JUDGMENT
Madan B. Lokur, J.
1. By this judgment, I propose to dispose of two applications being IA No. 4079/2006 and IA No. 5215/2006, both filed by Defendant No. 8.
2. In IA No. 4079/2006, the prayer is for this Court to intervene in the matter and direct the Plaintiff to execute the documents that have been annexed to the application. In IA No. 5215/2006, the prayer is to permit Defendant No. 8 to deposit in this Court the draft of Rs. 2 crores bearing No. 363488 dated 20th March, 2006 drawn on Oriental Bank of Commerce, Connaught Circus, New Delhi or in the alternative to permit Defendant No. 8 to deposit the amount in the name of the Registrar General of this Court.
3. These two applications have come to be filed in rather unfortunate circumstances.
4. The Plaintiff is the daughter-in-law of Defendant No. 8 and a partner in Defendant No. 1 (Hotel Marina). Defendants 2 to 9 are also partners in Hotel Marina. Admittedly, the Plaintiff has 8% share in the partnership business.
5. The Plaintiff has alleged in the plaint that Defendant No. 8 was not acting in the interest of the firm or the Plaintiff and this led to some disputes between the parties. It was alleged that there was mis-appropriation of funds and copies of accounts, etc. had not been forwarded to the Plaintiff who lost faith and confidence in the working of the partners of the firm. According to the Plaintiff, under these circumstances, it would be just, reasonable and equitable to dissolve the partnership firm and so she prayed for a decree of dissolution dissolving the partnership firm known as M/s. Hotel Marina and for a decree of rendition of accounts in respect of the business of M/s. Hotel Marina
6. In paragraph 16 of the plaint, it was averred that the value of the claim for the purposes of jurisdiction is fixed at Rs. 2 crores, which is the approximate value of the claims of the Plaintiff for the relief of rendition of accounts and dissolution of firm.
7. It seems that an arbitrator was also appointed to look into the disputes between the parties but since it was essentially a family dispute, some talks of an out of court settlement were perhaps simultaneously going on between the parties. Accordingly, on 23rd February, 2006, it was noted that the disputes between the parties are likely to be settled finally and it would be appropriate if the arbitration proceedings do not continue.
8. On 27th February, 2006, it was noted that learned Counsel for the Defendants agreed to pay a sum of Rs. 2 crores as claimed by the Plaintiff in paragraph 16 of the plaint but the Plaintiff who was present in person said that she was not willing to settle the matter. Accordingly, the matter was listed for disposal of the pending applications for 3rd March, 2006.
9. On 3rd March, 2006, the parties approached this Court with a settlement. They handed over a joint application under Order XXIII Rule 3 of the CPC and this was subsequently numbered as IA No. 6376/2006.
10. Broadly, the application stated that the parties have settled their disputes and that Defendant No. 8 had agreed to pay to the Plaintiff a sum of Rs. 2 crores on or before 30th March, 2006 in full and final settlement and adjustment of all rights that the Plaintiff may have in M/s. Hotel Marina including her share in the firm. The application was signed by the parties and supported by their affidavits. Since the parties were present in Court, the statement of the Plaintiff and the statement of Defendant No. 8 were recorded on oath and they confirmed the settlement in terms of the compromise application.
11. At this stage, I think it will be appropriate if some of the actual terms of the compromise application are reproduced. Paragraph 1(i), (ii), (iii) and 2 are of some importance and read as follows: –
1. The parties have amicably, by their free will and consent compromised the present suit on the following terms:
(i) The Defendant No. 8 shall pay to the Plaintiff a sum of Rs. 2,00,00,000/- (Rupees Two Crores only) on or before 30th March, 2006.
(ii) The said payment shall be in full and final settlement and adjustment of any and all rights, title or interest of the Plaintiff in the Defendant No. 1 Firm and the assets, properties, belongings, tenancy and business and affairs of the said Firm, including Plaintiff’s 8% share in the said Firm.
(iii) Upon the said payment,
(a) The Plaintiff shall cease to have any share in the Defendant No. 1 Firm and shall also have no claim or demand upon the said Firm.
(b) The Plaintiff shall have retired from the Defendant No. 1 firm with effect from 1st April 2006 or earlier when payment is made.
(c) The plaintiff shall have no subsisting dispute or difference with any of the defendants firms and all its partners all disputes and differences same shall be deemed to be fully and finally, unconditionally and absolutely satisfied.
(d) (e) (f) xxx xxx xxx
(g) The plaintiff undertakes to this Hon’ble Court that from time to time she shall at the request of Defendant No. 8 sign and execute any and all documents, papers and deeds required to give effect to the terms of this Agreement including the Dissolution Deed.
(h) xxx xxx xxx
2. The parties stated the Agreement arrived at between them, as aforesaid, it lawful and fully and finally settles the subject matter of the present suit and in any manner relating to the Defendant No. 1 firm. With the above said settlement, nothing with respect to the Defendant No. 1 firm remains to be adjudicated.
12. It appears to me on a plain reading of the aforesaid terms of settlement between the parties that Defendant No. 8 was to pay to the Plaintiff a sum of Rs. 2 crores on or before 30th March, 2006. It was also understood that this payment would be in full and final settlement and adjustment of any and all rights, title or interest that the Plaintiff may have in M/s. Hotel Marina and the assets, properties, belonging, tenancy and business and affairs of the Firm including her 8% share in the said firm. It was also clear that upon payment, the Plaintiff will have no claim or demand upon the firm and any dispute or difference would be deemed to be fully and finally, unconditionally and absolutely satisfied. In other words, on payment of a sum of Rs. 2 crores, no dispute or difference remained between the parties. The Plaintiff also undertook to execute necessary documents to give effect to the settlement including a dissolution deed.
13. In IA No. 4079/2006, it was stated by Defendant No. 8 that pursuant to the settlement a demand draft of Rs. 2 crores was prepared in the name of the Plaintiff on 20th March, 2006 along with necessary documents. The documents were handed over to the advocate of the Plaintiff on 21st March, 2006 for his perusal and they were returned on 27th March, 2006 after lunch with some minor changes. At that time (that is after lunch on 27th March, 2006), it was agreed between the parties that the documents would be executed on 29th March, 2006 along with registration of an irrevocable power of attorney. But it is alleged that on 29th March, 2006, the Plaintiff declined to execute the documents and wanted to make some more changes in them and claim some amounts lying with the partnership firm in her name. This was objected to by Defendant No. 8.
14. In view of these developments, on 29th March, 2006 itself an application was moved by Defendant No. 8 praying for the intervention of this Court in directing the Plaintiff to execute the documents.
15. The application was taken up for consideration on 5th April, 2006 and notice was issued to the Plaintiff, which was accepted by her learned Counsel in Court. Learned Counsel for the Plaintiff sought four weeks time to file a reply and learned Counsel for Defendant No. 8 also sought four weeks time to file a rejoinder with the result that the application was adjourned for hearing on 25th May, 2006.
16. On 4th May, 2006, Defendant No. 8 moved IA No. 5215/2006 in which it was stated that Defendant No. 8 had offered the amount of Rs. 2 crores to the Plaintiff and had requested her to execute the documents but she declined to do so. Under the circumstances, it was prayed in the application that the demand draft that was already prepared in favor of the Plaintiff may be permitted to be deposited in this Court or in the alternative Defendant No. 8 may be permitted to deposit an amount of Rs. 2 crores in the name of the Registrar General of this Court.
17. IA No. 5215/2006 was taken up for consideration on 8th May, 2006 and after issuing notice the application was listed for hearing on 25th May, 2006. Defendant No. 8 was permitted to deposit the amount of Rs. 2 crores in the Registry of this Court and the office report is that the amount has since been deposited.
18. On 15th May, 2006, the Plaintiff filed her reply to both the applications above mentioned. In her reply, the Plaintiff stated that Defendant No. 8 failed to make the payment of Rs. 2 crores on or before 30th March, 2006 and that he also refused to accept the changes that were suggested in the documents.
During the course of hearing, the only objection that was pointed out by learned Counsel for the Plaintiff in the documents was to the words underlined in paragraph 5 of the deed of retirement, that is,
5. That the continuing Partners agree and undertake to transfer the amounts standing to the credit of the retiring Partners under fixed Capital/ Current account including the amounts relating to the profit for the year ended 31st March, 2006 to the account of party of the Seventh part.
These words may have been repeated in other documents but they are really the bone of contention, the claim of the Plaintiff being that she had given some loan to the partnership firm and that was not accounted for and that loan was over and above the settlement amount of Rs. 2 crores and did not form a part of the compromise between the parties.
19. Learned Counsel for the Plaintiff made two submissions to contend that the compromise between the parties has fallen through and, therefore, cannot be enforced. The first contention was that the payment of Rs. 2 crores was not made to the Plaintiff on or before 30th March, 2006 and secondly the settlement between the parties was only with regard to the dispute raised in the plaint concerning the Plaintiff’s 8% share in M/s. Hotel Marina. There were some other amounts that was given by the Plaintiff to M/s. Hotel Marina on loan (or were due to the Plaintiff) and they were not the subject matter of the suit and, therefore, not a subject matter of the settlement between the parties.
20. Taking the second argument first, I think it merits complete rejection. The compromise application filed between the parties, the relevant terms of which have been reproduced above, clearly shows that the intention of the parties was to bring a complete end to all disputes and differences between them. The Plaintiff had valued her share in the assets of M/s. Hotel Marina at Rs. 2 crores, as mentioned in paragraph 16 of the plaint and this amount was agreed to be paid by Defendant No. 8 to her along with execution of certain documents. The Plaintiff has not said anywhere in the plaint that there are some other claims in respect of M/s. Hotel Marina or that she had given some loan to M/s. Hotel Marina. Similarly, in the compromise application the Plaintiff has not stated anywhere that she has any other claim in respect of M/s. Hotel Marina either in terms of a loan or in any other manner whatsoever or that she would like to reserve her right to raise any other outstanding dispute in respect of M/s. Hotel Marina at an appropriate forum.
21. On the contrary, the compromise application between the parties uses vast and expansive phraseology, such as ‘full and final settlement’ and adjustment of any and all rights, title or interest … in the … assets, properties, belongings, tenancy and business and affairs of the said Firm including Plaintiff’s 8% share in the said firm. The compromise application also records that the Plaintiff shall have no claim or demand upon the said firm and shall have no subsisting dispute or difference with the firm and all disputes and differences shall be deemed to be fully and finally, unconditionally and absolutely satisfied. The application also records that with the above settlement nothing with respect to the Defendant No. 1 firm remains to be adjudicated.
22. I have no manner of doubt that the intention of the parties was absolutely clear that they wanted to fully and completely settle all their differences and disputes without leaving anything outstanding.
23. As regards the first contention urged by learned Counsel for the Plaintiff, I do not find much substance in that also. The main thrust of the submission was that in terms of the compromise between the parties Defendant No. 8 was required to pay the amount of Rs. 2 crores to the Plaintiff on or before 30th March, 2006. If one were to interpret this literally, it would mean that the amount of Rs. 2 crores would have to be in the possession of the Plaintiff on or before 30th March, 2006. It is put to learned Counsel for the Plaintiff that if in a given situation, as in the present case, a demand draft is actually given to the Plaintiff but she decided not to encash it, could it be said that Defendant No. 8 has not paid Rs. 2 crores to her on or before the due date. Of course, learned Counsel for the Plaintiff realised the difficulty in pressing a literal interpretation and, therefore, very fairly did not advance it any further.
24. Under the circumstances, if one would look at the matter in a more pragmatic manner, the intention of the parties clearly was that an amount of Rs. 2 crores should be made available to the Plaintiff on or before 30th March, 2006. It is not as if the amount was to be paid to her or credited in her bank account because even in such a situation it is quite possible that after taking the amount of Rs. 2 crores, the Plaintiff might not execute the documents postulated in the compromise application. The intention of the parties, therefore, was that the execution of the documents on the transfer of Rs. 2 crores would have to be simultaneous and possibly at a joint sitting. It appears that this was also the understanding between the parties because there was no dispute about the fact that learned Counsel for the parties had agreed to meet on 29th March, 2006 for the execution of the documents, the draft of Rs. 2 crores having already been prepared more than a week earlier. Unfortunately, there seems to be some misunderstanding between the parties on 29th March, 2006 with the result that the documents were not executed and, therefore, demand draft was not given to the Plaintiff.
25. The reason for non-execution of the documents, as would transpired from the date of hearing of the applications is that the Plaintiff made out a claim for certain other amounts which will, according to her, due as a result of loan given by her to M/s. Hotel Marina.
26. It appears to me that the story of loan having been given by the Plaintiff to M/s. Hotel Marina or some other amount being due to her from M/s. Hotel Marina is a complete after thought. There is absolutely no mention about this in the plaint and in fact the plaint records in paragraph 16 that the amount, according to the Plaintiff would be about Rs. 2 crores. The Plaintiff did not reserve any right to raise any additional claim against M/s. Hotel Marina and even if she did have such claims, in view of the provisions of Order II Rule 2 of the CPC, the claims must be deemed to have been given up. Additionally, the compromise application makes it absolutely clear that there were no disputes and differences between the Plaintiff and M/s. Hotel Marina other than the amount of Rs. 2 crores, which according to the Plaintiff is due to her.
27. Learned Counsel for the Plaintiff very strongly urged that the amount of Rs. 2 crores should at least have been tendered to the Plaintiff and this was not done. I think learned Counsel for the Plaintiff is clutching at Strauss. There is no dispute about the fact the demand draft was prepared by Defendant No. 8 in favor of the Plaintiff on 20th March, 2006. No dispute has been raised by the Plaintiff that she was unaware of the draft having been made out in favor of the Plaintiff on 20th March, 2006. During the course of hearing, learned Counsel for the Plaintiff handed over a letter dated 31st March, 2006 signed by learned Counsel for Defendant No. 8 to him in which it is quite clearly mentioned that the lawyers had met in the morning of 29th March, 2006 in the premises of High Court for execution and registration of documents. A pay order of Rs. 2 crores was also shown to the Plaintiff on that occasion but the Plaintiff requested for certain changes in the documents, which were not accepted by Defendant No. 8.
28. In view of the events that transpired on 29th March, 2006, Defendant No. 8 immediately moved an application seeking the intervention of this Court. This clearly shows that in so far as Defendant No. 8 is concerned, he was quite clear in his mind that he wanted the settlement go through and had made efforts to ensure that it goes through by preparing the demand draft in favor of the Plaintiff on 20th March, 2006, arranging for preparation of the requisite documents and handing over them over to learned Counsel for the Plaintiff on 21st March, 2006 and even accepting the corrections made by the Plaintiff in the first instance. It is only the second set of corrections that was sought to be made by the Plaintiff which was objected to by Defendant No. 8 on 29th March, 2006.
29. As mentioned above, learned Counsel for the Plaintiff pointed out the objectionable portion of the documents. The objectionable portion only relates to the so-called claim of the Plaintiff for an additional amount, which she says was due to her as a result of a loan given by her to M/s. Hotel Marina. As already indicated above, there is no factual foundation for such a loan having been given nor is there any mention of it in any of the documents on record and even if there was such a loan, the claim was either given up by the Plaintiff by failing to mention it in the plaint or reserving her right to take appropriate action in respect of that through a separate proceedings and in any event the compromise application makes it absolutely clear that no claim in respect of it was fully and finally settled when the compromise application was signed by the parties and the statement of the Plaintiff was recorded in Court.
30. This is not clear what has motivated the Plaintiff to take the stand that she has, but I find no justifiable reason for her intransigence, while rejecting her contentions and allowing the applications filed by Defendant No. 8, I will impose costs of Rs. 5,000/- on the Plaintiff. She should pay these costs to Defendant No. 8 within a period of four weeks from today.
31. The amount of Rs. 2 crores is lying deposited in the Registry of this Court. The Plaintiff is free to withdraw this amount and the Registry should hand over the amount upon her execution of the documents, the text of which has been filed along with IA No. 4079/2006.
32. Needless to say, after execution of the documents if any registration of any of the documents is required under law, the Plaintiff would cooperate in that process.
33. The applications are disposed of in view of the above.