Original Side Appeal No. 442 of 2011 and M.P. No. 1 of 2011. Case: Vira Properties (Madras) Pvt Limited Registered Office at: No. 781-785, Anna Salai, Chennai 600 002. Rep. by its Executive Director, M.R. Pratap and Rayala Corporation Pvt Limited Registered Office at: No. 144/7, Old Mahabalipuram Road, Kottivakkam, Chennai 600 041,Rep. by its Managing Director, Ranjit Pratap Vs Baba Enterprises No. 781, Mount Road, Chennai 600 002, Rep. by its Partner Senthamilselvan and Mohan Breweries and Distilleries Ltd., Registered Office at: No. 112, M.M. Nagar, Valasarawakkam, Chennai 600 087, Rep. by its Managing Director N. Nandagopal. High Court of Madras (India)
| Case Number | Original Side Appeal No. 442 of 2011 and M.P. No. 1 of 2011 |
| Counsel | For Appellant: Mr. P.S. Raman. Senior Counsel for Mr. Satish Parasaran, Adv. and For Respondents: Mr. Srinath Sridevan, Adv. |
| Judges | C. Nagappan, J. and M. Sathyanarayanan, J. |
| Issue | Code of Civil Procedure (CPC) - Sections 148, 149, 151; Tamil Nadu Town and Country Planning Act, 1971 - Section 113 A (6) |
| Citation | 2012 (3) CTC 366, 2012 (2) LW 165 |
| Judgement Date | March 14, 2012 |
| Court | High Court of Madras (India) |
Judgment:
C.Nagappan, J.
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This appeal is preferred against the Order dated 21.11.2011 passed in Application No. 5028 of 2011 in Tr. C.S. No. 998 of 2008 on the file of this Court. Respondents 1 and 2 in the application are the appellants herein. The case of the second respondent herein/applicant is that numerous suits were pending on the file of this Court between the parties herein and they settled the disputes by entering into a compromise on agreed terms and conditions and under the compromise decree dated 19.04.2011 in C.S. No. 998 of 2008, it was agreed that a basic sum of Rs. 41,00,00,000/- would be paid by the defendants to the plaintiff in the suit and it was further agreed that the appellants herein would pay the second respondent herein an additional sum of Rs. 9,00,00,000/-, upon an order of regularisation for the eighth and ninth floors of the subject building from Chennai Metropolitan Development Authority on or before 17.10.2011 and though the second respondent herein diligently submitted the documents to obtain the order of regularisation, due to the Tamil Nadu State Assembly Elections, all such applications were not processed in a timely manner and the approval is in its final stage and the regularisation order shall be passed within a short time and hence, the time granted to obtain the order of regularisation be extended by a further period of three months from 17.10.2011 upto 17.01.2012.
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No counter was filed in the application by the appellants herein/respondents 1 and 2 and after hearing both sides, the learned single Judge held that the provisions of Section 148 of the Code of Civil Procedure cannot be a bar to exercise the inherent jurisdiction to do substantial justice between the parties and in the interest of justice, extended the time as prayed for and consequently, ordered the application as prayed for and the said order is under challenge in this appeal.
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The point for determination in the appeal is as to whether the second respondent herein is entitled for extension of time as granted to it so as to obtain an order of regularisation under Clause 3 of the consent decree.
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The relevant part of the consent decree dated 19.4.2011, reads as under:
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That the plaintiff herein agrees that in addition to the consideration of Rs. 41,00,00,000/- (Rupees forty one crores only) paid by them and as decreed in C.S. No. 732 of 2001 and the plaintiff shall pay an additional consideration of Rs. 9,00,00,000/- (Rupees nine crores only) to the defendant herein.
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That upon the defendant obtaining an order of regularization from the Chennai Metropolitan Development Authority for the 8th and 9th floor in Rayala Towers 11 & 111 of Rayala Towers on or before 17/10/2011 in terms of G.O.Ms. No. 76, Housing and Urban Development (UDI) dated 27/02/1999 (hereinafter referred to as the Regularization Scheme).
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That in the event the defendant does not obtain the said regularization within time as mentioned in clause (3) supra the plaintiff herein, shall not be liable to pay the additional consideration of Rs. 9,00,00,000/- (Rupees nine crores only) and right of the defendant to receive the same stands abated/extinguished and claim of the defendant for the said sum under this decree stands fully discharged.
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That however in such an event, the plaintiff shall pay sum of Rs. 54,67,324/- (Rupees fifty four lakhs sixty seven thousand three hundred and twenty four only) which has been actually expended by the defendant in applying for regularizing the additional construction subject to the same being duly supported by receipts issued by the Chennai Metropolitan Development Authority and also subject to handing over all records drawings and relevant papers in connection therewith to the plaintiff herein.
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That the plaintiff herein shall be liable to pay the aforementioned sum of Rs. 9,00,00,000/- (Rupees nine crores only) forthwith to the defendant within seven (7) days of the aforesaid order of regularization.
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That if the plaintiff defaults in making such payment within such time the defendant shall be entitled to execute this clause as a decree for money against the plaintiff herein.
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That the parties hereto agree to bear their respective costs.
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Mr. P.S. Raman, learned Senior Counsel appearing for the appellants, made the following submissions:
(i) Clause 3 of the Consent Decree constitutes a commercial understanding between the parties, arrived at after due negotiations and after taking into account various factors and hence, constitute an essential term of the contract and it is not capable of being extended or modified or altered by the Court without express consent of the parties. The condition for obtaining an order of regularisation from C.M.D.A. is a material commercial term and not just a ministerial act such as remittance of court fee or payment of costs and hence, time cannot be extended. Granting extension of time in such commercial transaction, more so in a consent decree, would tantamount to re-writing the contract, which is impermissible in law.
(ii) Inasmuch as parties agreed to a date in a negotiated settlement and no force majeure clause has been consciously inserted, time was clearly the essence of the contract and such time could not be extended invoking the provision under Section 148 or 151 C.P.C. The cut off date assumes certain sanctity and either party cannot plead or complain inequity or injustice in not honouring the cut-off date.
(iii) The stipulation and condition in the consent decree confer a benefit to the second respondent and any default in it would not amount to forfeiture or penalty and only deprive the additional benefit.
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The learned Senior Counsel cited the following decisions on this issue.
(I) A learned Single Judge of this Court in the decision in Moorianthakath Ammo v. Matathankandy Vattakkayil Pokkan (52 LW 336), held that when there is a decree based on an agreement between the parties, an essential term which fixes a definite period for the performance of an obligation as an essential part of the contract, cannot be changed by the Court on the application of one only of the parties but the consent of both the parties would be necessary to vary the terms of the decree and if the time stipulated is an essential part of the terms of the contract embodied in the decree and not a mere threat of a penal nature, there is no power in the court to make a new contract for...
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