* % + IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision:
28. h August, 2018. CS(OS) 1551/2005 TOMORROW LAND TECHNOLOGIES EXPORTS LIMITED Through: Mr. Pavan Sachdeva for plaintiff. ..... Plaintiff Versus HUDCO & ANR ..... Defendants Through: Ms. Meenakshi Arora, Sr. Adv. with Mr. Rohit Sharma and Mr. Anshul Chowdhary Advs. for HUDCO. Mr. Rajeev Sharma, Adv. for UOI. CORAM: HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW IA No.15619/2017 (of the defendant no.1 under Section 151 of the CPC for recall of the order dated 13th January, 2017).
1. The senior counsel for the applicant/defendant no.1 Housing and Urban Development Corporation Limited (HUDCO), the counsel for the defendant no.2 Union of India and Mr. Pavan Sachdeva, Managing Director of the plaintiff have been heard.
2. Finding, (i) that the plaintiff had filed the present suit for specific performance of an Agreement to Sell by the defendant no.1 HUDCO Ltd. of nine guest house blocks, nine restaurants and twenty five shops in Andrews Ganj Project of the defendant no.1 HUDCO Ltd.; (ii) that vide interim order in the said suit, the defendant no.1 HUDCO Ltd. had been restrained from dealing with the property agreed to be sold; (iii) that valuable property aforesaid of the defendant no.1 HUDCO Ltd. was being wasted, with neither CS(OS) 1551/2005 Page 1 of 9 the plaintiff nor the defendants being able to use the same; (iv) that the suit was still at the pre-issues stage, inspite of having remained pending for about 20 years, this Court, w.e.f. 10th August, 2016, and as recorded in the orders with effect therefrom, made attempts for amicable settlement of the controversy so that valuable property aforesaid, which qualifies as public property, did not continue to be wasted for another 20 to 30 years, obviously to the prejudice of members of the public, and owing to inability of Government and Governmental Authorities to take a decision on such matters. The proceedings thereafter are reflected in the orders dated 10th August, 2016, 27th September, 2016, 28th November, 2016, 23rd December, 2016 and 13th January, 2017 and need to reiterate the same herein is not felt. Suffice it is to state that this order be read in continuation of the said orders. Ultimately, vide order dated 13th January, 2017, a consent decree was passed, in favour of the plaintiff and against the defendant no.1 HUDCO Ltd., for refund by the defendant no.1 HUDCO Ltd. to the plaintiff of the amount of Rs.35,75,40,000/- being the principal amount of first instalment paid by the plaintiff to the defendant no.1 HUDCO Ltd. for purchase of the property and this Court, in accordance with the statement of the counsels that this Court may determine the interest payable thereon, determined the interest payable thereon.
3. The plaintiff, being not satisfied with the interest and being not satisfied with refusal for refund even of Earnest Money Deposit, preferred a petition for review of the order dated 13th January, 2017 but which Review Petition was dismissed, giving reasons, vide order dated 12th December, 2017. CS(OS) 1551/2005 Page 2 of 9 4. Now, the defendant no.1 HUDCO Ltd. seeks recall of the order dated 13th January, 2017 on the following grounds:-
"(a) that as reflected in the orders w.e.f. 10th August, 2016, it has always been the stand of the defendant no.1 HUDCO Ltd. that it does not have the resources to refund the monies to the plaintiff and the said monies have to first flow to the defendant no.1 HUDCO Ltd. from the defendant no.2 UOI; however the defendant no.2 UOI has refused to pay any monies and the defendant no.1 HUDCO Ltd. is thus unable to pay the decretal amount; (b) that the defendant no.1 HUDCO Ltd. entered into the compromise/settlement aforesaid on the premise that the defendant no.1 HUDCO Ltd. would be in a position to raise the monies for the decretal amount by further sale/transfer of the property subject matter of the suit and that the defendant no.2 UOI/Land & Development Office (L&DO) will give a No Objection Certificate (NOC) for such transfer, but the defendant no.2 UOI has not only refused to give such a NOC but has also refused to convert the said property into freehold and which has resulted in the defendant no.1 HUDCO Ltd. being not in a position to sell or alienate the aforesaid property and raise monies therefrom for satisfying the decretal amount; (c) that the plaintiff itself has reneged from the compromise; the plaintiff first preferred Special Leave Petition (SLP) to the Supreme Court against the order dated 13th January, 2017 and CS(OS) 1551/2005 Page 3 of 9 which was disposed of with liberty to the plaintiff to prefer a Review Petition in the suit; the plaintiff thereafter preferred Review Petition aforesaid and against the dismissal thereof has again approached the Supreme Court; once the plaintiff itself is not treating itself to be bound by the compromise, the defendant no.1 HUDCO Ltd. be also ordered to be not bound thereby; and, (d) that the defendant no.2 UOI has not only refused to give the NOC and/or convert the leasehold rights into freehold but has also issued notice to the concerned officials of the defendant no.1 HUDCO Ltd. to show cause as to why they should not be proceeded against for compromising with the plaintiff, instead of contesting the suit.
5. The counsel for the defendant no.2 UOI has drawn attention to para 13 of the order dated 13th January, 2017 and states that the defendant no.2 UOI still remains bound by what is recorded therein i.e. that the defendant no.1 HUDCO Ltd. does not need approval of the defendant no.2 UOI for the decision taken by its Competent Authority to refund the amounts aforesaid to the plaintiff and that the defendant no.1 HUDCO Ltd.as a lessee of the land underneath the Andrews Ganj Project shall bear all liabilities including those arising from Court’s orders.
6. I have enquired from the counsel for the defendant no.2 UOI, that if the stand of the defendant no.2 UOI is the same today as was earlier, on what premise have notices to show cause been issued to the officials of the defendant no.1 HUDCO Ltd., for entering into the compromise. CS(OS) 1551/2005 Page 4 of 9 7. The counsel for the defendant no.2 UOI states that the said show cause notices have been abandoned and are not and will not being be proceeded with further.
8. Mr. Pavan Sachdeva has referred to para 15 of Ram Chandra Singh Vs. Savitri Devi (2004) 12 SCC713and to para 7 of Amit Gupta Vs. Govt. of NCT of Delhi 2016 SCC OnLine Del 2275 (DB) to contend that the application though titled as for recall, is for review.
9. The aforesaid, in my opinion is not relevant.
10. I will now take up the grounds on which recall is sought.
11. Once a money decree has been passed in favour of the plaintiff and against the defendant no.1 HUDCO Ltd., the factum of defendant no.1 HUDCO Ltd. not having money to satisfy the decree cannot in law constitute a ground for recall of the decree. If the defendant no.1 HUDCO Ltd. is unable to, of its own, raise money for satisfying the decree, it will be up to the plaintiff to execute the decree by modes known in law. Significantly, it is not the plaintiff who is seeking revival of the suit on the ground that the monies cannot be recovered from the defendant no.1 HUDCO Ltd. In fact the plaintiff has already applied for execution, by attachment of properties of the defendant no.1 HUDCO Ltd. There is thus no merit in the first ground urged for recall.
12. As far as the second ground urged for recall of the order i.e. of the defendant no.1 HUDCO Ltd. having entered into the compromise on the premise of being able to raise monies from sale of valuable property which was locked up in the suit and the said sale being not possible now owing to the defendant no.2 UOI/L&DO refusing to give/issue NOC for transfer CS(OS) 1551/2005 Page 5 of 9 and/or convert the leasehold rights into freehold, is concerned, merely because defendant no.2 UOI/L&DO has taken such a stand, does not bind the defendant No.1 HUDCO Ltd. If the defendant no.1 HUDCO Ltd. is aggrieved from unlawful or arbitrary refusal of the defendant no.2 UOI/L&DO, it is not as if the defendant no.1 HUDCO Ltd. does not have remedy thereagainst. If the defendant no.1 HUDCO Ltd. has any hesitation in invoking the said remedies, this Court in execution of the decree will consider the said aspects and attempt to realise the monies for satisfaction of the decree. Moreover, in para 19 of the order dated 13th January, 2017, it has already been recorded that disputes if any between the defendant no.1 HUDCO Ltd. and defendant no.2 UOI were not to be adjudicated in the said suit.
13. I have enquired from the senior counsel for the defendant no.1 HUDCO Ltd. as well as from the counsel for the defendant no.2 UOI, who has supported the said arguments, as to how the factum of both the parties having afterthoughts qua the compromise decree, amounts to a ground for recall of the compromise. Neither has been able to cite any provision of law or any case law in this regard. Though parties have freedom to contract and to contract out, invoking the principle of novation, but once a compromise, which is nothing but a contract, has been entered into in a proceeding in a Court and has the imprimatur of the Court and crystallises into a decree, in my view, it is not open to a party to then ‘contract out’.
14. As far back as in Shankar Sitaram Sontakke Vs. Balkrishna Sitaram Sontakke AIR1954SC352 it was held that once a compromise is arrived at between the parties, the parties cannot be permitted to re-open the same. CS(OS) 1551/2005 Page 6 of 9 Again, in Rama Narang Vs. Ramesh Narang (2006) 11 SCC114it was held (i) that a compromise decree is as much a decree as a decree passed on adjudication and is not merely an agreement between the parties; (ii) that in passing the decree by consent, the Court adds its mandate to the consent; (iii) that a consent decree is composed of, both, a command and a contract; (iv) that by passing a decree in terms of a consent order, the Court authorises and approves the course of action consented to; and, (v) that consent decrees are also executable. In judgment dated 22nd April, 2008 in Civil Appeal No.953/2004 titled Bholi Vs. Lachhman Singh, it was reiterated that a decree passed in pursuance to settlement is a decree like any other decree passed by the Civil Court. It was further held that once a decree is passed by the Court, the Court becomes functus officio to modify the decree. I have also in Sunita Gupta Vs. Interjeet Singh 2011 SCC OnLine Del 473 held, (a) that under Section 21 of the Indian Contract Act, 1872, a contract is not voidable because it was caused by a mistake as to any law in force in India; similarly, under Section 22, a contract is not voidable merely because it was caused by one of the parties to it being under a mistake as to a matter of fact; (b) that the facts pleaded in that case for modification of the compromise were not such on the basis whereof it could be said that the imprimatur of this Court, of the contract being lawful, was erroneous or which would entitle either of the parties to the compromise to have the contract contained in the compromise declared void; (c) else, a contract is voidable/void, when consent thereto is caused by coercion, fraud or misrepresentation (under Section19), or when consent thereto is caused by undue influence (under Section 19A), or where both parties are under mistake as to a matter of fact essential to the agreement (under Section 20), or when consideration or CS(OS) 1551/2005 Page 7 of 9 object thereof is unlawful (under Sections 23&24), or when the contract is without consideration (under Section 25), or when the contract is in restraint of trade (under Section 27), or when the contract is in restraint of legal proceedings (under Section 28), or when the contract is uncertain (under Section 29), or when the contract is by way of wager (under Section 30); (d) that a party to an agreement cannot otherwise renege therefrom or seek change thereof.
15. It is not the case of the applicant/defendant No.1 HUDCO Ltd. that the consent of the applicant/defendant no.1 HUDCO Ltd. to the compromise has been obtained by any fraud practised by the plaintiff. The position was throughout threadbare, as evident from the reading of the orders with effect from 10th August, 2016 and once the counsel for the defendant no.2 UOI states that the stand of the defendant no.2 UOI remains the same, there is no change on account of which the defendant no.1 HUDCO Ltd. would be entitled to recall of the order.
16. Just like the applicant/defendant No.1 cannot renege from the compromise decree, so also the plaintiff cannot and merely because the plaintiff on an earlier occasion attempted to renege from the compromise or is still attempting to do so by filing SLP aforesaid in the Supreme Court, is no ground for the applicant/defendant No.1 to also renege therefrom.
17. The senior counsel for the defendant no.1 HUDCO Ltd. again contends that notice has been issued in the SLP preferred by the plaintiff against the order of dismissal of the Review Petition.
18. It is for the defendant no.1 HUDCO Ltd. to contend before the Supreme Court that the appellant/plaintiff, having referred the matter of CS(OS) 1551/2005 Page 8 of 9 interest to the Court, is, under Section 20 of the Indian Evidence Act, 1872, bound by the decision of the Court and merely because a wrong step has been taken by the plaintiff does not entitle the defendant no.1 HUDCO Ltd. to renege from the compromise recorded before this Court and the remedy of the defendant no.1 HUDCO Ltd. is to defend the SLP.
19. No other ground for recall has been urged.
20. No ground for recall of the order dated 13th January, 2017 is made out.
21. Dismissed. No costs. RAJIV SAHAI ENDLAW, J.
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