TaxTMI 
TaxTMI 
2005 (10) TMI 568
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....en the two daughters of DS and Lady DS viz. Amteshwar Anand (AA), Kirpal Kaur (KK) and KK's daughter, Guneeta, on the one hand and the heirs of Maninder and Mahinder on the other. It is unnecessary to burden this judgment with the names of all the parties except to note the name of the main respondent in these appeals. He is Virender Mohan Singh (VMS) and is the son of Maninder. He is supported by the other heirs of Maninder who are also respondents before us, including Maninder's eldest son, Anand Deep Singh (ADS). Although Mahinder's heirs are separately represented they also support VMS. 3. The basic question to be decided in these appeals is whether the disputes between the parties were set at rest by a valid consent decree dated 25th August, 1993 disposing of Suit No.63 of 1975 and Suit No.1495 of 1989. Suit No.63 of 1975 had been filed by Maninder, against Lady DS, Mahinder, AA, KK and KK's daughter, Guneeta. Suit No.1495 of 1989 was filed by ADS against AA, KK and Guneeta, the heirs of Mahinder and the other heirs of Maninder. Basically, both the suits were filed for partition of the properties of DS, portions of which were already in occupation and enjoyme....
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....sive properties of the defendant Shri V.M. Singh subject to the payments being made as specified aforesaid. Shri V.M. Singh shall be the owner of all interests, rights and benefits that have accrued or may accrue in favour of Smt. Kirpal and Kumari Guneeta and shall deem to vest with all the benefits accruing to Shri V.M. Singh and would deem to have been assigned in his favour and he shall be treated the exclusive owner to the extent of shares devolving on her from late Sir Datar Singh, late lady Satwant Datar Singh, HUF or otherwise. Smt. Kirpal and Kumari Guneeta also release, relinquish and assign their rights in 4.3 acres of land situated in Khasra No.128 of Village Behta, Bairagarh Bhopal standing in the names of Smt. Kirpal Kaur and Kumari Guneeta. (e) All the liabilities, litigations, consequential proceedings before the revenue authorities or otherwise shall be carried on by Shri V.M. Singh entirely at his responsibility and risk. Smt. Kirpal and Kumari Guneeta shall not be liable or responsible directly or indirectly for any acts, deeds that Shri V.M. Singh may do in regard to the property in question and he further assures that he shall do all lawful acts and deeds und....
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....ith the interest claimed by AA and VMS in the estate of DS. Its provisions were partly confirmatory of certain actions already taken by the respective parties in connection with such properties, some clarificatory, some operative in praesenti and others executable in future. The relevant clauses of the agreement provided as follows:- "a. That it is agreed that Defendant V.M. Singh shall pay a sum of Rs. 15 lakhs to Smt. Amteshwar Anand, Defendant No.8 on or before 30.6.1994. b. That Smt. Amteshwar Anand will have a lien over 8 acres of land falling to the share of Shri V.M. Singh by succession on the death of Sardar Maninder Singh the father of Shri V.M. Singh who was the owner of 41.2 acres of land. The lien will be till the said payment of Rs. 15 lakhs is made by Shri V.M. Singh to Smt. Amteshwar Anand. c. That Smt. Amteshwar Anand shall continue to remain in possession of 11 acres of land situated at Punjab Khor which is in her possession in pursuance of the order of the Revenue Authority dated 28.5.1975. It is clarified that Smt. Amteshwar Anand was in possession of 13 acres of land at the said village Punjab Khor and had sold two acres of land. d. That Smt. Amteshwar A....
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....nd VMS being I.A. No.4252 of 1993 in Suit No.1495 of 1989 under Order XXIII Rule 3 of the Code asking the Court to accept the compromise arrived at between the applicants. The application was disposed of on 27th May 1993 by directing the agreement " be taken on record". 6. On the very next day i.e. on 28th May, 1993 a third agreement was executed reflecting an oral settlement between the heirs of Maninder, including VMS (who were referred to as the second party) on the one hand and the heirs of Mahinder (referred to as the first party) on the other. AA, KK and Guneeta were included as the third and fourth parties to the deed "through their assignee____ appellant Virender Mohan Singh." It is not necessary to record the terms of the deed as they are not relevant to the issues raised in this appeal except to note clause (8) which provides: "That it is expressly agreed and undertaken by S. Virender Mohan Singh of the Second Party that he alone shall be responsible and liable to satisfy any present or future claim that may be made on the share falling to the first party under the present settlement/compromise by either the other members of the Second party, members/heirs and assignee....
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.... and decree passed by the Court should be cancelled. An agreed order was passed by the High Court of Delhi on 8th November,1995 under which KK and Guneeta were directed to execute a General Power of Attorney in favour of VMS within 2 weeks and deposit the same in Court when VMS would make payment of the balance amount as claimed by them. Pursuant to the order, VMS brought bank drafts for the balance amount but KK and Guneeta refused to accept the same. On 27th May 1996, AA filed an application for setting aside the second agreement and the decree dated 25th August 1993 on the ground that the agreement between AA and VMS was conditional upon VMS making payment of Rs. 15 lakhs to AA on or before 30th June 1994, that VMS had failed to pay the amount of Rs. 15 lakhs within that date or thereafter and had thereby committed a fundamental breach of the compromise and that the agreement stood repudiated. It was also alleged that the land over which AA was to have a lien by way of security for payment of Rs. 15 lakhs had also been mortgaged to Punjab National Bank which was the subject matter of a suit. This fact had been fraudulently suppressed by VMS. Furthermore, it was claimed that th....
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....by the appellants and accordingly dismissed the appeals. Two appeals have been preferred before us from the decision of the Division Bench. We also propose to dispose of them by this common judgment. 11. Before us, learned counsel appearing on behalf of AA has submitted that no notice was given to AA of the alleged family settlement or of the application for the compromise decree and she had no knowledge of the decree dated 25th August 1993. It was submitted that the compromise on which the decree was passed was not signed by AA and, therefore, was not binding on her under the provisions of Order XXIII Rule 3 of the Code. It was further submitted that no right had been created under the second agreement in favour of VMS and that he had not been assigned AA's share in the suit properties. It was said that the third agreement dated 28th May,1993 was admittedly a record of an earlier oral agreement dated 1st May, 1993 to which AA was not a party. It was contended that the purported assignment was not an assignment in law: first, because the agreement was a conditional one, namely the rights of AA were to be transferred to VMS subject to VMS making payment; second, the assignment....
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....atter of the compromise decree and which AA had sought to sell. It was submitted that only property which was the subject matter of the two suits had been affected by the agreement or the family settlement. The property of forty four acres of land in Raisen which were owned by Virender Singh, AA's son had already been sold to VMS by Virender Singh who had admittedly been paid the full consideration therefor. The conveyance could not be executed because the necessary papers were with the first appellant, who was at that time not in the country. Our attention was drawn to several documents in this connection. Clause (e) in the agreement between AA and VMS, according to VMS, merely clarified the position. It was submitted that the appellants had knowledge of the consent decree. Even after knowledge of the decree they were interested only in receiving the monies payable under their respective agreements and not in setting aside the final consent decree. Reliance was placed on some correspondence as well as on the 1995 application of KK and Guneeta. It was therefore submitted that the appeals should be dismissed. ADS has appeared through counsel and has supported VMS. He has said t....
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....o the three appellants were, on the other hand, to be made in future. The phrase "subject to the payments being made" in clause (d) of the first agreement and clause (f) of the second agreement does not operate as a precondition to the relinquishment of the rights of KK, Guneeta and AA in the suit properties. According to these clauses of the agreements, vesting had already taken place or was to take place with the execution of the agreements. In this context, to construe the phrase 'subject to' as amounting to a pre-condition would be contrary to the body of the clauses in which the phrase appears. The only meaning we can give to the phrase consistently with the other terms of the agreement, is that it imposed a personal obligation on VMS to make the payments . By the agreement, as has been rightly held by the courts below, the parties had finally resolved disputes with regard to their shares in the suit properties. Therefore, even if VMS had defaulted in making payment to the appellants of the amounts as specified in the agreements that would not give the appellants a ground to rescind the agreements. 14. The next question raised by the appellants relates to Order XXIII ....
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....ect of the suit properties had not yet been agreed upon, the stages were split into two. This does not mean that the orders dated 18th March, 1993 and 27th May, 1993 were not in keeping with the provisions of Order XXIII Rule 3. What the High Court has done by the two orders dated 18th March, 1993 and 27th May, 1993 is to comply with the mandate to record the agreements. 16. Finally the Court is required to pass decree in accordance with the agreement or compromise. The learned Single Judge correctly came to the conclusion that no decree could be passed disposing of the suits at that stage as the other parties in the suit had not yet entered into any settlement. When the third agreement was also filed subsequently, the Court recorded the statements of VMS who had also signed the third agreement as the assignee of the appellants, as well as the statements of the representatives of the other heirs. All the parties to the suits by this time had settled their differences in the pending suits. The submission of the appellants that their statements were required to be recorded is unacceptable in view of our finding that they had assigned their rights in the suit properties (except as pr....
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....did not seek to either create, declare, assign, limit or extinguish either in present or in future, any right title or interest in the property within the meaning of Section 17 (1)(b) of the Registration Act. All that Clause (e) of the second Agreement expressly did was to clarify a previous deal. It did not affect any change to any legal rights in the property and merely recited what the existing rights were. This clause would not therefore serve to take the consent decree dated 25th August, 1993 outside the scope of the exception in Section 17(2)(vi) of the Registration Act, 1908. 19. The disputes in the two suits between all the parties were resolved by the three agreements. But in concluding the three agreements, care was taken to see that the terms and conditions of one agreement did not conflict with the terms and conditions of another. Parties had separately signed their agreements and approached the Court (albeit at different points of time) seeking to get a decree passed in terms of their agreements. As such it was not necessary for the parties to one agreement to sign the other two agreements. It was thus also not necessary for any of the appellants to have signed the th....