Kohday Engineering Ltd. vs Bharat Dynamics Ltd. and Others

S.V. Maruthi, J.—This revision is filed against the order of the learned District Munsif, Sangareddy in E.P. No. 23 of 1991 in O.S. No. 178 of 1989.

Plaintiff is the petitioner before this Court. He filed the suit O.S.No. 178 of 1989 for a permanent injunction restraining the defendants-respondents from engaging any other agency or itself to complete the work.

It is necessary to refer to certain facts leading to the filing of the suit before considering the issue that arose for consideration in the revision petition.

Township Package-II (Konkur) work was entrusted to the petitioner by the respondents, vide work order dated 14-6-1988. The petitioner undertook the work, but, however, since he was expected to get the drawings and samples approved by the respondent No. 3, there was considerable delay in execution of the work. According to the petitioner, the delay was entirely due to the default of the respondents in giving approval. According to the work order, the entire work should be completed within 9 to 12 months reckoned from the 15th day of issue of Letter of Intent. Since the work could not be completed within the stipulated period, the 1st respondent issued a letter dated 27-9-89 rescinding the work order issued in favour of the petitioner. Since there was a threat of the respondents engaging the services of some third party contractor to complete the work, without settling the bills of the petitioner, petitioner filed the suit O.S.178 of 1989 on the file of the District Munsif Court, Sangareddy. However, before the learned District Munsif, a compromise memo was filed by both the parties and the learned District Munsif passed a decree in terms of the memo of compromise. The judgment and decree of the learned District Munsif reads as under:

"Judgment: The both parties have settled the matter and filed a compromise memo. In view of the compromise memo, the suit is disposed without costs."

Decree: 1. That the suit be and is hereby disposed of without costs as per terms and conditions of the compromise memo which is appended herewith."

The memo of compromise entered into by the parties reads as follows:

"Memo

In pursuance of the 1st defendant''s letter dt.13-10-1989 issued to the plaintiff, the parties are agreeable to be present on 23-10-1989 at 10-00 a.m. for taking joint measurements of the work executed by the plaintiff and the materials left on site and complete the same by 23-11-1989 to enable the preparation of the plaintiff''s final bills and settlement in accordance with the terms and conditions of the work order issued to the plaintiff in respect of the subject contract."

According to the petitioner, the parties met on 23-10-89 as per the compromise memo and joint measurements of the work executed by the petitioner and the materials left on the site were taken. However, as per the compromise memo, the defendants have not settled the bills and therefore he was compelled to file E.P.23 of 1991 claiming Rs. 1,14,90,885-20. The Execution Petition was dismissed by the learned District Munsif on the ground that the compromise decree is not executable and that the Court which passed the decree has no pecuniary jurisdiction.

The main contention of the petitioner is that the original executing court cannot go behind the decree and he relied upon the judgment of the Calcutta High Court in Gosto Behari Pramanik Vs. Sm. Malati Sen and Others, wherein it was held that a decree based on compromise between the parties to a suit is not void or a nullity merely because it involves an amount which exceeds the pecuniary limits of jurisdiction of the Court that passed it. He also brought to my notice a decision of this Court in Vanthala Appannamimnayaralu v. Bandi Sreeramulu 1978 (1) An.W.R. 440 wherein it was held that "the decision of a Court shall not be reversed purely on technical grounds like lack of territorial or pecuniary jurisdiction unless it has resulted in failure of justice and the objection to the lack of jurisdiction was taken at the earliest possible time".

The learned counsel further submitted that the original suit was filed for a permanent injunction restraining the defendants from engaging any other contractor to complete the work. However, the suit was compromised and the terms of the compromise were incorporated in the decree and the first part of the compromise decree was executed and the second part of the decree is yet to be executed.

Learned counsel for the respondents submitted that the so called compromise decree is not a compromise decree within the meaning of Section 2(2) of the Civil Procedure Code. It is only an order, and, therefore, it is not executable. He also submitted that in pursuance of the compromise, measurements were taken by the plaintiff and the defendants and amounts were arrived at and thereafter final bills were prepared in accordance with the terms and conditions of the work order issued to the plaintiff, leaving an amount of Rs. 9,18,355.70 ps. as due from the plaintiff itself towards its liability and an amount of Rs. 9,05,554-00 was recovered under intimation to the plaintiff from the cost of the material of the plaintiff which was in the custody of the defendants, sold by the plaintiff to the National Building Construction Corporation limited. The learned counsel also brought to my notice paragraph 5 of the counter-affidavit filed before the learned District Munsif in the Execution Proceedings:

"5. The defendants repudiate the details of the statement of amounts filed by the plaintiff alleging them to be due from the defendant Bharat Dynamics Limited and affirm that the details are as set out in the abstract of costs appended to this Counter, filed by the defendants. The deductions, reimbursements, retentions and recoveries set out in the appended abstract are entirely in accordance with the terms and conditions of the work order, leaving a net amount payable by the plaintiff as Rs. 56,61,122-70 ps. and after giving credit to the encashed bank guarantees in an amount of Rs. 47,42,770 -00, an amount of Rs. 9,18,351-70 ps. was due to the defendant Bharat Dynamics Limited by the plaintiff. This amount was adjusted out of the proceeds of the materials of the plaintiff sold to National Building Construction Corporation under the authorisation of the plaintiff."

In other words, the case of the respondents is that the compromise decree is not fully executable and that in pursuance of the compromise decree, there was a settlement of the dues payable to the petitioner and after such settlement, it was found that an amount of Rs. 9,05,554-00 was due to the respondents and the said amount was recovered. In view of the final settlement of the bills, the compromise decree was fully executed.

The learned District Munsif held that there was no claim in the main suit itself for recovery of amount as claimed in the memo filed by the parties while compromising the case and, therefore, there is no decree which is executable-He also observed that the decree was passed in an injunction suit requesting to restrain the defendants from appointing any new agency to complete the work entrusted which was ultimately settled through a compromise. The suit was valued for Rs. 1,000/- and a court fee of only Rs. 111/- was paid. The relief claimed in the E.P. was for Rs. 1,14,90,885-20 ps. which is beyond the pecuniary jurisdiction of the Court. There is no contract or specific agreement between the parties even at the time of entrusting the work and much less about the payment. According to the learned District Munsif "In fact according to the both parties all these things were settled at the time of compromise only basing on it the suit was decreed, in the terms of compromise. Now that as stated by the counsel for the decree-holder, I cannot interpret the several clauses and of presumptions without any clear proof or failure of non-compliance of compromise and further in the absence of proof of any payment due to the decree-holder the execution of decree for such huge amount does not arise and not accepted. There is no point for settlement particularly for any amount due from the defendant and there is no specific mention about it. I can interpret and go deep into the records for consideration only when there is no specific claim. But, in this instant case, no such claim was raised in O.S.No. 178/89. Therefore, I totally accept the contentions raised by the counsel for respondents judgment debtors and the execution petition is dismissed".

In other words, according to the learned District Munsif, since the original suit is for injunction and as there is no specific claim for a particular amount, the decree is not executable. He also says that since the amount claimed in the E.P. is beyond the pecuniary jurisdiction of the Court which passed the decree, the Court has no jurisdiction to pass the decree.

It is now well settled that the executing Court cannot go behind the decree and in view of the judgment of the Calcutta High Court, the order of the District Munsif refusing to execute the decree, on the ground of pecuniary jursidiction, cannot be sustained. The learned District Munsif has not given any reasons as to why the decree is not executable, except saying that the original suit is filed for a permanent injunction and it was not a suit claiming a specific amount. According to the counter-affidavit filed by the judgment-debtors, there was a settlement between the decree holder and the judgment debtors and in pursuance of which an amount of Rs. 9,05,554-00 was recovered from the petitioner and that the decree is not executable. The Court below has not considered the claim of the judgment-debtors that there was a settlement in pursuance of the compromise decree and also failed to give any reasons why the decree is not executable except saying that the original suit itself is for an injunction and not for recovery of money. The fact that the original suit is not for recovery of money and is for injunction, cannot be a ground for holding that the compromise decree is not executable. The learned District Munsif has not given any finding supported by reasons why the decree is not executable. He has also not considered the claim of the respondents that there was a settlement. If there was a settlement, pursuant to a decree of compromise, the question of decree not being executable does not arise.

I am, therefore, of the opinion, that the learned District Munsif cannot go into the question of pecuniary jurisdiction in the execution proceedings. I, therefore, set aside the order of the learned District Munsif and remand the matter to the District Munsif, Sangareddy to consider the issue as to the executability or otherwise of the compromise decree, in the light of the statements made by the judgment-debtors in the counter-affidavit filed by them in the execution proceedings.

C.R.P. is accordingly allowed and remanded. There will be no order as to costs.