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2007 DIGILAW 1455 (DEL)

NARESH KUMAR v. ASHOK ARORA

2007-07-23

A.K.SIKRI, ARUNA SURESH

body2007
A. K. SIKRI, J. ( 1 ) THE respondent herein had filed suit for possession and mesne profits. The relief clause contains certain other prayers as well, which includes decree of permanent injunction seeking restraint against the defendants (appellants herein) from transferring, selling, alienating or otherwise parting with possession of the premises,. e. Shop No. 3, Pocket D-12, Property No. 231/1, sector-7, Rohini, New Delhi and not to interfere, in any manner, with peaceful possession of the plaintiff in the premises shown red in the site plan annexed. With the consent of the parties, the matter was referred to mediation. Before the mediation the parties settled the matter and the terms on which the matter was settled were recorded in the proceedings dated 26. 7. 2006 by the judge/mediator Shri Dharmesh Sharma. In this, following terms were agreed:- "1. It is agreed that defendant No. 1 shall pay total sum of Rs. 5 Lacs to the plaintiff on or before 10th of November, 2006 by way of Pay Order or Bank draft; and 2. It is agreed by the Plaintiff that on payment of the said sum to him on or before 10th of November, 2006, he shall withdraw his complaint against defendant No. 1 u/s 138 of the Negotiable Instruments Act subjudice before Shri bhupesh Kumar, Ld. MM, Rohini, Delhi; and 3. It is also agreed by the plaintiff that on payment of the said sum, he shall also move an application before the Ld. M. M. , for compounding or withdrawal of criminal case against defendant No. 1 u/s 448/380 IPC and he shall not pursue the same. 4. It is also agreed by the defendant No. 1 that in the event of his failure to pay the agreed amount, he shall be liable to pay a sum of rs. 7,50,000/- to the plaintiff with interest, and 5. It is agreed that the plaintiff shall apply to the court concerned where the suit for possession is pending for a direction to the Controller of stamps for refund of court fee of Rs. 4,031/- and 6. It is also agreed that parties shall bear their own cost. " ( 2 ) IT is clear from the above that the appellants agreed to pay a sum of rs. 5 Lakhs to the respondent on or before 10. 11. 4,031/- and 6. It is also agreed that parties shall bear their own cost. " ( 2 ) IT is clear from the above that the appellants agreed to pay a sum of rs. 5 Lakhs to the respondent on or before 10. 11. 2006 and it was also agreed that if this amount is not paid by the agreed date, the liability of the appellants shall be Rs. 7,50,000/- with interest. Thereafter, the parties appeared before the learned trial court where the suit was pending and made statement to the effect that they had compromised the dispute with the intervention of Mediation centre, Tis Hazari, Delh. The statement of both the parties were recorded pursuant whereto compromise decree dated 8. 8. 2006 was passed in favour of the respondent herein. ( 3 ) THE appellant herein did not make the payment of Rs. 5 Lakhs as agreed by 10. 11. 2006. Instead, he moved application on 10. 11. 2006 seeking extension of time for payment of the settled amount. Thereafter, however, he turned turtle and moved another application for withdrawal of the aforesaid application for extension of time and instead made prayer for cancellation of the settlement decree. This application was dismissed by the learned trial court vide impugned order dated 30. 4. 2007 and challenging the said order, present appeal is filed. ( 4 ) IN nutshell, the prayer of the appellant herein is that the decree dated 8. 8. 2006 be set aside. This is clearly impermissible in law. From the facts noted above, it is clear that parties settled the matter before the mediator on the terms reproduced above, which were duly signed by both the parties. Not only that, thereafter they appeared before the trial court and reiterated their statements on oath, which were recorded by the learned trial court and duly signed by the appellant. Decree passed is, therefore, on the basis of settlement between the parties. There is no ground to resile from this statement. If settlement is before the Mediation, one cannot back out. Section 89 of the Code of Civil Procedure was amended by the Legislature in the year 2002 providing alternative mechanism, which includes mediation. Parties in this case had agreed to resolve their disputes through mediation. The effort was fructified as well, as in the mediation proceedings the parties could arrive at settlement. Section 89 of the Code of Civil Procedure was amended by the Legislature in the year 2002 providing alternative mechanism, which includes mediation. Parties in this case had agreed to resolve their disputes through mediation. The effort was fructified as well, as in the mediation proceedings the parties could arrive at settlement. After arriving at settlement in this manner and even sticking by that before the trial court by reiterating their respective statements, it would not be permissible for the parties to resile from the same. If such an attempt is permitted, it would negate the very purpose for which Section 89 has been inserted by the Parliament by way of amendment. Reference can be made to the case of Smt. Surinder Kaur and Ors v. Sh. Pritam Singh and Ors [cs (OS) No. 656 of 2003 pronounced on 20. 12. 2005] decided by one of us while sitting as a Single judge. In the said case, the suit was filed for partition of a property wherein matter was referred to the Mediation in view of the fact that it was a family dispute. An amicable settlement was arrived at between the parties. The terms of settlement well recorded to which all the parties agreed without any demur even before the court. However, since the payment was not made and other terms not complied by the paties, the plaintiffs filed interim application praying for the same. At the hearing of the application, all the parties were present and stated that on the next date of hearing they would discharge their part of the obligation by bringing requisite money/keys of the premises. However at the next date, one of the parties tried to wriggle out of the settlement and submitted that there was something more which was agreed thereto, namely, common use of one of the shops which the other party denied. The Court noted as under: "the contention of the defendant No. 5 about any such oral settlement does not inspire confidence inasmuch as the parties had negotiated the settlement through the good offices of the mediator and had decided on the modalities of the settlement by agreeing to detailed terms recorded in this settlement. Had there been any such understanding, it would have been included in the settlement itself. Had there been any such understanding, it would have been included in the settlement itself. On this plea, therefore, the defendant No. 5 cannot be allowed to back out of the settlement which he had earlier agreed to. I am, therefore, of the opinion that the parties have entered into the settlement as per the terms recorded before the mediator. 8. By amendment in the Code of Civil Procedure in the year 2002, legislature amended the provisions of Section 89 thereof under the heading `special proceedings' and provided for settlement of disputes outside the court. This provision contained in Section 89 stipulates that where it appears to the court that there exists elements of a settlement which may be acceptable to the parties, the court may refer the matter for arbitration, conciliation, judicial settlement including settlement through Lok Adalat or mediation. Thus, the legislative intention is to encourage settlement of disputes through the mechanism of Alternate Dispute Resolution (ADR ). Sub-Section (2) of Section 89, inter alia, provides that where the dispute has been referred for mediation, the court shall effect a compromise between the parties and shall follow such procedure as may be prescribed. Since compromise has been effected in mediation proceedings, the procedure which is to be followed is the one prescribed, namely, Mediation and Conciliation Rules, 2004 reference to which has already been made. We may also take assistance from Order XXIII of the Code of Civil procedure in this behalf. As per the provisions contained in Rule 3 of Order xxiii a decree in terms of compromise can be passed when the court is satisfied that the parties have compromised the subject matter of the suit. Rule 3 of order XXIII reads as under: "3. Duty of Court to make efforts for settlement- (1) In every suit or proceeding to which this Order applies, an endeavour shall be made by the Court in the first instance, which it is possible to do so consistent with the nature and circumstances of the case, to assist the parties in arriving at a settlement in respect of the subject-matter of the suit. (2) If, in any such suit or proceeding, at any stage it appears to the court that there is a reasonable possibility of a settlement between the parties, the court may adjourn the proceeding for such period as it thinks fit to enable attempts to be made to effect such a settlement. (3) The power conferred by sub-rule (2) shall be in addition to, and not in derogation of, any other power of the Court to adjourn the proceedings. " 9. Proviso to the aforesaid Rule stipulates that where it is alleged by one party and denied by the other that an adjustment or satisfaction has been arrived at, the court has to decide this question. Here the defendant No. 5 does not dispute that settlement as recorded was entered into between the parties, he also does not dispute that he appended signatures to the said settlement and agreed upon the terms contained therein. His only allegation is that something more was agreed to by the defendant No. 4, namely, common user of one of the shops which the defendant No. 4 is not agreeing to, now. 10. As already pointed out, there is nothing on record to indicate this and it is very unlikely that this was agreed upon between the parties when all other terms of the settlement are reduced into writing. 11. Therefore, I am satisfied that the parties have compromised the suit as per the terms contained in the settlement before the mediator for which the mediator has sent his report. Decree in terms thereof is passed. While drawing the decree, terms of the settlement recorded on 27th August, 2004 and sent by the mediator along with his report shall also form part of the decree. It is agreed by all the parties that the terrace above the shops would belong to occupants who are given the shops as per the settlement. " ( 5 ) IN the above case, the Court also took note of the Rules 24 and 25 of the Mediation and Conciliation Rules, 2004 notified vide Notification no. 171/rules/dhc dated 11th August, 2005 and reads as under:- "rule 24 Settlement Agreement (a) Where an agreement is reached between the parties in regard to all the issues in the suit or proceeding or some of the issues, the same shall be reduced to writing and signed by the parties or their constituted attorney. 171/rules/dhc dated 11th August, 2005 and reads as under:- "rule 24 Settlement Agreement (a) Where an agreement is reached between the parties in regard to all the issues in the suit or proceeding or some of the issues, the same shall be reduced to writing and signed by the parties or their constituted attorney. If any counsel has represented the parties, the conciliation/mediator may obtain his signature also on the settlement agreement. (b) The agreement of the parties so signed shall be submitted to the mediator/conciliator who shall, with a covering letter signed by him, forward the same to the Court in which the suit or proceeding is pending. (c) Where no agreement is arrived at between the parties, before the time limit stated in Rule 18 or where, the mediator/conciliator is of the view that no settlement is possible, he shall report the same to the Court in writing. Rule 25: Court to fix a date for recording settlement and pasing decree. (a) On receipt of any settlement, the court shall fix a date of hearing normally within seven days but in any case not beyond a period of fourteen days. On such date of hearing, if the court is satisfied that the parties have settled their dispute (s), it shall pass a decree in accordance with terms thereof. (b) If the settlement dispose of only certain issues arising in the suit or proceeding, on the basis of which any decree is passed as stated in Clause (a), the court shall proceed further to decide remaining issues. " ( 6 ) IT would also be apposite to reproduce the observations made by this Court in Double Dot Finance Limited v. Goyal MG Gases Ltd. 2005 (2) AD (Delhi) 534 though that case arose out of the arbitration proceedings: "if such pleas are sustained, the sanctity and purpose of 'amicable settlements' between the parties would stand totally eroded. Amicable resolution of disputes and negotiated settlements is 'public policy in India'. Section 89 of the Code of Civil Procedure, Arbitration and Concliation Act, 1996 as well as Legal services Authorities Act, 1995 call upon the Courts to encourage settlements of legal disputes through negotiations between the parties. Amicable resolution of disputes and negotiated settlements is 'public policy in India'. Section 89 of the Code of Civil Procedure, Arbitration and Concliation Act, 1996 as well as Legal services Authorities Act, 1995 call upon the Courts to encourage settlements of legal disputes through negotiations between the parties. If amicable settlements are discarded and rejected on flimsy pleas, the parties would be wary of entering into negotiated settlements and making payments thereunder as a shrewed party after entering into a negotiated settlement, may pocket the amount received under it and thereafter challenge the settlement and reagitate the dispute causing immeasurable loss and harassment to the party making payment thereunder. This tendency has to be checked and such litigants discouraged by the Courts. It would be in consonance with public policy of India. " ( 7 ) LEARNED counsel for the appellants, however, submitted that in the suit filed by the respondent, prayer of permanent injunction made by the respondent related to only one shop, namely, Shop No. 3, whereas in the execution petition the respondent has claimed attachment of Shop Nos. 2, 3 and 4. Copy of the execution petition is filed as Annexure A-4, perusal whereof would show that the respondent decree holder has sought attachment of the aforesaid properties for the purpose of realising the amount of Rs. 7,50,000/-, which was the decree passed in favour of the respondent. When the appellant has not made the payment of Rs. 7,50,000/-, which the appellant is now bound to pay because of his failure to make payment of Rs. 5,00,000/- by 10. 11. 2006 and the decree holder has filed execution petition for realising the said amount, it is permissible for the decree holder to seek attachment of any and all properties belonging to the appellant/judgment debtor. If the appellant has any objections to the attachment of specific properties under the law, it is permissible for the appellant to raise those objections. In this appeal, we are only concerned with the validity of the decree passed and we are of the opinion, in view of the foregoing discussion that it is not open to the appellant to challenge the said judgment and decree to which the appellant was a consenting party. This appeal is accordingly dismissed. CM No. 9671/2007 also stands dismissed.