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Structured Summary of the Opinion

Factual and Procedural Background

A suit seeking partition, permanent injunction and declaration in respect of property No. B-134, Jamrudpur, New Delhi (CS(OS) No. 1623/1995) was filed by respondent No. 1 (the decree-holder). During pendency, the parties and legal representatives of the late Shri Mam Raj Meena (the absolute owner) executed a settlement deed dated 18 April 2000 and sought a compromise decree. A compromise decree was passed on 2 August 2000 and has become final and binding.

The compromise decree provided that the property be sold and the sale proceeds be distributed: 1/3 of the sale consideration in favour of Smt. Gyan Devi (out of which she was to pay Rs. 10,00,000 to Smt. Leela Devi — respondent No. 1); 1/3 to respondent No. 2; and the remaining 1/3 to be used after payment of Rs. 1,00,000 to Master Lalit Kumar (then a minor, now stated to have attained majority) with the balance to be applied for construction/opening of a Dharamshala and charitable institutions in memory of late Shri Mam Raj Meena and Smt. Rattan Devi.

Because parties could not find a buyer, an application for appointment of a Receiver was made in execution petition Ex.P No. 118/2005. The Single Judge appointed a Receiver on 8 January 2007 to find a buyer and sell the property. The appellant proposed on 13 March 2007 to pay Rs. 10 lacs to respondent No. 1 to avoid the sale; the Single Judge rejected that prayer. The appellant challenged the orders dated 8 January 2007 and 13 March 2007 by filing the present appeal.

Legal Issues Presented

  1. Whether the appellant can be permitted to satisfy the decree by paying Rs. 10,00,000 directly to respondent No. 1 and thereby prevent the sale of the suit property contemplated by the compromise decree.
  2. Whether the Court can interfere with or go behind a final and binding compromise decree being executed by the Executing Court (including staying the sale under execution proceedings) in the circumstances of this case.

Arguments of the Parties

Appellant's Arguments

  • In terms of the compromise, respondent No. 1 is entitled to only Rs. 10,00,000; the appellant is ready and willing to pay that amount directly to respondent No. 1 and, on such payment, the compromise decree should be treated as satisfied.
  • Payment of Rs. 1,00,000 to the minor (Master Lalit Kumar) is not presently a bar because he has attained majority and his matter can be taken care of subsequently by the appellant if granted opportunity.
  • Accordingly, the appellant sought a stay of the proposed sale of the property.

Respondent / Opposing Counsel's Arguments

  • The settlement has been reduced into a compromise decree which the Executing Court is duty‑bound to implement; the court should not go behind the decree or interfere with its execution.
  • Reliance was placed on the decision of the Supreme Court in "Vasudev Dhanjibhai Modi v. Rajabhai Abdul Rehman and others, AIR 1970 SC 1475" to support the contention that the decree must be executed and cannot be circumvented.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Vasudev Dhanjibhai Modi v. Rajabhai Abdul Rehman and others, AIR 1970 SC 1475 Support for the proposition that an executing Court must give effect to and implement a decree and that courts should not go behind a decree which is being executed. The court accepted the principle that a final and binding compromise decree must be executed and should not be reopened; this principle was relied upon to refuse the appellant's request to avoid sale by unilateral payment of Rs. 10 lacs.

Court's Reasoning and Analysis

The court examined the settlement deed and the terms of the compromise decree, noting that the parties had expressly agreed that the property be sold and the sale consideration be apportioned in specified shares. Those terms were incorporated into a decree which has become final and binding.

The court reasoned that permitting the appellant to pay Rs. 10,00,000 to respondent No. 1 would not effectuate the full terms of the compromise decree. Specifically:

  • The decree mandates sale of the property and distribution of the sale consideration in the particular manner set out (including payment of one third to respondent No. 2 and allocation of sums from the remaining third for Master Lalit Kumar and for charitable construction/opening of a Dharamshala).
  • The amount equivalent to 1/3rd of the total sale consideration cannot be ascertained until the property is put to sale; consequently, the charitable allocations and other specified distributions cannot be determined or implemented without sale proceeds.
  • Even if the appellant paid Rs. 10,00,000 to respondent No. 1, that payment would not satisfy or set aside the decree because substantial parts of the decree (distribution to respondent No. 2, payment to Master Lalit Kumar, and application of funds to charitable purposes) would remain unimplemented.
  • As a final decree, it cannot be reopened, modified or ignored by substituting partial payments not contemplated by the settlement terms. The court must effectuate the decree as written unless it is set aside or held to be a nullity — which was not the case here.

On that basis, and applying the principle cited from the Supreme Court decision referred to by opposing counsel, the court found itself unable to accept the appellant's submission and to stay or alter the execution process.

Holding and Implications

Holding: The appeal is dismissed.

Implications:

  • The compromise decree (dated 2 August 2000) must be implemented and executed in accordance with its terms; the executing process (including appointment of a Receiver and sale of the property) may proceed to realize and distribute the sale consideration as provided by the decree.
  • The appellant's unilateral offer to pay Rs. 10,00,000 to respondent No. 1 does not and cannot substitute for the sale and full implementation of the decree; therefore the execution cannot be forestalled on that basis.
  • No new legal principle or precedent was laid down by this decision; the court applied existing principles that a final compromise decree must be executed and cannot be reopened except by setting it aside or declaring it a nullity.

Bench: Dr. Mukundakam Sharma, C.J. (opinion authored by Dr. Mukundakam Sharma, C.J.).

    Gyan Devi v. Leela Devi Narayani & Ors

    Dr. Mukundakam Sharma, C.J— By filing this appeal, the appellant has challenged the orders dated 8th January, 2007 and 13th March, 2007 passed by the learned Single Judge in the execution petition registered as Ex.P No. 118/2005.

    2. A suit was filed by the respondent No. 1.decree holder for partition along with the relief of permanent injunction and declaration in respect of property No. B-134, Jamrudpur, New Delhi (hereinafter referred to as ‘the suit property’), which was registered as CS(OS) No. 1623/1995. During the pendency of the aforesaid suit, the parties and the legal representatives of late Shri Mam Raj Meena, who are the absolute owner of the suit property arrived at a settlement. The terms and conditions of the said settlement were put in writing under the settlement deed executed by the parties thereto on 18th April, 2000. In view of the aforesaid settlement arrived at, a settlement deed was prepared and the said settlement deed was filed in the suit praying for passing a compromise decree in terms of the settlement. In terms thereof, a compromise decree was passed in the said suit being CS(OS) No. 1623/1995 under judgment and decree dated 2nd August, 2000. The said compromise decree has become final and binding and has not been questioned.

    3. It is recorded in the said decree that it is agreed to by the parties that the property in question be sold and the parties would receive their respective shares after the sale of the aforesaid property. Since it was not possible for the parties to find a prospective buyer, a prayer was made in the execution case for appointment of a Receiver, who would be entrusted with the duty to dispose of the property and to distribute the share to each parties in accordance with the decree. In terms of the prayer made, the learned Single Judge passed an order on 8th January, 2007 appointing a Receiver of the property in question directing him to find a buyer, to the satisfaction of all the three parties. It was also observed in the said order that the Receiver shall be permitted to sell the said property to the said buyer. The matter was again listed before the Court on 13th March, 2007 in view of the applications filed by the present appellant giving a proposal that the said applicant/appellant herein shall pay Rs. 10 lacs to the respondent No. 1 herein in terms of the deed of settlement so that the ancestral property may not be sold. The aforesaid prayer was rejected by the learned Single Judge in view of which the present appeal is preferred.

    4. We have heard Mr. A.S á Chandhiok, Sr. Advocate, Mr. S.K Luthra, Advocate and other Advocates, who appeared and argued the matter ‘on behalf of the parties. Mr. A.S Chandhiok submitted before us that in terms of the compromise arrived at between the parties, the respondent No. 1 is entitled to get only Rs. 10 lacs, which the appellant is ready and willing to pay directly to the respondent No. 1 and on payment of the same, it should be ordered that the decree passed on compromise would stand satisfied. So far as payment of Rupees one lac to the minor son is concerned, it was stated that in the meantime he has become major and that his case would also be taken care of by the appellant after an opportunity is granted to the appellant. It was prayed that sale of the property in question be stayed by this court.

    5. Mr. S.K Luthra, Advocate, however, vehemently opposed the aforesaid prayer contending, inter alia, that the settlement has been arrived at between the parties which is being given effect to by the Executing Court. It is also submitted that this Court cannot and should not go behind the decree as it is the bounden duty of the Executing Court to get the decree executed. In support of the said contention, Mr. Luthra sought support from the decision of the Supreme Court in Vasudev Dhanjibhai Modi v. Rajabhai Abdul Rehman and others, AIR 1970 SC 1475.

    6. In the light of the aforesaid stands taken, we have perused the records. During the pendency of the aforesaid suit seeking for a decree for partition filed by the respondent No. 1, a settlement was arrived at amongst the parties, who have been the legal representatives of Shri Mam Raj Meena, who was the absolute owner of the suit property, which is sought to be sold through the process of the Executing Court. The aforesaid legal representatives agreed to sell the suit property to a prospective buyer on the terms and conditions specifically mentioned in the settlement deed prepared and executed by the parties. In terms thereof 1/3rd of the total sale consideration was to go in favour of Smt. Gyan Devi. It is also agreed that out of the said 1/3rd share Smt. Gyan Devi shall pay Rs. 10,00,000/- (Rupees ten lacs only) to Smt. Leela Devi, respondent No. 1 herein, without any deductions whatsoever. It is also agreed that Rs. one lac would be paid under the terms and conditions of the settlement to Master Lalit Kumar, who was a minor. But it is agreed that he has attained majority as of now.

    7. The parties accepted that they shall not interfere with the rights of the parties of the 5th part (Smt. Gyan Devi) in selling the property in question so long the said party of the 5th part sells the suit property to the prospective buyer at the market value to the highest bidder. It was also agreed to that 1/3rd of the total sale consideration shall be given to Shri Ram Sunder Meena. It was further agreed to amongst the parties that upon selling the property at the market value, the total sale consideration received would be distributed in the following manner:—

    (a) 1/3rd of the total sale consideration of the property is to go in favour of the appellant out of which she shall have to pay an amount of Rs. 10 lacs to the respondent No. 1

    (b) 1/3rd of the total sale consideration was to go in favour of respondent No. 2 herein

    (c) Out of the remaining 1/3rd of the sale consideration, an amount of Rs. one lac was to be paid to Master Lalit Kumar, who was minor and the balance sale consideration was required to be spent for construction/opening of Dharamshala and charitable institutions at religious places, in the memory of late Shri Mam Raj Meena and Smt. Rattan Devi.

    8. In terms of the aforesaid settlement arrived at amongst the parties, a compromise decree was also passed on the prayer made by all the parties in the suit. The compromise decree has become final and binding. The said compromise decree is sought to be given effect to and executed by way of selling the property at which stage the aforesaid application came to be filed by the appellant herein praying for stay of sale of the property on the ground that the appellant is prepared to pay the amount of Rs. 10 lacs to the respondent No. 1 so as to save the ancestral property.

    9. We have considered the aforesaid prayer giving due consideration thereof. However, in the facts and circumstances of the case, it appears to us that we are not in a position to accept the said submission. The parties have settled the matter on terms and conditions specifically recorded in a settlement deed. Compromise decree has been passed on the said terms and conditions. Intention of the parties and the terms and conditions of settlement now stand incorporated in a decree passed by this Court. The settlement decree passed must be executed and should not be interfered with, by modifying the decree or going behind the decree. This Court cannot go behind the decree and pass an order which is not contemplated by the terms and conditions of the settlement arrived at amongst the parties. A decree that has become final and binding cannot be reopened. The decree includes and postulates payment of 1/3rd sale consideration, as stipulated, for charitable purpose, after payment of Rs. 1 lac to Mr. Lalit Kumar. Even if the appellant agrees to pay Rs. 10 lacs to the respondent No. 1, the same would not have the effect of setting aside the decree passed. The remaining portion of the settlement decree still requires implementation. Clear terms of the settlement is that 1/3rd of the total sale consideration shall have to be paid to the respondent No. 2 and out of the remaining 1/3rd sale consideration, a sum of Rs. one lac is to be paid to Master Lalit Kumar and the remaining consideration amount shall have to be spent for construction/opening of Dharamshala and charitable institutions at religious places, in the memory of late Shri Mam Raj Meena and Smt. Rattan Devi. Unless the property is put to sale in terms of the deed of settlement in an auction, the terms and conditions of settlement cannot be given effect to and implemented as 1/3rd of the total sale consideration minus one lac of rupees cannot be invested and spent for construction/opening of Dharamshala and charitable institutions. Even if Rs. 10 lacs is paid, that does not bring in a solution and would not in any manner amount to implementation of the decree passed by the Court. Decree once passed unless set aside or held to be nullity, has to be implemented and if required executed. It is not the case of the appellant and others supporting the appellant that the decree has been set aside or is a nullity. The amount equivalent to 1/3rd of the total sale consideration cannot not be ascertained so long the property is not put to sale. Without 1/3rd of the sale consideration being separated and utilised for Dharamshala and charitable institution in terms of the decree, the said decree will not be satisfied.

    10. In that view of the matter, we are unable to persuade ourselves to accept the contention of the counsel appearing for the appellant. We find no merit in this appeal and the same is dismissed.

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    Comments

    Gyan Devi v. Leela Devi Narayani & Ors
    (May 29, 2007)