Suit – Relief against the transfer of property – Execution of consent decree – The dispute was with respect to a property – The dispute was between the appellants- original plaintiffs (PA Group) and respondent nos. 1 to 6-original defendant nos. 1 to 6 (RA Group) and also between original defendant no. 10-Developer/Builder – The disputed property was of K.F. Pvt. Ltd. – In the said Company, 25% of the shareholding was with M.P. Recycling Company (Jointly held by plaintiffs and defendants nos. 1 to 6) and the remaining 75% of the shareholding with defendants nos. 1 to 6 in their individual capacities – According to the plaintiffs, defendants nos.
1 to 6 entered into a purported Development Agreement with defendant no. 10, to develop the disputed property behind the back of plaintiffs – As per plaintiffs, the defendants nos. 1 to 6 received Rs. 45 crores from the developer and 15 flats & 72 car parking spaces under the development agreement – According to the plaintiffs, the defendant nos. 1 to 6 did not give any rights/ benefits in the said property to them – This led to the filing of the suit – During the pendency of the suit, the suit came to be settled and it was disposed of in accordance of the consent terms – As per plaintiffs, the developer had in accordance with the consent terms executed the letter of allotment in ‘Annexure E’ in respect of the 8 apartments, which were to fall in the share of the plaintiffs, but defendant nos. 1 to 6 refused to abide by the consent terms and counter-sign the letter of allotment as per ‘Annexure E’ – The plaintiff initiated proceedings for the execution of the consent decree viz. for execution of the document at ‘Annexure E’ – The execution application was rejected by the Single Judge of the High court and it was observed that unless and until the supplementary consent terms are entered into between the parties, there is no obligation on the part of defendant nos. 1 to 6 to execute the letter of allotment in the form of ‘Annexure E’ – The Division Bench of the High Court confirmed the judgment and order passed by the Single Judge of the High Court – On appeal, held: From the consent terms, it appears that both the parties – PA Group and RA Group decided to resolve and settle the other disputes also i.e. the other larger companies and its constituents – The entire consent terms/ consent decree is required to be acted upon and/ or implemented by both the parties otherwise, the object and purpose to resolve all the disputes will be frustrated – Thus, there cannot be any execution of partial consent terms/ consent decree – Also, the further execution of supplemental consent terms/ family arrangement is required to be executed between the parties, considering the relevant terms of settlement – The both Single Judge as well the Division Bench were justified in holding that the execution of the further supplemental consent terms/ family arrangement is must – Therefore, both the parties directed to fully comply with the consent terms/ consent decree and enter into the further supplemental consent terms/ family arrangement after following the modalities with respect to valuation, bidding etc. – Also, RA Group to counter-sign ‘Annexure E’ letter with respect to 8 flats as per list at ‘Annexure A’ to the consent terms for which the developer had issued letter – However, it is further directed that till the consent terms/consent decree is fully implemented by both the parties and the supplemental consent terms/family arrangement is entered into/executed, the PA Group shall not alienate in any manner the said 8 flats.
Disposing of the appeals, the Court
HELD: 1. Having heard the respective parties and considering the relevant terms of the settlement, this Court is of the opinion that further execution of supplemental consent terms/family arrangement is required to be executed between the parties. For whatever reasons, the further supplemental consent terms have not been entered into between the parties. Therefore, as such, considering the fact that the parties entered into the consent terms/settlement for a complete parting of ways between the parties and so aimed at bringing about an eventual complete quietus to the disputes between the parties and even parties entered into the consent terms/settlement to resolve and settle the disputes in relation to the subject matter of AISCO, IMTC, Kash Foods, Orbit Arya Commercial Premises and the disputes in relation to the larger Arya Group of Companies and its constituents, which were beyond the dispute in the civil suit, the entire consent terms/consent decree is required to be acted upon and/or implemented by both the parties. There cannot be any execution of partial consent terms/consent decree. If the submission on behalf of the plaintiffs is accepted and the 8 flats as per list at ‘Annexure A’ are transferred absolutely and without any condition in favour of PA Group without there being any further supplemental consent terms/family arrangement, in that case, the entire object and purpose of entering into the consent terms/settlement to resolve all the disputes between the parties will be frustrated. Both the parties to the consent terms/consent decree are required to fully comply with the terms of settlement/the consent terms and the consent decree. One party cannot be permitted to say that that portion of the settlement which is in their favour be executed and/or complied with and not the other terms of the settlement/consent terms/consent decree. Under the circumstances, as such, both, the Single Judge as well as the Division Bench of the High Court are justified in holding that the execution of the further supplemental consent terms/family arrangement is must and there cannot be any partial execution of the consent terms/consent decree.[Para 6][789 G-H; 790 A-F]
2. Even in the case of Hari Shankar Singhania, the decision which has been relied upon by the appellants, this Court has observed that a family settlement is treated differently from any other formal commercial settlement as such settlement in the eye of the law ensures peace and goodwill among the family members. It is further observed that technicalities should not be put at risk of the implementation of a settlement drawn by a family, which is essential for maintaining peace and harmony in a family. It is further observed that it is the duty of the court that such an arrangement and the terms thereof should be given effect to in letter and spirit. [Para 7][790 F-H]
3. On a conjoint reading of all the terms of the settlement, it can be said that there is an implied term that both the parties have intended that on one hand as agreed between the parties further supplemental consent terms/family arrangement is to be entered into and on the other hand there shall be transfer/allotment of 8 flats as per list at ‘Annexure A’ in favour of PA Group. Any other interpretation would lead to unworking of the consent terms/consent decree. As observed hereinabove, if the consent decree is partially executed and the other parts of the consent terms are not implemented and/or acted upon, the object and purpose to resolve all the disputes amicably between the parties and to put an end to all the disputes between the parties will be frustrated. [Para 8.1][791 D-F]
4. However, at the same time, one cannot lose sight of the fact that the 8 flats as per list at ‘Annexure A’ are allotted in favour of PA Group and rest of the 7 flats as per list at ‘Annexure B’ are allotted in favour of RA Group. At present, the RA Group is in possession of all the 15 flats. The RA Group is also the beneficiary of Rs.45 crores. Therefore, to strike the balance between the parties, the RA Group can be directed to countersign ‘Annexure E’ letter issued by the Builders with respect to 8 flats as per list at ‘Annexure A’ which are allotted in favour of PA Group. However, with a caveat that till the further supplemental consent terms/family arrangement as agreed between the parties under the consent terms/consent decree is not executed, PA Group may not be permitted to sell, transfer and/or deal with the said flats till the consent terms/consent decree is fully acted upon and implemented between the parties. At the same time, both the parties are required to be directed to fully implement the consent terms/consent decree and to enter into further supplemental consent terms/family arrangement, the modalities of which are mentioned in the consent terms itself, at the earliest and within a reasonable time. Until then, both the parties to abide as per the Restraint order as per clause 22 of the consent terms, except the 7 flats as per list at ‘Annexure B’, which are allotted in favour of RA Group. [Para 9][791-F-H; 792-A-C]
5. The impugned judgment and order passed by the Division Bench of the High Court and that of the Single Judge are hereby modified as under: i) Both the parties – PA Group & RA Group are directed to fully comply with the consent terms/consent decree and enter into the further supplemental consent terms/family arrangement after following the modalities to be worked out with respect to valuation, bidding etc. as mentioned in the consent terms itself. Both the parties are directed to cooperate to fully comply with the consent terms/consent decree and fulfil their respective part of obligation under the consent terms/consent decree; ii) that the RA Group shall counter-sign ‘Annexure E’ letter with respect to 8 flats as per list at ‘Annexure A’ to the consent terms for which the original defendant no.10 – Builder had already issued a letter. However, it is directed that till the consent terms/consent decree is fully implemented by both the parties and further supplemental consent terms/family arrangement, as ordered hereinabove, is entered into/executed, the PA Group shall not alienate and/or transfer in any manner whatsoever the said 8 flats. At the same time, it will be open for original defendant nos. 1 to 6 – RA Group to deal with the 7 flats as per list at ‘Annexure B’ which are allotted to them. At the same time, both the parties to act as per the Restraint order as per clause 22 of the consent terms. The original injunction granted by the Single Judge which has been continued till date is directed to be continued till the execution of the further supplemental consent terms/family arrangement except the 7 flats as per the list at ‘Annexure B’ which are allotted in favour of RA Group. [Para 10][792 B-H]
Saradamani Kandappan v. S. Rajalakshmi & Ors.
(2011) 12 SCC 18 : [2011] 8 SCR 874 – not applicable.
Manish Mohan Sharma & Ors. v. Ram Bahadur Thakur Ltd. & Ors (2006) 4 SCC 416 : [2006] 3 SCR 97 ; Kale & Ors. v. Deputy Director of Consolidation & Ors. (1976) 3 SCC 119 : [1976] 3 SCR 202 ; Satya Jain & Ors. v. Anis Ahmed Rushdie & Ors. (2013) 8 SCC 131: [2013] 3 SCR 319 ; Hari Shankar Singhania & Ors. v. Gaur Hari Singhania & Ors. (2006) 4 SCC 658 : [2006]
3 SCR 726 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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