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Judgment
Justice (Retd.) V. G. Bisht, Member (J)]
By these applications, the Applicants seek declaration that the consent terms dated 7th January, 2023 pursuant to the mediation proceeding held by Shri. M. Raghunatha Bhat, Mediator are unenforceable and are liable to be set-aside.
Brief facts:
In terms of order dated 11th October, 2022 passed in C.A. No. 1036/2020 the mediation process was directed to be held between the parties who are before this Tribunal and accordingly consent terms were recorded between the parties on 7th January, 2023. However, on 9th January, 2023 one of the Applicant herein questioned the decision arrived at in the mediation proceedings and raised her objections to mediator vide her e-mail dated 9th January, 2023 (Exhibit-A). This e-mail was duly replied by the Mediator (Exhibit-B).
According to the Applicants there were many changes from the original draft of the consent terms without any discussion. Even the reply sent by the mediator shows that annexures to the so-called settlement dated 7th January, 2023 were also not finalized by all parties and therefore could not have been annexed to the alleged consent terms. This being so and the fact that annexures were not finalized, it cannot be said that the consent terms dated 7th January, 2023 are final and conclusive.
The Applicants in the light of above next contend that in the aforesaid circumstances it cannot be said that consent terms have been arrived between the parties voluntary without any pressure and coercion, rather the circumstances during the mediation proceeding demonstrate that the compromise/consent terms were arrived at under coercion, undue influence and duress, therefore, the same are not enforceable. Moreover, the said consent terms were arrived at in violation of the order of this Tribunal dated 23rd March, 2018.
Lastly, the Applicants contend that during the entire mediation proceedings the respondents kept on dominating over the Applicant no. 1 particularly and because of the Respondent’s pressure, anger, emotional outbreaks the whole mediation proceeding was vitiated. Therefore, the present applications.
Mr. Sushil Nimbalkar, Learned Counsel for the Applicants, has primarily assailed the consent terms on three main grounds viz:-
i) The consent of the parties to the settlement was not free consent and was arrived at under coercion, duress and undue influence.
ii) Consent terms were arrived at against directions of this Tribunal given in the order dated 23rd March, 2018 and;
iii) In terms of the judgment of the Hon’ble Apex Court given in Motiram Vs. Ashok Kumar & Anr. 2011 (1) SCC 466, the process of mediation, being confidential proceedings, the mediator is not allowed to write anything which was discussed or proposed to be done during the mediation proceedings and despite that the mediator in the present case submitted detailed report and therefore on this count alone the report, so submitted by mediator, is liable to be rejected.
Mr. Shrenik Gandhi, learned counsel for the Respondent, on the other hand, vehemently opposes the aforesaid submissions advanced by the learned counsel for the Applicants and submits that there is absolutely nothing on record to suggest even remotely that the consent terms were arrived at between the parties by exercising coercion, undue influence or duress upon the Applicants. According to the learned Counsel, if the consent terms are read carefully then it would reveal that the parties arrived at consent terms voluntarily and out of their own freewill without any pressure, undue influence or coercion. There being no merits in the applications the same are liable to be dismissed summarily, argued learned Counsel.
We have given our anxious consideration to the submissions advanced by learned Counsel for the parties. We have also carefully and cautiously gone through the consent terms dated 7th January, 2023.
To our mind, the main thrust of argument of learned Counsel for the Applicants is that the whole process of mediation was vitiated as there was no free consent and the consent was marred by duress, coercion and undue influence. These are very serious allegations and need a guarded and closure scrutiny. Before that, we would like to have recourse to the relevant provisions of Indian Contract Act, 1972 (“the Contract Act” for short)
Under Section 10 of the Contract Act, for the validity of a contract, it is not only necessary that there should be a consent, but also the consent must be free. Sections 14-19 of the Contract Act deals with free consent, actions which vitiates consent and ultimately the status of and remedies against agreement made in this manner. Coercion, undue influence, misrepresentation and fraud are the named actions vitiating free consent. Pertinently enough, the duress is not even one of these actions. Ordinarily the court presumes the consent, wherever it exists, to be free, unless there be some particular circumstances to justify and departure from a general rule.
If we consider the concept of coercion as is defined under Section 15 of the Contract Act, it only recognizes such actions to vitiate free consent if they are forbidden by Indian Penal Code, 1860. Since, duress has also been alleged by the Applicants, the same cannot be equated with coercion and the same would have to be ruled out.
The Applicants have not been able to demonstrate decisively any act on the part of respondents, during the course of execution of consent terms, such as to amount to an offence under the Indian Penal Code. The particulars of all facts which go to prove coercion and establish them are missing. Merely, saying that the Applicants were put under coercion would not tantamount to an offence under the Indian Penal Code as is contemplated by Section 15 of the Contract Act. This being so, element of coercion does not exists.
Next is undue influence. Section 16 of the Contract Act defines undue influence. It requires that one of the parties have real or apparent authority over the other and the said party is in a position to dominate the will of the other and uses that position to obtain an undue advantage over the other. No such requirement of law, in the instant case, is forthcoming. Particulars of undue influence are not set-forth in the applications in sufficient details. All that the Applicants allege is that the Respondents kept on demanding over the Applicant no. 1 particularly and because of their pressure, anger, emotional outbreaks the consent terms came to be executed. There is absolutely no elaboration as to the kind and nature of pressure anger or emotional outbreaks. The allegations are quite vague and do not enable us to elucidate and entertain this terminology like anger, emotional outbreaks in their proper perspective. There is no evidence of over powering influence and that the consent terms that is brought about is immoderate and irrational.
On the contrary, we are mindful of the fact that in the case in hand parties stood in equal position. Having regard to the class of persons i.e. parties before us, who are none other than brothers, sisters and mother inter-se and of full age and sound mind and who executed consent terms are bound by their own act. If the Applicants want us to set-aside the consent terms, they must prove some substantial reasons why that should be done.
The last ground is that of duress. The party alleging duress needs to establish that the duress was cause of entering into the contract and show that had there been no ultimate pressure from the opposite party, the agreement could not have been executed at all or at least on the terms in which it was agreed.
We have already pointed out in the foregoing paragraphs that there is no satisfactory explanation of coercion, undue influence and the so is case of duress. Although it is also pleaded by the Applicants that if the consent terms are forced to be continued, the parties will never be able to conduct the business independent of each other. But the consent terms itself go to show and more particularly paragraph 11.8 allays the fears, harbored by the Applicants when it says that-
“The parties agree, declare, confirm and acknowledge that, these Consent Terms are agreed and executed, to avoid any future dispute or differences, between the members of the Salunke Family and these Consent Terms are in the best interest of the entire Salunke family and each member thereof.”
Having cleared the grounds raised in law by the learned Counsel for the Applicants, it is noteworthy that the consent terms were executed on 7th January, 2023 whereas an e-mail was shot down on 9th January, 2023 by one of the Applicant to the Mediator raising all the concerns. Why she kept quiet for two days is no where explained. It is also pointed out from the reply of the Mediator dated 14th January, 2023 that he was also not in possession of certain annexures and on this ground also the Applicants not only questioned the role of the Mediator but also that no consent terms could have been arrived at in absence of those annexures.
We make it clear at the threshold that no specific or precise motive is attributed on the part of the Mediator by Applicants in her e-mail dated 9th January, 2023. If the reply of the Mediator is read carefully we notice that the annexures were not sent to him either by the Counsel of the Respondent or by the parties themselves. It cannot be said that parties were not aware of those annexures particularly when they whole heartedly signed the consent terms on 7th January, 2023. The Applicants cannot take the advantage of the reply of the Mediator now.
Consent terms is also assailed on the ground that it is against the directions of this Tribunal given in the order dated 23rd March, 2018. We have gone through the entire record and are unable to lay over hands on the said order. Assuming for the sake of argument that certain directions were given then ultimately the parties to the proceedings are the best masters of their interest and know what is good in their interest and in absence of any extraneous reasons, if they are able to arrive at consent terms then there is no reason to doubt the same. In the present case we have considered all the circumstances which are unsuccessfully raised by the Applicants herein.
The last ground banked upon by the Ld. Counsel for the Applicants is the judgment given in the case of Motiram (Supra). In the said case the Hon’ble Apex Court held that if the happenings in the mediation proceeding are disclosed, it destroys the confidentiality of the mediation process.
The Hon’ble Apex Court admittedly had given caution to the Mediators in respect of maintaining the confidentiality of mediation proceeding. In the said case also the mediator had mentioned the proposals made by the parties which was not liked by the Hon’ble Apex Court. However, it was not made a ground to reject the report of the Mediator. Therefore, this judgment does not further the case of Applicants.
From the above, we summarize that the Applicants have not been able to substantiate to the satisfaction of this Tribunal that the consent terms executed by the Parties are null and void, inoperative and incapable of being performed as the same violated the provisions under Section 14 to 19A of the Contract Act. We are unable to infer and comprehend anything from the terminology used by the Applicants such as undue influence, duress, coercion. These are only conjectures and mere probabilities or suspicion and do not take the place of proof.
For the aforesaid reasons, we are inclined to dismiss these applications. Hence following order.
ORDER
Interlocutory Application No. 143/2023 & 147/2023 are dismissed.
In view of the dismissal of IA Nos. 143/2023 & 147/2023 Transfer Company Petition No. 56 of 2014 also stands disposed of.
All the pending IAs’/MAs’ filed in the present Transfer Company Petition shall stood disposed of having become infructuous.
File be closed and consigned to record.