TaxTMI 
TaxTMI 
2000 (9) TMI 1071
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....e the respondent (judgment-debtor) evicted from the suit premises. During the pendency of the execution proceedings the parties entered into a compromise outside the court on November 7, 1990. Pursuant thereto, the respondent surrendered possession of the front portion of Door No.32, measuring 840 square feet, and for the rest of the suit premises, viz., Door No.31 and a back portion of Door No.32 (for short, the premises), the parties entered into an agreement of lease for three years, rate of rent remaining the same. The compromise, inter alia, provides that if the respondent fails to vacate the premises on the expiry of the said period, the appellant will be entitled to have the decree executed against him and get possession of the same. On filing the memo of compromise in the court, the E.P. was dismissed as "not pressed". Just before the expiry of the said period, the appellant by a written notice, sent by his advocate, asked the respondent to hand over vacant possession of the premises on November 6, 1993, the date on which the period of three years would expire. On the respondent failing to do so, the appellant filed a fresh E.P. (No.664 of 1993), for execution of....
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....arises for consideration is : whether in view of the compromise entered into between the parties and execution of a new lease deed, the ex parte decree dated May 2, 1990 got extinguished as such the appellant cannot get possession of the premises in execution of the existing decree. It may be pointed out here that after the rights of the parties are crystallised on passing of a decree by a competent court, in law they are not precluded from settling their disputes outside the court. But to have the compromise recognised by a court, it has to be recorded under Rule 2 of Order 21, C.P.C. The consequence of not having it so recorded is contained in Rule 3 of Order 21 of the C.P.C. Rules 2 and 3 of Order 21 read as under : 2. Payment out of Court to decree-holder - (1) Where any money payable under a decree of any kind is paid out of Court, [or a decree of any kind is otherwise adjusted] in whole or in part to the satisfaction of the decree-holder, the decree-holder shall certify such payment or adjustment to the Court whose duty it is to execute the decree, and the Court shall record the same accordingly. (2) The judgment-debtor [or any person who has become surety for the judgm....
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....ee, wholly or in part, and whether such adjustment or satisfaction had the effect of extinguishing the decree to that extent. If the executing court comes to the conclusion that the decree was adjusted wholly or in part but the compromise or adjustment or satisfaction was not recorded and/or certified by the court, the executing court would not recognise them and will proceed to execute the decree. That decision was followed by this Court in Badamo Devi & Ors. vs. Sagar Sharma [1999 (6) SCC 30]. Where in any execution proceedings objection to executability a decree is taken under Section 47 of the C.P.C. on the ground that by virtue of a compromise, the decree got extinguished and became inexecutable, the germane question that should be asked is whether the compromise was recorded by the court whose duty it is to execute the decree. As long back as in 1939, the Privy Council in The Oudh Commercial Bank Limited vs. Thakurain Bind Basni Kuer & Ors. [1938-39 (66) PC 84] laid down the law on the subject as follows : "If it appears to the Court, acting under Section 47, that the true effect of the agreement was to discharge the decree forthwith in consideration of certain prom....
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....aw and fact and has to be determined by the executing court on an application under Section 47 of the C.P.C. on interpretation of the decree and the compromise in the light of the facts and circumstances of each case. If on such determination it is gathered that the intention of the parties is to extinguish the decree and either the decree holder or the judgment-debtor got the compromise recorded under Rule 2 of Order 21 of the C.P.C. by the court whose duty it is to execute the decree, the execution of the decree cannot be proceeded with by the executing court. But if the intention of the parties is to keep the decree alive and to give effect to it in the manner agreed upon between the parties in the compromise, the decree will be given effect to accordingly or executed as it is depending upon whether the compromise is recorded by the court as aforementioned or not. In the instant case, as noticed above, after the decree was passed in favour of the appellant for ejectment of the respondent, the parties entered into compromise during the pendency of the execution proceedings which, inter alia, mentions that a portion of the suit premises was handed over to the appellant and in res....