G.S. Kulkarni, J.
1. The Applicant is the original Plaintiff in Special Civil Suit No.133 of 2004 filed against the Respondents-original defendants. The suit came to be decreed by the learned Civil Judge, Senior Division, Satara (the Trial Court) by judgment and order dated 7 April 2009 against which the Respondents in this application (original defendants) have filed the above First Appeal. The First Appeal is pending final hearing. In this first appeal the Applicant (Plaintiff) has filed the present Civil Application on 10 July 2015 under Order 23 Rule 3 of the Code of Civil Procedure inter alia for the following prayers:
(a) this Hon'ble Court be pleased to record the Compromise at Exhibit C and to pass a decree in accordance with the Compromise in Special Civil Suit No.133 of 2004 and in First Appeal No.780 of 2009;
(b) this Hon'ble Court be pleased to pass such orders and directions as are necessary for disposal of the Special Civil Suit No.133 of 2004 and First Appeal No.780 of 2009 in view of the Compromise and decree;
We refer to the parties as they stand in the Civil Application.
2. The factual antecedents are as under:
The Applicant is the owner of a residential bungalow (suit premises) situated at Mahabaleshwar which stands on a plot of land leased by the Government of Maharashtra.
3. The Respondents-Indian Oil Corporation was in occupation of the suit premises as a licensee under a leave and licence agreement. The case of the Applicant was that though the Respondents agreed to vacate the premises on termination of the licence and/or licence coming to an end by efflux of time, the Respondents failed to vacate and continued to wrongfully withhold the suit premises. The Applicant therefore filed a civil suit seeking a decree of possession of the suit premises alongwith mesne profit. The Respondents contested the suit.
By a judgment and order dated 7 April 2009 the trial Court decreed the Applicant's suit in the following terms:
1. The suit of the plaintiff is decreed with costs.
2. Defendant Nos.1 and 2 shall and do hand over vacant and peaceful possession of the property in dispute more particularly described in para 1 of the plaint, to the plaintiff within a period of two months from the date of this order, failing which plaintiff is at liberty to recover the possession by following due process of law.
3. Interim reliefs granted, if any, in favour of the plaintiff shall accordingly stands confirmed.
4. Separately inquiry be made in respect of mesne profits.
5. Decree be drawn accordingly.
4. The Respondents being aggrieved by the judgment and decree have preferred the above First Appeal, which has been admitted by an order dated 8 July 2009. The Respondents also filed a Civil Application No.2213 of 2009 seeking a stay on the execution of the decree pending the hearing of the First Appeal. By an order dated 15 July 2009 passed on the said Civil Application, a statement on behalf of the Respondents-judgment debtors was recorded that the Respondents are ready and willing to deposit an amount of Rs.1,00,000/- per month from April,2009 in the trial Court. It was further directed that the arrears for the period from April to July,2009 shall be deposited within four weeks and for the month of August,2009 onwards, an amount of Rs.1,00,000/- shall be deposited with the trial Court on or before 15th day of each month. It was directed that the trial Court shall invest the amount so received in fixed deposit in a nationalised bank, initially for a period of three years and thereafter for the like period, during the pendency of the appeal. On these conditions, the Civil Application was allowed in terms of prayer clause (a). It is not in dispute that in pursuance of the orders passed by this Court, the amounts were deposited by the Respondents and so far it is not withdrawn by the Applicant though the Applicant had desired to withdraw the same and orders in that regard were passed.
5. The case of the Applicant in this application is that during the pendency of the above First Appeal, the parties decided to resolve the dispute and accordingly a meeting was held between the parties on 8 November 2011 which was attended by four senior officers of the Respondents and the Applicant. An agreement was arrived at between the parties. The parties recorded the agreement in a document titled as Minutes of the meeting held between IOC and Shri.Manoj Sagar (Owner of the property on which officers Holiday Home at Mahabaleshwar is located), on 8 November 2011 at Western Regional Office. (for short the minutes ) As the relief in this application is for recording of a compromise under the provisions of Order 23 Rule 3 of the Code of Civil Procedure, in terms of this document, it would be appropriate to extract the contents of the said minutes of the meeting which reads thus:
Minutes of the meeting held between IOC and Shri.Manoj Sagar (Owner of the property on which officers Holiday Home at Mahabaleshwar is located), on 8 November 2011 at Western Regional Office.
In order to sort out the issue of vacation of the property belonging to Shri.Manoj Sagar on which IOCL is operating the Officers Holiday Home leading to litigations, a joint meeting was organized consisting of IOCL officers and Shri.Manoj Sagar at Western Regional Office of IOCL. The following were present:
1. Shri.M.K.Mukherjee DGP(MandT), WR
2. Shri.S.K.Maity-CFM, WR
3. Shri.A.P.Khakras Ch. AandW Manager, WR
4. Shri.K.M.Reddy, Manager (Law), WR and
Shri.Manoj Sagar, Owner of the property on which Officers Holiday Home at Mahabaleshwar is located at Mount Unique Bungalow, CTS No.98, Near Tehsil Office, Mahabaleshwar.
The committee extended a warm welcome to Shri.Manoj Sagar and informed that the property of Officers Holiday Home at Mahabaleshwar situated at Mount Unique Bungalow was with IOCL for a very long time and that IOCL was willing to find out an amicable and lasting solution that will be acceptable to both the parties. Shri.Manoj Sagar also reciprocated and expressed his desire to have an amicable settlement on the whole issue that has been pending for a long time. He also expressed his desire to stay in the said property that he had purchased.
After detailed discussions, where the viewpoints of both the sides were considered in details, the following points were arrived at as agreed by all.
1. Both,Shri.Manoj Sagar as well as IOCL shall withdraw the litigations and file the consent terms in the Court.
2. Shri.Manoj Sagar agreed to extend the lease period for the said property at Mahabaleshwar for a further period of three years w.e.f. 01.01.2012.
3. Lease rental for the subject property was agreed at Rs.90,000/- per month w.e.f. 01.04.2009 and will remain the same till the end of extended lease period.
4. Rupees one lakh per month being deposited by IOCL in lower court at Satara will be adjusted against the mutually agreed lease rental from 01.04.2009.
5. It was mutually agreed that within the extended lease period of three years, IOCL will search and try to finalize an alternate property at Mahabaleshwar for its Holiday Home. If IOCL is able to finalize the new Holiday Home property before the expiry of the contract period of three years IOCL will handover the existing property to Shri.Manoj Sagar, even before the expiry of extended lease period of three years.
6. After the expiry of extended lease period, in case, IOCL is unable to finalise an alternate property for its Holiday Home, then, any further extension / Renewal of the contract for the Holiday Home will be at the sole discretion of Shri.Manoj Sagar, who is the owner of the property.
7. In such case, if the situation warrants, and if Shri.Manoj Sagar agrees to further extend the lease of the property to IOCL, the rates of the lease will have to be renegotiated, considering the prevailing market rates. 8. During the extended period of lease of three years as mentioned above, IOCL will have no objection in case Shri.Manoj Sagar desires to renovate the outhouse property adjacent to the main bungalow.
The meeting ended with a vote of thanks from Shri.A.P.Dhakras.
Sd/- sd/- sd/- sd/-
(M.K.Mukherjee) (S.K.Maity) (A.P.Dhakras) (K.M.Reddy)
DGM(MandI), WR CFM, WR Ch, and W Mgr, WR Mgr (Law),WR
IOCL IOCL IOCL IOCL
Officers Holiday Home,
6. Mr.Khambata, learned Senior Counsel appearing for the Applicant (original Plaintiff) contends that a perusal of the minutes of the meeting, clearly indicate that the parties expressly recorded their desire for an amicable settlement and the terms thereof, which pertain to the vacating the suit premises. It is submitted that the document clearly records an agreement between the parties. An emphasis is to the following wordings as contained in the minutes After detailed discussions, where the viewpoints of both the sides were considered in detail, the following points were arrived at as agreed by all. It is submitted that this is an agreement in writing. The agreement is that the parties shall withdraw the litigation and file consent terms in the Court. It is submitted that the applicant on these terms had agreed to extend the lease period for the said property for a further period of three years with effect from 1 January 2012. A lease rental for the said property was also fixed at Rs.90,000/- per month with effect from 1 April 2009 for the extended lease period. An amount of Rs.1,00,000/- per month being deposited by the Respondents IOCL before the trial Court, was to be adjusted against the mutually agreed lease rental from 1 April 2009. Mr.Khambata submits that the clauses of the agreement, were clear, that the parties mutually agreed, that within the extended lease period of three years, the Respondent will search and try to finalize an alternate property at Mahabaleshwar for its holiday home. He submits that the parties therefore also agreed that if the Respondents were able to finalize the new holiday home property before the expiry of the contract period of three years, the Respondents in that case would hand over the existing property to the Applicant, even before the expiry of the extended lease period of three years. He submits that the further clauses of the agreement are significant namely that after the expiry of the extended lease period, in the event the Respondents were unable to finalize an alternate property for its holiday home, then, any further extension/renewal of the contract for the holiday home was agreed to be at the sole discretion of the Applicant who is the owner of the property, and in such a situation, if only the Applicant agreed to a further extension of lease of the property to the Respondents, the rates of the lease were required to be renegotiated considering the prevailing market rate. Our attention is also drawn to a further clause that during the extended period of lease of three years, the IOCL-Respondents would have no objection in case the Applicant wants to renovate the outhouse property adjacent to the main bungalow.
7. Mr.Khambata submits that the document/Minutes, containing the said agreement has been signed by four senior officers of the Respondents as also Applicant and this is not disputed by the Respondents. It is further submitted that further the parties have completely acted upon this document. To demonstrate this, the learned Senior Counsel has placed reliance on the tender bearing No.WR/HR/ADMN/MAHABALESHWAR/PT-03/1112 ( Exhibit F to the Civil Application (page 60)) issued by the the Respondents seeking alternative accommodation on lease/outright purchase, for Officers Holiday Home at Mahabaleshwar. It is further submitted that acting under this agreement, the Applicant by his letter dated 25 December 2013 addressed to the Respondents had requested to hand over the possession of the outhouse for starting of renovation work. This was replied by the Respondents by letter dated 8 January 2014, informing the Applicant that instructions in that regard to enable the Applicant to undertake the renovation, were issued to the caretaker of the holiday home and that an endorsement was made on the said letter by the higher officials that the vacant and peaceful possession of the outhouse be given to the Applicant on 22 January 2014 as per the instructions of the Respondents DGM I/C(HR), WR Mr. Dilip Hari.
8. Mr.Khambata for the Applicant has thereafter has placed reliance on the letter dated 12 June 2014 addressed by the Applicant to the Executive Director (Regional Services) of the Respondents, requesting the Respondents to surrender the possession of the suit premises as agreed in the said minutes/agreement. In this letter the Applicant recorded that the Applicant had undergone a angioplasty by implanting stents and that as per Doctor's advice he intends to permanently reside at Mahabaleshwar and, therefore, the Applicant desired to have vacant and peaceful possession of the suit premises on 31 December 2014 as agreed between the parties. It was also recorded that as agreed between the parties, the Respondents should instruct their lawyers to withdraw the pending litigations and initiate the process of filing consent terms in the High Court and inform the further steps to be taken in that regard in the mutual interest of the parties. Mr.Khambata has also drawn our attention to the Respondents' letter dated 4 July 2014 addressed to the Applicant informing the Applicant that the Respondents were making efforts to identify alternate property for their use, however, they could not succeed in that regard. The Respondents also recorded that as regards the request of the Applicant for withdrawal of the litigation, it was stated that since the legal action was initiated by the Applicant, the responsibility of withdrawing the case vested with the Applicant and that the Respondents were willing to co-operate in that regard. Mr.Khambata would further rely on the correspondence between the parties to show that the Applicant himself, had helped the Respondents to locate the alternate properties. On the basis of this correspondence it is submitted that there is not a iota of doubt that the parties acted upon the agreement on each of the aspects recorded therein.
9. Mr.Khambata also relies on the consent terms which came to be forwarded by the Applicant to the Respondents in pursuance of the agreement as contained in the said minutes dated 8 November 2011. He submits that by an Email of the Respondents dated 11 December 2014 the Applicant was for the first time informed, that based on the management's approval and legal opinion, the following changes would be incorporated in the consent terms:
(i) Vacation of premises will be on finalising a suitable property, (ii) Amendments will be made by our advocate for protecting IOC interest. The Respondents in this email also recorded that a final draft of the consent terms once approved by the Respondents' management, would be forwarded to the Applicant at the earliest.
10. Mr.Khambata, therefore, submits that the Respondents never disputed the agreement as contained in the minutes dated 8 November 2011 which in fact was completely acted upon between the parties. It is submitted that on the terms as agreed therein, extension of three years was granted to the Respondents. He submits that there is no dispute on this. It is submitted that during this period of three years, the Respondents had also taken all the steps to find out an alternate accommodation, as also appropriate consent terms were prepared and they were forwarded to the Respondents. Mr.Khambata submits that the only defence which is now for the first time raised in the affidavit in reply as filed on behalf of the Respondents is that the minutes do not contemplate an agreement as consent terms were to be filed in the Court. He submits that this is not a defence taken anywhere in the correspondence exchanged between the parties. It is submitted that only because the parties agreed in clause (1) that consent terms between the parties would be filed, is no good, to contend that there is no agreement in the said document/minutes of the meeting. It is submitted that the consent terms to be filed in pursuance of the agreement, is only a consequence of the basic agreement as entered between the parties and that the agreement cannot be denied. To support this submission, Mr.Khambata placed reliance on the decision of the Supreme Court in the case of Kollipara Sriramulu (Dead) by His Legal representatives Vs. T.Aswatha Narayana (Dead) by His Legal Representatives and Ors. (AIR 1968 SC 1028). Mr.Khambata therefore, submits that the prayers as made in the application that a compromise be recorded in terms of the minutes dated 8 November 2011 and a decree to be drawn in accordance with the compromise are the reliefs entitled to the Applicant.
11. Per contra Mr.Thorat, learned Senior Counsel appearing for the Respondents has opposed the application. In support of his submission he placed reliance on the three affidavits as filed on behalf of the Respondents, and the further affidavit filed by Mr.B.Ashok, the Chairman of the Respondents filed in pursuance of the directions of this Court in its order dated 9 October 2015 and 17 December 2015. Mr.Thorat, learned Senior Counsel for the Respondents has made the following submission in opposing the application:
(I) That the minutes dated 8 November 2011 which records the agreement between the parties are not signed on behalf of the Respondents-Indian Oil Corporation Limited which a legal entity but it is signed by the Officers and/or whom no powers were vested by any resolution of the Board of Directors and, therefore, there is no concluded agreement the parties. It is submitted that the authority to enter into such an agreement would lie with the Board of Directors. To support this submission, reliance is placed on a document tendered across the Bar titled as Deleasing of Immovable Properties Committee
(II) The said minutes of the meeting did not constitute an agreement as the contents are merely negotiations. In any case there is no concluded agreement between the parties as the consent terms were required to be prepared between the parties and to be filed in the Court. Clauses (6) and (7) of the agreement as contained in the minutes indicate that the agreement was on optimistic basis as the contents therein are completely foreign to the dispute between the parties.
(III) The prayer as made by the Applicant is barred by limitation in view of Article 137 of the Limitation Act as Article 137 provides for a limitation of three years for 'any other application' to be filed for which no period of limitation is provided elsewhere, and which would begin to run from when the right accrues.
(IV) Sufficient material is not available for recording a compromise in terms of the minutes dated 8 November 2011.
Mr.Thorat, learned Senior Counsel therefore, submits that the application deserves to be rejected.
12. We have heard the learned Senior Counsel appearing for the parties. With their assistance, we have also gone through the relevant documents as placed in the paper book. The parties have advanced submission on the basis of the pleadings of this application. The parties did not lead any oral evidence.
13. At the outset, we may observe that the Respondents have not disputed the minutes dated 8 November 2011 and consequently the agreement contained therein. We first examine the submission of the Respondents as made across the bar that four officers who signed the said minutes/agreement on behalf of the Respondents had no authority. Admittedly there is no specific plea in this regard in the four reply affidavits as filed on behalf of the Respondents. Mr.Thorat, learned Senior Counsel appearing for the Respondents has supported this submission relying on the document tendered during the course of his arguments, titled as Deleasing of Immovable Properties Committee . The contents of which read as under:
DELEASING OF IMMOVABLE PROPERTIES COMMITTEE
|SCOPE||To approve deleasing of Company leased flats/ buildings/ premises and land leased from Govt. Agencies/ statutory bodies and private parties of Marketing Division.|
|CONSTITUENTS||As approved by the Board from time to time|
|CHAIRMAN OF THE COMMITTEE||As approved by the Board from time to time|
|QUORUM||As approved by the Board from time to time|
To consider the requests for deleasing of company leased flats, buildings, premises and land leased from Govt. Agencies/ Statutory bodies and private parties in line with the approved policy guidelines for deleasing of Ros. (Premises leased by the Corporation (1) for the residential use of specific employees and (2) Transit camp or Guest House on completion of lease period or when corporation owned facilities are ready before expiry of such lease are not required to be considered by Deleasing Committee and would be approved by the respective Divisional Director).
14. The contention on the basis of this document is that any act contrary to these instructions would not be binding on the Respondent-Company. Mr.Thorat, however, has not been able to show as to what is the nature of this document, whether it is a part of the Articles of Association or a part of any resolution, and how it would be applicable qua the Applicant. Thus, there is much substance in the contention as urged on behalf of the Applicant that this document being not placed on record in the four affidavits filed on behalf of the Respondents, ought not be considered. The Applicant would submit that the said document as it stands, also does not support the case of the Respondents as it only pertains to 'Deleasing of Immovable Properties Committee.' Nothing is reflected which would show that the four officers who had signed the said Minutes of the Meeting had no authority. Considering the said document we feel that there is much substance in the Applicant's contention. Admittedly, the case of lack of authority in these four officers to sign the minutes of the meeting is not pleaded in the four substantive affidavits as filed on behalf of the Respondents including the affidavit filed on behalf of the Chairman of the Respondents. We may thus observe that this defence of lack of authority as urged on behalf of the Respondents appears to be clearly an afterthought and totally unsubstantiated. In any event what is most significant that in the entire correspondence between the parties right from 8 November 2011 (date of the Minutes of the meeting/agreement) there is no whisper in this regard. In fact the entire conduct of the Respondents is completely otherwise, the Court surely cannot be unmindful of this factual position to record any contrary finding. In the absence of any basic pleadings in that regard in the replies as filed on behalf of the Respondents, such plea remains only a lame defence. We, therefore, reject this submission as urged on behalf of the Respondents.
16. We are also surprised at the stand of the Respondents and significantly when the Respondent is a public body. We cannot be unmindful of the fact that four officers who have signed the minutes of the meeting in question would do so without any authority and if at all they have undertaken this act as a mistake or unauthorised act, then we do not find anything which would in any manner indicate that the management of the Respondents has considered such an act as a mistake and it intended to rectify the same. There is not an iota of material in this regard and, thus the oral stand in this regard, as taken by the Respondents is, in our opinion, absolutely to unreal and sham. Interestingly on this background the Chairman of the Respondents has taken a completely contradictory stand. In para 8 of his affidavit, he for the first time, after three affidavits are already filed, contends that the said minutes of the meeting were based on a without prejudice discussion, and those minutes were drawn for further steps to be taken by both parties as the final decision in regard to the suit premises would rest with the Board of Directors. Having considered the earlier three affidavits which were filed by the senior officers namely two affidavits by Mr.M.S.Ghai, the Chief AandW Manager, Western Region and one affidavit Mr.Dilip Hari, General Manager (Human Resource) and which form part of the record and not withdrawn by the Respondents, we are of the clear opinion that in raising a without prejudice plea by the Chairman of the Respondents in paragraph 8 of his affidavit is completely an afterthought. Moreover, the 'without prejudice plea' is not substantiated by any document. It is for this reason that all the three earlier affidavits do not make a whisper on this issue. On what basis the Chairman of the Respondent is making this averment is completely unknown apart from being contradictory to the pleas in the earlier affidavits filed on behalf of the Respondents. As regards the Chairman's next contention that the final decision in regards the suit premises would rest with the Board of Directors is also not substantiated. There is no material placed on record to show that everything what had happened with the suit premises was only on a decision of the Board of Directors and not otherwise. The Chairman on one hand is accepting in totality the said minutes of the meeting which contained the agreement between the Respondents. The Chairman does not dispute the authority of the four officers to sign the Minutes. If this be the position, then the contentions that the final decision would be with the Board of Directors in respect of the suit premises, cannot be accepted.
17. Now coming to the next aspect as to whether the minutes dated 8 November 2011 would be an agreement and as to whether the parties intended to act upon the same. The answer to this would be in affirmative inasmuch as a perusal of the minutes dated 8 November 2011 clearly indicates that it is an agreement between the parties and the same pertains to the suit premises. The Agreement specifically records the terms which are agreed between the parties and noted by us above. It also appears to be indisputed that the parties have acted upon the agreement as recorded in the minutes. This can be clearly seen from the following facts:
(i) The Respondents issued a tender to search for an alternate property.
(ii) It is recorded in the various letters that a search for alternate accommodation is undertaken, however, it could not bear fruits.
(iii) The Applicant also assisted the Respondents in searching alternate properties.
(iv) The Applicant forwarded the consent terms to be filed in the Court.
The Respondents having received the consent terms by their letter addressed to the Applicant dated 11 December 2014 stated that changes would be made in the consent terms in respect of vacating of the premises on finalizing a suitable property and that amendments would be made by the Advocate for protecting the interest of the Respondents.
18. Thus, a perusal of the minutes dated 8 November 2011 leaves no manner of doubt that there is an agreement between the parties. Moreover, the above facts clearly demonstrate that the Respondents at all material times were conscious of the agreement and further took steps and acted upon the same. It however appears that only because the Respondents could not locate an alternate property and when it came to surrendering the possession of the suit premises as agreed in the said minutes/agreement dated 8 November 2011, the Respondents changed their stand by its letter dated 11 December 2014 addressed to the Applicant by taking a position contrary to the agreement to record that based on the management's approval and legal opinion, changes would be incorporated in the consent terms as also the vacating of the premises will be only on finalizing suitable property and that amendment would be made by the Advocate for the Respondents for protecting IOC interest. This stand on behalf of the Respondents clearly indicates a turn around on the part of the Respondents. In fact when the Respondents say this, they overlook that there is a placit acceptance of the agreement as contained in the minutes. Also the submission on lack of authority on the part of the officers who signed the minutes falls to the ground. Considering these facts, we cannot countenance the submission made on behalf of the Respondents that there is no agreement between the parties as recorded in the minutes dated 8 November 2011 and that the same pertains to the suit premises being subject matter of the present pending appeal.
19. We do not find any material on record which would indicate that the Respondents had at any point of time disputed this agreement as contained in the minutes. It is also clear that the Respondents' submission as regards the lack of authority to the four officers who have signed the agreement, the same is unsuccessfully defended as noted by us above. The learned Senior Counsel for the Applicant, would thus be correct in contending that the Applicant was never put to notice of lack of authority of these officers who have signed the minutes, and that if such lack of authority was to be pleaded, then, in that case the Applicant would have asserted its case on different issues including the principles and the doctrine of indoor management and that in the absence of such pleadings, there can be no other influence that the officers who have signed the minutes of the meeting / agreement had authority in that regard and that the said document was binding on the Respondents.
20. The next contention as urged on behalf of the Respondents is that the minutes cannot be accepted to be compromise inasmuch as the parties were to undertake a further act of filing consent terms and therefore, the agreement as contained in the minutes cannot be regarded as a conclusive agreement. We do not agree. It cannot be accepted that only because the parties were required to file consent terms, the basic agreement as contained in the minutes of the meeting can be disregarded. The filing of the consent terms was only consequence of the agreement entered between the parties. The agreement as contained in the minutes however remains intact and undisturbed. Its existence is surely not dependent on the consent terms which the parties decided to file so as to give a formal burial to the disputes. What we observe is that the agreement was intended to ultimately end the litigation. The parties accordingly acted upon the terms as contained in the agreement. Thus as a consequence of all these actions as also some other understanding not necessarily touching the dispute the parties agreeing to file consent terms is no fetter. There is nothing wrong in this approach. The basic agreement which is the foundation of the subsequent actions of the parties cannot be denied by the parties. The law in this regard is well settled. The reliance in this context on behalf of the Applicant to the decision of the Supreme Court in the case Kollipara Sriramulu (supra) is apposite. The Supreme Court has observed that a mere reference to a future formal contract will not prevent a binding bargain between the parties. The observations of the Supreme Court in paragraph 3 read thus:
3. We proceed to consider the next question raised in these appeals, namely whether the oral agreement was ineffective because the parties contemplated the execution of a formal document or because the mode of payment of the purchase money was not actually agreed upon. It was submitted on behalf of the appellant that there was no contract because the sale was conditional upon a regular agreement being executed and no such agreement was executed We do not accept this argument as correct. It is well-established that a mere reference to a future formal contract will not prevent a binding bargain between the parties. The fact that the parties refer to the preparation of an agreement by which the terms agreed upon are to be put in a more formal shape does not prevent the existence of a binding contract. There are however, cases where the reference to a future contract is made in such terms as to show that the parties did not intend to be bound until a formal contract is signed. The question depends upon the intention of the parties and the special circumstances of each particular case. As observed by the Lord Chancellor (Lord Cranworth) in Ridgway v. Wharton (1) the fact of a subsequent agreement being prepared may be evidence that the previous negotiations did not amount to a concluded agreement, but the mere fact that persons wish to have a formal agreement drawn up does not establish the proposition that they cannot be bound by a previous agreement In Von Hatzfeldt-Wild-enburg v. Alexander(1) it was stated by Parker, J. as follows :
"It appears to be well settled by the authorities that if the documents or letters relied on as constituting a contract contemplate the execution of a further contract between the parties, it is a question of construction whether the execution of the further contact is a condition or term of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through. In the former case there is no enforceable contract either because the condition is unfulfilled or because the law does not recognize a contract to enter into a contract. In the latter case there is a binding contract and the reference to the more formal document may be ignored.
21. As regards the contention of the Respondents on limitation, we may observe that the issue of limitation is not pleaded in any of the reply affidavits. The oral plea is on the basis of the Article 137 of the Limitation Act which provides for a limitation of three years for 'any other application' to be filed for which no period of limitation is provided elsewhere, and which would begin to run from when the right accrues. In our opinion, the plea that the prayers in the application are barred by limitation as urged on behalf of the Respondents, cannot be sustained. Admittedly the Respondents have failed to vacate the suit premises on the expiry of three years of the extended lease period (i.e. on or before 31 December 2014). The cause of action to seek enforcement of the agreement as contained in the minutes would arise with effect from 31 December 2014. In the fact situation, there is no need to relate back the cause of action to the date on which the agreement in the said minutes (i.e. 8 November 2011) came to be executed. The right to sue has accrued to the Applicant only when the Respondents refused to vacate i.e. after the expiry of the three years on 31 December 2014. This application was filed on 10 July 2015. The application is therefore fully within limitation from applying Article 137 of the Limitation Act.
22. Reliance on behalf of the Applicant on the decisions of the Supreme Court in the case of M/s.Silver Screen Enterprises Vs. Devki Nandan Nagpal (1970(3) SCC 878)and in the case of K.Venkata Seshiah Vs. Kanduru Ramasubbamma (Dead) by LRS (1991)3 SCC 338)is appropriate. The Supreme Court in the case of M/s.Silver Screen Enterprises (supra), has held that it is open to a party to a suit to approach the Court even in an appeal on the basis of the compromise and seek a relief of a decree in accordance with the compromise. Their Lordships in paragraph 3 have observed as under:
3. The compromise in question specifically says that the parties thereto have compromised all their disputes mentioned therein including the two matters referred to earlier. On the basis of that compromise both the appellant and the respondent were required to withdraw all the pending proceedings excepting the one mentioned earlier. There is no dispute that one of the matters compromised is that relating to the appeal with which we are concerned herein. Once a dispute is validly settled out of Court, it is open to a party to a litigation to move the Court to pass a decree in accordance with the compromise. Rule 3 of Order XXIII of Code of Civil Procedure provides that where it is proved to the satisfaction of the Court that a suit (which expression includes an appeal) has been settled wholly or in part by any lawful agreement, the Court shall order such agreement, compromise or satisfaction to be recorded and shall pass a decree in accordance therewith so far as it relates to that suit. This is a mandatory provision. It is somewhat surprising that the High Court should have felt itself helpless under the circumstances of the case to do justice between the parties. Clause 12 of the compromise provides that if the respondent does not carry out the terms of the compromise, he shall be held responsible for all the losses that the appellant may suffer because of its breach. This clause does not preclude the appellant from putting forward the compromise and asking the Court to dismiss the appeal in accordance with its terms. Both the factum and the validity of the compromise are not in dispute. Hence, the appellate court was bound to accept the same. That Court acted in accordacne with law in dismissing the appeal. Hence, the Court was clearly wrong in interfering with the judgment of the appellate court.
The Supreme Court in the case of K.Venkata Seshiah (supra) has held that once a compromise is genuine and lawful, same is required to be acted upon.
23. On the conspectus of the above facts and the position in law, we are of the clear opinion that the minutes dated 8 November 2011 is an agreement /compromise between the parties pertaining to the subject matter of the dispute namely the suit premises. It is duly signed by the respective parties. As noted above there is nothing on record that the agreement is not lawful. The compromise clearly records that the parties intended to completely put an end to the dispute pending in this appeal. The Minutes of the Meeting/agreement is not disputed by the Respondents as noted above. Thus, we have no hesitation to observe that the Applicant proves that the parties intended to compromise the dispute pending in the appeal under the minutes of the meeting / agreement dated 8 November 2011. It is thus in the interest of justice that we record the compromise and proceed to decree the suit in terms of the compromise contained in the minutes of the meeting dated 8 November 2011. We accordingly pass the following order:
(i) Special Civil Suit No.133 of 2004 is decreed in terms of the compromise between the parties as contained in the Minutes of the meeting dated 8 November 2011. The decree passed by the Trial Court dated 7 April 2009 accordingly stands modified.
(ii) First Appeal No.780 of 2009 stands disposed of in terms of clause (i) above.
iii) Applicants are permitted to withdraw the amount which stand deposited in the Trial Court.
(iv) In view of disposal of First Appeal No.780 of 2009, pending Civil Application Nos.755 of 2015 and 4203 of 2015 do not survive and are accordingly disposed of.
(v) Parties to bear their own cost.
At this stage learned counsel for the respondent seeks continuation of the interim order dated 15/7/2009 for a period of six weeks. The prayer is opposed by Mr. Agarwal for the applicants. As the interim order dated 15/7/2009 is in operation till date, it is in the interest of justice that the said interim order be continued for a period of six weeks from today. Decree be drawn up accordingly. Civil Application No.2433 of 2015 is allowed in these terms.