M/S. Shakthi Trading Company vs. M/S. K Mohan And Comapny

Held

The Court held that the Memorandum of Compromise petition, filed by both parties, was acceptable. The Court noted that the learned counsels and the parties themselves had made submissions regarding the compromise. Consequently, the Court allowed the Memorandum of Compromise petition. The Miscellaneous First Appeal was disposed of in terms of the compromise. The reasoning was based on the mutual agreement of the parties to settle their disputes amicably as detailed in the compromise petition. The ratio decidendi is that when parties to an appeal voluntarily agree to compromise their differences and file a petition to that effect, the Court should allow the compromise and dispose of the appeal accordingly, provided the terms are lawful and not against public policy. No specific issue regarding GST provisions was decided on merits as the appeal was settled through compromise.

Facts

The appellant, M/s. Shakthi Trading Company, filed a Miscellaneous First Appeal under Order 43 Rule 1(r) of the CPC against an order on an interlocutory application in a civil suit. The appeal challenged an order passed by the Principal City Civil and Sessions Judge, Bengaluru. The parties, M/s. Shakthi Trading Company (appellant) and M/s. K. Mohan and Company (Exports) Private Limited (respondent No. 1) along with its directors, appeared before the High Court. A memorandum of compromise petition was filed by both parties, outlining the terms of their agreement regarding the sale of machinery. The compromise petition detailed the sale price, advance payment, payment schedule, and arrangements for dismantling and lifting the machinery. It also included terms for compounding a criminal complaint filed by the respondents.

Key Issues

1. Whether the Memorandum of Compromise, filed under Order XXIII Rule 3 read with Section 151 of the CPC, is acceptable and should be allowed, thereby disposing of the appeal in terms of the compromise. The Petitioner (Appellant) argued that the parties have voluntarily entered into a compromise agreement, settling all disputes between them. They contended that the terms of the compromise are clear and mutually agreed upon, and therefore, the appeal should be disposed of in accordance with these terms. The Revenue (Respondents) argued that they have also agreed to the terms of the compromise and acknowledge the settlement of disputes. They submitted that the compromise petition accurately reflects the mutual understanding and agreement between the parties. No specific GST provisions or amounts in dispute were explicitly mentioned or argued as the primary subject of the appeal, as the matter was settled through a compromise.