LexSMT. SOVA RAY & ANR. versus GOSTHA GOPAL DEY & ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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SMT. SOVA RAY & ANR.
v.•
GOSTHA GOPAL DEY & ORS.
MARCH 18, 1988
(A.P. SEN AND LALIT MOHAN SHARMA, JJ.]
Agreement-Whether an order of Court based on consent of
parties can be modified by Court at the instance of one party. without
further consent of other party-'-Whether it is open to Court to alter terms
of compromise otherwise-Whether a default clause in agreement is
penal in·nature and illegal:·
The appellants had filed a suit for partition of property claiming
1/3rd share. A preliminary decree was passed by .the trial c~urt.
Respondent No. 1 (defendant No. 9 in the suit) challenged the decree
before the High Court in first appeal. The appeal was disposed of on
compromise whereby the appellants plaintiffs' claim to l/3rd share was
accepted, but .it was agreed that half of the share of the plaintiffs would
go to the defendant No. 9, provided he paid Rs.40,000 to the plaintiffs
in two instalments, the first one of Rs. 10,000 by 3L 7.1979 and the
second of the remaining amount, by 28.2. 1980, failing which payment
within time, the decree passed by the trial court would stand confirmed
as per the terms of the compromise. The first instahnent was paid
within time, but the remaining amount was not paid. The defendant No.
9 made an application before the High Court on 28.8. 198 l for extension
of time for payment of the second instahnent. The High Court by its
order dated 31.8.1981 allowed the application. The appellants moved
this Court by special leave, challenging the said order dated 31.8.1981
of the High Court.
The appellants inter alia contended that an order based on the
consent of the parties could be modified only with the further consent of
the parties and it was not open to the Court to alter the terms otherwise.
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If the High Court had issued notice on the application for extension of G
time made by the defendant No. 9 to the plaintiffs-appellants, they
would have placed before the Court the circumstances showing that it
was against the cause of justice to allow the prayer of the defendant No.
9 and specially so after such a long delay. There was no justification
whatsoever for the High Court to condone the delay and extend the
period for deposit of the money, they contended.
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SUPREME COURT REPORTS
[1988] 3 S.C.R.
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The contesting respondents argued that the 6th term of the com-
promise dealing with the consequence of the default in payment of the
instalments was penal in nature and illegal, and that the clause ~eing
severable from the other terms of the compromise should be ignored. It
was further argued that it was not correct to suggest that the Court had
no power to permit the respondent No. l to make the deposit later.
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Allowing the appeal, the Court,
HELD: There was no merit in the argument that the impugned
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clause 6 of the agreement was illegal being penal in nature. It had to be
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noted that the plaintiffs had in the trial court obtained a decree for '
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partition for their I/3rd share in the suit properties and there was pre-
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sumption in favour of correctness of the decree. At the appellate stage,
one of the three branches of the parties, represented by the heirs of
Brajlll'pal, and uncle of the plaintiffs-appellants, was satisfied with the
share allotted to them and the interest of defendant No. 9, second uncle
of the plaintiffs, was identical to their interest. The situation was
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acceptable to the defendant No. 9 also but he wanted to acquire half the
share of the plaintiffs on payment of consideration, fixed at Rs.40,000.
The amount was to be paid by way of price. It had not been suggested
'by the defendant No. 9 or his heirs that the entire compromise should be
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ignored on account of the impugned clause 6 thereof. They had been
relying upon the compromise except the default clause which alone was
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sought to be ignored. Tliiit part of the compromise was in substance an
agreement for transfer by the plaintiffs of half of their share for a sum
of Rs.40,000 to be paid within stipulated time. The market price of the
property was higher, and a beneficial right was bestowed on the
defendant No. 9 to acquire the property for a considerably low amount.
In this background, the said defendant was subjected to the condition
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that if he had to take the advantage of the bargain, he was under a duty
to pay the stipulated amount within the time menExcerpt shown. Read the full judgment & AI analysis in Lexace.