Courts will be cautious in exercising inherent powers to interfere with a consent decree except when an exceptional or glaring error is recorded apparently: Supreme Court of India
Consent decrees are intended to create estoppels by judgment against the parties, thereby putting an end to further litigation between the parties. The court 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. However, this formulation is far from absolute and does not apply as a blanket rule in all cases. This auspicious judgment was recently passed by the Supreme Court of India in the matter of COMPACK ENTERPRISES INDIA (P) LTD. V BEANT SINGH [Special Leave Petition (Civil) No. 2224­2225 of 2021] by Honourable Justice Mohan M. Shantanagoudar. These petitions arise out of judgments of the High Court dated 14.02.2019 and 25.07.2019 wherein by the first impugned judgment the High Court disposed of regular first appeal against the judgment and order of the Additional District Court Delhi whereas in the second impugned judgment the HC disposed of a Review Petition concerning the first judgment. The facts of the case are, the case was filed for possession of a ground floor property in G.T. Karnal Road, Industrial Area, Delhi. Beant Singh is the owner of the suit property and he through M/s Channa Auto Agencies Ltd., of which he is a Director, executed a license agreement in favour of M/s Compack Enterprises for a period of 30 months in consideration for a monthly license fee of Rs. 28,000/ (hereinafter, 2000 Agreement’). Later, Compack Enterprises merged with Compack Enterprises India (P) Ltd. and the agreement continued with mutual consent of the parties and was later renewed in 2006. However, after the expiry of this renewed agreement, the possession of the property was not relinquished and hence a suit was filed for recovery of possession and mesne profits. The HC held that the admission made by the parties justify decreeing the suit for possession and directed that the possession of the entire suit property is to be handed over to the respondent. However, in the review petition, it was contended that HC erred in recording terms of the consent decree since, the judgment recorded that the mesne profits be increased by 10% every 12 months, instead of 10% increase every 24 months and that the possession of the entire suit property measuring 5,472 sq. ft. will be handed over when the documents on record showed that only 2,200 sq. ft was in possession. The Court relied on Gariwala v. Union Bank of India (1992) 1 SCC 31 to state that, “A consent decree would not serve as estoppel, 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 arithmetical errors, so as to make it conform with the terms of the compromise.“ Thus, the Court stated, “It is high time that the Petitioner stops making efforts to circumvent delivering possession of the suit property to the Respondent. 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 see no reason to interfere with this part of the consent decree.“ However, on the issue of mesne profits, the Court observed that “The learned Single Judge’s order has given rise to a lot of confusion. Given this background, and looking at the preponderance of probabilities, we are inclined to give the benefit of doubt to the Petitioner. Therefore, we hold that the intention of the compromise between the parties was that there should be a 10% increase in mesne profits 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.“
These petitions arise out of judgments of the High Court of Judge Rohini dated 23.09.2017 in Suit No 58395 2016 filed by the Respondent. Whereas by the second Review Petition No. 177 2019 filed by the Petitioner against the Ground Floor G.T. Karnal Road Industrial Area Delhi­110033 admeasuring 608 sq. yards (hereinafter ‘suit The Respondent Beant Singh is the owner of the suit in consideration for a monthly license fee of Rs. 28 000 ­ hereinafter ‘2000 Agreement’). On 1.04.2003 Compack Enterprises merged with Compack Enterprises IndiaLtd.and the 2000 Agreement continued with license fee to Rs.30 800 ­praying for a judgment on admission the Trial Court’s dismissal of this application the Respondent High Court by its judgment dated 12.11.2014 reversed the Trial Court’s dismissal and held that the admissions made by the thus directed that the possession of the entire suit property 10. On the question of mesne profits the Trial Court noted that suit property has still not been handed over to the Respondent despite the High Court’s order dated 12.11.2014. Instead the a. What is the area of the suit property for which Petitioner is 5 472 sq. ft11 SCC 678 Suvaran Rajaram Bandekar & ors. v. Narayan R. Bandekar & ors. 19. However this formulation is far from absolute and does not Gariwala v. Union Bank of India & ors. 1 SCC 31 has the compromise was vitiated by fraud misrepresentation or 20. The present Petitions thus must be answered in light of the that the first impugned judgment of the High Court dated the validity of that consent decree in the second impugned jurisprudence we would be cautious in exercising our inherent now refer to and answer the specific contentions raised by the 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 22. Further this question has already been settled by the High Court judgment dated 12.11.2014 in the earlier litigation for the entire area of 5 472 sq. ftNo. 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 and the Petitioner’s efforts to re­agitate this question in the present proceedings is a waste of this Court’s time and an abuse of the interest in the remaining 3 272 sq. ft. of the suit property there is no prejudice caused to the Petitioner by the order to vacate the 23. It is further an admitted position as recorded by the Trial Court that the Petitioner has not handed over possession to the Gosain instead in July 2015. This is despite the High Court’s judgment dated 12.11.2014 decreeing the suit for possession in 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 entire suit property of 5 472 sq. ft. to the Respondent and we see 25. As referred to supra Shri Mukul Rohatgi learned senior to have while recording the terms of the consent decree recorded a 26. On the contrary Shri Basava Prabhu S. Patil learned senior of the late learned Single Judge appearing in para 1 of the first impugned judgment dated 14.02.2019 to mean that the mesne i.e from 1.10.2009 1.10.2011 etc etc” has confused not only himself but also the parties to the litigation year i.e. from 2009 to 2011 in the example used by the learned mesne profits after every 12 months. The aforementioned the consent decree to bring it in conformity with the intended 23.09.2017 and the final decree dated 15.11.2017 passed by the Trial Court also awards a 10% increase only on each alternative year i.e. 01.04.2011 01.04.2013 01.04.2015 and so on. Further incorporated a 10% increase in license fee once every 30 months 2.5 years. Thus 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 that there should be a 10% increase in mesne profits every alternate year. The recording of a 10% increase after every 12 29. To this limited extent the second impugned judgment dated the judgment dated 12.11.2014 which has now attained finality Gosain the Petitioner handed over possession to Mr. Gosain in 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 the Respondent all arrears as directed in order dated 14.2.2019 with the limited by 10% every alternate year from 2009 till the date of handover of to the Respondent as stated in the impugned order dated