Case Note & Summary
The plaintiffs filed a suit (Suit No.2011 of 2002) against the defendants for recovery of Rs.3,30,00,000 with interest. On 3rd October 2006, the parties filed consent terms and the court decreed the suit in terms thereof. The consent terms provided for payment of the decretal amount in installments. Defendant No.2 (original) died on 14th July 2007. The plaintiffs filed Chamber Summons No.1143 of 2011 to bring the legal representatives of deceased defendant No.2 on record and for permission to execute the decree. The defendants (applicants in Chamber Summons No.1756 of 2011) sought a declaration that the consent terms and decree were validly rescinded by them due to failure of consideration, and sought an injunction restraining the plaintiffs from drawing up the decree. The court held that the consent terms constituted a binding contract and there was no clause permitting rescission. The defendants' alleged failure of consideration was not a ground to rescind the consent decree unilaterally. The court also held that the plaintiffs were entitled to substitute the legal representatives of the deceased defendant under Order 22 Rule 4 CPC. The court dismissed Chamber Summons No.1756 of 2011 and allowed Chamber Summons No.1143 of 2011, permitting substitution and execution of the decree.
Headnote
A) Civil Procedure - Consent Decree - Rescission - Consent terms constitute a binding contract between parties - A consent decree cannot be unilaterally rescinded by one party on the ground of failure of consideration unless there is a specific clause in the consent terms permitting rescission - The court held that the consent terms did not provide for rescission and the defendants could not unilaterally rescind the agreement (Paras 10-15). B) Civil Procedure - Substitution of Legal Representatives - Order 22 Rule 4 CPC - Where a defendant dies after passing of a consent decree but before execution, the plaintiffs are entitled to bring the legal representatives on record to execute the decree - The court allowed substitution of defendant No.2(a) and 2(b) as legal representatives of deceased defendant No.2 (Paras 16-20). C) Civil Procedure - Execution of Decree - Section 214 of Indian Succession Act, 1925 - A decree cannot be executed against the estate of a deceased person unless the executor or administrator obtains probate or letters of administration - However, the court held that the plaintiffs could execute the decree against the legal representatives who are already on record and have been substituted (Paras 21-25). D) Specific Relief - Injunction - Section 37 of Specific Relief Act, 1963 - The court refused to grant injunction restraining the plaintiffs from drawing up the decree as the consent decree was valid and binding (Paras 26-30).
Issue of Consideration
Whether the consent decree dated 3rd October 2006 can be rescinded by the defendants on the ground of failure of consideration, and whether the plaintiffs are entitled to bring the legal representatives of the deceased defendant on record and execute the decree.
Final Decision
Chamber Summons No.1756 of 2011 filed by defendants is dismissed. Chamber Summons No.1143 of 2011 filed by plaintiffs is allowed. The plaintiffs are permitted to bring the respondents on record as defendant No.2(a) and 2(b) in place of deceased defendant No.2. The plaintiffs are permitted to execute the decree on the basis of certified copy of the judgment pending drawing up of the decree. No order as to costs.
Law Points
- Consent decree is a contract between parties
- cannot be rescinded unilaterally
- Order 22 Rule 4 CPC applies for substitution of legal representatives
- Section 214 of Indian Succession Act
- 1925 requires probate for execution against estate of deceased
- Section 37 of Specific Relief Act
- 1963 for injunction
- Section 151 CPC for inherent powers
