N.K. RAJGARHIA versus M/S. MAHAVIR PLANTATION LTD. AND ORS.

Citation: [2005] SUPP. 5 S.C.R. 882 · Decided: 16-12-2005 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed

Judgment (excerpt)

A 
B 
N.K. RAJGARHIA 
v. 
MIS. MAHAVIR PLANTATION LTD. AND ORS. 
DECEMBER 16,2005 
(S.B. SINHA AND P.K.BALASUBRAMANY AN, JJ.] 
Code of Civil Procedure, 1908-0rder XXlll Rule 4.-Recovery suiJ-
Compromise between parties and consent decree passed for half of the 
c· amount-Part payment made and thereafter, settlement in execution 
proceedings-Consent order Jo the effect that in case of default in payment, 
decree holder would be entitled to execute the balance decree-Judgment 
debtor again defaulted, sought extension of time, grant of, by High Court-
Thereafter, judgment debtor paid amount in terms of consent order-However, 
claim of decree holder that original claim revived on default-Sustainability 
D of-Consent order, interpretation of-Held: Consent order is to be construed 
in entirety to ascertain its true intent and purport-Word 'decree' after word 
'balance' was used loosely-Sum which was waived did not form part of 
consent decree-It was merely a claim which did not fructifY into any decree-
Hence, commission of default does not entitle the decree holder to execute 
the balance decree-Furthermore, such settlement in execution proceedings 
E is permissible in /aw-Constitution of India, 1950-Article 136. 
Appellant filed recovery suit for Rs. 75 lakhs towards repayment of 
advance with interst and damages against the responde!Jt However, the parties 
entered into a compromise and the court passed a consent decree for a sum 
F of Rs. 41,69,110/- and respondents issue cheques. In terms of compromise 
clause in case of dishonour of cheque, the entire balance amount would be 
payable at one time failing which the decree holder was entitled to execute 
the decree for the same with interest. Respondent made only part payment 
and as such execution proceedings were initiated. Again parties entered into 
settlement with regard to the balance amount of Rs 42,04,222/- respondent 
G gave an undertaking that in case of dishonour of any of the cheques the decree 
holder would be entitled to execute the balance decree. Respondent again 
defaulted and execution application was filed. However, respondentfiled an 
application for extension of time for payment of decretal dues and High Court 
allowed the same. Aggrieved, appellant tiled an appeal. Division Bench of High 
H 
882 
J
N.K. RA.JGARHIA v. MAHAVIR PLANTATION LTD. 
883 
Court directed the respondent to present the cheques and in case of non- A 
encashment to initiate appropriate proceedings. Respondent was granted 
another extension. Thereafter, the judgment-debtor paid the entire amount 
with interest, in terms of the consent order. 
In the appeal, appellant-creditor contended that since the respondent 
failed to abide by its undertaking, the original claim of the appellant revived; B 
and that the High Court had no jurisdiction to grant extension of time for 
payment of the decretal dues without his consent. 
Respondent - debtor contended that this Court should not exercise its 
discretionary jurisdiction under Article 136 of the Constitution in favour of C 
the appellant since the entire amount stands paid; and that despite Rule 4 of 
Order XXIll of CPC, there does not exist any bar to enter into a compromise 
at the execution stage. 
Dismissing the appeal, the Court 
HELD: 1.1. An order of a court of law and, in particular, a consent order, D 
must be read in its entirety for the purpose of ascertaining its true intent 
and purport. It cannot be said that once a default is committed by the 
respondent, the appellant in terms thereof, would be ·entitled to execute the 
balance decree immediately which would mean he would be entitled to a further 
sum of about Rs. 41 lakhs, which was waived by him on the premise that the E 
respondent had agreed to settle the disputes. The word 'decree' after the word 
'balance', has been us.ed loosely. The matter might have been different ifthe 
amount payable under the compromise entered into by the parties in the 
execution case would have been less than the amount paid by the respondent 
to the appellant in terms of the consent decree passed originally. It is not so. F 
Whereas under the original decree, a sum of Rs. 41,69,110/- was payable, in 
terms of the consent order passed in the execution case, a sum of Rs. 
42,04,222/- became payable. Furthermore, the sum which was waived did not 
form part of the consent decree. It was merely a claim which never fructified 
into any decree. (889-E; 890-D-F) 
1.2. Order XXIII Rule 4 of CPC, 

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