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Smart Summary

Factual and Procedural Background

The plaintiff filed a suit for specific performance of a contract of sale after Title Suit No. 313 of 1971 (filed by the defendant against the plaintiff and others) ended in compromise. A term of the compromise required the plaintiff to pay Rs. 550 by Chaitra, 1381 B.S., upon which the defendant would execute a Sale Deed in respect of the suit land. The plaintiff alleges tender and readiness to perform but the defendant refused to accept payment and did not execute the deed. The trial court decreed the suit holding that time was not of the essence and the defendant failed to prove the plaintiff was away in Bangladesh. The appellate court below confirmed that judgment and decree. The defendant (appellant) lodged this second appeal against the judgment and decree of the lower courts.

Legal Issues Presented

  1. Whether a suit for specific performance to enforce a term of a decree made in compromise is barred by Section 47 of the Code of Civil Procedure and must instead be enforced only by execution.
  2. Whether a decree of dismissal in terms of compromise can be enforced by a separate suit for specific performance (or whether such enforcement must proceed by execution).
  3. Whether, in view of prior case law allowing conversion of a suit into an execution proceeding under Section 47(2) C.P.C., the executing court may treat a plaint as an execution petition given the subsequent deletion of sub‑section (2) by the 1976 amendment.

Arguments of the Parties

Appellant's Arguments

  • The suit for specific performance is barred by Section 47 of the C.P. Code; the remedy to enforce the terms of the compromise decree is execution and not an independent suit.
  • Relied on decisions: Rabindra Nath v. Dhirendra Nath (43 CWN 1007 : AIR 1940 Cal 82) and Sadananda v. Union of India (60 CWN 99 : AIR 1956 Cal 317) to support the proposition that a suit to enforce terms of a compromise decree is impermissible.
  • Contended that conversion under S.47(2) (as previously recognized) is now impermissible due to deletion of sub‑section (2) by the 1976 amendment.

Respondent's Arguments

  • Contended that the appeal had become infructuous because the plaintiff-decree holder had obtained a Sale Deed by execution in the meantime.
  • Relied on Charu Ch. v. Birendra Nath (73 CWN 645 : AIR 1970 Cal 34) (and related observations referred to as Charu Ch. v. Dhirendra Nath (supra)) to argue that where a decree was a dismissal in terms of compromise a separate suit for specific performance could lie, and that conversion of a suit into a proceeding under S.47(2) could be appropriate if limitation had not expired.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Rabindra Nath v. Dhirendra Nath, reported in 43 CWN 1007 : AIR 1940 Cal 82 That a decree incorporating compromise terms must be enforced by execution and an independent suit to enforce those terms is not maintainable. The court accepted that this decision supports the appellant's contention that the instant suit (to enforce terms of a compromise decree) is void and should have been pursued by execution.
Sadananda v. Union of India, reported in 60 CWN 99 : AIR 1956 Cal 317 Same principle as above: enforcement of compromise-decree terms by execution rather than by separate suit. The court treated this decision as reinforcing the view that the plaintiff could not maintain an independent suit to enforce the compromise decree.
Charu Ch. v. Birendra Nath, reported in 73 CWN 645 : AIR 1970 Cal 34 Holds that where a decree is one of dismissal in terms of compromise a separate suit for specific performance may lie; contains observations about conversion under S.47(2). The court considered this decision but distinguished it: where an earlier suit ended in a compromise decree (not a dismissal in terms of compromise) enforcement should proceed by execution. The court also noted the decision's para 12 observation on conversion under S.47(2), but found S.47(2) had been deleted by amendment.
Charu Ch. v. Dhirendra Nath (supra) Observation cited regarding conversion of suit into proceeding under S.47(2) provided limitation period had not expired. The court referenced this observation but held that deletion of sub‑section (2) by the 1976 amendment made such statutory conversion impermissible; nonetheless the court invoked the possibility of exercising inherent power to secure justice by treating the plaint as an execution application.

Court's Reasoning and Analysis

The court began by observing that concurrent findings of fact by the two lower courts were not challenged and that the appellant did not dispute those findings. The appellant's central legal point—that a suit to enforce terms of a compromise decree is barred by Section 47 C.P.C. and must be enforced by execution—was found to be supported by earlier decisions (Rabindra Nath and Sadananda). The court held that where an earlier suit ended in a decree by compromise, the remedy is execution and an independent suit for specific performance to enforce those compromise-terms is not maintainable.

The court considered the decision relied upon by the respondent (Charu Ch. v. Birendra Nath) which permits a separate suit where a decree is one of dismissal in terms of compromise; the court distinguished that situation from the present case where the earlier matter resulted in a compromise decree requiring execution.

The respondent's contention that the appeal was infructuous because the decree had been satisfied by execution was rejected: the court held the appeal remained maintainable despite satisfaction of the decree and that, if the appellant succeeded, restitution could be sought.

The court addressed the question of conversion: earlier case law (para 12 of the Charu Ch. decision) allowed treating suits as execution proceedings under S.47(2) if limitation had not expired. The court noted that sub‑section (2) of S.47 had been deleted by the 1976 amendment, making statutory conversion impermissible. Nevertheless, to secure justice the court held that the executing court could (by way of appropriate power) treat the plaint in Title Suit No. 246 of 1975 as an application for execution, since that plaint was filed within the limitation period.

On that basis the court concluded that the independent suit was improperly maintainable, set aside the decrees of the two courts below, dismissed the suit, and directed the executing court to treat the plaint in Title Suit No. 246 of 1975 as an application for execution and proceed in accordance with law.

Holding and Implications

Holding: The appeal is allowed; the judgment and decree of the courts below are set aside and the suit for specific performance is dismissed. The executing court is directed to treat the plaint in Title Suit No. 246 of 1975 as an application for execution and to proceed with execution in accordance with law. No order as to costs was made.

Implications: The direct effect is that enforcement of the compromise-decree terms must proceed by execution rather than by an independent suit in the circumstances of this case. The court found the appeal maintainable despite satisfaction of the decree, allowing for possible restitution if the appellant succeeds; the opinion does not purport to establish a novel binding precedent beyond applying and distinguishing existing authorities cited in the judgment.

    Nebubala Sardar v. Abdul Aziz Baidya .

    1. The Second Appeal has been preferred against the judgment and decree passed in Title Appeal No. 770 of 1977 by the 3rd Court of the Additional District Judge, Alipore, 24 Parganas.

    2. The plaintiff filed a suit for specific performance of contract of sale.

    3. The plaint case is that the defendant filed Title Suit No. 313 of 1971 against the plaintiff and others. The suit ended in a compromise. One of the terms of the petition of compromise was that the plaintiff would pay a sum of Rs. 550/- to the defendant by Chaitra, 1381 B.S and the defendant in turn would execute a Deed of Sale in favour of the plaintiff in respect of the suit land. The defendant did not execute the Sale Deed in spite of tender of a sum of Rs. 550/- by the plaintiff. The defendant refused to accept the money and execute the deed. Time was not the essence of the contract. The plaintiff was always ready and willing to perform his part of contract and the defendant did not deliberately discharge his obligation under the contract. Therefore, the suit has been filed.

    4. The defence is that the time was the essence of the contract. The plaintiff did not tender the money to the defendant within the stipulated date. The plaintiff was away from his village and went to Bangladesh at the material point of time. The defendant made several attempts to contact the plaintiff in vain and under such circumstances, the defendant could not perform his part of the contract.

    5. The trial court decreed the suit. It held that time was not the essence of the contract. According to him, the defendant failed to prove that the plaintiff was away to Bangladesh. The trial court finally decreed the suit. The court of appeal below confirmed the trial court's judgment and decree.

    6. This second appeal has been preferred by the defendant being aggrieved by the judgment and decree of the lower Court. The concurrent findings of fact cannot be challenged in this Court of appeal. As a matter of fact, Mr. Bagchi, appearing for the appellant, does not assail any of the findings of the two courts below. He takes a very short and interesting point in this second appeal. His contention is that the suit for specific performance of contract is barred u/S. 47 of the CP. Code and therefore, any decree that may be passed in this suit by the court is void. In other words, he means to say that execution ought to have been levied to reap the benefit under the decree in Title Suit No. 313 of 1971, and an independent suit would not lie. In support of his contention reliance is placed upon two decisions, namely, (1) Rabindra Nath v. Dhirendra Nath, reported in 43 CWN 1007 : AIR 1940 Cal 82 and (2) Sadananda v. Union of India, reported in 60 CWN 99 : AIR 1956 Cal 317. I have gone through those decisions. Those decisions squarely uphold the views expressed by Mr. Bagchi. The decree in the instant suit is void. The plaintiff could not institute the suit to enforce the terms of compromise which was incorporated in a decree. In other words, a suit for specific performance of contract would not lie to enforce the terms of the compromise decree. The result under the compromise decree could be achieved only by way of execution. Mr. Chakraborty, appearing for the respondent, relied upon another Division Bench decision in Charu Ch. v. Birendra Nath, reported in 73 CWN 645 : AIR 1970 Cal 34. What is spelt out in this decision is that in case of a decree of dismissal in terms of compromise a separate suit for specific performance of contract would lie. Mr. Bagchi submits that there is no real conflict between the decisions cited by him and the decision relied upon by Mr. Chakraborty. The most-distinguishable feature of the two sets of decisions is that while a decree in terms of compromise can only be satisfied by means of execution of a decree, a decree of dismissal in terms of compromise cannot be so satisfied. In order to enforce a term of a decree of compromise which ended in dismissal it can only be satisfied by means of an independent suit unless, of course, in the said terms of compromise it is stated that the term so stipulated in the compromise petition is enforceable by means of an execution despite a decree of dismissal. In the instant case, therefore, the suit filed by Mr. Chakraborty's client can, by no means, succeed since the earlier suit being Title Suit No. 313 of 1971 had ended in a decree by compromise. Therefore, the plaintiff ought to have levied execution in order to satisfy the terms of decree instead of maintaining an independent suit for specific performance of contract. I quite agree with Mr. Bagchi in this behalf.

    7. Mr. Chakraborty, however, contends that the appeal lodged by Mr. Bagchi has become infructuous since in the meantime the plaintiff-decree holder has obtained a deed of sale by way of execution. I am unable to subscribe to the view placed before me by Mr. Chakraborty. Sometimes the decree is granted by a court of law which is appealed against. The judgment-debtor may not ask for stay of execution and the decree is satisfied by means of execution. The appellant may finally succeed and may ask for the Court to undo the effect in execution. I therefore, hold that in the instant case inspite of satisfaction of the decree the appeal is maintainable. If the appellant succeeds he may ask for restitution.

    8. Mr. Chakraborty places reliance upon an observation of the learned Judges made in para 12 of the decision in Charu Ch. v. Dhirendra Nath (supra). What the court found that in such contingency the suit might be converted into a proceeding and vice-versa in view of S. 47(2) of the Code of Civil Procedure provided the period of limitation has not expired. In the instant case that period had not expired at the material time. Under sub-sec. (2), it is argued, the court is entitled to convert a suit, which is, otherwise hit by the said section, into a proceeding. Mr. Bagchi rightly contends that in view of deletion of sub-sec. (2) of S. 47, C.P Code by amendment of 1976 such conversion as found by the learned judges is now impermissible. In such contingency the inherent power of the court may be exercised to secure justice. Therefore, the executing court will convert the plaint into an execution petition if the respondent so moves the court. The later suit being Title Suit No. 246 of 1975 was filed on 2-5-75 and the earlier suit being Title Suit No. 313 of 1971 was decreed on 10-7-75. Obviously, therefore, the plaintiff has sought for his remedy within a year from the date of the compromise decree. Execution within that period was not therefore, time barred. In that view of the matter, the plaint in Title Suit No. 246 of 1975 may be treated as an execution petition and the executing court may satisfy the decree passed in Title Suit No. 313 of 1971 if not otherwise barred. Mr. Bagchi submits that it cannot be so done for two reasons. The first point is that the finding of the learned Judge is an obiter and therefore, is not binding upon this Court. It is true that the obiter of this Court is not binding upon me. But the legal proposition propounded in the said decision can very well be followed by me to secure justice despite amendment of the Code. The second point is that the relief for specific performance of contract being a discretionary relief the court will not exercise discretion in favour of the plaintiff. As a matter of fact, I do not give any discretionary relief in favour of the plaintiff. Relief has been made available under the compromise decree. I am inclined to set aside the decree only passed by the two courts below and give an appropriate relief as the plaintiff is entitled to in these proceedings. In this view of the matter, the appeal must succeed. The judgment and decree of the court below are set aside and the suit is dismissed. I make no order as to costs. The court of first instance which is the executing court is directed to treat the plaint in Title Suit No. 246 of 1975 as an application for execution and proceed with the execution in accordance with law.

    Appeal allowed.

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    Comments

    Nebubala Sardar v. Abdul Aziz Baidya .
    (Feb 11, 1991)