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Supreme Court of India
Pawan Kumar Arya vs Ravi Kumar Arya on 2 March, 2020Author: M.R. Shah
Bench: Ashok Bhushan, M.R. Shah
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 945-946 OF 2020
(Arising from SLP(C) Nos. 9971-72/2018)
Pawan Kumar Arya and others …Appellants
Versus
Ravi Kumar Arya and others …Respondents
JUDGMENT
M.R. SHAH, J.
Feeling aggrieved and dissatisfied with the impugned judgment and order
dated 21.12.2017 passed by the High Court of Judicature at Bombay in Appeal
(L) No. 447 of 2017 with Notice of Motion (L) No. 2541 of 2017 in Appeal (L)
No. 447 of 2017, by which the Division Bench of the High Court has dismissed
the said intra court appeal preferred by the appellants herein – original plaintiffs
and has confirmed the judgment and order passed by the learned Single Judge
dated 30.11.2017 dismissing the execution petition, the original plaintiffs –
decree holders have preferred the present appeals.
2. The dispute is between the appellants herein – original plaintiffs
(hereinafter referred to as ‘PA Group’) and respondent nos. 1 to 6 herein –
Signature Not Verified
Digitally signed by
MEENAKSHI KOHLI
original defendant nos. 1 to 6 (hereinafter referred to as ‘RA Group’) and also
Date: 2020.03.02
15:22:42 IST
Reason:
between original defendant no. 10 – Omkar Realtors and Developers Private
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Limited (hereinafter referred to as ‘Omkar Builders’). The dispute was with
respect to the asset of Kash Foods Private Limited admeasuring 4134 square
meters plot at Worli, Mumbai.
2.1 That the appellants herein – original plaintiffs filed a Suit (L) No. 194 of
2015 against the respondents herein/original defendants seeking the relief
against the transfer of the property of Kash Foods Private Limited in favour of
respondent no.10 herein – defendant no. 10 – Omkar Developers. As observed
hereinabove, the original plaintiffs Pawan Kumar Arya and others belong to PA
Group and original defendant nos. 1 to 6 belong to RA Group, the brother of
Pawan Kumar Arya. According to the original plaintiffs, original defendant
no.7 – M.P. Recycling Company was jointly held by PA Group and RA Group
with each credit or holding 50% of its shareholding. That M.P. Recycling held
25% of shareholding in Kash Foods. That Kash Foods owned a plot of land at
Worli admeasuring about 4134.27 sq, meters. That 25% of the shareholding in
Kash Foods was purchased by M.P. Recycling and the remaining 75% of the
shareholding in Kash Foods was bought by RA Group in 2011 in their
individual capacities.
2.2 That by conveyance deed dated 22.12.2012, a portion of the assets of
Kash Foods was transferred to original defendant nos. 3 & 4 that are the
members of the RA Group. A development agreement was executed between
Omkar Builders – original defendant no.10, Kash Foods, original defendant no.
8 and defendant nos. 3 and 4, which was subjected to challenge by the plaintiffs
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in the suit. According to the original plaintiffs, original defendant nos. 1 to 6 in
violation of the Right of First refusal clause in favour of M.P. Recycling to buy
shares of Kash Foods as contained in the Articles of Association of Kash Foods,
surreptitiously and behind the back of the plaintiffs bought 75% outsiders’
shareholding in the names of defendant no.1’s family. According to the
plaintiffs, defendant nos. 1 to 6 entered into a purported Development
Agreement dated 10.04.2013 with Omkar Builders, a third party developer, to
develop the Worli property behind the back of M.P. Recycling and the plaintiffs.
According to the plaintiffs, under the purported Development Agreement with
Omkar Builders, defendant nos. 1 to 6 and Kash Foods received Rs. 25 crores
from Omkar Builders and an additional Rs. 20 crores as security. That as per
the case of the plaintiffs, defendant nos. 1 to 6 and Kash Foods also received
79,000 sq. ft. carpet area, i.e., 15 flats and 72 car parking spaces from Omkar
Builders under the Development Agreement. According to the plaintiffs, 15
agreements for sale were registered and executed in favour of defendant nos. 1
to 6 and Kash Foods.
2.3 According to the plaintiffs, defendant nos. 1 to 6 did not give any
rights/benefits in the said consideration/carpet area received from Omkar
Builders either to the plaintiffs and/or to M.P. Recycling. The aforesaid led to
the filing of the suit by the plaintiffs against original defendant nos. 1 to 6
seeking a 50-50 division of the benefits received by Kash Foods under the
Development Agreement with Omkar Builders. That during the pendency of
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the suit, the suit came to be settled and the aforesaid suit came to be disposed of
in accordance of the consent terms. As per the consent terms, out of 15
apartments that were to come up on the Worli land, 8 apartments admeasuring
27000 sq. meters in all were to fall to the share of the plaintiffs – PA Group and
7 apartments with a total area of 52000 sq. meters were to go to defendant nos.
1 to 6 – RA Group. According to the plaintiffs, as per the consent terms, the
letter of allotment of their 8 apartments was liable to be executed by defendant
no. 10 – Omkar Builders and the same was liable to be counter-signed by
defendant nos. 1 to 6 – RA Group. According to the plaintiffs, defendant no. 10
– Omkar Builders had in accordance with the consent terms executed the letter
of allotment in ‘Annexure E’ in respect of the 8 apartments, but defendant nos. 1
to 6 refused to abide by the consent terms and counter-sign the letter of
allotment as per ‘Annexure E’.
2.4 Therefore, in view of the refusal on the part of defendant nos. 1 to 6 – RA
Group to abide by the consent terms and counter-sign the letter of allotment as
per ‘Annexure E’, the plaintiffs initiated the proceedings under Order 21 Rule
34 of the Code of Civil Procedure for the execution of the consent decree viz.
for execution of the document at ‘Annexure E’ to decree dated 14.08.2015, by
defendant nos. 1 to 6 – RA Group and defendant no. 10 – Omkar Builders
jointly and/or severally. The execution application came to be rejected by the
learned Single Judge by the judgment and order dated 30.11.2017 by holding
that neither Omkar Builders nor defendant nos. 1 to 6 – RA Group could have
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been directed at this stage to execute ‘Annexure E’ to the consent terms nor
could the RA Group be restrained from dealing with the properties that form
the subject matter of Kash Foods property. The learned Single Judge also
observed that unless and until the supplementary consent terms are entered into
between the parties, there is no obligation on the part of defendant nos. 1 to 6 to
execute the letter of allotment in the form of ‘Annexure E’.
2.5 Feeling aggrieved by the dismissal of the Chamber Summons/Execution
Petition, the appellants herein preferred appeal before the Division Bench. That
by the impugned judgment and order, the Division Bench of the High Court has
dismissed the said appeal and has confirmed the judgment and order passed by
the learned Single Judge dated 30.11.2017 dismissing the chamber
summons/execution petition. That while dismissing the chamber summons, the
learned Single Judge as well as while dismissing the appeal, the Division Bench
has observed that no direction against the RA Group to execute the letter of
allotment in the form of ‘Annexure E’ can be issued on the basis of clause 28 of
the consent terms relied upon by the plaintiffs as there is nothing in clause 28 of
the consent terms that casts an obligation upon defendant nos. 1 to 6 – RA
Group to execute the letter of allotment in the form of ‘Annexure E’.
2.6 Feeling aggrieved and dissatisfied with the impugned judgment and order
passed by the Division Bench of the High Court dismissing the appeal,
confirming the judgment and order passed by the learned Single Judge
dismissing the chamber summons/execution petition and refusing to issue any
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direction against defendant nos. 1 to 6 – RA Group to execute the letter of
allotment in the form of ‘Annexure E’ with respect to 8 apartments, the original
plaintiffs have preferred the present appeals.
3. Dr. Abhishek Manu Singhvi and Shri Dhruv Mehta, learned Senior
Advocates have appeared on behalf of the appellants herein – original plaintiffs
and Shri Shyam Divan and Shri Haresh Jagtiani, learned Senior Advocates have
appeared on behalf of the respondents herein – original defendants.
3.1 Dr. Singhvi, learned Senior Advocate appearing on behalf of the
appellants – original plaintiffs has vehemently submitted that in the facts and
circumstances of the case, both, the learned Single Judge as well as the Division
Bench have materially erred in dismissing the notice of motion and not issuing
the directions as prayed against original defendant nos. 1 to 6 and defendant no.
10. It is vehemently submitted that by not issuing the directions as prayed in the
notice of motion, both, the learned Single Judge as well as the Division Bench
have virtually nullified the consent terms and the consent decree.
3.2 It is further submitted by the learned Senior Advocate appearing on
behalf of the appellants – original plaintiffs that the absurd consequence of the
impugned order is that though in terms of the consent terms/decree flats were
allotted to both, the appellants and respondent nos. 1 to 6, the appellants have
got nothing under the consent decree till date. It is submitted that on the other
hand respondent nos. 1 to 6 have got not only 7 flats of double the area of the
PA Kash Foods Property, but also Rs. 45 crores and are enjoying the above since
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about 2015 by mortgaging and dealing with their flats by raising large finances.
It is submitted that as held by this Court in the case of Manish Mohan Sharma
and others v. Ram Bahadur Thakur Ltd. and others (2006) 4 SCC 416
(paragraphs 31 & 32), the effort of the executing court must be to see that the
parties are given the fruits of the decree. It is submitted that it is further
observed in the said decision that the mandate is reinforced when it is a consent
decree and doubly reinforced when the consent decree is a family settlement. It
is submitted that it is further observed in the aforesaid decision that family
settlements are governed by a special equity and are to be enforced if honestly
made. Reliance is also placed upon the decision of this Court in the case of
Kale and others v. Deputy Director of Consolidation and others (1976) 3 SCC
119.
3.3 It is further submitted by the learned Senior Advocate appearing on
behalf of the appellants – original plaintiffs that the net result as of today is that
both the consent terms and the consent decree in effect result in a zero-sum
game with no transaction accruing to the benefit of the appellants. It is
submitted that if that was so, there was no purpose to enter into the consent
terms at all.
3.4 It is further submitted by the learned Senior Advocate appearing on
behalf of the appellants – original plaintiffs that there is no basis, in any event,
for the Division Bench to ignore the clear recognition of the appellants’
entitlement under the consent terms/consent decree.
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3.5 Now so far as the observations made by the learned Single Judge on the
necessity to have supplementary consent terms, before the other terms of the
consent decree are acted upon is concerned, it is vehemently submitted that the
same is erroneous. It is submitted that the reliance placed upon clauses 13, 22,
23 and 27 of the consent terms by the learned Single Judge is absolutely
misplaced. It is submitted that there is not a single clause in the entire consent
terms and/or the consent decree which either expressly or impliedly postpones
or in any manner makes the appellants’ entitlement to get ‘Annexure E’ letter
contingent upon respondent nos. 1 to 6’s specious plea of simultaneity with the
supplementary consent terms.
3.6 It is further submitted by the learned Senior Advocate appearing on
behalf of the appellants – original plaintiffs that the learned Single Judge ought
not to have read an implied term into the consent decree and/or consent terms
which was never intended by the parties and thereby making the issuance of
‘Annexure E’ letter to the appellants conditional and/or subject to the happening
of an event, i.e., filing of the supplementary consent terms, when no such clause
finds place either in the consent decree or consent terms. It is submitted that it
is a settled law that an implied term can be read into a contract only when it is
so obvious that the parties intended something but inadvertently the same was
left out. In support, reliance is placed upon the decision of this Court in the case
of Satya Jain and others v. Anis Ahmed Rushdie and others (2013) 8 SCC 131
(paragraphs 32 to 35).
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3.7 It is further submitted by the learned Senior Advocate appearing on
behalf of the appellants – original plaintiffs that as such there is no such
contingency supplied anywhere in the consent terms and/or consent decree and
in fact clause 28 of the consent terms read with paragraphs 2, 3 and 6 of the
consent decree is an antithesis of the finding that ‘Annexure E’ is contingent
upon the supplementary consent terms. It is submitted that ‘Annexure E’ shall
not depend upon the supplementary consent terms to be executed/entered into as
observed by the learned Single Judge. It is submitted that clause 28 of the
consent terms read with paragraphs 2, 3 and 6 of the consent decree
unambiguously and unequivocally makes it clear that respondent no. 10 and
respondent nos. 1 to 6 were to provide ‘Annexure E’ letter immediately and not
at the RA Group’s convenience and/or at a later date, as per the whims and
fancies of respondent nos. 1 to 6 or contingent upon the supplementary consent
terms.
3.8 It is further submitted by the learned Senior Advocate appearing on
behalf of the appellants – original plaintiffs that none of the clauses in the
consent terms and/or the consent decree provides the supplementary consent
terms contingent upon ‘Annexure E’ letter and/or vice versa. It is submitted that
as held by this Court in the case of Saradamani Kandappan v. S. Rajalakshmi
and others (2011) 12 SCC 18, the order of performance should be expressly
stated or provided, i.e., the agreement should say that only after performance of
obligations of the vendors, the purchaser will have to perform her obligations.
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3.9 It is further submitted by the learned Senior Advocate appearing on
behalf of the appellants – original plaintiffs that even otherwise because of the
total non-cooperation on the part of respondent nos. 1 to 6 and with a malafide
intention respondent nos. 1 to 6 are not co-operating in execution of
supplementary consent terms. It is submitted that out of the four items listed for
valuation at clause D9(d) of the consent terms, item no. (a) is a company in
which both brothers hold 25.5% of the shareholding each and the balance 49%
is held by a third party; item no. (b) and (c) is a company and a property
respectively which are held 50:50 by both brothers; item no. (d) is the PA Kash
Foods Property which was to be valued for the purposes of adjustment. It is
submitted that the valuation was not done despite numerous reminders by the
appellants. It is submitted that several without prejudice emails were addressed
to respondent nos. 1 to 6 calling upon them to execute and agree to the draft of
the supplementary consent terms, which has not been done till date.
3.10 It is further submitted by the learned Senior Advocate appearing on
behalf of the appellants – original plaintiffs that as such the plaintiffs entered
into the consent terms to buy peace and to resolve the overall family dispute
between the parties. It is submitted that as held by this Court in the case of
Hari Shankar Singhania and others v. Gaur Hari Singhania and others (2006) 4
SCC 658 (para 42 and 43), a family settlement is treated differently from any
other formal commercial settlement as such settlement in the eye of the law
ensures peace and goodwill among the family members. It is submitted that it is
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further observed in the said decision that even technicalities of limitation, etc.
should not be put at risk of the implementation of a settlement drawn by a
family, which is essential for maintaining peace and harmony in a family.
3.11 Making the above submissions and relying upon the aforesaid decisions
of this Court, it is prayed to allow the present appeals.
4. Shri Shyam Divan, learned Senior Advocate appearing on behalf of
respondent nos. 1 to 6 and 8 & 9 has vehemently submitted that as such the
notice of motion/execution proceedings by the appellants herein itself was
premature and was for execution of only part of the consent decree dated
14.08.2015 and therefore the same was not maintainable at all being premature
execution proceedings.
4.1 It is further submitted that the appellants are seeking to execute a
particular clause of consent terms dated 14.08.2015, which under the said
consent terms itself is required to be implemented after the parties thereto
arrived at a supplementary agreement which till date has not been arrived at or
entered into. It is submitted that therefore the learned Single Judge rightly
dismissed the said execution petition. It is submitted that by these proceedings
the appellants are seeking to execute a part of the consent decree without
entering into the supplementary agreement.
4.2 It is further submitted that the orders interpreting the consent decree are
per se reasonable and based on sound reasoning taking into account all relevant
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facts and material and submissions advanced by both the sides and therefore
does not warrant any interference by this Court.
4.3 It is further submitted that as such the consent terms went well beyond
the dispute raised in Civil Suit No. 191/2015 and seeks to comprehensively
resolve all disputes such as those pertaining to the factories owned by the
parties, namely, AISCO, IMTC, Orbit Arya Commercial Premises and overall
family settlement.
4.4 It is further submitted that parties entered into the consent terms and the
consideration for the RA Group agreeing to allot 8 flats (‘Annexure A’
properties) in favour of the PA Group was that the RA Group would be rid of the
minority status of AISCO – one of the group companies of both the groups
wherein RA Group was in a minority and whose rights were being oppressed in
the said company and the disputes qua all the other group companies would also
achieve quietus. It is submitted that in fact the 8 flats (‘Annexure A’ properties)
were as such belonged to RA Group. It is submitted that by the present
execution proceedings the appellants want to execute that part of the consent
decree which favours them – allotment of 8 flats (‘Annexure A’ properties), but
without in any manner complying with their obligations under the consent
terms/consent decree, i.e., the execution of supplementary consent terms, as
defined in clause 13. It is submitted that the appellants cannot be permitted to
get the consent decree executed in part and which is in their favour and without
in any way complying with their obligations under the consent decree.
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4.5 It is further submitted that neither under the consent terms nor under the
consent decree, there is an obligation on the part of the RA Group to issue
‘Annexure E’ forthwith upon signing of the consent terms. It is submitted that if
the submission on behalf of the appellants that ‘Annexure E’ is to be executed
forthwith and that vesting/allotment of PA Kash Foods Property immediately
upon signing of the consent terms is accepted, in that case, it would defeat the
plain language of clauses 9, 13, 14, 17 and 18, all of which mandate that matters
relating to PA Kash Foods Property are to be contained in the supplemental
consent terms. It is submitted that the settlement between the parties in all
respects was to be crystallized in the supplemental consent terms. It is
submitted that therefore the present consent terms/consent decree can be
described only as a “framework” in clauses 2, 3 and 30.
4.6 Now so far as reliance placed upon clause 28 of the consent terms by the
appellants is concerned, it is vehemently submitted that clause 28 provides for
no direction to RA Group to sign ‘Annexure E’ on execution of the consent
terms. It is submitted that in the absence of a direction in a clause dealing with
a “direction/request” to Omkar Builders regarding ‘Annexure E’ completely
militates against PA Group’s submission and their interpretation. It is submitted
that if the intention was for ‘Annexure E’ to be issued by the RA Group
“forthwith”, clause 28 would have been the obvious and natural pace to provide
for it. It is submitted that even the Omkar Builders was not a party to the
consent terms/decree and therefore the contents of clause 28 would not bind it.
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It is submitted that it is only with a view for securing compliance of Omkar
Builders that the High Court passed an order on the same day enabling Omkar
Builders to issue ‘Annexure E’.
4.7 Now so far as the reliance placed upon clause 22 of the consent terms by
the appellants, it is vehemently submitted that as per clause 22 RA Group will
be free to deal with PA Kash Foods Property as their exclusive and absolute
owners thereof with effect from the filing of the consent terms and the PA
Group does not have any claim direct, derivative or otherwise of whatsoever
nature upon the same. It is submitted that therefore there may not be any
restrain against RA Group from dealing with the properties that form the subject
matter of Kash Foods Property.
4.8 It is further submitted that as both the learned Single Judge as well as the
Division Bench have succinctly interpreted the consent terms/consent decree
and upon understanding and comprehending the intention of the parties have
held that RA Group was not obligated to execute ‘Annexure E’ at this stage and
that independently there was no fetter on the RA Group from dealing with its
properties.
4.9 Making the above submissions, it is prayed to dismiss the present
appeals.
5. We have heard the learned Senior Advocates for the respective parties at
length.
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5.1 At the outset, it is required to be noted that as such the present
proceedings arise out of the execution proceedings initiated by the appellants
herein, who were also parties to the consent terms/consent decree. The consent
decree came to be passed in Suit No. 194/2015 filed by the PA Group. It is also
required to be noted that the dispute in Civil Suit No. 194/2015 filed by the
appellants/PA Group was for seeking 50:50 division of the benefits received by
Kash Foods under the development agreement with Omkar Builders. However,
from the consent terms dated 14.08.2015, it appears that both the parties – PA
Group and RA Group decided to resolve and settle the other disputes also, i.e.,
over and above the dispute in the suit. From the consent terms, it appears that
both the parties unconditionally and unequivocally amicably resolved and
settled the disputes in relation to the subject matter of Arya Iron and Steel
Company Private Limited (“AISCO”); International Minerals Trading Company
Private Limited (“IMTC”); Kash Foods Private Limited’s premises in the
Omkar 1973 Project at Worli (“Kash Foods”), which forms the subject matter of
the present Suit; Orbit Arya Commercial Premises (“Orbit Arya Commercial
Premises”); and Disputes in relation to the larger Arya Group of Companies and
its constituents (collectively “the Dispute”). Further, in the consent terms in
para 2, it has been specifically mentioned that the said consent terms are an
identified and mutually agreed framework for a complete parting of ways
between the parties and is aimed at bringing about an eventual complete quietus
to the disputes. Clause 3 of the consent terms further provides that the parties
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shall execute a definitive “Family Arrangement and Settlement” and/or writings
as may be required and/or as may be advised for a complete parting of ways,
which shall work on the basis of the said mutually agreed framework (“Family
Arrangement and Settlement”). Other terms and conditions provide for
modalities to be worked out to enter into a further “Family Arrangement and
Settlement”. Clause 13 also provides for execution of supplemental consent
terms. Clause 21 also further provides that until conclusion of the transfer, the
parties shall not affect each other’s rights, in any way in AISCO and/or IMTC.
As per clause 22 of the consent terms, RA Group and/or Kash Foods shall not in
any manner directly and/or indirectly or derivatively be entitled to sell and/or
transfer, and/or dispose of and/or encumber and/or otherwise deal with the PA
Kash Foods Property. It further provides that the modification, if any, of the
Restraint, shall be identified in the supplementary consent terms. Clause 23 of
the consent terms further provides that the RA Group and/or Kash Foods shall
publish a Public Notice within 3 days of filing of the supplemental consent
terms, withdrawing their claims in relation to PA Kash Foods Property (more
particularly described at ‘Annexure C’). Clause 25 also further provides that
similarly the PA Group shall publish a Public Notice within 3 days of filing of
the supplemental consent terms, as more particularly described at ‘Annexure D’.
Clause 28 of the consent terms further provides that Omkar Builders be
directed/requested to issue a separate letter in relation to the PA Group’s
entitlement to the PA Kash Foods Property in Omkar 1973 Project (more
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particularly ‘Annexure A’) as per draft at ‘Annexure E’. Under the said clause,
Omkar Builders was also further directed to strictly abide by the Restraint in
relation to the PA Kash Foods property. The relevant terms of the settlement are
as under:
“The parties have unconditionally and unequivocally amicably
resolved and settled the disputes in relation to the subject matter
of:
a. Arya Iron and Steel Company Private Limited (“AISCO”);
b. International Minerals Trading Company Private Limited
(“IMTC”)
c. Kash Foods Private Limited’s premises in the Omkar 1973
Project at Worli (“Kash Foods”), which forms the subject matter
of the present Suit;
d. Orbit Arya Commercial Premises (“Orbit Arya Commercial
Premises”); and
e. Disputes in relation to the larger Arya Group of Companies
and its constituents (collectively “the Dispute”)
2. The present Consent Terms is an identified and mutually
agreed framework for a complete parting of ways between the
Parties and is aimed at bringing about an eventual complete
quietus to the Disputes.
3. The Parties shall on or before November 1, 2015 (or such
date as may be mutually extended in writing by the Parties)
execute a definitive Family Arrangement and Settlement and/or
writings (including such documents, writings, undertakings and
agreements) as may be required and/or as may be advised for a
complete parting of ways, which shall work on the basis of the
said mutually agreed framework (“Family Arrangement and
Settlement”).
13. As to the (i) PA Kash Foods Property and (ii) Orbit
Arya Commercial Premises the Parties have agreed that they
would mutually decide the modalities of brief to the Valuers
and the Third Valuer and mode of adjustment/payment on or
before August 29, 2015; and Supplemental Consent Terms
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recording the same (“Supplemental Consent Terms”) shall be
filed in this Court on August 30, 2015.
14. On arriving at a final valuation for the Orbit Arya
Commercial Premises the PA Group agrees to take over the RA
Group’s 50% share in the Orbit Arya Commercial Shop as per
the modality identified in the Supplementary Consent Terms.
18. The Parties further agree that if there is any dispute or
difference of opinion with respect to modalities for valuation,
method of adjustment/payment, Bidding Process and
subsequent Transfer Process, modalities for consummation of
transaction and/or guidelines for Valuers then the Parties have
agreed that their respective nominated Attorneys will be
authorized to respective Parties to resolve such
dispute/difference of opinion. The Parties undertake not to, at
any stage, raise any objection relating to conflict of Interest
against the said Attorneys for assisting in resolving such
matters.
21. Until conclusion of the transfer the Parties shall not
affect each other’s rights in any way in AISCO and/or IMTC.
22. RA Group and/or Kash Foods shall not in any manner,
directly and/or indirectly or derivatively, be entitled to sell
and/or transfer and/or dispose of and/or encumber and/or
otherwise deal with the PA Kash Foods Property (more
particularly defined in the schedule of Annexure A) (the
“Restraint”). The modification, if any, of the Restraint, shall be
identified in the Supplementary Consent Terms. It is expressly
agreed and understood between the Parties that the RA Group is
free to deal with RA Kash Foods Property (as more particularly
defined in Annexure B) as their exclusive and absolute owners
thereof with effect from the filing of these consent terms and
the PA Group does not have any claim direct, derivative or
otherwise of whatsoever nature upon the same.
23. The RA Group and/or Kash Foods shall publish a
Public Notice within 3 days of filing of the Supplemental
Consent Terms, withdrawing their claims in relation to PA Kash
Foods Property (as more particularly described at Annexure C).
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24. The PA Group withdraws all allegations against the
Defendants in the captioned Suit and confirms that the PA
Group does not have any further interest in Kash Foods Pvt.
Ltd or any of its properties save and except properties described
in PA Kash Foods Portion, more particularly described at
Annexure A herein.
25. The PA Group shall publish a Public Notice within 3
days of filing of the Supplemental Consent Terms, as more
particularly described at Annexure D.
26. In so far as the eventual and complete parting of ways
between the Parties, the Parties agree that the larger group
matters, which shall be mutually identified in the
Supplementary Consent Terms, shall be finally determined,
decided and settled by 4 Mediators – 2 appointed by PA Group
and 2 appointed by RA Group. The Mediators shall be
appointed on or before August 29, 2015.
27. The Parties hereto agree that for the purpose of giving
effect to and/or implementing these Consent Terms, each party
unconditionally irrevocably undertakes that it shall, from time
to time and at all times at the request of the other party provide
full and complete co-operation and do all such further acts,
matters, debts and/or things that are in any manner required
and/or necessary, and/or may be necessary and/or as may be
and/or are reasonably required by the other Party including
executing Supplementary Consent Terms hereto.
28. Omkar Realtors and Developers Private Limited
(“Omkar” or “Defendant No. 10”) is hereby directed /requested
to issue a separate letter in relation to the PA Group’s
entitlement to the PA Kash Foods Property in Omkar 1973
Project (more particularly annexed at Annexure A hereto) as per
draft at Annexure E hereto. Omkar is hereby further directed to
strictly abide by the Restrain in relation to the PA Kash Foods
Property.
30. The present Consent Terms provide a frame work for
resolution of all matters. The Parties are at liberty to suitably
amend and/or modify the frame work by mutual consent for the
purpose of more effectively dealing with modalities as may be
required from time to time.”
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From the aforesaid terms of settlement, it can be seen that it was an
overall settlement of all the disputes between the parties in relation to the
subject matter of AISCO, IMTC, Kash Foods, Orbit Arya Commercial Premises
and the disputes in relation to the larger Arya Group of Companies and its
constituents. As observed hereinabove and so stated in clause 2 of the terms of
settlement, the consent terms is an identified and mutually agreed framework
for a complete parting of ways between the Parties and is aimed at bringing
about an eventual complete quietus to the Disputes Considering the aforesaid
terms of the settlement which subsequently became part of the consent decree,
further entering into the family arrangement/supplemental consent terms was
required to be entered into between the parties and the modalities to be worked
out with respect to the valuation, bidding etc. are also mentioned in the consent
terms. At the same time, under the consent terms/consent decree and as agreed
between the parties, 8 flats as mentioned in the list at ‘Annexure A’ to the
consent terms are agreed to be allotted under the re-developed building to the
PA Group and the flats mentioned in the list at ‘Annexure B’ to the consent
terms are agreed to be allotted to RA Group. For the 8 flats allotted to PA
Group, Omkar Builders – original defendant no.10 was required to issue a
separate letter in relation to the PA Group’s entitlement to the PA Kash Foods
Property in Omkar 1973 project as per draft at ‘Annexure E’ to the consent
terms. Allotment of the 8 flats as per list at ‘Annexure A’ to the consent terms in
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favour of PA Group is not disputed and cannot be disputed. Even in paragraph 3
of the consent decree, the submissions of the learned counsel appearing on
behalf of the respective parties have been recorded and as per the submissions
made by the learned counsel appearing on behalf of both the parties – PA Group
& RA Group, the division in ‘Annexure A and Annexure B’ is final, viz-a-viz
defendant no.10 – Omkar Builders. Para 3 of the consent decree reads as under:
“3. Mr. Samdani, learned Senior Advocate on behalf of
Defendant No. 10, the developer, states that this division of flats
in Annexures “A” and “B” is between the two Arya groups inter
se. For their part, Mr. Dwarkadas, learned Senior Advocate for
the Plaintiffs, and Mr. Jagtiani, learned Senior Advocate for Ravi
Arya Group, agree that the division in Annexures “A” and “B” is
final vis-a’-vis Defendant No. 10. They also agree that
allotments made and possession given in terms of Annexure “A”
and Annexure “B” would constitute a full, sufficient and
complete discharge of the 10th Defendant’s obligations under the
Development Agreement, as also the individual flat agreements
already executed in favour of the parties. In view of these
statements made by Mr. Dwarkadas and Mr. Jagtiani, which are
on instructions, Mr. Samdani states, on instructions, that his
clients, Defendant No. 10, will issue the letter a proforma of
which is at Exhibit “E” to the consent terms.”
It appears that as such original defendant no.10 – Omkar Builders had
already issued the letter in the proforma as per ‘Annexure E’ to the consent
terms in favour of PA Group with respect to 8 flats allotted to PA Group.
Therefore, it appears that so far as original defendant no. 10 is concerned,
original defendant no.10 has already complied with its obligation under the
consent decree. However, RA Group is not counter-signing the said ‘Annexure
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E’ and therefore there is not complete transfer of 8 flats in favour of PA Group
which as such are allotted to them. Therefore, making a grievance by not
counter-signing the letter of allotment as per ‘Annexure E’, the original
defendant nos. 1 to 6 – RA Group have refused to abide by the consent
terms/consent decree. It is the case on behalf of original defendant nos. 1 to 6 –
RA Group that unless and until there is a total compliance of the consent
terms/consent decree including entering into or execution of the supplemental
consent terms/family arrangement as agreed between the parties as per the
consent terms/consent decree the defendant nos. 1 to 6 – RA Group are justified
in not counter-signing the letter of allotment as per ‘Annexure E’. On the other
hand, it is the case on behalf of the appellants – plaintiffs that further execution
of supplemental consent terms/family arrangement has nothing to do with the
allotment of 8 flats in favour of PA Group.
6. Having heard the learned Senior Advocates for the respective parties and
considering the relevant terms of the settlement, reproduced hereinabove, we
are of the opinion that further execution of supplemental consent terms/family
arrangement is required to be executed between the parties. For whatever
reasons, the further supplemental consent terms have not been entered into
between the parties. Therefore, as such, considering the fact that the parties
entered into the consent terms/settlement for a complete parting of ways
between the parties and so aimed at bringing about an eventual complete quietus
to the disputes between the parties and even parties entered into the consent
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terms/settlement to resolve and settle the disputes in relation to the subject
matter of AISCO, IMTC, Kash Foods, Orbit Arya Commercial Premises and
the disputes in relation to the larger Arya Group of Companies and its
constituents, which were beyond the dispute in the civil suit, the entire consent
terms/consent decree is required to be acted upon and/or implemented by both
the parties. There cannot be any execution of partial consent terms/consent
decree. If the submission on behalf of the plaintiffs is accepted and the 8 flats
as per list at ‘Annexure A’ are transferred absolutely and without any condition
in favour of PA Group without there being any further supplemental consent
terms/family arrangement, in that case, the entire object and purpose of entering
into the consent terms/settlement to resolve all the disputes between the parties
will be frustrated. Both the parties to the consent terms/consent decree are
required to fully comply with the terms of settlement/the consent terms and the
consent decree. One party cannot be permitted to say that that portion of the
settlement which is in their favour be executed and/or complied with and not the
other terms of the settlement/consent terms/consent decree. Under the
circumstances, as such, both, the learned Single Judge as well as the Division
Bench are justified in holding that the execution of the further supplemental
consent terms/family arrangement is must and there cannot be any partial
execution of the consent terms/consent decree.
7. Even in the case of Hari Shankar Singhania (supra), the decision which
has been relied upon by the learned senior counsel appearing on behalf of the
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appellants, this Court has observed that a family settlement is treated differently
from any other formal commercial settlement as such settlement in the eye of
the law ensures peace and goodwill among the family members. It is further
observed that technicalities should not be put at risk of the implementation of a
settlement drawn by a family, which is essential for maintaining peace and
harmony in a family. It is further observed that it is the duty of the court that
such an arrangement and the terms thereof should be given effect to in letter and
spirit.
7.1 In the case of Manish Mohan Sharma (supra), this Court has observed
and held that effort of the executing court must be to see that the parties are
given the fruits of the decree. It is further observed that mandate is reinforced
when it is a consent decree and doubly reinforced when the consent decree is a
family settlement.
8. Now so far as the relied placed upon the decision of this Court in the case
of Saradamani Kandappan (supra), relied upon by the learned Senior Advocate
appearing on behalf of the appellants – plaintiffs, more particularly reliance
placed upon paragraph 54 of the said judgment in support of his submission that
in the consent terms/consent decree, it is expressly stated or provided the order
of performance, namely, that the further supplementary settlement is to be
executed and only after such execution the 8 flats as per list at ‘Annexure A’ to
the consent terms shall be allotted in favour of PA Group is concerned, on
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considering conjoint reading of the terms of the settlement, the said decision
shall not be applicable to the facts of the case on hand.
8.1 Even on conjoint reading of all the terms of the settlement, more
particularly the clauses referred to hereinabove, it can be said that there is an
implied term that both the parties have intended that on one hand as agreed
between the parties further supplemental consent terms/family arrangement is to
be entered into and on the other hand there shall be transfer/allotment of 8 flats
as per list at ‘Annexure A’ in favour of PA Group. Any other interpretation
would lead to unworking of the consent terms/consent decree. As observed
hereinabove, if the consent decree is partially executed and the other parts of the
consent terms are not implemented and/or acted upon, the object and purpose to
resolve all the disputes amicably between the parties and to put an end to all the
disputes between the parties will be frustrated.
9. However, at the same time, one cannot lose sight of the fact that the 8
flats as per list at ‘Annexure A’ are allotted in favour of PA Group and rest of the
7 flats as per list at ‘Annexure B’ are allotted in favour of RA Group. At
present, the RA Group is in possession of all the 15 flats. The RA Group is also
the beneficiary of Rs.45 crores. Therefore, to strike the balance between the
parties, the RA Group can be directed to counter-sign ‘Annexure E’ letter issued
by Omkar Builders with respect to 8 flats as per list at ‘Annexure A’ which are
allotted in favour of PA Group. However, with a caveat that till the further
supplemental consent terms/family arrangement as agreed between the parties
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under the consent terms/consent decree is not executed, PA Group may not be
permitted to sell, transfer and/or deal with the said flats till the consent
terms/consent decree is fully acted upon and implemented between the parties.
At the same time, both the parties are required to be directed to fully implement
the consent terms/consent decree and to enter into further supplemental consent
terms/family arrangement, the modalities of which are mentioned in the consent
terms itself, at the earliest and within a reasonable time. Until then, both the
parties to abide as per the Restraint order as per clause 22 of the consent terms,
except the 7 flats as per list at ‘Annexure B’, which are allotted in favour of RA
Group.
10. In view of the above and for the reasons stated above, the impugned
judgment and order passed by the Division Bench of the High Court and that of
the learned Single Judge are hereby modified as under:
i) Both the parties – PA Group & RA Group are directed to fully comply
with the consent terms/consent decree and enter into the further supplemental
consent terms/family arrangement after following the modalities to be worked
out with respect to valuation, bidding etc. as mentioned in the consent terms
itself, within a period of four months from today. Both the parties are directed
to cooperate to fully comply with the consent terms/consent decree and fulfil
their respective part of obligation under the consent terms/consent decree;
ii) that the RA Group shall counter-sign ‘Annexure E’ letter with respect to 8
flats as per list at ‘Annexure A’ to the consent terms for which the original
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defendant no.10 – Omkar Builders had already issued a letter, within a period of
two weeks. However, it is directed that till the consent terms/consent decree is
fully implemented by both the parties and further supplemental consent
terms/family arrangement, as ordered hereinabove, is entered into/executed, the
PA Group shall not alienate and/or transfer in any manner whatsoever the said 8
flats. At the same time, it will be open for original defendant nos. 1 to 6 – RA
Group to deal with the 7 flats as per list at ‘Annexure B’ which are allotted to
them. At the same time, both the parties to act as per the Restraint order as per
clause 22 of the consent terms. The original injunction granted by the learned
Single Judge which has been continued till date is directed to be continued till
the execution of the further supplemental consent terms/family arrangement
except the 7 flats as per the list at ‘Annexure B’ which are allotted in favour of
RA Group.
11. With the aforesaid observations and directions, both these appeals stand
disposed of. However, in the facts and circumstances of the case, there shall be
no order as to costs.
……………………………….J. [ASHOK BHUSHAN]
NEW DELHI; ……………………………….J.
MARCH 2, 2020. [M.R. SHAH]
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