GUPTA STEEL INDUSTRIES versus M/S. JOLLY STEEL INDUSTRIES PVT. LTD. AND ANR.

Citation: [1996] SUPP. 6 S.C.R. 669 · Decided: 23-09-1996 · Supreme Court of India · Bench: K. RAMASWAMY, G.B. PATTANAIK · Disposal: Disposed off
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Judgment (excerpt)

GUPTA STEEL INDUSTRIES 
v. 
M/S. JOLLY STEEL INDUSTRIES PVT. LTD. AND ANR. 
SEPTEMBER 23, 1996 
[K. RAMASWAMY AND G.B. PATTANAIK, JJ.] 
Code of Civil Procedure, 1908 : 
Compromise decree-Modification of-Pending the first appeal in the 
High Court, a compromise decree was passed whereunder respondents were 
required to deposit in t1ial cowt ce1tain amounts and the appellants to hand 
over possession of the la11d and machine1y to the receiver-Respondents did 
not deposit the amou11t within time-High Cowt accepted delayed payment 
A 
B 
c 
by the respondents and directed the appellant to pay damages for use and 
occupation as may be detennined by civil cowt-Held, as a principle of law, 
High Court was b1c01Tect in inteif ering with and modifying the consent decree D 
unless p01ties agree for the same-However, it would not be justified to 
inteif ere with the order at this distance of tim~irections given to trial court 
to .conduct an inquiry whether the appellant was prevented by the respondents 
to remain in possession from working out the factory and decide the question 
of damages accordingly-If the amount deposited to the credit of the suit had 
not been invested in interest eaming secwity, respondents would pay interest 
at the commercial rate from the date of deposit till date of judgment of the 
High Court. 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 12995-
13000 of 1996 Etc. 
From the Judgment and Order dated 18.7.96 of the Bombay High 
Court in C.A. Nos. 3588/91, 1686, 3580/92 1415 and 1414 of 1993. 
Bhimrao Naik and A.M. Khanwilkar for the Appellant. 
E 
F 
Soli J. Sorabjee, J.K. Das and J. Savla for the Respondents. 
G 
The following Order of the Court was delivered : 
Leave granted. 
We have heard learned counsel on both sides. 
669 
H 
670 
SUPREME COURT REPORTS (1996) SUPP. 6 S.C.R. 
A 
These appeals by special leave arise from the order of the Division 
Bench of the High Court of Bombay made on July 18, 1996 in Civil 
Application Nos. 3588-89/91 in FA No. 1 & 2/90. 
The admitted position is that pursuant to a compromise entered into 
betwe.en the parties, pending the first appeal in the High Court, a com-
B promise decree came ·to be made by the Division Bench on 12.4.1991. 
Clause (2) of the Compromise Decree reads as under : 
"2. (a) The parties agree that Jolly Steel Industries Pvt. Ltd. and 
· Jolly Torsteel Pvt. Ltd., the respondents herein and the Original 
C 
plaintiffs in Suit No. 446 of 1987 and Suit No. 447 of 1987, 
respectively, shall between them deposit in the.Trial Court, a sum 
of Rs. 15,00,000 (Rupees Fifteen Lakhs only) in the aggregate on 
or before 31st May, 1991 and a further sum of Rs. 10,40,000 
(Rupees Ten Lakhs and forty thousand only) on or before 29th 
June, 1991; 
D 
E 
(b) These amounts are to be deposited in Suit No. 446 of 1987 in 
the Court of Additional Civil Judge, Senior Division, Pune, on 
account of over payment by the Appellants (Original defendants) 
as the defendants were not liable to pay and the Respondents 
(Original plaintiffs) were not entitled to receive the same. 
(c) The Appellants (Original Defendants) are at liberty to 
withdraw the aforesaid amounts." 
Admittedly, Rs.12 lakhs was deposited after expiry of the last date, 
p 
namely, June 29, 1991, after one month. In the meanwhile, the respondents 
filed an application for extension of time in the trial Court. That was 
dismissed on the ground that it had no jurisdiction. Consequently, the 
application came to be filed in the High Court. Similarly under Clause 5(a) 
the appellants also agreed to hand over possession of the disputed land 
and the machinery to the receiver on or before 31st March, 1992. In view 
G of the default committed by the respondent, the appellants came to file an 
application, on the basis of which the High Court passed an order to 
maintain the status quo on March 27, 1992. The appellants have taken out 
contempt proceedings against the respondents in which another Division 
Bench of the High Court passed an order on July 18, 1996 stating that the 
H respondents have prevented the appellants from taking possession due to 
GUPTA STEEL INDS. v. JOLLY STEEL INDS. (P) LTD. 
671 
the factory having been locked by the respondent. Nonetheless, no action A 
was taken on the contempt petition. In the impugned order, the Division ' 
Bench passed an order accepting the delayed payment by the respondents 
and directed the appellants to pay damages for use and occupation as may 
be determin
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