Case Note & Summary
The High Court of Karnataka dismissed a writ petition filed by judgment debtors challenging an execution order. The case involved a mediated settlement where the judgment debtors agreed to pay Rs.4,50,000 by 26.06.2020, with a default clause allowing enforcement of a sale agreement if payment was delayed. The judgment debtors failed to pay on time, and the decree holder initiated execution proceedings. Although the judgment debtors later deposited the amount and argued that payment had been made, the Court held that the default clause in the settlement was enforceable because the payment was not made within the agreed timeframe. The Court found no merit in the petitioners' arguments regarding COVID-19 delays or subsequent compliance, as the terms of the mediated settlement were binding. The Trial Court's dismissal of the application under Order XXI Rule 11 of CPC was upheld, and the writ petition was dismissed.
Headnote
The High Court of Karnataka at Bengaluru dismissed a writ petition filed under Article 227 of Constitution of India challenging an order dated 28.09.2022 passed by the I Additional Senior Civil Judge, Bangalore Rural District in Execution No.20/2020 -- The petitioners/judgment debtors had filed an application under Order XXI Rule 11 of Code of Civil Procedure, 1908 (CPC) objecting to execution proceedings, which was dismissed by the Trial Court -- The dispute arose from a memorandum of settlement (MOU) executed on 27.11.2019 as part of a mediated settlement, where the judgment debtors agreed to pay Rs.4,50,000 to the decree holder by 26.06.2020, with a default clause allowing enforcement of an earlier agreement of sale dated 28.05.2012 if payment was not made on time -- The judgment debtors failed to pay by the deadline, leading the decree holder to file execution proceedings -- During pendency, the judgment debtors deposited the amount via demand draft on 20.04.2022 and filed a memo, arguing that payment had been complied with and execution should not proceed -- The Court held that the mediated settlement terms were binding and the default clause was enforceable, as the payment was not made within the stipulated time, making the subsequent deposit irrelevant to the enforcement of default consequences -- The Court emphasized that the decree holder did not waive the default clause and was entitled to seek execution as per the MOU -- The writ petition was dismissed, upholding the Trial Court's order
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Issue of Consideration: The Issue of Consideration was whether the petitioners/judgment debtors could challenge the execution proceedings under Order XXI Rule 11 of Code of Civil Procedure, 1908 (CPC) after failing to comply with the payment deadline in a mediated settlement, despite subsequent deposit of the decretal amount
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Final Decision
The High Court dismissed the writ petition, upholding the Trial Court's order dated 28.09.2022. The Court held that the mediated settlement terms were binding, and since the judgment debtors failed to pay by 26.06.2020, the default clause was enforceable. The subsequent deposit did not invalidate the enforcement of the default consequences, and the decree holder was entitled to proceed with execution as per the MOU.
