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CASE NO.: Appeal (civil)  5325 of 2003

PETITIONER: GANGADEEP PRATISTHAN PVT. LTD. & ORS.

RESPONDENT: M/S. MECHANO & ORS.                      

DATE OF JUDGMENT: 23/02/2005

BENCH: B.P.SINGH & ARUN KUMAR

JUDGMENT: J U D G M E N T (ALONGWITH THE RECORD OF S.L.P.(C) NO.12016 OF 2002)  

                B.P.SINGH,J.                      Application for condonation of delay in filing additional  documents is allowed.          In this appeal by special leave the appellants have impugned the  judgment and order of 16th August, 2002 of the High Court of  Judicature at Calcutta allowing the appeal of Respondent No.1 herein  and setting aside the consent decree passed by the learned Single Judge  of the High Court dated 12.1.1998. We may briefly refer to the                                                  ...2/-                         -2-

facts of the case so far as they are relevant for the disposal of this  appeal :         The Respondent No.1 herein was running a factory in a part of  the premises in question measuring about 1040 sq. ft. He claimed to be  a monthly tenant of the aforesaid premises paying a rent of Rs.200/- per  month. The aforesaid respondent filed a suit for injunction before the  second Munsif, Alipore Court to restrain his landlord from making any  construction on the premises in question. The suit was ultimately  transferred to the High Court of Calcutta and was registered as E.O.  Suit No.11 of 1996. The landlord disputed the tenancy claimed by the  respondent herein and in the written statement a counter claim was  made for recovery of possession from him. The appellant herein  purchased the premises from the former landlord of Respondent No.1.  It is the case of the appellant that he entered into a compromise with the  contesting respondent under which Respondent No.1 agreed to vacate  the premises subject to fulfilment of certain terms and conditions which  included payment of Rs.7.50 lacs to him. The case of the appellant is  that the consent                                                  ...3/-                         -3- terms were drawn up on 29.12.1997 which was signed by the parties  including Respondent No.1 on the basis of which a prayer was made  for passing a consent decree. The consent decree was passed on  12.1.1998. According to the appellant the Respondent No.1 vacated the  premises in terms of the settlement reached between the parties.         On 11th February, 1998 Respondent No.1 herein filed an  application before the learned Single Judge who had passed the decree  praying for recalling of the order decreeing the suit on the basis of the  consent terms, alleging that the consent of Respondent No.1 had been  obtained under duress and coercion. The consent allegedly given by  Respondent No.1 was therefore, vitiated and the decree also stood  vitiated by such reason. Learned Judge by his Order dated 24th March,

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1998 rejected the said application.         After rejection of the application for recalling the Order dated  12.1.1998, Respondent No.1 for the first time filed an appeal against  the consent decree dated 12.1.1998 on 19.8.1998, i.e. after about seven  months. No doubt it was accompanied by an application for  condonation                                                  ...4/-          

                       -4- of delay. During the pendency of the appeal, the High Court appointed  a Receiver namely Mr. Basudeo Banerjee. The High Court also passed  an order to the effect that application for condonation of delay in filing  the appeal as well as the appeal be heard together. The appellant herein  was aggrieved by this order and filed a special leave petition before this  Court which was disposed of by this Court by Order dated November  20, 2001 directing the High Court to consider the question of  condonation of delay and maintainability of the appeal first, before  considering the merit of the appeal. By Order  dated 3rd May, 2002 the  High Court condoned the delay in preferring the appeal. This order was  challenged before this Court by the appellant by filing a special leave  petition No.12016 of 2002. However, the High Court by Judgment and  Order dated 16.8.2002 decided the appeal on merit. This judgment and  order dated 16th August, 2002 is the subject matter of challenge before  us.         Before adverting to the findings recorded by the High Court a  few other facts need to be noticed. According to the appellant the  consent terms were settled on                                                  ...5/-

                       -5- 29.12.1997 and 15 cheques of Rs.50,000/- each were handed over to  Respondent No.1 on that day. It is not disputed that out of the 15  cheques which were deposited by the Respondent in his account, 5 of  them were not honoured for some reason and therefore, the appellant  substituted those cheques by pay orders issued by the Bank. The pay  orders were deposited and encashed. It is also the case of the appellant  that in terms of an earlier order of the High Court dated 7.10.1996 both  the parties informed the police in advance before action was taken to  get the premises vacated. For that reliance is placed on a letter written  by Respondent No.1 on 29.10.1997 to the police confirming the  settlement and stating that he had vacated the premises. The  Respondent No.1 had also written a letter to the appellant stating the  fact that he had surrendered the possession of the premises. The  Respondent No.1 later wrote to the Police Commissioner on 2nd  January, 1998 withdrawing his letter addressed to him dated  29.12.1997. Thereafter again by letter dated 4.1.1998 the Respondent  No.1 withdrew his letter dated 2.1.1998. We shall refer to the contents  of the letters later.                                                 ...6/-

                       -6-         The application filed by Respondent No.1 on 12.2.1998 for  recalling the compromise decree of 12.1.1998 recited the fact that on  27.12.1997 the Special Officer with a gang of anti social elements  engaged by defendant Nos. 3 to 17, accompanied by police force,  raided the business premises of the plaintiff, destroyed his machinery,  papers, tools etc. and started demolishing the structure occupied by  Respondent No.1. Thus Respondent No.1 suffered a loss of about Rs.  50 lacs. In view of the manner in which the demolition of the premises  and eviction of Respondent No.1 was carried out, the Respondent No.1  felt so threatened by the anti social elements that he signed whatever

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papers were placed before him, and under duress and coercion he  mechanically consented to withdraw the suit on 12.1.1998. It is  admitted by Respondent No.1 that the terms of settlement were signed  on 29.12.1997 under duress and coercion. It was not signed with free  will as it was under threat. In these circumstances it was prayed that he  should be permitted to proceed with the suit and the order dated  12.1.1998 decreeing the suit in terms of the settlement should be  recalled.                                                 ...7/-                         -7-         As noticed earlier this application was rejected by a learned  Judge of the High Court on 24th March, 1998. The order rejecting the  application was not appealed from but an appeal was filed against the  consent decree passed on 12.1.1998.         In the appeal two questions arose for consideration namely,  whether there was sufficient explanation for condonation of delay in  filing the appeal, and secondly, whether the appeal was maintainable.  The second question arose on account of the fact that against  a consent decree there could be no appeal. Obviously, therefore, the  High Court had to first record its finding as to whether the consent  decree was a valid consent decree, or whether the same was vitiated on  account of duress and coercion exercised by the appellant. If the High  Court came to the conclusion that the compromise was vitiated by  duress and coercion, there could be no objection to  entertain the appeal  on merit.         The High Court has condoned the delay in filing the appeal by its  order dated 3rd May, 2002. Though the High Court was not really  satisfied with the explanation furnished by Respondent No.1 yet it  found some explanation                                                  ...8/-

                       -8- for the delay. Keeping in view the fact that the allegations in the case  were of serious nature, the Court was of the view that the delay should  be condoned and the matter investigated. We are also not satisfied that  any real and satisfactory explanation was furnished for condoning the  delay of about 7 months (122 days) in preferring the appeal. No doubt  against the consent decree passed on 12th January, 1998 an application  for recalling the decree was filed on 12.2.1998 which was rejected on  24.3.1998. But, there is hardly any explanation for the delay of about 5  months thereafter in preferring the appeal. However, since the High  Court has exercised its discretion and condoned the delay primarily for  the reason that the facts alleged by Respondent No.1, were of such  nature that in the interest of justice the matter required to be  investigated, we do not wish to interfere with that order.         The question then arises as to whether the consent of Respondent  No.1 was vitiated by duress and/or coercion.         We have carefully perused the judgment and order of the High  Court. We also requested the counsel appearing                                                  ...9/-          

                       -9- for Respondent No.1 to show us a clear finding in the judgment that the  consent given by Respondent No.1 was vitiated by duress and/or  coercion. The learned Counsel was unable to point out to us a clear  finding in this regard, but reading the observations of the learned  Judges in different paragraphs of the order he submitted that the High  Court after considering the plea raised by Respondent No.1 before it  has concluded that they must be accepted. There is no real discussion of  any material on record to conclude that in fact on account of duress and  coercion the Respondent No.1 was compelled to sign the consent terms.  What appears to have impressed the High Court is that the record

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disclosed that apart from a sum of Rs.7.50 lacs paid by cheques, a sum  of Rs.7.50 lacs was also paid to the Respondent No.1 by cash. This,  according to the High Court was a very "disturbing" feature of the case  and in view of this fact the consent decree could not be permitted to  remain on the records of the Court as that "would be a sad perversion of  the truth","and a permission to allow the parties to pervert the truth  with the help of sacrosanct Court records". It was observed that  although a                                                  ...10/-

                       -10- Court has jurisdiction to record a compromise, which adjusts only a  part of the suit, yet, it has no jurisdiction to record only a part of the  compromise which ends or adjusts the suit before it, wholly or partly.  This reasoning  of the High Court does not appeal to us. It is no doubt  true that the records disclose that the Respondent No.1 had also  received a sum of Rs.7.50 lacs in cash apart from payment of Rs.7.50  lacs by cheques. The parties agreed not to make this a term of the  compromise, and this payment was made perhaps on the basis of  mutual faith. But the finding cannot be read as a finding that the  consent was vitiated by duress or coercion.          The other circumstance pointed out by the High Court is that the  Respondent No.1 questioned his eviction alleging that the delivery of  possession by him was not peaceful, but obtained by intervention of the  police as well as hooligans on the basis of an order which was obtained  just before the Court closed for the Christmas vacation. Though the  High Court has recorded the plea of the respondent No.1, we find no  finding in the judgment to the effect that the material on record  established that Respondent No.1 was evicted from the premises by use  of                                                  ...11/-

                       -11- force or any other illegal means. In the absence of any such finding  recorded by the High Court, we felt compelled to consider the material  on record. To us it appears that all the circumstances that appear on  record go against the case set up by the Respondent No.1. We may  discuss them briefly hereafter.         According to Mr. Ranjan Mukherjee, counsel for Respondent  No.1 the alleged occurrence in which Respondent No.1 was forcibly  evicted took place on 24th December, 1997 though the case of the  Respondent No.1 in the High Court was that he was evicted on  27.12.1997. The consent terms were finalised on 29.12.1997 which  were signed by all the parties concerned. On the application of the  parties a consent decree was passed on 12.1.1998. If the Respondent  No.1 was forcibly evicted in an illegal manner on 24.12.1997, what  steps did he take to report the matter to the higher authorities,  complaining to them that he had been forcibly evicted and made to sign  certain papers? The first document which is on record is a letter written  by Respondent No.1 to the Commissioner of Police, Calcutta dated 2nd  January, 1998. Though this letter was written almost a week after the  alleged occurrence on 24.12.1997                                                  ...12/-

                       -12- it is conspicuous for its failure to mention two important facts, namely,  that police force was present when the eviction took place, and  secondly, Respondent No.1 was forced to sign certain documents. This  letter of 2nd January, 1998 was however withdrawn by the Respondent  No.1 on 4.1.1998 stating that under some misunderstanding that letter  had been written. What is also significant is the fact that the letter of  2nd January, 1998 was written much after alleged written settlement

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recorded on 29.12.1997. Even if we assume for a moment that on  24.12.1997 Respondent No.1 was forcibly  evicted, there appears no  justification for him to have signed the settlement terms on 29.12.1997.  As noticed earlier between these two dates, Respondent No.1 made no  complaint to anyone about the manner in which he was evicted or about  his having been forced to sign certain documents.         Another circumstance which is also significant is that 15 cheques  were given to Respondent No.1 totalling a sum of Rs.7.50 lacs on  29.12.1997. He deposited all the cheques in his account for encashment  and barring 5 cheques the rest were encashed. Those 5 dishonoured  cheques were substituted by pay orders issued by the Bank                                                  ...13/-

                       -13- which were deposited and encashed by Respondent No.1. Thus all the  cheques given to Respondent No.1 on 29.12.1997 were encashed by  him. This conduct of Respondent No.1 is wholly inconsistent with the  stand that he had been forcibly evicted from the premises on  24.12.1997, and that the settlement was recorded on 29.12.1997 under  duress and coercion. If we read the plea of Respondent No.1 closely,  the settlement was got signed on the date on which the eviction took  place, and if that be so, the settlement terms must have been signed on  the same date on which Respondent No.1 was evicted. Surprisingly, the  date of the settlement is 29.12.1997 and that is not disputed by  Respondent No.1. Moreover, if the cheques were given to Respondent  No.1 on 29.12.1997 he would not have encashed those cheques if he  was compelled to sign the consent terms and the cheques were forced  upon him. In normal course, what was expected of him was to move the  Court or the police authorities for appropriate action, which he failed to  do promptly. The fact that he encashed those cheques is itself a proof of  the fact that he held himself bound by the terms of settlement. It  appears that only later he changed his mind and gave a twist to the                                                  ...14/-

                       -14- happenings that took place on 24.12.1997 or 27.12.1997 or 29.12.1997.  The failure of Respondent No.1 to take prompt action after he was  dispossessed on 24.12.1997, the fact that he signed the terms of  settlement on 29.12.1997, coupled with the fact that he encashed the  cheques given to him on 29.12.1997 almost conclusively establish that  Respondent No.1 held himself bound by the consent terms and acted in  accordance therewith. His failure to report the incident to the concerned  authorities promptly leads us to hold that no such incident took place in  the manner alleged, and the Respondent No.1 voluntarily surrendered  possession in terms of the settlement reached between the parties.         We are, therefore,  of the view that the High Court was not  justified in setting aside the consent decree on a finding that the consent  of Respondent No.1 was vitiated by duress and coercion. Accordingly,  we allow the appeal, set aside the impugned judgment and order of the  High Court dated 16th August, 2002 and hold that the consent decree  passed on 12.1.1998 is a consent decree valid in law.         Civil Appeal is allowed.                                                 ...15/-                         -15-         Pursuant to the Order of this Court dated 28th July, 2003,  Counsel for the Respondent No.1 states that the sum of Rs.7.50 lacs  was deposited with the Registrar, Calcutta High Court and that in view  of the dismissal of the appeal he may be permitted to withdraw the  same. The prayer is not opposed. We direct the Registrar of  Calcutta  High Court to refund the amount to Respondent No.1 on application  being made. Any interest earned on the said amount, if kept in deposit,  shall also be paid to Respondent No.1. SPECIAL LEAVE PETITION(C) 12016 OF 2002         

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       The Special Leave Petition which is preferred against the order  of the High Court dated 3rd May, 2002 condoning the delay is rejected  as we have held in our judgment that we do not wish to interfere with  the exercise of discretion by the High Court in condoning the delay.