Law Web: Whether the court can pass decree the suit or mould the relief on the basis of reneged compromise?

In view of the aforesaid, a compromise pursis at

Exh.13 duly signed by the parties to the appeal, was

presented before the first appellate Court on 3/9/2020 with

the following prayer therein :

“The appeal be ordered as withdrawn in terms of

the Compromise and the Decree of R.C.S.

No.119/2015 passed by C.J.S.D. (M.C.A.),

Aurangabad on 9.9.2019 be confirmed as per terms

and conditions of this Compromise and oblige.” {Para 25}

26. Thereafter the Law Officer of the AMC submitted a

pursis dated 15/9/2020, whereunder the AMC reneged on the

compromise pursis. The first appellate Court, therefore, did

not endorse the compromise. The appeal was heard on its

merits and came to be dismissed.

35. The subsequent event of the compromise between

the AMC and the plaintiff firm or concessionaire is a fact not in

dispute. Most of the terms of compromise were executed in

nature. True, some of them were executory. To be specific,

additional FSI was to be granted permitting further

construction. It is also true that, the subject matter of the

present appeal is not the enforcement of the terms of the

compromise.

This Court, relying on decision of the Apex Court

in case of Nidhi (supra), finds that, when the AMC went back

on its promise and it has offered every excuse therefor, this

Court finds that, those facts need not be brought on record by

amending the respective pleadings. This subsequent event is

the admitted fact. The defendant AMC is a local authority. It

has a battery of lawyers on its panel to advice it. True, it has

every authority not to take the compromise terms to logical

conclusion. The Court seized of the present Second Appeal,

however, could not be oblivious to the factum of settlement.

In the present case, a compromise pursis was

submitted for withdrawal of the appeal. Be that as it may.

This Court is neither endorsing the compromise nor enforcing

the same. The factum of compromise, however, is viewed to

hold the defendant – AMC to have diluted its stand on the

decision of cancelling the lease agreement for illegality

committed by the plaintiff firm and/or its sister concern.

In view of the above, the substantial questions of

law are answered accordingly.

IN THE HIGH COURT OF JUDICATURE OF BOMBAY

BENCH AT AURANGABAD

SECOND APPEAL NO.335 OF 2022 WITH

CIVIL APPLICATION NO.8534 OF 2022

M/s Shalaka Engineers and JV Vs Aurangabad Municipal Corporation,

CORAM : R. G. AVACHAT, J .

Dated : 22nd December, 2022

This is original plaintiff’s appeal from appellate

decree (Second Appeal). The plaintiff is a partnership firm. It

filed a suit, being Regular Civil Suit No.119/2015 against

Aurangabad Municipal Corporation (AMC) for the following

reliefs :-

(a) By Decree of Declaration it be declared that

the order dated 24/7/2015 passed by the

Defendant terminating the Agreement of

Lease dated 16/10/2009 is illegal, null and

void and be quashed.

(b) By Decree of Mandatory Injunction the

Defendant be directed to remove the seal

affixed from the suit property as described in

the claim clause and description clause of the

plaint on 25/7/2015, vide Panchanama of the

even date.

Defendant be restrained from creating any sort

of third party interest in the suit property of

any nature and also from causing obstruction

and interference in the peaceful possession of

the Plaintiff of the suit property as described

in the claim clause and description clause of

the plaint.

2. The trial Court decreed the suit vide its judgment

dated 9/9/2019. The AMC, therefore, preferred first appeal,

being Regular Civil Appeal No.254/2019. The appellate Court,

vide its judgment and decree dated 14/1/2022, reversed the

decree passed by the trial Court and dismissed the suit.

3. The facts giving rise to this Second Appeal are as

follows :-

An open site bearing C.T.S. No.16262, situated at

Jyotinagar, Aurangabad belongs to AMC. A swimming pool

complex with amenities was proposed to be constructed

thereon under Build Operate and Transfer (BOT) Scheme. A

concessionaire agreement was, therefore, executed between

AMC and Shalaka Engineers & Joint Ventures (JV) on

7/5/2007. Shalaka Engineers and Joint Ventures, under the

concessionaire agreement, was authorised to lease out

swimming pool complex to anyone on certain terms and

conditions. A tri-party agreement was executed between

AMC on one hand and Shalaka Engineers and JV and plaintiff

firm on the other. Needless to mention, the plaintiff firm is a

sister concern or the subsidiary of Shalaka Engineers and JV.

The plaintiff firm was given the swimming pool complex on

lease.

4. All was well for initial period of six years. The

project was run smoothly. As per the case of the AMC, the

plaintiff firm committed breach of the terms and conditions of

agreement. The plaintiff firm made unauthorised and illegal

construction on the open land. A Hukka Parlour was operated

from one of the shop blocks in swimming pool complex. A

massage parlour was opened in another block. Females were

engaged as masseuse. Under the guise of massage parlour,

illegal activities were performed. A restaurant was opened at

the swimming pool. One side transparent glass partition was

raised between the restaurant and the swimming pool. It was

only with a view that the customers at the restaurant could

watch swimming activities of women. The AMC received

number of complaints from the residents. The AMC

authorities, therefore, paid visit to the swimming pool. The

police too paid similar visit. Crimes came to be registered.

The concerned pleaded guilty for the offence of running Hukka

Parlour. They were sentenced to pay a fine. The AMC first

issued the plaintiff firm a notice, calling upon it to give

explanation. The notice was purportedly issued in terms of

clause No.5.6 of the lease agreement. The AMC authorities,

after having realised that activities committed by the plaintiff

firm were illegal, invoked clause 5.19. Lease agreement came

to be cancelled. The swimming pool complex came to be

placed under seal.

5. The plaintiff firm initially filed Writ Petition against

the AMC. The petition came to be disposed of with a direction

to AMC to de-seal the premises and take appropriate action in

accordance with law. The plaintiff, meanwhile, preferred

Municipal Appeal, under Section 81(F) of the Bombay

Provincial Municipal Corporations Act (for short, the Act). The

appeal came to be dismissed with the observations that the

plaintiff has not challenged the order of termination of the

lease. The plaintiff firm, therefore, filed the suit.

6. The trial Court decreed the suit, observing the

plaintiff to have not been given due opportunity of hearing

before the action impugned in the suit was taken by the AMC.

The first appellate Court upset the decree passed by the trial

Court. It observed that, the plaintiff firm indulged in illegal

activities and thus committed breach of the terms of the lease

agreement. The AMC was, therefore, justified in invoking

clause 7.19 of the lease agreement to terminate the same.

7. This Second Appeal is being finally decided at

admission stage on the following substantial questions of law,

although the learned counsel for the appellant submitted no

such questions of law arise herein.

(I) Whether in the facts and circumstances of the case

the first appellate Court was justified in reversing

the decree passed by the trial Court ?

(II) Whether in view of the subsequent events,

particularly settlement between the parties,

interference with the impugned decree is

warranted ?

8. Point No.I :-

Clause (1) of the Concession Agreement dated

7/5/2007 executed between AMC and M/s Shalaka Engineers

and JV reads :-

“ (1) Scope of work :- The project scheme is to

develop the part of open space by constructing

swimming pool with Amenities through

entrepreneur/ bidder. The project scheme

involves construction of swimming pool, children

swimming pool with all amenities like- health

club and health care facilities shower area, sports

shop etc. as per D.C. rules. The successful

entrepreneur/ bidder will be responsible for the

construction of the swimming pool complex by

his own funds. The Aurangabad Municipal

Corporation owner of land of project will allow

the successful entrepreneur/ bidder to recover his

investment by giving the successful entrepreneur/

bidder the right to lease out swimming pool

complex having land area 2114.75 sq.mt. with

constructed area 422.95 sq.mt. on a long term

lease of 30 years further renewal for maximum

99 years to occupants of his choice on payment

of non refundable deposit or by making members

of his choice by charging membership fees to

avail the swimming pool complex facilities to

recover his investment on the said project. The

occupant of swimming pool complex will have to

pay rent Rs.5/- per sq.mt. per month on

chargeable area to A.M.C. for first 30 years.

A.M.C. will renew this lease for further 30 years

on same rent a max. of 99 years.”

9. Admittedly, the plaintiff firm, a subsidiary of M/s

Shalaka Engineers and J.V., filed the suit in a capacity as an

occupant of the swimming pool complex. A tripartite

agreement in the nature of B.O.T. agreement for lease was

executed on 16/10/2009 between AMC on one hand and the

plaintiff firm with M/s Shalaka Engineers and J.V. on the other.

In the definition clause of the said agreement, the term

“Concessionaire’s Event of Default” has been defined as :-

“Concessionaire’s Event of Default” means the

concessionaire failure to perform any of its

obligations in accordance with the provisions of

this agreement and or the concession agreement.”

10. Clauses 5.6 and 7.19 of the B.O.T. agreement for

lease (Exhibit B) are very much relevant to decide the present

Second Appeal. Both the clauses are, therefore, reproduced

for ready reference :-

“5.6: In the occupant event of default after the

concession period, AMC shall serve upon the

occupant a notice in writing mentioning therein

the default and shall time, as may deem fit and

proper considering the nature of default, to the

occupant for removal/ rectification of the default.

In case the occupant does not remove/ rectify the

default, AMC is empowered to terminate this

lease agreement by giving a one month notice in

this regard.”

7.19: That the occupant shall not carry on any

illegal activity in the leased premises. In case he/

she/ it does so, the the lease granted under this

agreement shall liable to be terminated forthwith

without notice.”

11. It is the case of the AMC that, the concessionaire,

M/s Shalaka Engineers and J.V. committed illegal activities on

the leased premises and, therefore, the agreement of lease

came to be terminated invoking clause 7.19. The illegal

activities stated to have been committed are :-

Unauthorised construction in the parking space,

open space. Hukka parlour was being run. Restaurant, music

and dancing class and massage parlour were operated

unauthorisedly. A glass partition was raised between the

swimming pool and the restaurant. The glass was of such a

type (transparent from one side), whereby swimming

activities of women could be seen from the pool side

restaurant.

12. Learned counsel for the AMC would submit that,

the concessionaire or even the plaintiff firm has admitted in

no uncertain terms the commission of illegal activities. The

AMC was, therefore, justified in invoking clause 7.19 of the

lease agreement. According to him, M/s Shalaka Engineers

and J.V. had preferred a Municipal Appeal, challenging the

AMC’s action of taking possession of the swimming pool

complex. The appeal came to be dismissed. The order

passed therein had not been challenged. As such, the said

order attained finality. Validity of clause 7.19 has not been

challenged. A team of officials of the AMC has paid visit to

the swimming pool complex. First Information Reports have

been lodged against the representatives of the plaintiff firm.

In case of illegal running of Hukka parlour, the concerned

pleaded guilty and even paid fine. Section 43 of the Indian

Penal Code defines the term ‘illegal’ to mean everything which

is an offence or which is prohibited by law, or which furnishes

ground for a civil action; and a person is said to be “legally

bound to do” whatever it is illegal in him to omit.

13. Complaints from residents of Jyotinagar locality,

whereat the swimming pool complex is situated, were

received. Because of a foot-fall at the swimming pool

complex on account of illegal activities, life of women in the

vicinity became unsafe. Attention of this Court was adverted

to the oral evidence in the case.

14. Learned counsel for the plaintiff firm would, on the

other hand, submit that, the alleged illegal activities have

already been done away with. Running of Hukka parlour is

not such an activity warranting action under clause 7.19. He

relies on the judgment of the Apex Court in case of Narinder

S. Chadha Vs. Municipal Corporation of Greater Mumbai [AIR

2015 SC 756]. The relevant provisions of the Cigarettes and

Other Tobacco Products (Prohibition of Advertisement and

Regulation of Trade and Commerce, Production, Supply and

Distribution) Act, 2003 were also relied on.

15. A team of officers of AMC paid visit to the

swimming pool complex on 3/7/2015. A panchanama of the

visit (Exh.52) was drawn. The AMC issued M/s Shalaka

Engineers and J.V. a communication dated 17/7/2015

(Exh.57) in relation to illegalities noticed at the swimming

pool complex. The last clause of the communication states in

so many words that, it was a notice in terms of clause 5.6 of

the lease agreement. The plaintiff firm gave its response

dated 23/7/2015 to the notice (Exh.57). It half-heartedly

denied commission of illegal activities at the swimming pool

complex. It was its stand that the restaurant was being run

for only refreshment purposes. It was given to an operator-

Mr. Amol Pawar. The Hukka parlour was being run without the

knowledge of the plaintiff firm. The activities such as parlour,

music and dancing class would in no way be termed to be

illegal. No complaint was ever received in that regard. The

AMC was ultimately requested to withdraw the notice.

16. It appears that, the AMC had constituted a three

member committee of its officials purportedly on the

directions of the High Court in a Writ Petition. This Court does

not find any such direction asking the AMC to constitute a

committee. Be that as it may, a Writ Petition filed by M/s

Shalaka Engineers and J.V. (Writ Petition No.6834/2015) was

disposed of vide order dated 10/7/2015 with the following

observations :-

“(1) Heard. Learned counsel appearing for

Municipal Corporation, Aurangabad, on

instructions, makes a statement that the Municipal

Corporation shall draw panchanama, tomorrow i.e.

on 11th July, 2015 and de-seal the premises, i.e.

swimming pool complex with amenities situated at

Plot No.CTS No.16261 at Jyotinagar, Aurangabad;

and the Corporation may also continue with the

action, which is already initiated.

2) It would be open for the Municipal

Corporation to take appropriate steps and action in

accordance with the BOT lease agreement for lease

and in consonance with the provisions of law.”

The aforesaid order, in no way, suggests the AMC

to have been given any direction to constitute a three

member committee.

17. The Committee gave its report to the

Commissioner, AMC on 23/7/2015. It concluded the plaintiff

firm (occupant) to have committed unauthorised activities

and, therefore, it would be desirable to cancel the lease

agreement, taking recourse to clause 7.19. The

Commissioner, AMC, therefore, vide order (Exh.79) dated

24/7/2015, cancelled the lease agreement. The swimming

pool complex came to be placed under its seal.

18. The reasoning given by the first appellate Court

that recourse to clause 5.6 could have only been taken only

during the first year of the lease agreement, was unfounded.

It was nobody’s case as well. This Court, therefore, do not

propose to advert to the said reasonings.

19. A reference to relevant oral evidence would not be

out of place at this stage itself.

The plaintiff’s witness Sunil Mulchand Raka has

admitted in no uncertain terms to have had made

unauthorised illegal construction in the open space and

parking area. He also admitted that, Hukka parlour was being

operated. Undisputedly, a particular type of glass through

which activities at the swimming pool could be seen from the

pool side restaurant was raised. It is also not in dispute that,

a massage parlour was being operated from one of the blocks

in swimming pool complex.

As against this, the witness examined on behalf of

the AMC admitted that, M/s Shalaka Engineers and J.V. has

filed the suit in the capacity of occupant. He also admitted

that, M/s Shalaka Engineers and J.V. was appointed as

occupant in dual capacity as functional and occupant. In case

of any default, objectionable wrong on the swimming pool

complex, could be rectified as per clause 5.6. He also

admitted that, there was no hearing or decision on the basis

of letter dated 17/7/2015. BOT Cell of AMC had not put up a

proposal for termination of lease agreement. The

Commissioner did not obtain approval of general body prior to

taking decision of termination of agreement of lease. The

witness went on to admit that, so called illegalities were

removed/ done away with before 25/7/2015 itself. He was

specific to state that, all illegalities were removed between

3/7/2015 and 24/7/2015.

20. Admittedly, the representatives of the plaintiff firm

pleaded guilty in a prosecution instituted under Section 33(w)

read with Section 131 of the Mumbai Police Act and under

Section 4 read with 21 of the Cigarettes and Other Tobacco

Products (Prohibition of Advertisement and Regulation of

Trade and Commerce, Production, Supply and Distribution)

Act, 2003 (for short the Act). It was relating to running of a

Hukka parlour/ restaurant without obtaining a permit or

licence to operate the same. They paid a fine of Rs.1200/-

each. It is also true that, an F.I.R. has been lodged for

illegalities, namely unauthorised construction etc.

21. Section 4-A of the Act speaks of prohibition of

Hukka Bar. The Section reads :-

“4-A. Prohibition of hookah bar.

Notwithstanding anything contained in this Act,

no person shall, either on his own or on behalf of

any other person, open or run any hookah bar in

any place including the eating house.

Explanation:- The term “eating house” shall

have the same meaning as assigned to it in clause

(5A) of section 2 of the Maharashtra Police Act.

Section 3-ee of the Act defines the term “hookah

bar” to mean an establishment where people gather to smoke

tobacco from a communal hookah or narghile which is

provided individually.

Section 21-A of the said Act came to be introduced

by way of amendment in 2018, whereunder, contravention of

provision of Section 4-A is made punishable with

imprisonment which may extend to three years and with fine

which may extend to one lakh rupees but which shall not be

less than fifty thousand rupees. This was not the legal

position when the offence of running Hukka parlour was

committed. At the relevant time, it was an offence under

Mumbai Police Act. The contravention was punishable with

imposition of fine only.

22. Although motive of the operators of pool side

restaurant and massage parlour was oblique, there is nothing

to suggest that under the guise of running a massage parlour,

illegal activities like prostitution was being run.

23. True, the fact remains that the plaintiff firm

committed illegal activities in operating the swimming pool

complex. The question is whether the AMC was justified in

cancelling the lease agreement, taking recourse to clause

7.19. True, the said clause empowers the AMC to cancel the

lease agreement at once, once any illegal activity is noticed.

Admittedly, the communication/ notice dated 17/7/2015 was

issued to M/s Shalaka Engineers and J.V. taking recourse to

clause 5.6 of the lease agreement. The same suggests the

AMC authorities had called upon the noticee to rectify the

wrong within a notice period of one month. Admittedly, all

the illegal activities were removed before 24/7/2015. When

the AMC takes recourse to clause 5.6 of the lease agreement,

the same suggests that the illegal activities committed by M/s

Shalaka Engineers and J.V. were not of such a nature

compelling to have a recourse to clause 7.19. Admittedly, the

noticee - M/s Shalaka Engineers and J.V. gave its response to

the communication dated 17/7/2015, calling upon the AMC to

withdraw the notice since unauthorised construction was

removed and other illegal activities were ceased. In this

factual backdrop, the AMC ought not to have taken recourse

to clause 7.19 to cancel the lease agreement and place the

swimming pool complex under seal.

24. Had the AMC really been serious over the

illegalities/ lapses committed by the plaintiff firm, it would not

have entered into a compromise. Pending the first appeal,

tenure of the elected body of people’s representatives came to

an end. The Municipal Commissioner became the

Administrator of the AMC. He is said to have taken a stock of

all BOT projects. He decided to enter into a compromise with

M/s Shalaka Engineers and J.V. A copy of the minutes of the

meeting dated 31/8/2020 indicates that on negotiations with

Sunil Raka, developer of the swimming pool complex, a

revised agreement of lease was decided to be entered into.

The developer agreed to enhance the lease amount from

Rs.5/- to Rs.15/- per sq.mtr. Thereafter on 28/8/2020, the

Municipal Commissioner-cum-Administrator approved the

proposal regarding entering into a renewed lease. For better

appreciation, the order approving the proposal is reproduced

below in verbatim.

{Vernaculars omitted}

25. In view of the aforesaid, a compromise pursis at

Exh.13 duly signed by the parties to the appeal, was

presented before the first appellate Court on 3/9/2020 with

the following prayer therein :

“The appeal be ordered as withdrawn in terms of

the Compromise and the Decree of R.C.S.

No.119/2015 passed by C.J.S.D. (M.C.A.),

Aurangabad on 9.9.2019 be confirmed as per terms

and conditions of this Compromise and oblige.”

26. Thereafter the Law Officer of the AMC submitted a

pursis dated 15/9/2020, whereunder the AMC reneged on the

compromise pursis. The first appellate Court, therefore, did

not endorse the compromise. The appeal was heard on its

merits and came to be dismissed.

27. The learned counsel for the AMC made very many

submissions in this regard. He first took this Court through

the legal dictionary meaning of the term ‘compromise’. He

then relied on relevant provisions of Order 23 of the Code of

Civil Procedure. He also relied on the judgments of the Apex

Court in this regard. According to him, the decree in terms of

compromise was not passed. The first appeal was argued on

its own merits without taking recourse to the subsequent

event of proposed compromise. The terms of compromise

were not in the nature of concluded contract. The plaintiff has

filed a Writ Petition before this Court for enforcement of the

terms of compromise. No ground in that regard has been

made in the memo of this Second Appeal. An affidavit of a

Law Officer was placed on record in justification of going back

on the terms of compromise. It was further submitted that,

the first appellate Court did not verify the compromise memo.

The compromise was withdrawn before it received sanctity of

the orders of the Court. Till the stage of verification of the

compromise, the compromise was not concluded and consent

to the same could be withdrawn. It was also submitted that,

since there was an interim order against the AMC, preventing

it from creating any third party interest in relation to the

swimming pool complex, it was thought fit to take appropriate

steps in accordance with law for putting the property for

beneficial use of citizens. Complaints from the residents

were, however, received. A proposal of compromise got wide

publicity in the dailies. Ex-Corporators were up in ante. It

was, therefore, thought expedient not to go ahead with the

compromise. Relevant provisions of Order 23 Rule 3 have

also been adverted to. This Court do not propose to

reproduce the same.

28. A brief reference to the authorities relied on by the

learned counsel for the AMC is necessary before arriving at a

conclusion.

In case of Shyama Sundar & ors. Vs. Ram Kumar

& anr. [ AIR 2001 SC 2472 ], the issue involved was, whether

amended Section 15 of Punjab Pre-emption Act had

retrospective effect. The Hon’ble Supreme Court held that,

the Amending Act being prospective in operation, did not

affect the rights of the parties to the litigation on the date of

adjudication of preemption suit and the appellate Court was

not required to take into account or give effect to the

substituted Section 15 introduced by the Amending Act.

This Court has carefully perused the entire

judgment and specifically paragraphs No.29 and 30 thereof.

The said judgment is quite distinguishable and would,

therefore, be of no assistance to AMC in the facts and

circumstances of the case.

29. The judgment of the Apex Court in case of Sushil

Kukar Agarwal Vs. Meenakshi Sadhu & ors. (Civil Appeal

No.1129 of 2012) speaks of a suit for specific performance of

development agreement. Provisions of Section 14 of the

Specific Relief Act, 2018 were under consideration in the said

appeal.

30. The facts in case of R. Rathinavel Chettiar Vs. V.

Sivaraman [ (1999) 4 SCC 89 ] suggest that, permission to

withdraw a suit after passing decree and matter being at

appellate stage, was not granted to the plaintiff since the

subject matter of the suit (immovable property) was sold

pending the suit. The assignees became parties on the basis

thereof. The Court found that, allowing of application for

withdrawal of the suit by plaintiff would have been prejudicial

to valuable rights that came to be vested in the transferees.

31. The judgment of Apex Court in Banwari Lal Vs.

Smt. Chando Devi (through L.R.) & anr. [ AIR 1993 SC 1139 ]

speaks of, that even after a compromise has been recorded,

the Court concerned can entertain an application under

Section 151 of the Code of Civil Procedure questioning the

legality or validity of the compromise. Rule 3-A of Order 23

bars a remedy of suit to set aside a decree on the ground that

the compromise of which the decree was based, was not

lawful.

32. This Court has also perused the Apex Court

judgment in case of State of Punjab & ors. Vs. Ganpat Raj

[ AIR 2006 SC 3089 ] and the judgment of Madras High Court

in case of Athappa Gounder Alias Poosari Gounder Vs.

Periasami Gounder [ AIR 1956 Madras 344 ] to find to have

no bearing on the fate of the present Second Appeal.

33. In case of Nidhi Vs. Ram Kripal Sharma (D)

through L.Rs. (Civil Appeal No. 1008 of 2017), the Apex Court

observed :-

15. Ordinarily, rights of the parties stand

crystallised on the date of institution of the suit.

However, the court has power to take note of the

subsequent events and mould the relief accordingly.

Power of the court to take note of subsequent events

came up for consideration in a number of decisions. In

Om Prakash Gupta vs. Ranbir B. Goyal (2002) 2 SCC

256, this Court held as under:-

“11. The ordinary rule of civil law is that the

rights of the parties stand crystallised on the

date of the institution of the suit and,

therefore, the decree in a suit should accord

with the rights of the parties as they stood at

the commencement of the lis. However, the

Court has power to take note of subsequent

events and mould the relief accordingly

subject to the following conditions being

satisfied: (i) that the relief, as claimed

originally has, by reason of subsequent

events, become inappropriate or cannot be

granted; (ii) that taking note of such

subsequent event or changed circumstances

would shorten litigation and enable complete

justice being done to the parties; and (iii) that

such subsequent event is brought to the notice

of the court promptly and in accordance with

the rules of procedural law so that the

opposite party is not taken by surprise. In

Pasupuleti Venkateswarlu v. Motor & General

Traders (1975) 1 SCC 770 this Court held that

a fact arising after the lis, coming to the

notice of the court and having a fundamental

impact on the right to relief or the manner of

moulding it and brought diligently to the

notice of the court cannot be blinked at. The

court may in such cases bend the rules of

procedure if no specific provision of law or

rule of fair play is violated for it would

promote substantial justice provided that there

is absence of other disentitling factors or just

circumstances. The Court speaking through

Krishna Iyer, J. affirmed the proposition that

the court can, so long as the litigation pends,

take note of updated facts to promote

substantial justice. However, the Court

cautioned: (i) the event should be one as

would stultify or render inept the decretal

remedy, (ii) rules of procedure may be bent if

no specific provision or fair play is violated

and there is no other special circumstance

repelling resort to that course in law or

justice, (iii) such cognizance of subsequent

events and developments should be cautious,

and (iv) the rules of fairness to both sides

should be scrupulously obeyed.”

Om Prakash Gupta’s case was referred with

approval in Ram Kumar Barnwal vs. Ram

Lakhan (Dead) (2007) 5 SCC 660.

34. While in case of Bachhaj Nahar Vs. Nilima Mandal

& anr. (Civil Appeal Nos.5798-5799 of 2008), the Apex Court

has observed :-

“8. . . . . . . . . . . . . .

(i) No amount of evidence can be looked into,

upon a plea which was never put forward in the

pleadings. A question which did arise from the

pleadings and which was not the subject matter of

an issue, cannot be decided by the court.

(ii) A Court cannot make out a case not pleaded.

The court should confine its decision to the

question raised in pleadings. Nor can it grant a

relief which is not claimed and which does not

flow from the facts and the cause of action alleged

in the plaint.

(iii) A factual issue cannot be raised or considered

for the first time in a second appeal.

Civil Procedure Code is an elaborate codification

of the principles of natural justice to be applied to

civil litigation. The provisions are so elaborate that

many a time, fulfillment of the procedural

requirements of the Code may itself contribute to

delay. But any anxiety to cut the delay or further

litigation, should not be a ground to float the

settled fundamental rules of civil procedure. Be

that as it may. We will briefly set out the reasons

for the aforesaid conclusions.”