The State Of Karnataka vs. M N Lokesh S/O Late M S Nanjappa Gowda

Held

The Court held that the memorandum of settlement, voluntarily executed by both parties and found to be admissible under the law, should be recorded. The reasoning was based on the parties' admission of voluntarily executing the settlement and agreeing to its terms. The Court found no impediment to recording the settlement. Consequently, the appeal was allowed in terms of the memorandum of settlement. The impugned judgment and decree dated December 21, 2009, passed in O.S. 25/2003 was set aside, and the suit was decreed in accordance with the settlement terms. The operative direction was to draw the decree accordingly. No specific issues were left undecided; the entire matter was resolved through the settlement.

Facts

This case involves a Regular First Appeal (RFA) filed by the State of Karnataka and the Executive Engineer, PWD Division, Chitradurga (Appellants) against M.N. Lokesh (Respondent), a contractor. The appeal challenges a judgment and decree dated December 21, 2009, passed by the I-Additional Civil Judge (Senior Division), Chitradurga, in O.S. 25/2003, which decreed the respondent's suit for declaration and recovery of money. The parties appeared before the High Court and submitted a memorandum of settlement arrived at through mediation. As per the settlement, the respondent agreed to receive Rs. 35,08,878/- plus applicable GST by March 8, 2024. The appellants agreed to refund the Earnest Money Deposit (EMD) and security deposit of Rs. 2,78,000/- to the respondent by the same date. The respondent accepted this amount in full settlement of his claim.

Key Issues

1. Whether the memorandum of settlement arrived at by the parties through mediation is admissible and can be recorded by the Court? The Appellants, represented by the State of Karnataka and the Executive Engineer, PWD Division, Chitradurga, argued that the settlement terms are acceptable and that the appeal should be allowed in accordance with the memorandum. They relied on the voluntary execution of the settlement by both parties. The Respondent, M.N. Lokesh, through his Special Power of Attorney Holder, also agreed to the terms of the memorandum of settlement. His counsel submitted that the respondent has accepted the agreed amount in full settlement of his claim and that the settlement is admissible under the law. The Court did not record any specific arguments against the settlement's admissibility or enforceability from either side, as both parties actively participated in and agreed to its terms.