http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5  

PETITIONER: SMT. KALLOO & ORS.

       Vs.

RESPONDENT: DHAKADEVI & ORS.

DATE OF JUDGMENT09/02/1982

BENCH: ISLAM, BAHARUL (J) BENCH: ISLAM, BAHARUL (J) VENKATARAMIAH, E.S. (J)

CITATION:  1982 AIR  813            1982 SCR  (3) 201  1982 SCC  (1) 633        1982 SCALE  (1)177

ACT:      Code of Civil Procedure 1908 s. 47 and Or. XXI.      Landlord and  Tenant-Decree for  possession obtained by landlord execution  against tenant-Matter compromised-Tenant to continue  in portion  of property and pay damages for use and occupation  without default-Breach  by  tenant-Execution petition by  landlord-Whether maintainable-Test-Whether  the compromise extinguishes  decrees and  creates fresh lease or provides mere mode for discharge of decree.

HEADNOTE:      The predecessor  of the  respondents filed  a suit  for eviction of  the predecessor  of the  appellants from a shop and obtained  a decree  on March  21, 1960 for eviction. The decree-holder filed  an application for the execution of the decree on  March 22,  1966 and  during the pendency of these proceedings, a  compromise  was  entered  into  between  the parties, and the Executing Court passed an order dated March 21, 1968 in terms of the compromise. The compromise provided for the  judgment-debtor to  give vacant  possession of  the remaining half  of the shop to the decree-holder by December 31, 1972  and to  pay damages  for use and occupation by the 5th of  every month  to the  decree-holder at  Rs. 110/- per month, and  that on six months damages being due the decree- holder will be entitled to have the shop vacated.      The  decree-holder  filed  an  execution  petition  for recovery of  possession on  November 25,  1975 alleging that the judgment  debtor had not paid damages at the rate of Rs. 110/- per  month from  July  1,  1975.  The  judgment-debtor contested the  execution  proceedings  contending  that  the terms of  compromise created  a fresh lease in favour of the judgment-debtor in  respect of  the remaining  half  of  the shop, and  that the decree was therefore not executable. The Executing  Court  upheld  the  objection  holding  that  the compromise dated March 21, 1968 amounted to a fresh lease.      On appeal,  the District  Judge, set aside the order of the Executing  Court, but  in Second  Appeal, the High Court upheld the  order of  the District  Judge, and dismissed the appeal.      In the  appeal to this Court it was contended on behalf of the  appellant/judgment-debtor, that the compromise dated March 21,  1968 created  a fresh  lease, in  favour  of  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5  

judgment-debtor in  respect of  the undelivered  half of the shop and the decree-holder’s remedy was by way of a suit for recovery of possession. 202      Dismissing the appeal, ^      HELD: When  a compromise  takes place  in the course of execution of  a  decree  for  eviction  the  compromise  may extinguish the  decree and  create a  fresh  lease,  or  the compromise may  provide a mere mode for the discharge of the decree. What actually takes place depends upon the intention of the  parties to  the compromise, and the intention has to be gathered  from  the  terms  of  the  compromise  and  the surrounding circumstances  including the  order recorded  by the Court on the basis of the compromise. [205 C-D]      In the  instant case  para 1 of the compromise petition and  the   order  of   the  Executing  Court  recording  the compromise  disclose  the  intention  of  the  parties.  The judgment-debtor had  already vacated  "half of  the shop and given its possession" and time was granted till December 31, 1972 for  vacating and  delivering possession  of the  other half of  the shop  as the  judgment-debtor wanted  time till then lest  his business "will be ruined by vacating the shop in hurry."  This shows that the intention of the parties was not to  create a  fresh lease  in respect of the half of the shop in possession of the judgment-debtor but to help him to find out alternative accommodation and time for vacating was given till  December 31,  1972. Further, the term ’damages’, and not  ’rents’ is  used in the compromise petition as well as the  order of  the Executing  Court. The intention of the parties  clearly  was  not  to  extinguish  the  decree  for eviction but to create a mode of its full discharge. [205 E- H]      Konchada Ramamurthy  Subudhi &  Anr. v.  Gopinath Naik, [1968] 2 SCR 559, referred to.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 2612 of 1981.      Appeal by  special leave  from the  judgment and  order dated the 6th January, 1981 of the Madhya Pradesh High Court (Jabalpur Bench) in M.P. No. 87 of 1980.      Amlan Ghosh for the Appellants.      Sobhagmal Jain and S.K. Jain for the Respondents.      The Judgment of the Court was delivered by      BAHARUL ISLAM,  J. This  appeal by  special leave is by the judgment-debtors.  The material  facts which  are not in dispute may be stated thus:      2. The  predecessor  of  the  respondents  (hereinafter referred  to  as  ’the  decree-holder’)  filed  a  suit  for eviction of  the predecessor  of the appellants (hereinafter referred to  as ’the judgment-debtor’) and obtained a decree on 21.3.1960, inter alia, for eviction from a 203 shop. The  decree-holder filed  a petition  for execution of the decree  for eviction in the executing court on 3.1.1961. The petition  was dismissed  on 20.1.1961.  A fresh petition for execution  was filed on 19.1.1965. It was also dismissed on 20.3.1965.  The decree-holder  again filed an application for  execution  of  the  decree  on  22.6.1966.  During  the pendency of  this execution  proceeding, the parties filed a compromise  petition   on  31.3.1968.   The  terms   of  the compromise on the interpretation of which the result of this

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5  

appeal depends were as follows:      (Material portions only):           "In the  above case,  a compromise has taken place      between the parties as follows:      (1)  That for  the present  the judgment-debtor  is not           getting a  shop. His  established business will be           ruined by  vacating the  shop in hurry. Therefore,           the judgment-debtor  wants  time  till  31.12.1972           from the  decree-holder for vacating half the shop           in his  possession. So  the  judgment-debtor  will           vacate the shop and give possession thereof to the           decree-holder by  31.12.1972. He  has vacated half           the shop and given its possession.      (2)  That during  this period the judgment-debtor shall           pay damages  to the  decree-holder for  use of the           shop @ 110/- per month.      (3)  That the  damages shall  be paid  upto the  5th of           every  month.  In  the  event  of  non-payment  of           damages for  any  six  months,  the  decree-holder           shall be  entitled to  get  the  shop  immediately           vacated, by  filing execution, from the possession           of the  judgment-debtor, without  any objection as           regards limitation.      (4)  The decree-holder  wants to  have new shutters put           up after  removing the  present  shutters  in  the           front portion  of the  shop.  The  judgment-debtor           will not be entitled to object to this.      He will  help in  the putting  of girders  and he  will vacate the portion.      If he  will demur to it, the decree-holder can have the shop vacated,  without any  objection as  regards the  above limitation. 204      So, the  aforesaid compromise  be accepted  and kept on record."      3. It  is also  not in  dispute that at the time of the compromise, half  of the  shop  had  been  vacated  and  its possession delivered  to the  decree-holder as stated in the compromise petition. In order to appreciate the intention of the parties to the compromise, it is also necessary to refer to the order dated 21.3.1968 recorded by the execution court on the  basis of  the compromise.  The material  para of the order is para 3 and it is in the following terms:           "The judgment-debtor  to give vacant possession of      the shop  to the decree-holder by 31.12.72 according to      the compromise  and he  will pay  damages for  use  and      occupation by  the 5th  of every  month to  the decree-      holder according  to the  compromise @  Rs.  110/-  per      month. On  six months’  damages being  due, the decree-      holder will  be entitled  to have the shop vacated. The      decree-holder  will   provide  shutters  in  the  front      portion. The judgment-debtor will not object to them.      The case is decided in terms of the compromise.      The compromise be recorded."      4. On  25.11.1975, the decree-holder filed an execution petition for  recovery of  possession of the portion of shop in possession  of the  judgment-debtor,  alleging  that  the judgment-debtor had  not paid  damages at  the rate  of  Rs. 110/- per  month from  1.7.1975.  Notice  of  the  execution petition was  issued to the judgment-debtor who appeared and raised several  objections to the execution proceedings. But we are concerned in this appeal only with one which was that in terms  of the  compromise, a  fresh lease  was created in favour of  the judgment-debtor  in respect  of the remaining half of the shop. It was therefore submitted that the decree

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5  

was not executable. The Executing Court upheld the objection holding that  the compromise  dated 21.3.1968  amounted to a fresh lease.  An appeal  was  taken  to  the  Court  of  the District Judge  who set  aside the  order of  the  Executing Court. In  a second  appeal, the High Court upheld the order of the  District Judge,  and dismissed  the  appeal.  It  is against this  order of  the High  Court is  this  appeal  by special leave. 205      5. The  only point urged before us by Shri Amlan Ghosh, learned  counsel   for  the  judgment-debtor  was  that  the compromise dated  21.3.1968 created  a fresh lease in favour of the judgment-debtor in respect of the undelivered half of the shop,  and the  decree-holder’s remedy was by a suit for recovery of its possession.      6. When  a compromise petition is filed in an execution proceeding, and  a contention  is raised  by  the  judgment- debtor on  a  subsequent  execution  being  started  by  the decree-holder that  the compromise has given rise to a fresh contract between  the parties  and that the decree sought to be executed is not executable, what is to be seen is whether the  decree  has  been  extinguished  as  a  result  of  the compromise  and   a  fresh  contract  has  emerged.  When  a compromise takes  place in  the course  of  execution  of  a decree-for  eviction,  the  compromise  may  extinguish  the decree and  create a  fresh lease,  or  the  compromise  may provide a  mere mode  for the  discharge of the decree. What actually takes place depends on the intention of the parties to the compromise. And the intention has to be gathered from the  terms   of   the   compromise   and   the   surrounding circumstances including  the order  recorded by the Court on the basis of the compromise.      7. In  the instant  case, paragraph 1 of the compromise petition quoted  above and  the order of the Executing Court recording the  compromise are  important  and  disclose  the intention of  the parties.  Paragraph 1  of  the  compromise petition shows that the judgment-debtor had already "vacated half of  the shop  and given  its possession"  and time  was granted  till   31.12.1972  for   vacating  and   delivering possession of  the other  half of  the shop as the judgment- debtor wanted  time till  then lest  his business  "will  be ruined by  vacating the  shop in  hurry". This clearly shows that the  intention of the parties was not to create a fresh lease in  respect of  the half  of the shop in possession of the judgment-debtor,  but to  help the  judgment-debtor find out, not  in a hurry; alternative accommodation for his shop so that  his established  business was not ’ruined’ and time for vacating the half of the room was given till 31.12.1972. And this was also how the compromise petition was understood by the  Executing Court  when it  recorded in  para 3 of its order: "The judgment-debtor to give vacant possession of the shop to  the decree-holder  by 31.12.1972  according to  the compromise.....". The  intention of  the parties clearly was not to  extinguish the  decree for  eviction but to create a mode of its full discharge. 206      8. The  above interpretation  gets support from the use of the  term ’damages’,  and not  ’rents’, in the compromise petition as  well as  the order  of the Executing Court. The view we have taken gets support also from a decision of this Court reported  in [1968]  2 SCR  559.(1). In that case, the appellant filed  a suit  for eviction of the respondent from the appellant’s  house. The  suit was dismissed by the trial court In  appeal compromise  was entered  into  between  the parties  and   the  decree   was  passed  in  terms  of  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5  

compromise. The  compromise provided  for  the  respondent’s continuation of  possession of the house for five years, but it enabled  the appellant  to execute the decree by evicting the respondent,  if the  latter failed to pay rent for three consecutive months.  When the  appellant sought to evict the respondent, the  latter claimed  protection from eviction on the ground  that the  compromise decree  created a lease. It was held by this Court that the facts that the appellant had filed  a  suit  for  eviction  of  the  respondent  and  the compromise decree  enabled him  to  execute  the  decree  by evicting the  respondent, showed  that the  intention of the parties, which  was the decisive test, was not to enter into a relationship of landlord and tenant.      9- This  appeal has  no merit  and  is  dismissed  with costs. N.V.K.                                     Appeal dismissed. 207