Compack Enterprises India (p) Ltd. v. Beant Singh
MOHAN M. SHANTANAGOUDAR, J.
1. These petitions arise out of judgments of the High Court of
Delhi (hereinafter ‘High Court’) dated 14.02.2019 and 25.07.2019. By
the first impugned judgment dated 14.02.2019, the High Court disposed
of the regular first appeal RFA No. 253/2018 filed by the Petition er
against judgment and order of the Ld. Additional District Judge, Rohini
(‘Trial Court’) dated 23.09.2017 in Suit No. 58395/2016 filed by the
Respondent. Whereas by the second impugned judgment dated 25.7.2019,
the High Court disposed of Review Petition No. 177/2019 filed by the
Petitioner against the judgment in RFA No. 253/2018.
I. Background Facts
2. These cases concern a suit for possession and mesne profi ts
filed by the Respondent/plaintiff against the Petitioner/defendant, with
respect to the ground floor of the property bearing No. B-60, Gr ound
Floor, G .T. Karnal Road, Industrial Area, Delhi-110033, admeasuring 608
sq. yards (or, 5,472 sq. ft.) (hereinafter ‘suit property’).
3. The Respondent, Beant Singh, is the owner of the suit property.
He, through M/s Channa Auto Agencies (P) Ltd. (of which he is a
Director), executed a license agreement dated 1.11.2000 in respect of a
portion of the suit property in favour of M/s Compack Enterprises (the
Petitioner’s predecessor), for a period of 30 months in consideration for
a monthly license fee of Rs. 28,000/- (hereinafter, ‘2000 Agreement’).
On 1.04.2003, Compack Enterprises merged with Compack Enterprises
India (P) Ltd. (i.e., the Petitioner herein), and the 20 00 Agreement
continued with mutual consent of parties. The license arrangement was
renewed on 1.07.2003 for another 30 months, with a 10% increase in
monthly license fee to Rs.30,800/- (hereinafter, ‘2003 Agreement’). The
2003 Agreement was renewed for the last time effective from 1.04.2006
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and expiring on 30.09.2008, with a further 10% increase in monthly license
fee to Rs.33,900/- (hereinafter, ‘2006 Agreement’).
4. However, even after the expiry of the 2006 Agreement on
30.9.2008, and non-renewal of the same, the Petitioner continued to
occupy the suit property. Consequently, the Respondent brough t O.S.
No. 58395/2016 against the Petitioner on 13.02.2009 for recovering
possession of the entire suit property and mesne profits thereon from
1.10.2008 till the vacation of the suit property.
Petitioner/Defendant’s Arguments in Original Suit No. 58395/
2016
5. On the question of vacating possession , the Petitioner
admitted to having been in possession of only a portion of the suit property
measuring 2,200 sq. ft., averring that it was only this portion, not the
entire suit property admeasuring 5,427 sq. ft., that was licensed to them
by the Respondent.
6. Petitioner further contended that its continued possession of
this portion of the suit property was lawful, since the Resp ondent had
concealed the material fact of having entered into an agreeme nt dated
11.6.2008 to sell the suit property to one Mr. Ajay Gosain for a sum of
Rs. 4 crores, of which the Respondent had already received a sum o f
Rs. 65 lakhs. The suit property was agreed to be sold to, and was thus in
lawful possession of, Mr. Gosain before the expiry of the 2006 Agreement
on 30.09.2008. Mr. Gosain is the husband of one of the Petitioner’s
Directors, and also the brother of another Director.
7. On the question of mesne profits, Petitioner contended that
it had been in possession of only 2,200 sq. ft. of the suit property and had
been paying license fee for it till July, 2015 as per the interim order
passed by the Trial Court; and that they vacated the premis es in July,
2015 and handed over possession to Mr. Gosain, to whom the Respondent
had allegedly transferred possession of the suit property pursuant to the
agreement to sell. Thus, the Petitioner claims that it is not liable to pay
any further sum to the Respondent.
Trial Court’s Judgment dated 23.09.2017
8. On the question of vacating possession, the Trial Court
held that the issue had already been decided by the High Court in C.M.(M)
No. 193/2013 by judgment dated 12.11.2014, and could not be re-opened.
COMPACK ENTERPRISES INDIA (P) LTD. v. BEANT SINGH
[MOHAN M. SHANTANAGOUDAR, J. ]
9. The Respondent had earlier filed an application before the Trial
Court under Order XII, Rule 6, of the Code of Civil Procedure, 1908
(hereinafter, ‘CPC’), praying for a judgment on admission decreeing the
suit for possession in favour of the Respondent. Upon the Trial Court’s
dismissal of this application, the Respondent approached the High Court
under Article 227 of the Constitution in C.M.(M) No. 193/2013 praying
for the aforesaid relief. Therein, the High Court by its judg ment dated
12.11.2014 reversed the Trial Court’s dismissal, and h eld that the
admissions made by the parties justify decreeing the Respondent’s suit
for possession. It had thus directed that the possession of the entire suit
property measuring 5,472 sq. ft. be handed over to the Responde nt by
the Petitioner.
10. On the question of mesne profits, the Trial Court noted
that it is an admitted fact between the parties that the possession of the
suit property has still not been handed over to the Respondent des pite
the High Court’s order dated 12.11.2014. Instead, the Petitioner claimed
to have handed over possession to Mr. Gosain in July, 2015. The following
further observations of the Trial Court are relevant for our purposes:
a. What is the area of the suit property for which Petition er
is liable?
The High Court’s order dated 12.11.2014 had settled the dispute
qua the area that was in possession of the Petitioner, decreeing the
Respondent’s suit for possession for the entire suit pro perty area of
5,472 sq. ft (and not only the 2,200 sq. ft. portion claimed to be possessed
by the Petitioner). The view taken by the aforesaid order ha s attained
finality as far back as on 12.11.2014 and is binding.
b. What is the quantum of compensation payable?
For the period between 1.10.2008 to 27.04.2009, the Respondent
is entitled to license fee @ Rs. 37,290/- p.m., i.e., the license fee agreed
upon in the 2006 Agreement (Rs. 33,900/-) with a hike of 10%. For the
period of unlawful possession between 28.04.2009 till va cation of
possession, Petitioner shall pay mesne profits @ Rs.60,000/- p.m. with
10% increase on the 1st April of each alternate year, till the suit property
is handed over to Respondent.
11. Aggrieved by the decision on mesne profits, both the Petitioner
and Respondent filed cross-appeals before the High Court aga inst the
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judgment of the Trial Court dated 23.09.2017, seeking, respective ly,
reduction and enhancement in the quantum of mesne profits.
First Impugned Judgment of the High Court dated 14.02.2019
in the above cross-appeals
12. The High Court passed a consent decree, directing that the
Petitioner shall pay to the Respondent, by way of mesne profi ts, an
enhanced sum of Rs.1,00,000/- p.m., with a 10% increase “after every
12 months, i.e. from 1.10.2009, 1.10.2011 etc etc ” w.e.f. 1.10.2008
(i.e., the date on which the 2006 Agreement expired) till the dat e the
Petitioner hands over actual possession of the suit property measur ing
5,472 sq. ft. to the Respondent.
13. Aggrieved that the terms of the consent decree were recorded
incorrectly in the aforesaid order, the Petitioner filed R eview Petition
No. 177/2019, which was dismissed by the High Court.
Second Impugned Judgment of the High Court in the abov e
review petition dated 25.07.2019
14. The Petitioner contended in its review petition that the High
Court in the first appeal had erred in recording the terms of the consent
decree agreed to by the Petitioner. First, the judgment records that the
mesne profits be increased by 10% every 12 months, instead of recording
a 10% increase every 24 months. Second, the judgment erroneously
records that the Petitioner will hand over possession of the entire suit
property measuring 5,472 sq. ft., when the documents on record would
show that the Petitioner was only ever in possession of 2,200 sq. ft.
15. The High Court, rejecting the Petitioner’s contentions, held
that there was no error apparent on the face of the record t o justify its
review jurisdiction, and that the Petitioner was dishonestly trying to wriggle
out of the consent decree by attempting to overreach the Court . The
review petition was dismissed with exemplary costs of Rs.1,00,0 00/-
payable by the Petitioner to the Respondent.
II. Submissions made by the Petitioner in the present SL P
16. Shri Mukul Rohatgi, learned senior counsel for the Petitioner,
contends that the High Court ought to have, while recording the terms of
the consent decree, recorded a 10% increase in mesne profits every 24
months, instead of 12 months. As per him, this typographical error is
COMPACK ENTERPRISES INDIA (P) LTD. v. BEANT SINGH
[MOHAN M. SHANTANAGOUDAR, J. ]
borne out by the fact that a 10% increase every 24 months closely mirrors
the terms of the license agreements where the license fee was increased
by 10% every 30 months. The reference to a 10% increase “after every
12 months, i.e. from 1.10.2009, 1.10.2011 etc etc” in the first impugned
judgment of the High Court dated 14.02.2019 (supra) also corroborates
this.
17. The learned senior counsel for the Petitioner has also contended
that the first impugned judgment dated 14.02.2019 erred in recording
that the Petitioner has consented to handing over possession of the entire
suit property area of 5,472 sq.ft., when the Petitioner has c onsistently
maintained that only 2,200 sq.ft. was licensed to him and in his possession.
Both these submissions are vehemently opposed by Shri Basava Prabhu
S. Patil, learned senior counsel for respondent.
III. This Court’s Analysis
18. Before adverting to the specific contentions raised by the
learned senior counsel for the Petitioner, it may be useful to briefly
summarise the law governing consent decrees that shall info rm our
conclusions on the present matter. It is well-settled that consent decrees
are intended to create estoppels by judgment against the parties, thereby
putting an end to further litigation between the parties. Resultantly, this
Court has held that it would be slow to unilaterally interfere in, modify,
substitute or modulate the terms of a consent decree, unless it is done
with the revised consent of all the parties thereto. (Gupta Steel Industries
v. Jolly Steel Industries Pvt. Ltd. & anr., (1996) 11 SCC 678; Suvaran
Rajaram Bandekar & ors. v. Narayan R. Bandekar & ors. , (1996)
10 SCC 255).
19. However, this formulation is far from absolute and does not
apply as a blanket rule in all cases. This Court, in Byram Pestonji
Gariwala v. Union Bank of India & ors ., (1992) 1 SCC 31, has held
that a consent decree would not serve as an estoppe l, where the
compromise was vitiated by fraud, misrepresentation, or mistake. Further,
this Court in the exercise of its inherent powers may also unilaterally
rectify a consent decree suffering from clerical or arit hmetical errors,
so as to make it conform with the terms of the compromise.
20. The present Petitions thus must be answered in light of the
above-stated position of law. It is relevant at this juncture to note that
the first impugned judgment of the High Court dated 14.2.2019 recorded
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the terms of the compromise that the Petitioner had agreed to; and that
the same Court has subsequently upheld the validity of that c onsent
decree in the second impugned judgment dated 25.07.2019. Thus, keeping
in line with this Court’s jurisprudence, we would be cautious in exercising
our inherent power to interfere in this consent decree, exc ept where
there is any exceptional or glaring error apparent on the f ace of the
record. We now refer to and answer the specific contentions rai sed by
the parties.
On the question of area of possession:
21. Having undertaken a close perusal of the License Agreements
executed between the Petitioner and Respondent, we reject learned
senior counsel Mr. Rohatgi’s contention that the Petitioner was only in
possession of and licensee to a 2,200 sq.ft. portion of the suit property. It
is evident that, unlike the 2000 Agreement and 2003 Agreement, the
2006 Agreement, which is the relevant agreement for the present
purposes, pertains to the entire suit property, and does not delimit the
licensed area to a 2,200 sq. ft. portion. Thus, the 2006 Agreement effective
from 1.04.2006 to 30.09.2008, licensed the total area of 5,472 sq. ft. to
Petitioner. Hence, the material on record discloses that the Petitioner is
presently in illegal possession of the entire suit proper ty admeasuring
5,472 sq. ft.
22. Further, this question has already been settled by the Hi gh
Court judgment dated 12.11.2014 (supra) in the earlier litigation between
the parties, decreeing the Respondent’s suit for possession for the entire
area of 5,472 sq. ft (and not only the 2,200 sq. ft. portion claimed to be
possessed by the Petitioner). In that order, the High Court had taken
note of an admitted document on the record wherein the Petitioner was
stated to be in possession of the entire suit property. The Petitioner’s
challenge to this judgment dated 12.11.2014 before the Supreme Court
has been dismissed in SLP(C) No. 7531/2015, and R.P.(C) No. 1494/
2015 in SLP(C) No. 7531/2015, by orders dated 16.03 .2015 and
15.07.2015 respectively. Thus, this view has attained finality, a nd the
Petitioner’s efforts to re-agitate this question in the present proceedings
is a waste of this Court’s time and an abuse of the process of law. In any
case, since the Petitioner claims no right or interest in the remaining
3,272 sq. ft. of the suit property, there is no prejudice ca used to the
Petitioner by the order to vacate the entire suit property since he is not
the owner of property to that extent also.
COMPACK ENTERPRISES INDIA (P) LTD. v. BEANT SINGH
[MOHAN M. SHANTANAGOUDAR, J. ]
23. It is further an admitted position, as recorded by the Tr ial
Court, that the Petitioner has not handed over poss ession to the
Respondent – having claimed to have handed over possession to Mr.
Gosain instead in July, 2015. This is despite the High Court’s judgment
dated 12.11.2014 decreeing the suit for possession in favour of the
Respondent. Mr. Gosain’s right in the suit property is a question pending
in separate specific performance proceedings filed by him. Thus, at this
stage, the Respondent is entitled to get possession of the suit property,
pending adjudication of Mr. Gosain’s claims. This view attained finality
as far back as on 12.11.2014, and it is high time that the Petitioner stops
making efforts to circumvent delivering possession of the suit property
to the Respondent.
24. Thus, the High Court was correct in upholding the terms of
the consent decree directing Petitioner to hand over possession of the
entire suit property of 5,472 sq. ft. to the Respondent, and we s ee no
reason to interfere with this part of the consent decree.
On the question of mesne profits:
25. As referred to supra, Shri Mukul Rohatgi, learned senior counsel
for the Petitioner has contended that the High Court ought to have, while
recording the terms of the consent decree, recorded a 10% increas e in
mesne profits every alternate year, instead of every year.
26. On the contrary, Shri Basava Prabhu S. Patil, learned senior
counsel for the Respondent wants us to construe the observations of the
late learned Single Judge appearing in para 1 of the first impugn ed
judgment dated 14.02.2019 to mean that the mesne profits payable are
to be increased by 10% every year.
27. The learned Single Judge, in noting that “this figure of mesne
profits of Rs.1 lakh will be increased by 10% after every 12 months,
i.e from 1.10.2009, 1.10.2011 etc etc ” (emphasis supplied), has
confused not only himself, but also the parties to the litigation. There is
an inconsistency in so far there is a gap of every alternate year, i.e. from
2009 to 2011, in the example used by the learned Single Judge even
though the decree notes an increase of 10% in mesne profits after every
12 months. The aforementioned inconsistency in the underlined extract
of the consent decree is an error apparent on the face of the record.
Hence we find that this is a fit case to exercise inherent the jurisdiction
to correct the terms of the consent decree, to bring it in conformity with
the intended compromise.
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28. At this stage, it is relevant to note that even the judgment
dated 23.09.2017 and the final decree dated 15.11.2017 passed by the
Trial Court also awards a 10% increase only on each alternati ve year,
i.e. 01.04.2011, 01.04.2013, 01.04.2015 and so on. Further, the original
terms of the license agreement between the parties also inco rporated a
10% increase in license fee once every 30 months/2.5 years. T hus, the
learned Single Judge’s order dated 14.02.2019 has given rise to a lot of
confusion. Given this background, and looking at the preponderance of
probabilities, we are inclined to give benefit of doubt to the Petitioner.
Therefore, we hold that the intention of the compromise betw een the
parties was that there should be a 10% increase in mesne pro fits every
alternate year. The recording of a 10% increase after every 12 months
in the consent decree was an inadvertent error, which we have now
rectified.
29. To this limited extent, the second impugned judgment dated
25.07.2019 is overturned, and the consent decree recorded by the learned
Single Judge’s judgment dated 14.02.2019 stands modified.
III. Final Conclusions
30. At this stage, this Bench would like to register its displeasure
at the Petitioner’s repeated and persistent efforts to re-agitate the question
of delivery of possession to the Respondent, in an attempt to circumvent
complying with the view taken by the High Court in the judgment dated
12.11.2014, which has now attained finality. Despite the clear direction
in that judgment to vacate possession in favour of the Respondent,
pending any adjudication on the separate proceedings for pos session
and specific enforcement initiated by Mr. Gosain, the Petitioner handed
over possession to Mr. Gosain in July, 2015. Possession has to this date
not been handed over to the Respondent, who has been dragged to the
court time and again due to the Petitioner’s conduct. This is an instance
of blatant disregard for the Court’s orders, and an abuse of judicial
process.
31. Hence the present petitions are disposed of, with direction to
the Petitioner to take steps for handing over possession of the suit property
measuring 5,472 sq. ft. to the Respondent within eight weeks from today,
without fail. Further, the Registry is directed to expeditiously release the
arrears of mesne profits, if any, already deposited by the Petitioner before
this Court to the Respondent. The Petitioner is further directed to pay to
COMPACK ENTERPRISES INDIA (P) LTD. v. BEANT SINGH
[MOHAN M. SHANTANAGOUDAR, J. ]
the Respondent all arrears as directed in order dated 14.2.2019, with the
limited modification that the mesne profits are to be treated as increasing
by 10% every alternate year, from 2009 till the date of hando ver of
possession.
32. The Petitioner is additionally directed to pay costs of
Rs. 1 lakh to the Respondent as stated in the impugned order da ted
25.7.2019.
33. The Special Leave Petitions stand disposed of accordingly.
Divya Pandey Petitions disposed of.