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2018 DIGILAW 1008 (KER)

Thara v. Manju

2018-12-06

N.ANIL KUMAR

body2018
JUDGMENT : 1. Petitioner is the defendant in O.S.No.715/2013 on the file of Principal Subordinate Judge’s Court, Thiruvananthapuram. The suit was for recovery of money on the strength of an agreement for sale. The petitioner/defendant entered appearance and filed a written statement. 2. Ext.P3 agreement for sale was entered into between the parties to sell an area of 18.75 ares of land comprised in Re.Sy.336/6 of Cheruvakkal Village for an amount of Rs.2,80,000/- per cent. By virtue of Ext.P3, an amount of Rs.30,00,000/- was paid as advance sale consideration, followed by an amount of Rs.20,00,000/- by virtue of Ext.P4. 3. Pending proceedings, the court below referred the matter for mediation. Consequently, Ext.P5 memorandum of settlement dated 29.5.2018 was arrived at between the parties. 4. Ext.P5 memorandum of settlement inter alia produced as follows:- “1. The aforesaid Suit/Appeal/Petition/Complaint was referred to mediation for solving the dispute between the parties. In the course of mediation, they have resolved their dispute and have agreed to the following terms and conditions. 2. The parties agreed to settle the case full and finally. The defendant agreed to settle the matter full and finally by paying an amount of Rs.50,00,000/- (Rupees Fifty Lakhs) to the plaintiff within six months from the date of signing the agreement. 3. Both parties shall not raise any claim or demand with respect to this dispute. 4. In default of payment of the above amount of Rs.50,00,000/- (Rupees Fifty Lakhs) by the defendant within the agreed period, of above mentioned 6 months, the plaintiff is entitled to realise the said amount of Rs.50,00,000/- (Rupees Fifty Lakhs) with 12% interest from the date of suit till the date of realisation of the same from the defendant and her assets. 5. If the plaintiff is not releasing the attachment over the scheduled property of the defendant after receiving the above mentioned amount of Rs.50,00,000/-(Rupees Fifty Lakhs) within six months from the date of the agreement, the plaintiff is not entitled to claim the interest mentioned in the default clause.” 5. According to the learned counsel for the petitioner, on verification of Ext.P5 settlement, it is brought out that the default clause on 12% interest per annum from the date of suit till date of realisation is provided in Ext.P5 settlement, which was not noticed by the petitioner. Feeling aggrieved, the petitioner filed an application before the Mediator. According to the learned counsel for the petitioner, on verification of Ext.P5 settlement, it is brought out that the default clause on 12% interest per annum from the date of suit till date of realisation is provided in Ext.P5 settlement, which was not noticed by the petitioner. Feeling aggrieved, the petitioner filed an application before the Mediator. Thereafter, the petitioner filed an application before the court below for remitting back the memorandum of settlement for further mediation in respect of penalty clause provided in Ext.P5 settlement deed without the consent of the petitioner as per Ext.P6. 6. The respondent filed Ext.P7 objection to Ext.P6 petition contending that the petitioner and the learned counsel for the petitioner put their signatures in Ext.P5 memorandum of settlement after fully reading and understanding the terms thereof. 7. After having heard both sides, the court below dismissed Ext.P6 petition holding that the dispute has been legally compromised as per Ext.P5 and hence the court below is debarred from remitting back the report to the same mediator or to set aside the same. Learned counsel for the petitioner contended that the petitioner’s signature in Ext.P5 Memorandum of Settlement was obtained without fully understanding the terms and conditions thereof and the default clause and interest thereon was suppressed. It is further contended that the learned counsel appearing for the petitioner was absent and the petitioner put signature without understanding the real purport of Ext.P5. 8. Arbitration, conciliation, judicial settlement including settlement through Lok Adalath and mediation are the recognised modes to settle the dispute outside the court. Every award of the Lok Adalath shall be deemed to be a decree of a civil court, where a compromise or settlement has been arrived at by a Lok Adalath in case referred to it under S.20(1) of the Legal Services Authorities Act,1987 by virtue of S.21 of the said Act. However, the memorandum of settlement arrived at between the parties cannot be treated as a deemed decree, as provided under S.21 of the Legal Services Authorities Act, 1987. This can only be treated as a compromise between the parties pursuant to the mediation effected between the parties. Hence, the court below is obliged to consider as to whether the compromise or settlement arrived at between the parties pursuant to the mediation can be acted upon. This can only be treated as a compromise between the parties pursuant to the mediation effected between the parties. Hence, the court below is obliged to consider as to whether the compromise or settlement arrived at between the parties pursuant to the mediation can be acted upon. Where it is proved to the satisfaction of the court that the suit has been compromised in writing and signed by the parties pursuant to the mediation effected, the court is empowered to order such compromise to be recorded. Prima facie satisfaction of the court is necessary in this regard. Unless and until the court is satisfied, it is incorrect on the part of the court below to accept a mediation agreement entered into between the parties for passing a decree of the court. In the case on hand, the defendant is not accepting the compromise entered into between the parties, pursuant to the mediation effected. The defendant also filed an I.A. stating reasons for not accepting the compromise. It is incorrect on the part of the court to compel the defendant to accept the compromise, if the defendant is of the stand that the defendant has not signed the compromise, after fully understanding the terms of compromise thereof. Under the circumstances, the finding of the court below in Ext.P8 is illegal and is liable to be set aside. 9. Rule 20 of the Civil Procedure (Alternative Dispute Resolution) Rules, 2008 provides procedure to be followed by the courts with regard to settlement arrived at between the parties in a Court annexed mediation. In Mohanan P.K. and others v. Sudakshina Ramakrishnan & Ors.( 2017(3) KHC 155 ), this Court held that if in the case of denial of an agreement or in the case of unilateral withdrawal, Court will have to enter a satisfaction whether there was a compromise of the subject matter of the suit or not. Needless to say, in the case of denial or withdrawal of the agreement, the court is bound to frame question in this regard and decide the matter as contemplated under Order XXIII Rule 3 of the Civil Procedure Code, 1908. In the result, the Original Petition is allowed. The impugned order is set aside. Needless to say, in the case of denial or withdrawal of the agreement, the court is bound to frame question in this regard and decide the matter as contemplated under Order XXIII Rule 3 of the Civil Procedure Code, 1908. In the result, the Original Petition is allowed. The impugned order is set aside. The court below is directed to frame a question as stated supra and decide the matter afresh as contemplated under Order XXIII Rule 3 of C.P.C., after giving the parties an opportunity to adduce evidence in this regard.