2021 INSC 0081
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
SPECIAL LEAVE PETITION (CIVIL) NOS. 2224­2225 OF 2021
(Arising out of SLP(C) Diary No. 38441 of 2019)
COMPACK ENTERPRISES INDIA (P) LTD.  …PETITIONER
VERSUS
BEANT SINGH  …RESPONDENT
J  U  D  G  M  E  N  T
MOHAN M. SHANTANAGOUDAR, J. : 
1. These   petitions   arise   out   of   judgments   of   the   High   Court   of
Delhi   (hereinafter   ‘High   Court’)   dated   14.02.2019   and   25.07.2019.
By the  first impugned judgment dated 14.02.2019, the High Court
disposed of the regular  first appeal RFA No. 253/2018 filed by  the
Petitioner against judgment and order of the Ld. Additional District
Judge,   Rohini   (‘Trial   Court’)   dated   23.09.2017   in   Suit   No.
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58395/2016   filed   by   the   Respondent.   Whereas   by   the   second
impugned   judgment   dated   25.7.2019,   the   High   Court   disposed   of
Review   Petition   No.   177/2019   filed   by   the   Petitioner   against   the
judgment in RFA No. 253/2018.
I. Background Facts
2. These   cases   concern   a   suit   for   possession   and   mesne   profits
filed   by   the   Respondent/plaintiff   against   the   Petitioner/defendant,
with   respect   to   the   ground   floor   of   the   property   bearing   No.   B­60,
Ground   Floor,   G.T.   Karnal   Road,   Industrial   Area,   Delhi­110033,
admeasuring   608   sq.   yards   (or,   5,472   sq.   ft.)   (hereinafter   ‘suit
property’).
3. The   Respondent,   Beant   Singh,   is   the   owner   of   the   suit
property. He, through M/s Channa Auto Agencies (P) Ltd. (of which
he  is a  Director), executed a  license agreement  dated 1.11.2000 in
respect of a portion of the suit property in favour  of M/s Compack
Enterprises (the Petitioner’s predecessor), for a period of 30 months
in   consideration   for   a   monthly   license   fee   of   Rs.   28,000/­
(hereinafter,   ‘2000   Agreement’).   On   1.04.2003,   Compack
Enterprises   merged   with   Compack   Enterprises   India   (P)   Ltd.   (i.e.,
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the   Petitioner   herein),   and   the   2000   Agreement   continued   with
mutual consent of parties. The license arrangement was renewed on
1.07.2003 for  another  30 months, with a 10% increase in monthly
license fee to Rs.30,800/­ (hereinafter, ‘2003 Agreement’). The 2003
Agreement   was   renewed   for   the   last   time   effective   from   1.04.2006
and   expiring   on   30.09.2008,   with   a   further   10%   increase   in
monthly license fee to Rs.33,900/­ (hereinafter, ‘2006 Agreement’).
4. However,   even   after   the   expiry   of   the   2006   Agreement   on
30.9.2008,   and   non­renewal   of   the   same,   the   Petitioner   continued
to occupy the suit property. Consequently, the Respondent brought
O.S.   No.   58395/2016   against   the   Petitioner   on   13.02.2009   for
recovering possession of the entire suit property and mesne profits
thereon from 1.10.2008 till the vacation of the suit property.
Petitioner/Defendant’s Arguments in Original Suit No.     58395    /2016
5. On   the   question   of   vacating   possession ,   the   Petitioner
admitted to having  been in possession of only a portion of the suit
property   measuring   2,200   sq.   ft.,   averring   that   it   was   only   this
portion, not the entire suit property admeasuring 5,427 sq. ft., that
was licensed to them by the Respondent.
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6. Petitioner   further   contended   that   its   continued   possession   of
this   portion   of   the   suit   property   was   lawful,   since   the   Respondent
had concealed the material fact of having entered into an agreement
dated 11.6.2008 to sell the suit property to one Mr. Ajay Gosain for
a   sum   of   Rs.   4   crores,   of   which   the   Respondent   had   already
received a sum of Rs. 65 lakhs. The suit property was agreed to be
sold to, and was thus in lawful possession of, Mr. Gosain before the
expiry   of   the   2006   Agreement   on   30.09.2008.   Mr.   Gosain   is   the
husband of one of the Petitioner’s Directors, and also the brother of
another Director. 
7. On the question of mesne profits,   Petitioner contended that
it   had   been   in   possession   of   only   2,200   sq.   ft.   of  the   suit   property
and   had   been   paying   license   fee   for   it   till   July,   2015   as   per   the
interim order  passed by the Trial Court; and that they vacated the
premises in July, 2015 and handed over possession to Mr. Gosain,
to whom the Respondent had allegedly transferred possession of the
suit property pursuant to the agreement to sell. Thus, the Petitioner
claims   that   it   is   not   liable   to   pay   any   further   sum   to   the
Respondent. 
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Trial Court’s Judgment dated 23.09.2017
8. On the question of vacating possession,  the Trial Court held
that the issue had already been decided by the High Court in C.M.
(M) No. 193/2013 by judgment dated 12.11.2014, and could not be
re­opened. 
9. The   Respondent   had   earlier   filed   an   application   before   the
Trial Court under Order XII, Rule 6, of the Code of Civil Procedure,
1908   (hereinafter,   ‘CPC’),   praying   for   a   judgment   on   admission
decreeing the suit for possession in favour of the Respondent. Upon
the   Trial   Court’s   dismissal   of   this   application,   the   Respondent
approached the High Court under Article 227 of the Constitution in
C.M.(M) No. 193/2013 praying for  the aforesaid relief. Therein, the
High   Court   by   its   judgment   dated   12.11.2014   reversed   the   Trial
Court’s   dismissal,   and   held   that   the   admissions   made   by   the
parties justify decreeing the Respondent’s suit for possession. It had
thus   directed   that   the   possession   of   the   entire   suit   property
measuring   5,472   sq.   ft.   be   handed   over   to   the   Respondent   by   the
Petitioner. 
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10. On the question of mesne profits,  the Trial Court noted that
it is an admitted fact between the parties that the possession of the
suit   property   has   still   not   been   handed   over   to   the   Respondent
despite   the   High   Court’s   order   dated   12.11.2014.   Instead,   the
Petitioner claimed to have handed over possession to Mr. Gosain in
July, 2015. The following further observations of the Trial Court are
relevant for our purposes: 
a. What   is   the   area   of   the   suit   property   for   which   Petitioner   is
liable? 
The   High   Court’s   order   dated   12.11.2014   had   settled   the   dispute
qua   the area that was in possession of the Petitioner, decreeing the
Respondent’s suit for possession for the entire suit property area of
5,472   sq.   ft   (and   not   only   the   2,200   sq.   ft.   portion   claimed   to   be
possessed by the Petitioner). The view taken by the aforesaid order
has attained finality as far back as on 12.11.2014 and is binding. 
b. What is the quantum of compensation payable? 
For the period between 1.10.2008 to 27.04.2009, the Respondent is
entitled   to   license   fee   @   Rs.   37,290/­   p.m.,   i.e.,   the   license   fee
agreed   upon   in   the   2006   Agreement   (Rs.   33,900/­)   with   a   hike   of
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10%. For the period of unlawful possession between 28.04.2009 till
vacation   of   possession,   Petitioner   shall   pay   mesne   profits   @
Rs.60,000/­   p.m.   with   10%   increase   on   the   1 st
  April   of   each
alternate year, till the suit property is handed over to Respondent. 
11. Aggrieved by  the decision on mesne profits, both the Petitioner
and   Respondent   filed   cross­appeals   before   the   High   Court   against
the   judgment   of   the   Trial   Court   dated   23.09.2017,   seeking,
respectively, reduction and enhancement in the quantum of mesne
profits. 
First Impugned Judgment of the High Court dated 14.02.2019 in the
above cross­appeals
12.   The   High   Court   passed   a   consent   decree,   directing   that   the
Petitioner shall pay to the Respondent, by way of mesne profits, an
enhanced   sum   of   Rs.1,00,000/­   p.m.,   with   a   10%   increase   “ after
every   12   months,   i.e.   from   1.10.2009,   1.10.2011   etc   etc ”   w.e.f.
1.10.2008 (i.e., the date on which the 2006 Agreement expired) till
the   date   the   Petitioner   hands   over   actual   possession   of   the   suit
property measuring 5,472 sq. ft. to the Respondent. 
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13.   Aggrieved   that   the   terms   of   the   consent   decree   were   recorded
incorrectly in the aforesaid order, the Petitioner filed Review Petition
No. 177/2019, which was dismissed by the High Court. 
Second   Impugned   Judgment   of   the   High   Court   in   the   above   review
petition dated 25.07.2019 
14.   The   Petitioner   contended   in   its   review   petition   that   the   High
Court   in   the   first   appeal   had   erred   in   recording   the   terms   of   the
consent   decree   agreed   to   by   the   Petitioner.   First,   the   judgment
records   that   the   mesne   profits   be   increased   by   10%   every   12
months,   instead   of   recording   a   10%   increase   every   24   months.
Second,   the   judgment   erroneously   records   that   the   Petitioner   will
hand   over   possession   of   the   entire   suit   property   measuring   5,472
sq.   ft.,   when   the   documents   on   record   would   show   that   the
Petitioner was only ever in possession of 2,200 sq. ft.
15. The High Court, rejecting the Petitioner’s contentions, held that
there  was  no   error  apparent  on  the  face  of  the  record  to  justify   its
review jurisdiction, and that the Petitioner was dishonestly trying to
wriggle   out   of   the   consent   decree   by   attempting   to   overreach   the
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Court.   The   review   petition   was   dismissed   with   exemplary   costs   of
Rs.1,00,000/­ payable by the Petitioner to the Respondent. 
II. Submissions made by the Petitioner in the present SLP 
16.   Shri   Mukul   Rohatgi,   learned   senior   counsel   for   the   Petitioner,
contends   that   the   High   Court   ought   to   have,   while   recording   the
terms   of   the   consent   decree,   recorded   a   10%   increase   in   mesne
profits   every   24   months,   instead   of   12   months.   As   per   him,   this
typographical   error   is   borne   out   by   the   fact   that   a   10%   increase
every 24 months closely mirrors the terms of the license agreements
where  the  license  fee  was   increased  by   10%  every   30  months.  The
reference   to   a   10%   increase   “ after   every   12   months,   i.e.   from
1.10.2009, 1.10.2011 etc etc ” in the first impugned judgment of the
High Court dated 14.02.2019 (supra) also corroborates this. 
17.     The   learned   senior   counsel   for   the   Petitioner   has   also
contended   that   the   first   impugned   judgment   dated   14.02.2019
erred in recording that the Petitioner has consented to handing over
possession of the entire suit property area of 5,472 sq.ft., when the
Petitioner   has   consistently   maintained   that   only   2,200   sq.ft.   was
licensed to him and in his possession. Both these submissions are
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vehemently opposed by Shri Basava Prabhu S. Patil, learned senior
counsel for respondent.
III. This Court’s Analysis
18.   Before   adverting   to   the   specific   contentions   raised   by   the
learned senior counsel for the Petitioner, it may be useful to briefly
summarise the law governing consent decrees that shall inform our
conclusions   on   the   present   matter.   It   is   well­settled   that   consent
decrees   are   intended   to   create   estoppels   by   judgment   against   the
parties,   thereby   putting   an   end   to   further   litigation   between   the
parties.   Resultantly,   this   Court   has   held   that   it   would   be   slow   to
unilaterally interfere in, modify, substitute or modulate the terms of
a   consent   decree,   unless   it   is   done   with   the   revised   consent   of   all
the   parties   thereto.   ( Gupta   Steel   Industries   v.   Jolly   Steel
Industries   Pvt.   Ltd.   &   anr. ,   (1996)   11   SCC   678;   Suvaran
Rajaram   Bandekar   &   ors.   v.   Narayan   R.   Bandekar   &   ors. ,
(1996) 10 SCC 255). 
19.   However,   this   formulation   is   far   from   absolute   and   does   not
apply as a blanket rule in all cases. This Court, in  Byram Pestonji
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Gariwala   v.   Union   Bank   of   India   &   ors .,   (1992)   1   SCC   31,   has
held   that   a   consent   decree   would   not   serve   as   an   estoppel,   where
the   compromise   was   vitiated   by   fraud,   misrepresentation,   or
mistake.   Further,   this   Court   in   the   exercise   of   its   inherent   powers
may also unilaterally rectify a consent decree suffering from clerical
or   arithmetical   errors,   so   as   to   make   it   conform   with   the   terms   of
the compromise.
20.   The   present   Petitions   thus   must   be   answered   in   light   of   the
above­stated   position   of   law.   It   is   relevant   at   this   juncture   to   note
that   the   first   impugned   judgment   of   the   High   Court   dated
14.2.2019 recorded the terms of the compromise that the Petitioner
had   agreed   to;   and   that   the   same   Court   has   subsequently   upheld
the   validity   of   that   consent   decree   in   the   second   impugned
judgment dated 25.07.2019. Thus, keeping in line with this Court’s
jurisprudence,   we   would   be   cautious   in   exercising   our   inherent
power to interfere in this consent decree, except where there is any
exceptional  or  glaring   error  apparent  on the  face of  the record.  We
now   refer   to   and   answer   the   specific   contentions   raised   by   the
parties.
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On the question of area of possession:
21.   Having   undertaken   a   close   perusal   of   the   License   Agreements
executed between the Petitioner and Respondent, we reject learned
senior counsel Mr. Rohatgi’s contention that the Petitioner was only
in   possession   of   and   licensee   to   a   2,200   sq.ft.   portion   of   the   suit
property.   It   is   evident   that,   unlike   the   2000   Agreement   and   2003
Agreement,   the   2006   Agreement,   which   is   the   relevant   agreement
for   the   present   purposes,   pertains   to   the   entire   suit   property,   and
does   not   delimit   the  licensed  area  to   a   2,200  sq.  ft.   portion.   Thus,
the   2006   Agreement   effective   from   1.04.2006   to   30.09.2008,
licensed   the   total   area   of   5,472   sq.   ft.   to   Petitioner.   Hence,   the
material on record discloses that the Petitioner is presently in illegal
possession of the entire suit property admeasuring 5,472 sq. ft. 
22.   Further,   this   question   has   already   been   settled   by   the   High
Court   judgment   dated   12.11.2014   (supra)   in   the   earlier   litigation
between the parties, decreeing the Respondent’s suit for possession
for   the   entire   area   of   5,472   sq.   ft   (and   not   only   the   2,200   sq.   ft.
portion claimed to be possessed by the Petitioner). In that order, the
High Court had taken note of an admitted document on the record
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wherein   the   Petitioner   was   stated   to   be   in   possession   of   the   entire
suit   property.   The   Petitioner’s   challenge   to   this   judgment   dated
12.11.2014 before the Supreme Court has been dismissed in SLP(C)
No.   7531/2015,   and   R.P.(C)   No.   1494/2015   in   SLP(C)   No.
7531/2015,   by   orders   dated   16.03.2015   and   15.07.2015
respectively.   Thus,   this   view   has   attained   finality,   and   the
Petitioner’s   efforts   to   re­agitate   this   question   in   the   present
proceedings   is   a   waste   of   this   Court’s   time   and   an   abuse   of   the
process  of  law.  In  any  case,  since  the   Petitioner   claims  no   right  or
interest in the remaining 3,272 sq. ft. of the suit property, there is
no   prejudice   caused   to   the   Petitioner   by   the   order   to   vacate   the
entire   suit   property   since   he   is   not   the   owner   of   property   to   that
extent also.
23.   It   is   further   an   admitted   position,   as   recorded   by   the   Trial
Court,   that   the   Petitioner   has   not   handed   over   possession   to   the
Respondent – having claimed to have handed over possession to Mr.
Gosain   instead   in   July,   2015.   This   is   despite   the   High   Court’s
judgment   dated   12.11.2014   decreeing   the   suit   for   possession   in
favour of the Respondent. Mr. Gosain’s right in the suit property is
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a   question   pending   in   separate   specific   performance   proceedings
filed   by   him.   Thus,   at   this   stage,   the   Respondent   is   entitled   to   get
possession   of   the   suit   property,   pending   adjudication   of   Mr.
Gosain’s   claims.   This   view   attained   finality   as   far   back   as   on
12.11.2014,   and   it   is   high   time   that   the   Petitioner   stops   making
efforts   to   circumvent   delivering   possession   of   the   suit   property   to
the Respondent. 
24. Thus, the High Court was correct in upholding the terms of the
consent   decree   directing   Petitioner   to   hand   over   possession   of   the
entire  suit  property   of  5,472  sq. ft.  to  the  Respondent,  and  we  see
no reason to interfere with this part of the consent decree. 
On the question of mesne profits: 
25.   As   referred   to   supra,   Shri   Mukul   Rohatgi,   learned   senior
counsel for the Petitioner has contended that the High Court ought
to have, while recording the terms of the consent decree, recorded a
10% increase in mesne profits every alternate year, instead of every
year.
26.   On   the   contrary,   Shri   Basava   Prabhu   S.   Patil,   learned   senior
counsel   for   the   Respondent   wants  us   to   construe   the   observations
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of   the   late   learned   Single   Judge   appearing   in   para   1   of   the   first
impugned   judgment   dated   14.02.2019   to   mean   that   the   mesne
profits payable are to be increased by 10% every year.  
27.   The   learned   Single   Judge,   in   noting   that   “ this   figure   of   mesne
profits of Rs.1 lakh will be increased by 10%   after every 12 months ,
i.e   from   1.10.2009,   1.10.2011   etc   etc ”   (emphasis   supplied),   has
confused   not   only   himself,   but   also   the   parties   to   the   litigation.
There is an inconsistency in so far there is a gap of every alternate
year,   i.e.   from   2009   to   2011,   in   the   example   used   by   the   learned
Single   Judge   even   though   the   decree   notes   an   increase   of   10%   in
mesne   profits   after   every   12   months.   The   aforementioned
inconsistency in the underlined extract of the consent decree is an
error apparent on the face of the record. Hence we find that this is a
fit case to exercise inherent the jurisdiction to correct the terms of
the   consent   decree,   to   bring   it   in   conformity   with   the   intended
compromise. 
28. At this stage, it is relevant to note that even the judgment dated
23.09.2017   and   the   final   decree   dated   15.11.2017   passed   by   the
Trial   Court   also   awards   a   10%   increase   only   on   each   alternative
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year,   i.e.   01.04.2011,   01.04.2013,   01.04.2015   and   so   on.   Further,
the original terms of the license agreement between the parties also
incorporated   a   10%   increase   in   license   fee   once   every   30
months/2.5   years.   Thus,   the   learned   Single   Judge’s   order   dated
14.02.2019   has   given   rise   to   a   lot   of   confusion.   Given   this
background,   and   looking   at   the   preponderance   of   probabilities,   we
are inclined to give benefit of doubt to the Petitioner. Therefore, we
hold that the intention of the compromise between the parties was
that   there   should   be   a   10%   increase   in   mesne   profits   every
alternate   year.   The   recording   of   a   10%   increase   after   every   12
months   in   the   consent   decree   was   an   inadvertent   error,   which   we
have now rectified. 
29.   To   this   limited   extent,   the   second   impugned   judgment   dated
25.07.2019   is   overturned,   and   the   consent   decree   recorded   by   the
learned Single Judge’s judgment dated 14.02.2019 stands modified.
III. Final Conclusions
30.   At this stage, this Bench would like to register  its displeasure
at   the   Petitioner’s   repeated   and   persistent   efforts   to   re­agitate   the
question of delivery of possession to the Respondent, in an attempt
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to  circumvent  complying  with the view taken  by  the  High  Court in
the   judgment   dated   12.11.2014,   which   has   now   attained   finality.
Despite the clear direction in that judgment to vacate possession in
favour of the Respondent, pending any adjudication on the separate
proceedings for possession and specific enforcement initiated by Mr.
Gosain,   the   Petitioner   handed   over   possession   to   Mr.   Gosain   in
July, 2015. Possession has to this date not been handed over to the
Respondent, who has been dragged to the court time and again due
to the Petitioner’s conduct. This is an instance of blatant disregard
for the Court’s orders, and an abuse of judicial process. 
31.   Hence   the   present   petitions   are   disposed   of,   with   direction   to
the Petitioner  to take steps for handing over possession of the suit
property   measuring   5,472   sq.   ft.   to   the   Respondent   within   eight
weeks from today, without fail.   Further, the Registry is directed to
expeditiously   release   the   arrears   of   mesne   profits,   if   any,   already
deposited   by   the   Petitioner   before   this   Court   to   the   Respondent.
The   Petitioner   is   further   directed   to   pay   to   the   Respondent   all
arrears   as   directed   in   order   dated   14.2.2019,   with   the   limited
modification   that   the  mesne  profits  are  to   be  treated  as  increasing
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by 10% every alternate year, from 2009 till the date of handover of
possession. 
32. The Petitioner is additionally directed to pay costs of Rs. 1 lakh
to   the   Respondent   as   stated   in   the   impugned   order   dated
25.7.2019.
33. The Special Leave Petitions stand disposed of accordingly. 
…..…………................................J.
(MOHAN M. SHANTANAGOUDAR)
.……………………………...............J.
(VINEET SARAN)
NEW DELHI,
FEBRUARY  17, 2021
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