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Shah Tribhuvandas Lallubhai Vs. Shah Chhitalal Chunilal - Court Judgment

LegalCrystal Citation
SubjectContract;Civil
CourtGujarat High Court
Decided On
Case NumberSecond Appeal No. 414 of 1960
Judge
Reported inAIR1963Guj256; (1963)GLR1096
ActsCode of Civil Procedure (CPC) , 1908 - Sections 2 - Order 23, Rule 3; Contract Act - Sections 74
AppellantShah Tribhuvandas Lallubhai
RespondentShah Chhitalal Chunilal
Appellant Advocate V.J. Desai, Adv.
Respondent Advocate N.R. Oza, Adv.
DispositionAppeal Dismissed
Cases ReferredLaldas v. Kishordas
Excerpt:
.....was penal in nature as such relief against forfeiture maintainable - in case consent agreement contains penalty clause court to consider terms of consent agreement before passing decree - once decree is passed it must be executed as it is in view of provisions of part ii of code unless decree is modified or reversed in appeal by superior court - effect of decree was that defendant to pay rs. 3800 due to plaintiff if he does not pay rs. 1801 on or before particular date - held, no penal clause in decree. - - it shall contain the number of the suit, the names and descriptions of the parties, and particulars of the claim, and shall specify clearly the relief granted or other determination of the suit. the learned judges who decided 36 mom lr 798: (air 1934 bom 370) did not refer..........this contention was rejected in appeal by the district judge, baroda, who held that there was no penal clause in the decree. he also held that the contention was barred by the principle of res judicata in view of the decision inspecial suit no. 103 of 1953 which was filed by the sons of the judgment-debtor to which the judgment-debtor was a party, wherein an issue was raised whether the plaintiffs proved that the aforesaid decree was of a penal nature and hence not binding upon them. on that issue a negative finding was recorded. the learned appellate judge observed, that although the judgment-debtor was not a co-defendant, the contention having been disposed of finally, it operated as res judicata. on both these grounds, he dismissed the appeal filed before him by the judgment-debtor......
Judgment:

V.B. Raju, J.

1. This arises out of a consent decree passed in a suit filed by the respondent. In the decree it was provided that if the amount of Rs. 1,801/- was not paid by a particular date, the appellant should pay Rs. 3,800/- to the plaintiff. The decree was partly executed in Darkhast No. 29 of 1953 in the Sankheda Civil Court, that is, in the Court which passed the decree. It was then transferred to the Dabhoi Court for execution in regard to the balance of the money. The contention taken before the Dabhoi Court was that the decree was penal and that, therefore, there should be relief against forfeiture and relief against the penalty. This contention was rejected in appeal by the District Judge, Baroda, who held that there was no penal clause in the decree. He also held that the contention was barred by the principle of res judicata in view of the decision inSpecial Suit No. 103 of 1953 which was filed by the sons of the judgment-debtor to which the judgment-debtor was a party, wherein an issue was raised whether the plaintiffs proved that the aforesaid decree was of a penal nature and hence not binding upon them. On that issue a negative finding was recorded. The learned Appellate Judge observed, that although the judgment-debtor was not a co-defendant, the contention having been disposed of finally, it operated as res judicata. On both these grounds, he dismissed the appeal filed before him by the judgment-debtor. Hence this second appeal by the original judgment-debtor.

2. In appeal it is contended that a penalty contained in a second decree can be relieved against even by the executing Court and reliance is placed on Barjorji Shapurji v. Madhavlal Jesingbhai, 36 Bom LR 798: (AIR 1934 Bom 370), Mohiuddin v. Mt. Kashmiro Bibi : AIR1933All252 , and Shyam Sunder v. Indramoni Das, AIR 1951 Orissa 46. It is contended that in the case of a decree passed upon a compromise, the principle of Section 74, Contract Act would apply. It is difficult to agree with this contention. A decree as defined in Section 2 of the Civil Procedure Code is the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to the matters in controversy in the suit decided. Therefore, if the Court passes a decree that Rs. 3800/- are due to the plaintiff from the defendant, that is an adjudication which conclusively determined the rights of the parties unless the decree is taken up in the appeal. Under Section 33 of the Civil Procedure Code, after hearing the case, the Court shall pronounce the judgment and on such judgment a decree shall follow. It is provided in Section 34 of the Civil Procedure Code that interest can be ordered at such rate as the Court deems reasonable. In the case of a suit for money, the decree, therefore, adjudges the amount due to the plaintiff. Order 20, Civil Procedure Code, refers to judgment and decree and Rule 6 of Order 20 provides as under:

'(1) The decree shall agree with the judgment: it shall contain the number of the suit, the names and descriptions of the parties, and particulars of the claim, and shall specify clearly the relief granted or other determination of the suit.

(2) The decree shall also state the amount of costs incurred in the suit, and by whom or out of what property and in what proportions such costs are to be paid.

(3) The Court may direct that the costs payable to one party by the other shall be set off against any sum which is admitted or found to be due from the former to the latter.'

Rules in the First Schedule have effect as if enacted in the body of the Code (vide Section 121of the Civil Procedure Code). Appendix 'D' to the First Schedule gives the Forms of the decrees. In the case of a suit for money, the Form shown is Form No. 2 and the reference is to Section 34 of the Civil Procedure Code. That Form reads as follows:

'Claim forThis suit coming on this day for finaldisposal before in thepresence of for the plaintiffand of for the defendant,it is ordered that do pay tothe the sum of Rs.with interest thereon at the rate ofper cent per annum fromto the date of realization of the saidsum and do also pay Rs.the costs of this suit, with interestthereon at the late of per cent. perannum from this date to the date ofrealization.Given under my hand and the seal ofthe Court, this day of 19.'

The Court, therefore, orders the defendant to pay certain sum of money to the plaintiff. In the instant case the effect of the decree is that the defendant should pay to the plaintiff Rs. 3800/-if he does not pay Rs. 1801/- on or before a particular date. The amount of Rs. 3800/- is, therefore, the amount adjudged by the Court. It ii a relief granted to the plaintiff by the Court. A I decree as defined in Section 2 of the Code can never be a contract between the parties although the decree is based upon consent terms. Strictly speaking, the decree is the result of adjudication by the Court and the reason of such adjudication is the consent of the parties. A decree as defined in Section 2 of the Civil Procedure Code can never be a contract and the principles of Section 74 can never apply to a decree. Courts of civil justice are meant to do justice between the parties and are not, meant to penalize any party. It is, therefore, difficult to agree with the contention that a decree of a Civil Court might be penal in nature. A judgment of a Criminal Court can be penal, but the judgment of a Civil Court can never be penal. It is the result of the adjudication by the Civil Court of the rights of the parties. The Civil Court only decides what amount is due to the plaintiff from the defendant. If the consent agreement between the parties contains a penal clause, in that case the Civil Court should give its attention that and should not incorporate the penal clause of the agreement into the decree. Whether there is a penal clause in the agreement or contract between the parties is for the Court to decide before passing a decree. It is not open to any Court, after the decree is passed, to ascertain whether the decree as passed contains a penal clause. The idea of a penal clause is foreign to a decree of a Civil Court. The Civil Court only adjudicates upon the civil rights of the parties and when it makes a decree, the decree contains only an adjudication as regards the civil rights of the parties. The view that I have taken was taken in Shirakuli Tinnappa v. Mahablya, ILR 10 Bom 435. It was there held that the doctrine of penalties was not applicable to stipulations contained in decrees. Reference was also made to the following observations of West, J.:--

'The principles which govern the enforcement of contracts and their modification, when justice requires it, do not apply to decrees which, as they are framed, embody and express such justice as the Court is capable of conceiving and administering. The admission of a power to vary the requirements of a decree once passed would introduce uncertainty and confusion. No one's rights would, at any stage, be so established that they could be depended on, and the Courts would be overwhelmed with applications for the modification, on equitable principles, of orders made on a full consideration of the cases which they were meant to terminate. It is obvious that such a state of things would not be far removed from a judicial chaos; and as ordinary decrees are thus unchangeable, so we think are those in which, through a special provision for the convenience of parties, their own disposals of their disputes are embodied. The doctrine of penalties is not applicable to such a class of cases; and those who, with their eyes open, have made alternative engagements and invited alternative orders of the Court, must if theyfail to perform the one, perform the other, how ever greatly severe its terms may be.' But it is contended that the decision of the Division Bench in ILR 10 Bom 435 was overruled by the Full Bench in Krishnabai v. Harigovind, ILR 31 Bom 15. The decisions of one Division Bench of a High Court could only be overruled by the Privy Council at that time and by the Supreme Court now. No Division Bench of any High Court whether it consists of 3 Judges, 5 Judges or 7 Judges is given the power by High Court Charter to overrule the decisions of another Division Bench even if it consists of 2 Judges. As a matter of fact the decision of the Division Bench in ILR 31 Bom 15 consisting of 3 Judges refers to some other point altogether. The question referred to that Division Bench was, 'whether when a plaintiff is seeking to enforce by original suit a right to forfeiture contained in a consent decree whereby the status of landlord end tenant is established between the plaintiff and defendant, the Court in the exercise of its equitable jurisdiction is precluded from granting such relief against forfeiture as it might have granted, had the status arisen from contract or custom.'

The learned Judges were dealing with a suit to enforce a consent decree and were not dealing with the execution of a consent decree. The decision in ILR 31 Bom 15 (FB) is, therefore, on a different point altogether and need not be further considered. In 36 Born LR 798: (AIR 1934 Bom 370), a decision of the Full Bench in Laldas v. Kishordas, ILR 22 Bom 463, was referred to. It was to the effect that an executing Court can look at an agreement made before the date of the decree providing that the decree shall not be executed according to its terms. That again is a different question altogether. The agreement was to the effect that the decree should not be executed according to its terms. There is no such agreement in the present case. The learned Judges who decided 36 Mom LR 798: (AIR 1934 Bom 370) did not refer to either ILR 10 Bom 435 or ILR 31 Bom 15 (FB). The principle enunciated in 36 Bom LR 798 : (AIR) 1934 Bom 370) by a Division Bench is completely cotradictory to that enunciated by the Division Bench of the same Court in ILR 10 435. The provisions in the Civil Procedure Code relating to execution contained in Part II clearly show that the decree should be executed as it is. It is provided in Section 74 of the Con-tract Act that where a penalty is stipulated for in a contract, the Court has certain powers in regard to the consequences of the breach of a con-tract. The Court passing a decree can relieve a party from the penalty clause in a contract. Therefore, if a consent agreement contains a penalty clause, the Court would consider the terms of the consent agreement before passing a decree. If the consent agreement contains a penalty clause, the Court which passes a decree should act under the provisions of Section 74 before passing the decree. But once a decree is passed, it must be executed as it is in view of the provisions of Part II of the Civil Procedure Code unless the decree is modified or reversed in appeal by superior Court. For the reasons given above, I do not agree with the decisions in : AIR1933All252 and AIR 1951 Orissa 46. I also agree with the learned Appellate Judge when he observes that there is no penal clause in the decree because even according to the plaintiff's suit, he was entitled 16 Rs. 3800/-. The effect of the decree is that the defendant should pay Rs. 3800/-. which was due to the plaintiff, if hedoes not pay Rs. 1801/- on or before a particular date. This is certainly not a penal clause. It is not, therefore, necessary to decide the question of res judicata in view of the above finding.

3. The appeal is dismissed but no order as to costs.


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