Sri. K V Ranjith Kumar vs. Smt. Jamuna K N

Held

The Court held that the parties have amicably settled their dispute outside the court and have filed a Memorandum of Compromise petition under Order XXIII Rule 3 of the Code of Civil Procedure, 1908. The parties, present before the Court and identified by their respective counsel, were interacted with and confirmed that they entered into the Memorandum of Compromise voluntarily, without any force, undue influence, coercion, or misrepresentation, and that they abide by its terms. The compromise stipulated that the appellant would pay Rs. 40,00,000/- towards the final settlement of both suits, in addition to the Rs. 60,00,000/- already paid. The respondents agreed to accept this amount as final settlement. The appellant had already deposited Rs. 40,00,000/- in pursuance of an interim order. The Court directed the release of this amount to Respondent No. 2. The appeals were disposed of in terms of the compromise, signifying a full and final settlement of all claims. The appellant was also entitled to a refund of the court fee.

Facts

The appeals were filed by the appellant, Sri. K V Ranjith Kumar, challenging the judgment and decree dated 28.10.2025 passed by the Commercial Court, Bengaluru in Com.O.S.No.504/2024. This suit was initially filed by the respondents/plaintiffs for the recovery of a refundable security deposit of Rs. 1,00,00,000/-. During the pendency of the suit, a settlement was reached where the appellant agreed to pay Rs. 70,00,000/-. The appellant paid Rs. 60,00,000/- but failed to pay the balance. Consequently, the Commercial Court decreed the suit in part for the balance security deposit of Rs. 40,00,000/- along with interest and dismissed the appellant's counterclaim. Additionally, another suit (Com.O.S.No.1713/2024) was filed by the respondents against the appellant for recovery of Rs. 49,98,842/- towards GST amount, which was also decreed in part. The present appeals challenged these decrees.

Key Issues

1. Whether the settlement agreement reached between the parties, as recorded in the Memorandum of Compromise, is valid and binding? 2. Whether the terms of the compromise, including the payment of Rs. 40,00,000/- by the appellant and the withdrawal of claims by the respondents, are to be accepted by the Court? Petitioner/Appellant's Arguments: The appellant, through their counsel, submitted that the parties have amicably settled their disputes outside the court and have filed a Memorandum of Compromise under Order XXIII Rule 3 of the Code of Civil Procedure, 1908. They have interacted with the court and affirmed the compromise was entered into voluntarily, without force, undue influence, coercion, or misrepresentation. The appellant has agreed to pay Rs. 40,00,000/- towards the final settlement of both suits, in addition to the Rs. 60,00,000/- already paid. They seek the disposal of the appeals in terms of the compromise. Respondents' Arguments: The respondents, represented by their counsel, have also agreed to the terms of the Memorandum of Compromise. They have agreed to receive Rs. 40,00,000/- as a final settlement for both suits and have no further claims against the appellant. They have confirmed their voluntary participation in the compromise.