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2022 DIGILAW 1533 (GUJ)

Swati Land Developers Pvt Ltd. v. Vrajlal Tapubhai Lodhia

2022-11-09

A.S.SUPEHIA

body2022
JUDGMENT : 1. The present Civil Revision application filed under section 115 of the Code of Civil Procedure, 1908 (CPC) emanates from the order dated 25.04.2019 passed below Exh.10 in Special Execution Application No.154 of 2001 by 8th Additional Senior Civil Judge, Rajkot. FACTS: 2. Special Civil Suit No.303 of 2002 was instituted by the applicant-Company that the defendant No.1 (present respondent no.1) Shri Vrajlal Tapubhai Lodhia and defendant no.2-Smt.Chandrikaben Vrajlal Lodhia (now represented through her legal heirs as respondent no.2) claiming a decree of Rs.7,21,18,013/- with 20% interest on the ground that they have siphoned the aforesaid amount. Vajubhai Jwellers and Chandraprabha Builders were arraigned as party defendants nos.3 and 4, who are not the party respondents in the present revision application. 2.1 The said suit was decided and disposed of on 11.09.2000 on the consent terms and accordingly a decree was drawn in view of the consent terms. 2.2 The defendant No.1 and 2 filed Execution Application No.154 of 2001 in the Court of 8th Additional Senior Civil Judge, Rajkot, wherein the plaintiff filed written objections at Exh.20 as well as an application filed by the applicant at Exh.40 dated 24.12.2001 and also has filed an application vide Exh.10 contending that the execution application is not maintainable in relation to the amount of Rs.3,03,45,000/- claimed by the original defendant against the plaintiff. 2.3 By the impugned order dated 25.04.2019, the learned Court below has rejected the application below Exh.10, which has given rise to the present application. SUBMISSIONS: 3. Learned Senior Advocate Mr. Unmesh Shukla with learned Advocate Mr.Sharvil Majmudar has submitted that the impugned order rejecting the application of the applicant filed below Exh.10 questioning the maintainability of the execution proceedings deserves to be quashed and set aside since the Memorandum of Understanding (MoU) dated 11.09.2000, on which the execution proceeding is premised, is not signed by the defendant Nos.1 and 2 in Special Civil Suit No.303 of 2000, hence, the said MoU cannot be executed, in the execution application. It is submitted that the said MoU does not reflect the name of any mediator, in presence of whom the accounts are said to have been settled outside the Court as mentioned in the consent decree. It is contended that the executing court cannot go beyond the scope of the decree and hence, the terms of the MoU cannot be enforced. It is contended that the executing court cannot go beyond the scope of the decree and hence, the terms of the MoU cannot be enforced. Reliance is placed by him on the judgements of the Apex Court in the cases of Rameshwar Dass Gupta vs. State of U.P. and Anr., (1996) 5 S.C.C. 728 , Bhagwat Sharan vs. Purushottam and Anr., (2020) 6 S.C.C. 387 and in the case of Vedic Girls Senior Secondary School, Arya Samaj Mandir, Jhajjar vs. Rajwanti (Smt) and Ors., (2007) 5 S.C.C. 97 . 3.1 Learned Senior Advocate Mr. Shukla has submitted that the MoU dated 11.09.2000, which is said to have been executed outside the Court, by one Shri Gopal K. Patel is shown as one of the parties, who has said to have undertaken to pay the amount as alleged therein in his personal capacity as well as in the capacity of director of the plaintiff-Company, however Shri Gopal K. Patel was not the party in the said civil suit in his personal capacity and, therefore, no decree can be said to have been passed against Gopal K. Patel and as such the execution application is not maintainable and further, the director can also not be made liable for any payment. Thus, it is submitted that the present revision application may be allowed by setting aside the impugned order. 3.2 In response to the aforesaid submissions, learned Senior Advocate Mr. Mehul Shah has submitted that the impugned order does not require any interference since the same is precisely passed by the court below rejecting the application filed by the applicant-original respondent below Exh.10. He has invited the attention of this Court to the contents of the application at Exh.10 and has submitted that the same does not in any manner disclose any averment being made in the said application with regard to the execution proceedings having being barred and not maintainable against the applicant - Swati Land Developers Private Limited. It is submitted that in fact the application is filed by Swati Land Developers Private Limited and Shri Purshottam D. Patel has put his signatures as a director. 4. Learned Senior Advocate Mr. Shah has invited the attention of this Court to the decree passed in Special Civil Suit No.303 of 2000 and the parties arraigned in that suit. It is submitted that in fact the application is filed by Swati Land Developers Private Limited and Shri Purshottam D. Patel has put his signatures as a director. 4. Learned Senior Advocate Mr. Shah has invited the attention of this Court to the decree passed in Special Civil Suit No.303 of 2000 and the parties arraigned in that suit. He has submitted that in fact the plaintiff is the present applicant - Swati Developers Private Limited and the defendants have actually arrived at a compromise and the consent terms are recorded in the said decree. It is submitted that as per the consent terms the defendant nos.1 has declared that Shri Gopal K. Patel is a Chairman and Managing Director of the plaintiff-Company i.e. the present applicant and continued such with all assets with all responsibilities. He has submitted that paragraph no.4 of the consent terms specifically declares that as per the settlement of account between the parties, the defendant nos.1 and 2 are entitled to receive the amount determined by the parties in presence of the mediators and all the parties and the plaintiff - Gopal K. Patel agrees to undertake to pay the said amount within a period of one year. It is submitted that it is specifically recorded in the consent terms that a separate right will be executed between the plaintiff and by Gopal K. Patel. Further, he has pointed out the condition nos.5, 7 and 9 of the consent terms. Accordingly, learned Senior Advocate Mr. Shah has submitted that the MoU was entered into between the parties i.e. one Vrajlal Tapubhai Lodhiya and Smt. Chandrikaben Vrajlal Lodhiya i.e. the defendant nos.1 and 2 and Mr. Gopal K. Patel, who has entered the same in the personal capacity as well as in the capacity of Chairman and Managing Director of Swati Land Developers Private Limited. Thus, it is submitted that as per the said MoU, the applicant was required to pay the amount as determined and since the same was not paid, Special Execution Application No.154 of 2001 was filed. 4.1 Learned Senior Advocate Mr. Shah has submitted that the Execution Petition is specifically filed against the present applicant i.e. Swati Land Developers Private Limited and hence, the contentions raised by the applicant that the execution is sought to be executed against a person, who was not the signatory of the MoU, is absolutely misconceived. 4.1 Learned Senior Advocate Mr. Shah has submitted that the Execution Petition is specifically filed against the present applicant i.e. Swati Land Developers Private Limited and hence, the contentions raised by the applicant that the execution is sought to be executed against a person, who was not the signatory of the MoU, is absolutely misconceived. It is submitted that the execution petition is absolutely against the same parties, who were the parties to the special civil suit. He has submitted that on the very first instance, the respondents chose to file an execution petition in the year 2001, after the consent decree was passed. It is submitted that the respondents were constrained to file Summery Suit No.4 of 2003 since a specific contention was raised by the plaintiff that the execution petition was not maintainable against Swati Land Developers Private Limited and Shri Gopal K. Patel. 4.2 Learned Senior Advocate Mr. Shah has referred to the recitals of paragraph nos.4 and 5 of the plaint of Summery Suit No.4 of 2003 and has submitted that it is specifically mentioned therein that since an objection has been raised by the present applicant-Company with regard to maintainability of the execution proceedings as a safeguard, the suit is instituted. It is submitted that the proceedings of the suit may be stayed during the pendency of the execution proceedings and he has no objection in this regard. 4.3 Learned Senior Advocate Mr. Shah has submitted that in fact the MoU dated 11.09.2000 is not a stand alone contract and it has to be read in the consent terms and the judgment and decree, which has been passed and the same is enforceable. In support of his submissions, he has placed reliance on the judgments of the Supreme Court in the cases of Smt. Kalloo and Ors. vs. Dhakadevi and Ors., AIR 1982 SC 813 , Bhavan Vaja and Ors. vs. Solanki Hanuji Khodaji Mansang and Anr., AIR 1972 SC 1371 , Motilal Hirabhai and Ors. vs. Bai Mani, AIR 1922 BOMBAY 370, Prataprai Trambaklal Mehta vs. Jayant Nemchand Shah and Ors., AIR 1996 BOMBAY 296 and in the case of Jai Narain Ram Lundia vs. Kedar Nath Khetan and Ors., AIR 1956 SC 359 . Thus, it is submitted that the impugned order may not be disturbed when the execution proceedings cannot be stayed. 5. vs. Bai Mani, AIR 1922 BOMBAY 370, Prataprai Trambaklal Mehta vs. Jayant Nemchand Shah and Ors., AIR 1996 BOMBAY 296 and in the case of Jai Narain Ram Lundia vs. Kedar Nath Khetan and Ors., AIR 1956 SC 359 . Thus, it is submitted that the impugned order may not be disturbed when the execution proceedings cannot be stayed. 5. In rejoinder to the aforesaid submissions, learned Senior Advocate Mr. Shukla has submitted that as per the provisions of Section 10 of the CPC, the second suit against the Summery Suit filed by the respondents is not maintainable and there cannot be two litigation for the same cause. It is submitted that filing of the execution petition is contrary to the doctrine of election since once the respondents have chosen to file a summery suit it is not open for them to pursue the execution proceedings. It is submitted that the MoU is a separately executed document and cannot be read in the consent decree and hence, the same is not enforceable. With regard to the decisions, upon which reliance is placed by the learned advocate Mr. Shah, learned advocate Mr. Shukla has submitted that the same will not apply in the facts of the case. Reliance is placed by him on the judgement of the Apex Court in the case of Mumbai International Airport (P) Ltd vs. Golden Chariot Airport and Anr., (2010) 10 S.C.C. 422 on the principle of approbate and reprobate. Thus, it is submitted that the impugned order may be set aside and the execution proceedings filed against the present applicant may be declared as null and void. CONCLUSION: 6. The present applicant-Company filed an application below Exh.10 in Special Execution Application No.154 of 2001. The contents of the execution application are translated and reproduced as under:- “(1) The decree holder of this case has filed the present execution petition against the judgement debtor against the decree awarded by the Ld. Civil Judge (S.D.), Vadodara in the Special Suit No – 303/2000. The present decree holder was the defendant in the original suit and since there is no decree in his favour, the decree holder has no right to file the present execution petition as per the law. Therefore, the execution petition of the decree holder is not maintainable as per the law and the same is liable to be dismissed. The present decree holder was the defendant in the original suit and since there is no decree in his favour, the decree holder has no right to file the present execution petition as per the law. Therefore, the execution petition of the decree holder is not maintainable as per the law and the same is liable to be dismissed. (2) The amount for which the decree holder has filed the execution petition was not the subject of suit in the original suit. As the amount was the matter beyond the subject of the suit, it has not been included in the decree and separate agreement was made for it. The agreement is not the part of the decree and the execution petition cannot be filed for the matter which is not the part of the decree. The execution petition cannot be maintained for the matter which is not the subject of the decree. Therefore also, the present execution petition of the decree holder is prima facie liable to be dismissed. The right to produce objections against the execution petition after the disposal of this application is reserved. (3) It is prayed that; Considering the above fact and my present application, the execution petition of the decree holder be dismissed prima facie without carrying out any further procedure. Date: 04/10/2001.” 7. The aforesaid application below Exh.10 has been filed by the Shri Purshottam Dahaybhai Patel on behalf of the Company, who has put his signature as a Director. A bare perusal of the contents of the application below Exh.10, reveals that there is not a whisper that the execution petition is not maintainable against Shri Gopal K. Patel, who is the signatory of the MoU. The contention raised before this Court is that the MoU or the contract does not form part of the consent decree and hence, such execution proceedings are not maintainable. 8. Keeping in mind the contents of the application below Exh.10 and the submissions advanced before this Court, I may incorporate the facts leading to filing of the said application. Special Suit No.303 of 2000 was instituted by the present applicant - Swati Land Developers Private Limited against defendant no.1-Vrajlal Tapubhai Lodhiya, defendant no.2-Smt.Chandrikaben Vrajlal Lodhiya, defendant no.3-Vajubhai Jewellers and defendant no.4-Chandraprabha Builders Private Limited for recovery of money and other incidental reliefs and the total amount claimed in the suit was Rs.7,21,18,013/- with 20% interest. Special Suit No.303 of 2000 was instituted by the present applicant - Swati Land Developers Private Limited against defendant no.1-Vrajlal Tapubhai Lodhiya, defendant no.2-Smt.Chandrikaben Vrajlal Lodhiya, defendant no.3-Vajubhai Jewellers and defendant no.4-Chandraprabha Builders Private Limited for recovery of money and other incidental reliefs and the total amount claimed in the suit was Rs.7,21,18,013/- with 20% interest. In the said suit, a compromise was arrived at and accordingly, the consent terms are recorded in the decree dated 11.09.2000. The relevant clause of the said consent decree would be clause nos.4 and 5, which reads as under:- “4. The parties have examined the accounts of the plaintiff company and defendant no.3 and defendant no.4 and upon examination of the said accounts of the respective parties of the suit and in view of this settlement of account between the parties the defendant no.1 and 2 are entitled to receive the amount determined by the parties in presence of Mediators of the parties and the plaintiff and Gopalbhai K. Patel agrees and undertakes to pay the said amount within the period of one year regularly at every quarter of the year from the date of this consent terms and the parties to the suit have also accepted the settlement of the said claim and since the subject matter is not within the pleadings of the plaint the same has not been elaborately stated in these terms and conditions the separate writing is executed today and by the plaintiff and Gopalbhai K. Patel. 5. In view of the above terms and conditions of the settlement of the disputes and differences between the parties to the suit, the parties hereby agree to cooperate each other in performance of their due rights and obligations arising from the over all settlement of disputes and differences by and between them.” 9. On the very same day, an MoU has been recorded between the defendant no.1 and defendant no.2 i.e. Vrajlal Tapubhai Lodhiya and Smt. Chandrikaben Vrajlal Lodhiya. Since the respondent no.2 has passed away, she is represented by her legal heirs. The signatory to the MoU and party is one Mr.Gopal K. Patel, who has entered into such MoU in the capacity of Chairman and Managing Director of Swati Land Developers Private Limited-Applicant(plaintiff-Company). Since the respondent no.2 has passed away, she is represented by her legal heirs. The signatory to the MoU and party is one Mr.Gopal K. Patel, who has entered into such MoU in the capacity of Chairman and Managing Director of Swati Land Developers Private Limited-Applicant(plaintiff-Company). Paragraph nos.2 and 3 of the said MoU are translated and produced as under:- “(2) On behalf of the Messrs Swati Land Developers, as the Managing Director of the said Company, I filed Special Civil Suit No.303/2000 against you in the Court of Civil Judge (S.D) of Vadodara for receiving the accounts of the aforesaid two companies and Messrs Vajubhai Jewelers and for checking the accounts and to recover the due amount. Settlement is done between the two parties in this suit, today and as stated in the settlement, the parties have got the accounts audited in presence of the Mediator. After auditing and settling these accounts, I am to pay you Rs.2,55,00,000/- Rupees Two Crore Fifty Five Lakhs only as per the accounts and not to make any default in the same. As the above accounts were settled, the full amount to be paid to you by me i.e. Rs.2,55,00,000/- Rupees Two Crore Fifty Five Lakhs only, the same is to be paid by me within one year from today in equated installments of three months ( Every three months). If we failed to pay any of the installments, you will be entitled to recover the entire remaining amount at once with 18 percent interest. You will be entitled to recover such amount from all type of my personal property and property of The Messrs Swati Land Developers Pvt. Ltd. We are to pay you the aforesaid amount at Rajkot and to collect proper written receipt for the paid amount. (3) It is hereby made clear that, we have seen and get audited all the accounts of the Messrs Swati Land Developers Pvt. Ltd. and Messrs Chandraprabha Pvt. Ltd. and Messrs Vajubhai Jewelers till today and any question or any type of dispute does not remain between us in regard with checking or auditing the accounts of the said business, all the accounts are settled.” 10. Since the applicant-Company did not pay the agreed amount as per the consent terms and MoU, the respondent nos.1 and 2 filed an execution application being Special Execution Application No.154 of 2001. Since the applicant-Company did not pay the agreed amount as per the consent terms and MoU, the respondent nos.1 and 2 filed an execution application being Special Execution Application No.154 of 2001. The cause-title of the Execution Petition reflects that the same is filed against the present applicant – Company - Swati Land Developers Private Limited by the defendant nos.1 and 2 i.e. the present respondents. Thus, the Execution Petition is not filed for execution of decree against Shri Gopal K. Patel in an individual capacity, but it is against the present – Company i.e. Swati Land Developers Private Limited, through the Chairman and Managing Director Shri Gopal K. Patel. The said application thus, can be said to be in accordance with the provisions of the Order XXI Rule 11 of the CPC. 11. The genesis of filing of the application below Exh.10 by the applicant-Company lies in the MoU, which is signed and entered into by the present-Company with the defendant nos.1 and 2 and more particularly Paragraph No.4 of the consent decree as mentioned hereinabove. The applicant-Company was the plaintiff, which has agreed and has undertaken to pay the said amount, which would be determined by the Mediators of the parties within a period of one year regularly at every quarter of the year from the date of consent terms. It is also narrated that the parties to the suit have accepted the settlement of the said claim since the subject matter is not within the pleadings of the plaint and the same has not been elaborately stated in the terms and conditions for which the separate writing is executed today by Gopalbhai K. Patel as a director of the Company. 12. Thus, the MoU, which is executed on the same day, can be said to be forming a part of the decree, which is not severable and cannot be treated as separate from the decree as the parties themselves have consented to such MoU. The decree specifically refers and reads such consent terms and the MoU which is entered on the same day. The MoU cannot be read as stand alone document, but it forms integral part and parcel of the consent decree. The decree specifically refers and reads such consent terms and the MoU which is entered on the same day. The MoU cannot be read as stand alone document, but it forms integral part and parcel of the consent decree. Once the plaintiffs have agreed upon the consent terms and have also showed their willingness and have in fact executed the MoU in view of the recitals contained in the decree; subsequently it is not open for them to resile from such consent terms and render the entire decree as futile. Thus, a volte-face has been taken by the applicant-Company, by contending that the terms of the consent decree cannot be acted upon and is not executable in the execution proceedings. The conduct of the present applicant is highly deplorable and requires to be condemned. In paragraph No.5 of the decree, it is recorded that in terms of the settlement of the disputes the parties agree to cooperate with each other in performance of their due rights and obligations arising from the over all settlement of disputes and differences by and between them. Thus, having induced the confidence in the respondents-defendants of paying the amount and making a promise, as recorded in paragraph nos.4 and 5 of the decree and the MoU, it is not open for the applicant- Company to retract from the consent terms. 13. The execution petition seeking execution of the consent decree which records the execution of MoU between the parties cannot be declared as non-maintainable and non-executable. Reliance placed by the applicant on the judgements in the cases of Rameshwar Dass Gupta (supra) and Rajwanti (Smt) (supra) cannot rescue the applicant from the execution proceedings, since the same will not apply to the facts of the case, as in the present case, the execution is sought on the decree which is passed on the basis of the compromise entered into by the parties. In the present case it cannot be held that the executing court is acting beyond the scope of the decree. The decree which is sought to be enforced is premised on the intention of the parties to compromise and settle the dispute, and details and terms of compromise is reflected in the MoU and the decree. In the present case it cannot be held that the executing court is acting beyond the scope of the decree. The decree which is sought to be enforced is premised on the intention of the parties to compromise and settle the dispute, and details and terms of compromise is reflected in the MoU and the decree. The guided principle, which is to be kept in mind is the readiness and willingness shown on the part of the applicant-Company to pay the amount as specified in the MoU to the defendants. Keeping faith in the applicant-Company, the defendants had invited the consent decree, and accordingly the decree was drawn. By resorting to filing an application below Exh.10, the applicant-Company has tried to shatter the faith of the defendants and frustrate the decree. The same runs afoul to their intention to settle the dispute. Ignorance of the terms of settlement of the MoU would be a myopic characterization of the decree hence, its execution proceedings will be an exercise in futility. 14. It appears that, after filing of the execution application, the defendants have filed Summery Suit No.4 of 2003 claiming an amount of Rs.3,75,61,500/-. I have perused the recitals made in the plaint, more particularly, paragraph no.5, wherein it is stated by the plaintiffs i.e. the present respondents no.1 and 2 that though they are aware that the amount can be recovered in the execution proceedings, but since the defendants have raised an objection with regard to maintainability of the execution petition, in order to see that the limitation period does not come in their way in subsequent proceedings, the present suit is instituted. Thus, the execution application is filed prior to filing of the summary suit, and hence the subsequent filing of the summary suit cannot eclipse the execution proceedings. The doctrine of election cannot bar the execution proceedings which is prior in point of time. So far as plea taken by the applicant-Company, the same could have been raised by them in the summary suit which is instituted. The respondents have clarified before this Court that they do not intend to proceed with the summary suit and the same may be stayed. Accordingly, it is always open for the applicant- Company to file appropriate application in the summary suit challenging its maintainability. The doctrine of apporobate and reprobate, as canvassed by learned Senior Advocate Mr. The respondents have clarified before this Court that they do not intend to proceed with the summary suit and the same may be stayed. Accordingly, it is always open for the applicant- Company to file appropriate application in the summary suit challenging its maintainability. The doctrine of apporobate and reprobate, as canvassed by learned Senior Advocate Mr. Shukla, while placing reliance on the judgemnt of the Apex Court in the case of Mumbai International Airport Private Limited (supra) does not even remotely apply in the present case and hence, the doctrine cannot bar the execution proceedings. 15. The impugned order dated 25.04.2019 passed by 8th Additional Senior Civil Judge, Rajkot rejecting the application filed by the applicant below Exh.10 moved in Special Execution Application No.154 of 2001 does not suffer from any infirmity, hence, the present revision application fails. RULE is discharged. There shall be no order as to costs.