 90/- Kiraya Partivadi 31 March 1976 Tak Wadi Ko Ada Karega. Prativadi Yakum August 1976 Se Kiraya 15/- Mahina Wadi Ko Mah Ba Mah Ada Karta Rahega. Agar Prativadi Ne 31-3-1976 Tak Bakaya Kiraya Ada Na Kiya To Dawa Wadi Digri Mutasawwar Hoga. Lihaza Darkhast Hai Ki Muqadma Barue Tasfiya Tai Framaya Jawe Aur Tasfiya Juj Digree Framaya Jawe. " 6. The factual position in the present case was that the arrears of rent from 1st August, 1975 to 22nd January, 1976 were never paid. The petitioner failed to deposit the full amount of arrears etc. on the first date of hearing and thus did not avail himself of the provisions of section 20 (4) of U. P. Act No. 13 of 1972. It was thereafter, that is, on 20th January, 1976 that a compromise was effected and it was agreed that with effect from 1st August, 1975 the rent would be payable at the rate of Rs. 15/- per month instead of Rs.
It was thereafter, that is, on 20th January, 1976 that a compromise was effected and it was agreed that with effect from 1st August, 1975 the rent would be payable at the rate of Rs. 15/- per month instead of Rs. 12.50 (which was the former rent) and in case the defendant did not pay the balance of rent by 31st March, 1976 the suit of the plaintiff would stand decreed. Thus, it was clear that default in payment of rent had already occurred, the tenant had failed to comply with the provisions of section 20 (4) of U. P. Act No. 13 of 1972 and save himself from ejectment. Hence, a right of ejectment had already accrued to the plaintiff, it was not an innovation introduced by the compromise. In this situation the compromise really speaking opened a fresh opportunity for the defendant to save himself from ejectment by paying within the stipulated time the balance of rent at the enhanced rate. On account of the second default the defendant deprived himself of the benefit which could have accrued to him in terms of the compromise. Clearly, therefore, the tenant consistently by his own default missed the opportunities of saving himself from ejectment. The compromise which merely enhanced the previous rate of rent from Rs. 12.50 to Rs. 15/- per month (which enhancement was almost nominal) instead of being a penalty was, in fact, a blessing in disguise which the petitioner unfortunately failed to trun to his advantage. The petitioner tried to invoke the aid of the provisions of section 74 of the Indian Contract Act. That section merely provides that when a contract has been broken which contained any stipulation by way of penalty, the party complaining of the breach is entitled to receive from the party which has broken the contract reasonable compensation. It was held by a Full Bench of this Court in Mohiuddin v. Mt. Kashmire Bibi, AIR 1933 Allahabad 252 that : "Section 74, Contract Act, does apply to a compromise decree and it is open to a Court executing such decree to go behind it so as to interfere with a stipulation by way of penalty contained in the compromise.
Kashmire Bibi, AIR 1933 Allahabad 252 that : "Section 74, Contract Act, does apply to a compromise decree and it is open to a Court executing such decree to go behind it so as to interfere with a stipulation by way of penalty contained in the compromise. But it needs to be emphasised that it is only in a case when the contract contains some stipulation which can be construed as penalty that the court has the power under section 74 to determine reasonable compensation. The principle has been approved by the Supreme Court in Fateh Chand v. Balkishan Dass, AIR 1963 SC 1405 (paragraph 11) and it was observed : " Duty not to enforce the penalty clause but only to award reasonable compensation is statutorily imposed upon Courts by Sec. 74. In all cases, therefore, where there is a stipulation in the nature of penalty for forfeiture of an amount deposited pursuant to terms of contract which expressly provides for forfeiture, the Court has jurisdiction to award such sum only as it considers reasonable, but not exceeding the amount specified in the contract as liable to forfeiture. " (Emphasis added). Therefore, it is only where the contract contains an element of punishment that the court would refuse to enforce it. It is impossible to lay down any established rule for deciding as to whether a particular stipulation constitutes penalty or not. It must be decided with reference to the particular facts and circumstances which are different in each individual case. We may, however, derive sufficient guidance from the test formulated in Deorao v. Ambadas, AIR 1918 Nagpur 82 in which it was observed : "A bargain is unconscionable where it is such as no man in his senses and not under delusion, would make on the one hand and as no honest and fair man would accept on the other," The same criterion was accepted in Munshi Lal v. Ahmad Mirza Beg, AIR 1933 Oduh 291 and it was held : "Where a condition in contract carries with it an element of punishment, it is in the nature of a penalty." In such a case it would be just and equitable to relieve the defendant of the specific enforcement of the condition.
Learned counsel for the petitioner tried to buttress his argument by referring particularly to a Division Bench case of the Bombay High Court in which the judgment-debtor was relieved against forfeiture clause in a consent decree. In Gajanan Govind Pathak v. Pandurang Keshav Puntambekar, AIR 1951 Bombay 290 it was held by Gajendragadkar, J. : "Where the compromise decree created or continues the relationship of landlord and tenant between the decree-holder and the forfeiture which the decree-holder seeks to enforce has resulted from the judgment-debtor's failure to pay the amount of rent within the stipulated period, the judgment-debtor is entitled to the relief against forfeiture." That case did not arise under any special Act but proceeded on the footing of the general law and so cannot afford any guidance in deciding the present controversy. In our opinion the cases governed by the general law contained in Section 114 of the Transfer of Property Act stand on a different footing. They are invariable cases in which the lease itself contains a forfeiture clause and section 114 is attracted when the forfeiture for non-payment of rent is incurred under the terms of the lease itself. The principle underlying that section should not be extended to cases governed by special Acts such as the Rent Control statutes which by their special provision already afford the lessee an opportunity of saving himself from ejectment by making the deposits of the arrears claimed on the first date of hearing or in accordance with other relevant provision of a similar nature. This distinction is based on good authority. It was accepted in Sardar Kartar Singh v. Smt. Phoolwati, AIR 1961 Allahabad 95 where it was observed ; "Section 114 of the Transfer of Property Act applies to cases where the forfeiture relied upon by the plaintiff is one incurred under the terms of the lease." The present case was governed by U. P. Act No. 13 of 1972 which contained a specific provision in section 20 (4) which permits the court to relieve the tenant against his liability for eviction on the ground that he unconditionally pays to the landlord or deposits in court the entire amount of rent and damages together with interest etc. at the first hearing of the suit. As we have already observed, the petitioner failed to comply with the said provision and incurred the liability of eviction. 7.
at the first hearing of the suit. As we have already observed, the petitioner failed to comply with the said provision and incurred the liability of eviction. 7. The last contention of the petitioner was that the effect of compromise was that a new tenancy had been created and, therefore, a decree for eviction of the tenant in the present suit could not be passed. This contention on the facts of the present case is untenable. Reference was made to a decision of this Court in Shri Gandhi Ashram, Meerut v. Ram Gupta, 1983 ALJ 300. In that case a compromise decree had been passed in a suit for eviction prior to the commencement of U. P. Act No. 13 of 1972 and that decree provided for enhancement of rent. It also provided that the tenancy shall commence on the first of each calendar month and the accommodation shall stand vacated after the stipulated period. The decree, however, did not provide that either in case of default of payment of rent or on non-delivery of possession after the stipulated period, the decree-holder shall be entitled to execute the decree. The decree was sought to be executed after the commencement of U. P. Act No. 13 of 1972. It was held on interpretation of the terms of the decree that the decree created a new tenancy and the action taken for eviction of the tenant stood exhausted. Therefore, the eviction of the defendant could not be made by execution of the decree in face of the new tenancy. The terms of the compromise decree passed in the present case are radically different. Here the compromise recites that if rent at the enhanced rate was not paid within the stipulated time, a decree for eviction would be deemed to have been passed. This unmistakably reflects the intention of the decree-holder not to create a fresh tenancy. This was the crucial test according to the Supreme Court in Konchada Ramamurty Subudhi (dead by his legal representatives) v. Gopinath Naik, AIR 1968 SC 919 for determining whether on the terms of the compromise it was possible to impute to the decree-holder an intention to create a fresh tenancy.
This was the crucial test according to the Supreme Court in Konchada Ramamurty Subudhi (dead by his legal representatives) v. Gopinath Naik, AIR 1968 SC 919 for determining whether on the terms of the compromise it was possible to impute to the decree-holder an intention to create a fresh tenancy. In that case in a suit for ejectment the compromise decree was passed by the appellate court enabling the decree-holder by its terms to execute the decree after the judgment-debtor failed to pay "rent" for any three consecutive months. The Court held that the compromise deed did not create a lease. Likewise in Smt. Kalloo v. Dhaka Den, 1982 AWC 273 (Supreme Court) a compromise took place in the course of execution of the decree for eviction which, inter alia, recited that the judgment-debtor had already vacated half of the shop and was granted time till December 31, 1972 for vacating and delivering possession of the other half of the shop. Interpreting these terms it was held by the Supreme Court that the intention of the parties was not to create a fresh lease in respect of the half of the shop but to help the judgment-debtor to find out not in a hurry alternative accommodation for his shop so that his established business was not ruined. 8. On the other hand, authorities are not wanting for the proposition that even in cases governed by special or Rent Act a decree for eviction by compromise can be passed. In Tej Chaddha v. Smt. Siddheshwari, 1973 ALJ 533 it was held that after a suit had been filed in accordance with the provisions of section 3 of U. P. (Temporary) Control of Rent and Eviction Act 1947 it had to be decided under the provisions of Code of Civil Procedure and there was nothing in the language of that section to show that it barred the passing of a decree under the provisions of Order 23, Rule 3 of the Code of Civil Procedure in a suit filed under that section. The point is clinched by the pronouncement of the Supreme Court in Roshan Lal v. Madan Lal, AIR 1975 SC 2130 .
The point is clinched by the pronouncement of the Supreme Court in Roshan Lal v. Madan Lal, AIR 1975 SC 2130 . As observed by Untwalia, J. in paragraph 5 of the Reports : "In order to get a decree or order for eviction against a tenant whose tenancy is governed by any Rent Restriction or Eviction Control Act the suit for must make out a case for eviction in accordance with the provisions of the Act. When the suit is contested the issue goes to trial. The Court passes a decree for eviction only if it is satisfied on evidence that a ground for passing such a decree in accordance with the requirement of the Statute has been established. Even when the trial proceeds ex parte, this is so. If, however, parties chose to enter into a compromise due to any reason such as to avoid the risk of protracted litigating expenses, it is open to them to do so. The Court can pass a decree on the basis of the compromise." We have already held that in the present case the compromise was neither unconscionable nor did it contain an element of punishment. On the other hand, it was a concession offered by the plaintiff and virtually extended the first date of hearing for making the deposit of rent and wipe off the arrears. Even the increase in rent was nominal, yet the tenant failed to avail himself of this opportunity. Consequently, he did not deserve to be given any relief, particularly when in the compromise it was recited that in the event of default the decree for eviction shall be deemed to have been passed. In the facts of the present case the conclusion cannot be escaped that the compromise was not hit by the provisions of section 74 of the Indian Contract Act. Our answer to the first question referred is that the compromise decree which contained the default clause would not be invalid to the extent of that clause and the default clause would be enforceable. In this view of the matter it is not necessary to answer the second question. 9. The position therefore which emerges is that the parties should be relegated to the position which they held prior to the filing of the compromise and the status quo ante be restored.
In this view of the matter it is not necessary to answer the second question. 9. The position therefore which emerges is that the parties should be relegated to the position which they held prior to the filing of the compromise and the status quo ante be restored. The finding of fact recorded in the case is that the conditions of section 20 (4) of U. P. Act No. 13 of 1972 were not fulfilled, the arrears of rent from 1-8-1975 to 22-1-1976 (the date of the compromise) were never paid, the petitioner had committed default in payment of rent and had made himself liable for eviction. Hence, in our opinion the decree for eviction and arrears of rent was rightly passed against the petitioner. It was a valid and executable decree and the objections raised by the petitioner in execution were rightly dismissed. The impugned order is not vitiated by any error of law. 10. Thus, we find no force in this writ petition and it is accordingly dismissed with costs. Petition dismissed.