Housing & Urban Development … vs Tomorrow Land Technologies Exports Ltd … on 6 May, 2026

May 7, 2026

Delhi High Court

Housing & Urban Development … vs Tomorrow Land Technologies Exports Ltd … on 6 May, 2026

1.1. RFA(OS) 79/2018 has been filed by the Housing & Urban
Development Corporation Ltd. (HUDCO) challenging the judgment
AND Decree dated 13.01.2017 passed by the learned Single Judge of
this Court in CS(OS) 1551/2005.

1.2. HUDCO has also filed EFA(OS) 19/2018 challenging the order
dated 29.10.2018 passed by the learned Single Judge of this Court in
EA No.482/2018 in Ex.P. No.19/2018, dismissing the objections filed
by it against the execution of the judgment and decree dated
13.01.2017.

1.3. RFAs(OS) 1 and 2/2025 have been registered on Special Leave
Petition (Civil) 10752-10753/2018 filed by M/s Tommorrow Land
Limited against HUDCO being transferred to this Court in terms of
the order dated 10.12.2024 passed by the Supreme Court in the said
petitions. The said petitions had been filed by M/s Tommorrow Land
Limited, earlier known as M/s Shoes East Ltd. Co., challenging the

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By:REYMON VASHIST
Signing Date:07.05.2026
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judgment and decree dated 13.01.2017 as also the order dated
12.12.2017 passed by the learned Single Judge of this Court in
Review Petition No.313/2017, which in turn, had been filed by it
seeking review of the judgment and decree dated 13.01.2017 passed in
the abovementioned suit.

1.4. As these appeals primarily arise out of and challenge the
judgment and decree dated 13.01.2017 passed by the learned Single
Judge of this Court in the abovementioned Suit, they had been taken
up together for hearing and are being disposed of by this common
judgment.

1.5. We may herein itself note that as far as RFA(OS) 79/2018 is
concerned, the same had been filed with a delay of 620 days and
HUDCO had filed an application seeking condonation of the said
delay, being CM APPL. 48747/2018. At the very commencement of
the hearing of these appeals and with the consent of the counsels
appearing for the parties, we had clarified that as the issue of
condonation of delay also raises similar submissions of facts as raised
in the appeal, it shall be considered along with the appeals. In case we
find the delay not to have been sufficiently explained by HUDCO,
RFA(OS) 79/2018 shall be dismissed without going into the merits of
the same, while in case we find the delay to be explained and
sufficient cause being shown by HUDCO to condone the delay, the
appeals shall be considered on merits. We have, therefore, proceeded
to hear the counsels appearing for the parties on not only the
application seeking condonation of delay in filing of RFA(OS)
79/2018 but also on the merits of the appeals.

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By:REYMON VASHIST
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1.6. As these are cross appeals, for sake of convenience, HUDCO
shall hereinafter be referred to as the ‘appellant’ and Tommorrow
Land Technologies Exports Ltd. shall be referred to as the
‘respondent’.

II. FACTUAL MATRIX:

Facts in brief giving rise to the present set of appeals are as under:
2.1. The appellant is a Public Sector Government company engaged
in providing loans for the purpose of housing and urban infrastructure
projects in India.

2.2. The land admeasuring about 60.6 acres situated at Pinjrapole
(Andrews Ganj) in Delhi was allotted to the appellant by the Ministry
of Urban Development vide the allotment letter dated 01.11.1990. The
said allotment letter provided that the piece of land admeasuring 17.6
acres was meant for the purpose of a Community Centre (hereinafter
referred to as the „HUDCO Place‟) to be utilized for the development
of hostel and guest house facilities as per the urban design for the
complex approved by the Ministry of Urban Development.
Subsequently, allotment letters dated 27.03.1992 and 15.06.1993 were
issued by the Government of India in favour of the appellant,
modifying the terms of the allotment.

2.3. The appellant, on 30.06.1994, released a brochure inviting bids
for giving on long term co-terminus lease of 99 years, constructed
properties on the above land, including guest houses, comprising of
rooms, restaurants, shops, etc., and a Five Star Hotel land along with
car park, built and situated in the HUDCO Place.

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2.4. The respondent, on 15.07.1994, submitted a bid of Rs. 3.85
crores for 9 guest house blocks, 9 restaurants and 25 shops situated
and constructed in HUDCO Place with the facilities as claimed by the
aforesaid brochure. The respondent was announced as the highest
bidder and through three separate allotment letters dated 31.10.1994,
allotted 9 guest house blocks, 9 restaurants and 25 shops, respectively,
for a total consideration of Rs. 99.01 Crores on a sub-lease basis. The
said allotment letter for guest house blocks had provided a schedule of
payment for the respondent to deposit the requisite amount in three
instalments in the manner as follows:

                              Instalment     Instalment Amount                 Deadline
                              1st        Rs. 28,40,40,000/-             By 28.11.1994 (Within
                                         (Balance     amount    after   four weeks of the date
                                         deducting the earnest money    of the allotment letter
                                         paid with the offer amounts    dated 31.10.1994)
                                         to Rs. 25,25,40,000/-)
                                nd
                              2          Rs. 28,40,40,000/-             By 31.01.1995 (Within
                                                                        three months of the date
                                                                        of the allotment letter
                                                                        dated 31.10.1994)
                              3rd/Final        Rs. 14,20,20,000/-       Payable at the time of
                                                                        handing     over     the
                                                                        possession of the guest
                                                                        house blocks.

2.5. The allotment letter for 9 restaurants provided a schedule of
payment for the respondent to deposit the requisite amount in three
instalments in the manner as follows:

                                Instalment     Instalment Amount                Deadline
                                1st        Rs. 8,69,72,000/-              By         28.11.1994
                                           (Balance     amount    after   (Within four weeks of
                                           deducting the earnest money    the date of the
                                           paid with the offer amounts    allotment letter dated
                                           to Rs. 8,24,72,000/-.)         31.10.1994)



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                                 2nd              Rs. 8,69,72,000/-            By          31.01.1995
                                                                              (Within three months
                                                                              of the date of the
                                                                              allotment letter dated
                                                                              31.10.1994)
                                3rd/Final        Rs. 4,34,86,000/-            Payable at the time of
                                                                              handing over the
                                                                              possession of the
                                                                              restaurants.

2.6. The allotment letter for 25 shops had provided a schedule of
payment for the respondent to deposit the requisite amount in three
instalments in the manner as follows:

                                 Instalment    Instalment Amount                    Deadline
                                 1st        Rs. 2,50,28,000/-                 By         28.11.1994
                                            Balance     amount   after        (Within four weeks of
                                            deducting     the  earnest        the date of the
                                            money paid with the offer         allotment letter dated
                                            amounts         to     Rs.        30.10.1994)
                                            2,25,28,000/-
                                 2nd        Rs. 2,50,28,000/-                 By         31.01.1995
                                                                              (Within three months
                                                                              of the date of the
                                                                              allotment letter dated
                                                                              31.10.1994)
                                 3rd/Final        Rs. 1,25,14,000/-           Payable at the time of
                                                                              handing over the
                                                                              possession of the
                                                                              shops.

2.7. Simultaneously, the appellant also issued Allotment Letter
dated 31.10.1994 in favour of the respondent for perpetual lease for
the Five Star Hotel land admeasuring 3 acres along with 415 Car Park,
for a consideration of Rs. 64.10 crores (for the Hotel site) and Rs. 14
crores (for the Car Park), payable in instalments as under:

“(A) Hotel Site (Rs. 64.10 Crores)

(i) Within 4 weeks of the date of this allotment

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letter (i.e. before 28.11.94)- 40% (Rs. 25,64,00,000)

(ii) Before the end of one year of the date of this allotment letter (i.e.
before 31.10.95)- 30% (Rs.19,23,00,000)

(iii) Before the end of two years of the date of this allotment letter (i.e.
before 31.10.96)- 30% (Rs.19,23,00,000)

———————

Rs.64,10,00,000

———————

(B) Car Parking Space (Rs.14.00 Crores)

(i) Within four weeks of the date of issue of allotment letter (i.e. before
28.11.94)- 10% (Rs. 1,40,00,000)

(ii) Before the end of one year of the date of issue of allotment letter
(i.e. before 31.10.95)- 40% (Rs.5,60,00,000)

(iii) Within four weeks of issue of letter by HUDCO intimating that the
services were ready for being handing over- 50%
(Rs.7,00,00,000)

———————

Rs.14,00,00,000

——————–”

2.8. The respondent filed Suit No. 1062/1995 before this Court
seeking declaration that Clause 2 (viii) of the allotment letters is void
and inoperative and also prayed for a permanent injunction against the
appellant from cancelling the allotment letters dated 31.10.1994, with
a further mandatory injunction directing the appellant to grant an
extension of six months for the respondent to pay the amount payable
as the second instalment of payments to be made for the
aforementioned allotment of Guest Houses, Restaurants and shops.
2.9. This Court, vide an interim order dated 15.12.1995, directed
that subject to the payment of the dues owed by the respondent till
31.04.1995 along with interest at the rate of 24% from 01.05.1995 to
31.12.1995, on or before 31.12.1995, the appellant shall remain
restrained from terminating the allotment in favour of the respondent.
It was further clarified that on the respondent failing to make the

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payment, the injunction granted in favour of the respondent shall be
deemed to be vacated and the appellant shall be free to proceed in
accordance with law.

2.10. The said order was not complied with by the respondent due to
which, the appellant issued three separate cancellation letters dated
01.01.1996, cancelling the said allotments made vide allotment letters
dated 31.10.1994 and forfeiting the amount already paid by the
respondent.

2.11. As recorded in the order dated 11.01.1996 passed by this Court
in Suit No. 1062/1995, the respondent had offered a bank draft of Rs.
90 Crores to the appellant. The same was, however, not accepted by
the appellant.

2.12. The Land & Development Office, in supersession of the letter
dated 27.03.1992, issued allotment letter dated 19.03.1996 in favour
of the appellant, allotting 42.6 acres of land at Andrews Ganj in favour
of the appellant, subject to certain conditions.
2.13. Pursuant to the aforementioned allotment letters, the appellant
had obtained sanctions for building plans for the guest house blocks
from the Fire Department on 14.05.1996 and from the Delhi Urban
Art Commission on 15.05.1996.

2.14. The appellant on 14.06.1996 proceeded to release a fresh
brochure inviting bids for the Guest House Blocks. However, no bids
were received by the appellant.

2.15. The Municipal Corporation of Delhi, vide approval letter dated
09.08.1996, approved the building plans for the guest house blocks
situated in HUDCO Place.

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2.16. In November, 1996, the appellant released another brochure
inviting bids for the Five Star Hotel situated in the community centre,
while disclosing that perpetual lease of the same was yet to be
executed in its favour. Pursuant to such invitation, the bids for the
five-star hotel were allotted in favour of Leela Hotels Ltd. for Rs.
217.94 Crores on 31.03.1997.

2.17. It is the case of the respondent that simultaneously, the
appellant granted further extensions of time for payment of
instalments without levy of interest in favour of another allottee within
the same Community Centre project, namely Ansal Properties &
Industries Ltd., in respect of the Shopping Arcade component situated
in HUDCO Place.

2.18. In January 1997, the respondent instituted Suit No. 2/1997
before the Court of the learned Additional District Judge, Delhi
against the appellant and the Municipal Corporation of Delhi,
challenging the cancellation letters dated 01.01.1996 and seeking
declaratory and injunctive reliefs in respect of the guest house blocks,
restaurants and shops, along with consequential protection against
coercive municipal demands.

2.19. Thereafter, on 30.01.1997, the respondent filed an application in
Suit No. 1062/1995, which was pending before this Court, and sought
withdrawal of the said suit while stating that a comprehensive
subsequent suit had already been filed covering the full cause of action
arising from cancellation and forfeiture.
2.20. This Court, vide order dated 13.02.1997, permitted withdrawal
of Suit No. 1062/1995 in view of the subsequent comprehensive

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proceedings, and the earlier suit accordingly stood disposed of as
withdrawn.

2.21. As far as the Five Star Hotel land and car park is concerned, the
appellant issued an allotment letter dated 31.03.1997 in favour of
Leela Hotels Ltd.

2.22. The Land & Development Office executed a perpetual lease
deed dated 04.07.1997 for a period of 99 years in respect of the land
allotted for the Community Centre in favour of the appellant, thereby
formalising the long-term leasehold rights of the appellant over the
project land.

2.23. Following infrastructure allotments and grid sub-station
arrangements within the project area, in November 1997, electricity
connections to the Guest House Blocks were commissioned through
the concerned utility Service Provider.
2.24. In Suit No. 2/1997 filed by the respondent, the learned
Additional District Judge, vide order dated 23.02.1998, confirmed the
interim status-quo protection earlier granted in favour of the
respondent and disposed of the pending interim applications filed by
both sides. Aggrieved by the same, the appellant had preferred FAO
No. 129/1998 before this Court.

2.25. In the said appeal, this Court, vide its order dated 26.03.1998,
stayed further proceedings in the Suit.
2.26. In September 2003, the appellant filed an application in FAO
No. 129/1998, seeking permission to utilize the subject properties
without re-tendering or creating third party rights, including by way of
short-term licensing to government bodies or other entities, pending

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final adjudication of the appeal. This Court passed a consent order
dated 18.11.2003, modifying the earlier status quo directions and
permitting limited utilization of the properties by the appellant without
re-allotment, while preserving the rights and contentions of the parties
in the pending suit.

2.27. This Court, by a consent order dated 17.12.2003, disposed of
the appeal by directing that the Suit shall be amended to include relief
of specific performance and damages, and on payment of requisite
court fee, the Suit shall be transferred to this Court.
2.28. In the meantime, the Municipal Corporation of Delhi issued
Occupancy Certificate dated 06.07.1998 in favour of the appellant in
respect of nine Guest House Blocks along with restaurants and shops
forming part of the project, and on the same date, revised layout
approvals were granted subject to approval of service and drainage
plans. The Water Supply Scheme was also approved on 30.08.1999.
Additionally, on 06.09.1999, an approval was granted for the Drainage
Plan Scheme for the project area by the concerned authority.
Thereafter, the Revised Sewerage Scheme for the project was
approved on 07.09.1999 by the competent authority, thereby
completing the set of major utility and service plan sanctions required
for the project layout.

2.29. Meanwhile, this Court also delivered a judgment dated
20.01.2003 in OMP No. 308/2002, titled HUDCO vs. Leela Hotels
Ltd., filed by the appellant, directing refund of the entire amount paid
by Leela Hotels Ltd. together with interest at the contractual rate. The
appeal of the appellant against the same was dismissed by the

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Division Bench of this Court vide its order dated 09.11.2004, and the
Special Leave Petition filed by the appellant also came to be dismissed
by the Supreme Court vide order dated 12.02.2008.
2.30. As noted above, this Court passed a consent order dated
17.12.2003, directing that the pending suit be amended to include
reliefs in the nature of specific performance and that requisite court
fees be paid, and be transferred to this Court for expeditious disposal
within the time indicated. In compliance therewith, the Suit No.
2/1997 was transferred to this Court on 16.01.2004 and renumbered as
CS(OS) No. 1551/2005.

2.31. In the Suit, the appellant filed an application, being I.A. No.
15484/2008, seeking vacation of the interim order dated 17.12.2003
restraining it from re-allotment of the Suit Properties. The same was,
however, rejected vide order dated 24.05.2010, albeit permitting the
appellant to let out the same by inviting applications from the general
public.

2.32. On 10.08.2016, the learned Single Judge passed the following
order in the Suit:-

1. Today‟s hearing is in pursuance to the
order dated 25th July, 2016.

2. The senior counsel for the plaintiff at the
outset, without prejudice to the rights and
contentions of the plaintiff and to put an
expeditious end to the controversy and to
prevent further waste of the property subject
matter of this suit, states that the plaintiff
would be willing to consider resolving the
dispute subject to the entire amount paid by
the plaintiff to the defendant no.1 Housing &
Urban Development Corporation Ltd.

(HUDCO) being refunded to the plaintiff with

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interest at such rate which may be deemed
appropriate by the Court.

3. On enquiry, I am told that the plaintiff has
paid a sum of about Rs.3.85 crores as earnest
money, Rs.1.45 crores towards delayed
payment interest and about Rs.36 crores
towards first instalment as against the total
price of about Rs.99 crores.

4. The clause in the agreement between the
parties with respect to forfeiture has been
perused. The same indeed permits forfeiture of
all amounts paid till date. However the fact
remains that as per the prevalent law, the
defendant no.1 HUDCO, to be entitled to
forfeiture of such a large amount, is required
to prove damage to that extent accruing from
the breach of the agreement by the plaintiff.
The question of breach itself is a disputed one
and it is yet to be determined whether the
breach was on the part of the plaintiff or on
the part of the defendant no.1.

5. As far as I recollect, as per the recent dicta
of the Supreme Court in Kailash Nath
Associates Vs. Delhi Development Authority
(2015) 4 SCC 136 it would be difficult for
defendant no.1 HUDCO to sustain a claim for
forfeiture of such a large amount of money
especially when on enquiry I am informed that
the claim for forfeiture in the written statement
is only on the basis of contractual clause and
not on the basis of having suffered any actual
loss. The only loss which the defendant no.1
HUDCO appears to have suffered is of the
property being locked up since the year 1997-
98 when the completion certificate was issued.
That aspect can be taken into consideration
while directing refund to the plaintiff.

6. This is informed to be a commercial dispute
within the meaning of The Commercial Courts,
Commercial Division and Commercial
Appellate Division of High Courts Act, 2015
and the CPC, as applicable to commercial
suits, permits the Court to summarily dispose
of the suit.

7. Prima facie, it appears that the proposal

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placed by the plaintiff today and as recorded
above is a reasonable one and should be
seriously considered by the defendant no.1
HUDCO and Union of India (UOI), having
regard to the fact that the expeditious disposal
of the suit in terms thereof will set free the
property and the defendant no.1 HUDCO
would be able to immediately reap benefits
therefrom. I may add that even if the restraint
order in force qua the property were to be
vacated, the cloud over the title of the property
would remain and which would prevent the
defendant no.1 HUDCO from freely dealing
with the property.

8. It is therefore deemed appropriate that the
Board of Directors of defendant no.1 HUDCO
and the Secretary, Ministry of Urban
Development, Government of India should
bestow their attention to the proposal in a
commercial sense, as is the purport of
introducing the Commercial Courts Act.

9. The Secretary of defendant no.1 HUDCO is
requested to, within one week, issue notices
convening a meeting of the Board of Directors
of defendant no.1 HUDCO to consider the
proposal and in the event of the Ministry of
Urban Development being approached by
defendant no.1 HUDCO in this regard, the
Secretary, Ministry of Urban Development is
also requested to expeditiously consider the
proposal along with the comments if any of
defendant no.1 HUDCO. 10. A copy of this
order be also forwarded to Mr. Sanjay Jain,
Additional Solicitor General for appropriate
steps.”

2.33. The above order can be said to be the genesis of the entire
dispute now before us.

2.34. Pursuant to the above order, the Board of Directors of the
appellant passed the following resolution in its meeting held on
23.08.2016:

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“Thereafter, the Board unanimously passed
the following resolution(s):

“RESOLVED THAT in view of the Hon’ble
High Court of Delhi order dated 10th August,
2016 and subject to necessary approval/NOC
of the Ministry of Urban Development
(MoUD), the approval of the Board be and is
hereby accorded for refund of first instalment
forfeited by HUDCO excluding earnest money
& the interest for delayed payment paid
thereon by MS Shoes East Limited (MSSEL)
for Guest House Block(s) after adjusting the
commercial losses caused to HUDCO due to
the omission and commission of MSSBL, etc,
and other expenses incurred by HUDCO since
1997-98, from the date of completion of
project.

RESOLVED FURTHER THAT MoUD be
requested for
i. Issuing „NOC‟ to refund/ release the
payment of first Instalment paid by MS Shoes
East Limited and release the aforesaid
payment to HUDCO for onward release to
MSSEL in view of the advice of Hon’ble High
Court of Delhi; and
ii. Release the accumulated outstanding
balance in the „No lien AGR Account‟, which
is presently in a deficit subject to
reconciliation by General Accounts Wing,
HUDCO,

RESOLVED FURTHER THAT in case the
MoUD so directs and in view of the High
Court Orders, approval of the Board be and is
hereby accorded to HUDCO to refund the first
instalment to MS Shoes, East Limited (MSSEL)
paid by them after adjusting the commercial
losses caused to HUDCO due to the omission
and commission of MSSEL, etc, and other
expenses incurred by HUDCO since 1997-98,
from the date of completion of project and the
same be debited to No Lien AGP Account as
project expenditure which shall be charged
Interest @ 10.75% p.a., as approved by the

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Board in its 472nd meeting held on 27th August,
2010 vide Item no. 47210.

RESOLVED FURTHER THAT approval of the
Board be and is hereby accorded to work out
the commercial losses and other expenditure
incurred by HUDCO since completion of
Guest House Blocks in 1997-98 through
independent valuation to be got done an top
priority by the WD Wing in a time bound
manner through a professional real estate
valuation entity dealing with such type of
complex projects and if so required, limited
tender may be invited by following the due
procedure.

RESOLVED FURTHER THAT HUDCO’s
Advocate be advised to plead before the
Hon‟ble Delhi High Court for not paying any
interest on the first call money paid by MSSEL
for Guest House Blocks, keeping in view the
various expenses incurred/commercial losses
suffered by HUDCO on the project.

RESOLVED FURTHER THAT HUDCO to
continue implementing the project as per
existing arrangements and continue seeking
reimbursement of the amount spent by it,
through the ‘No lien AGP Account‟ which is
presently in deficit on the projects out of its
own resources for carrying out Andrewsganj
Project liabilities including the future
expenditure, if any, to be incurred on the
project.

RESOLVED FURTHER THAT WD Wing to
continue to vigorously follow up the matter
with MoUD for immediate settlement of No
lien AGP Account and till the same is settled,
HUDCO to continue to charge Interest
@10.75% p.a. as approved by the Board
earlier.”

2.35. The appellant also addressed a letter dated 19.09.2016 to the

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L&DO bringing to their attention the order passed by the learned
Single Judge of this Court as also the Board Resolution dated
23.08.2016, and for seeking their No Objection to the refund/release
of the first instalment paid by the respondent excluding Earnest
Money and interest, etc.. We quote from the letter as under:

“In view of the above the action on part of
HUDCO has been taken for complying
Hon‟ble High Court direction and MoUD is
kindly requested to consider the following to
comply court direction.

i. Issue ‘No Objection Certificate’
(NOC) to refund/release the payment
of first installment paid by MS Shoes
East Limited excluding Earnest
Money and the interest of the delayed
payment and release the aforesaid
payment to HUDCO for onward
release to MSSEL in view of the
advice of Hon’ble High Court of Delhi.
ii. Release the accumulated outstanding
balance of Rs.330.16 crore in the
‘No Lien AGP Account’, which is
presently deficit balance as on 31st
August, 2016.

iii. A direction to make due payment and
book the same into the ‘No Lien AGP
Account’ of Govt. of India being
maintained by HUOCO in case of funds
are not released by MoUD.

An early decision is solicited to facilitate
Hon’ble High Court direction as the matter is
listed on 27.09.2016.”

2.36. In response to the above, the L&DO, vide a communication
dated 25.11.2016, informed the appellant that in view of a decision
taken in a meeting dated 27.04.2015, NOC was not required. We
quote the letter as under:

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“I am directed to refer to your e-mail
dated 24.11.2016 on the above cited subject
and to Inform that on perusal of old records, it
has been found that a meeting was held on
27.04.2015 In the chamber of Secretary
(HUPA), which was also attended by the
Secretary (UD) along with officers from
MoUD, MoHUPA, L&DO and NBCC to
discuss the issues related to HUDCO’s
Andrewsganj Project and to finally decide the
future course of action in this matter (copy of
the Minutes of Meeting enclosed). After
detailed discussions, the decision taken in the
meeting related to this case, in para 5(ii), is
reproduced as under:

“HUDCO as a lessee will bear all the
liabilities of its Andrewsganj Project
including liabilities generated out of
compliance of various court Orders in cases
related to this project.”

2. In view of tile above decision taken in the
aforesaid last high level meeting, issues of
NOC to the HUDCO, as requested by them,
vide their letter dated 19th September, 2016 is
simply not required. In view of this decision,
no further clarification from Ministry of Urban
Development/ L&DO is required to be given in
this case.

3. It Is, therefore, requested to kindly enter
appearance on the next date of hearing i.e,
28.11.2016 and apprise the Hon’ble High
Court, the above position.”

2.37. In the hearing of the Suit held on 28.11.2016, the counsel for
the Union of India also placed similar instructions received by him.
Though the counsel for the appellant objected to the same and sought
time to sort out this issue with the Central Government, the learned
Single Judge of this Court felt that the same was not required. We
quote the order as under:

“1. This order is in continuation of the earlier

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order dated 10th August, 2016. The counsel for
Union of India states that Union of India has
vide letter dated 25th November, 2016
informed that it is for HUDCO to take a
decision in the matter. He has in this regard
handed over a copy of the said letter dated 25th
November, 2016 and which is taken on record.

2. The counsel for HUDCO states that the said
letter is on the basis of some earlier Minutes
which do not convey what the said letter
interprets the same as.

3. The counsel for the Union of India
reiterates that HUDCO can take a decision
without reference to Union of India.

4. Once that is so, it matters not whether the
reason given by HUDCO is correct or not.

5. The counsel for the HUDCO then states that
the time be given to consider the letter and
take a decision.

6. The matter cannot be adjourned like this. I
have already in the order dated 10th August,
2016 stated the reasons in law for which the
suggestion as contained therein was made.

7. The counsel for the HUDCO upon being
asked to argue, states that the senior counsel
engaged will be arguing.

8. The counsel for the plaintiff states that
HUDCO has already taken a decision as
contained in the letter dated 19th September,
2016 to refund the monies received except the
earnest money and interest.

9. The counsel for the HUDCO agrees but
states that that was the suggestion of HUDCO
to Union of India which Union of India has to
accept or reject.

10. As per the letter dated 25th November,
2016, HUDCO does not need any further
clarification from the Ministry of Urban
Development.

11. List on 23rd December, 2016. Mr.
Akhilesh Kumar, Executive Director (WD) of
HUDCO to also remain present in court on the
next date.”

2.38. The appellant, vide its letter dated 02.12.2016 addressed to the

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L&DO, contested the stand of the L&DO and again sought NOC from
it to the terms of the settlement.

2.39. On 23.12.2016, both, the L&DO and the appellant, reiterated
their respective stands before the learned Single Judge. The learned
Single Judge directed them to hold a meeting and to communicate the
categorical decision in this regard to the Court on 13.01.2017, failing
which the concerned officers were to remain present before the Court.
2.40. On 13.01.2017, the learned Single Judge was again informed
that the L&DO and the appellant could not reach a consensus and
there was a dispute between them as to who shall bear the financial
burden of the proposed settlement with the respondent. At this
juncture, the learned Single Judge proceeded to consider the claim of
the appellant for forfeiture of the amount paid by the respondent and
found that for the same the appellant would have to prove damages
accruing from the breach of the agreements by the respondent. The
learned Single Judge, relying on the provisions of the Commercial
Courts Act, 2015, invoked its power for a summary disposal of the
Suit and observed that while the appellant was willing to refund most
of the amounts paid by the respondent, the only impediment to the
settlement was the submission of the appellant that it required
permission of the Government to do so, while the Government was
maintaining that no such permission is required. The learned Single
Judge opined that this was not an issue to be determined in the Suit
and found that the same cannot act as an impediment to the appellant
paying amounts to the respondent and getting the property freed of the
encumbrance. As far as the plea of the appellant that it did not have

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the resources to pay the respondent, the learned Single Judge opined
that the appellant can transfer the property to third party and realise
substantial amount; it can also pass on the responsibility of getting the
property converted to freehold and to bear the charges for the same.
The learned Single Judge, accordingly, passed the impugned Decree in
favour of the respondent and against the appellant for a sum of Rs.
35,75,40,000/-, being the principal sum of the first instalment paid by
the respondent. As far as interest on the same is concerned, the learned
Single Judge directed interest at the rate of 16.48% per annum to be
paid on the above amount from 30.11.1994 till 30.01.1995 and at the
rate of 6% per annum from 30.01.1995 till the date of payment. We
quote from the impugned Decree as under:-

“18. The position which emerges is that the
plaintiff is willing to finish the litigation on
refund of the amounts paid and defendant no.1
HUDCO Ltd. is willing to refund most of the
said amounts. The only impediment to disposal
of this suit in terms of the said
settlement/agreement is, that while HUDCO
Ltd. says that it needs the permission of
Government of India to do so, Government of
India states that HUDCO Ltd. does not need
such permission.

19. The question, whether defendant no.1
HUDCO Ltd. need such permission or not is
not to be adjudicated in this suit and is beyond
the scope thereof. Whether the said issue is
pending before another bench of this Court or
not is also not material as even if it is not
pending, since the competent authority of
HUDCO Ltd. has agreed to refund as
aforesaid and the Government of India is not
saying that HUDCO Ltd. is not entitled to,
there is no impediment to HUDCO Ltd. paying
the same to the plaintiff and to having its

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property freed.

20. As far as the contention of the senior
counsel for defendant no.1 HUDCO Ltd. that
HUDCO Ltd. has no resource to pay the same,
I have enquired from the senior counsel for
defendant no.1 HUDCO Ltd. whether not
HUDCO Ltd. would realize monies from
further transfer of the said property / parts
thereof upon the same being freed from this
litigation and as to why the amounts to be so
paid by HUDCO Ltd. cannot be paid
therefrom.

21. The senior counsel for defendant no.1
HUDCO Ltd. states that as per the terms and
conditions imposed by Government of India
there are lot of impediments to such transfer.

22. The counsel for Government of India states
that Government of India in fact has offered
that on HUDCO Ltd. complying with the
requisite conditions, the leasehold rights in the
land underneath can be converted to freehold.

23. It appears to me that HUDCO Ltd. while
further transferring the property can always
pass on the responsibility of getting the said
freehold conversion done and to bear the
charges therefor on the prospective
transferee/s. Though the senior counsel for
HUDCO Ltd. has expressed apprehensions
about the requisite permissions being granted
by Government of India but I am confident that
the Government of India would not add to the
wastage which the property has already
undergone for the last more than 20 years.

24. In the aforesaid state of affairs, when
HUDCO Ltd. has agreed to refund most of the
amounts on receipt of which the plaintiff has
agreed to the settlement of its claims subject
matter of the suit and otherwise with respect to
the property, I see no impediment to disposal
of the suit in terms thereof. Though the

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litigation is twenty years old but, if the
application for rejection of plaint is not
accepted, issues even in the suit have not been
framed as yet. Moreover, the matter is still in
the first Court and any orders of the first
Court would be subject to appeals.

25. I accordingly pass a decree in favour of
the plaintiff and against the defendant no.1
HUDCO Ltd. for recovery of
Rs.35,75,40,000/- being the principal amount
of the first instalment paid by the plaintiff to
the defendant HUDCO Ltd. for purchase of the
property.

26. The senior counsel for the defendant no.1
HUDCO Ltd. states that HUDCO Ltd. has
agreed to the same subject to its claims for
compensation being adjudicated.

27. The senior counsel for the plaintiff states
that the plaintiff is also entitled to interest on
the said amount from the date of payment. It is
informed that the said first installment as per
the agreement was payable on 30th November,
1994 but Rs.35,00,00,000/- was paid on 30th
January, 1995 and Rs.75,40,000/- was paid on
13th February, 1995; that the plaintiff has paid
interest at the rate of 16.48% amounting to
Rs.98,91,594/- for the delay in payment of first
installment and thus the plaintiff is entitled to
interest on the amount of Rs.35,75,40,000/-
with effect from 30th November, 1994. It is
further contended that since HUDCO Ltd.
demanded and collected interest at the rate of
16.48%, it should pay interest at the same rate
while refunding the monies to the plaintiff.

28. The senior counsel for the defendant no1.
HUDCO Ltd. states that the defendant
HUDCO Ltd. has suffered commercial loss
owing to the interim order obtained by the
plaintiff in this proceeding and in the
proceedings earlier instituted which resulted
in defendant HUDCO Ltd. being not able to

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put the property to any use.

29. I have considered the rival contentions. If
the contract had been fulfilled, the defendant
no.1 HUDCO Ltd. would have received the
balance amount of about Rs.60,00,00,000/-
from the plaintiff and would have enjoyed the
benefit thereof. Though the property has
remained in the possession of defendant no1.
HUDCO Ltd. but owing to interim orders,
defendant no.1 HUDCO Ltd. has been unable
to reap any benefit therefrom.

30. Having considered all the aforesaid facts
and having heard the counsels, I am of the
opinion (and in which respect the plaintiff had
left the decision to the Court) that a direction
to the defendant no1. HUDCO Ltd. for
payment to the plaintiff, of besides the said
sum of Rs.35,75,40,000/-, interest thereon at
the rate of 16.48% per annum from 30th
November, 1994 till 30th January, 1995,
amounting to Rs.98,91,594/- and interest at
the rate of 6% per annum with effect from 30th
January, 1995 till the date of payment, would
serve the interest of justice and balance the
equities.

31. Accordingly, in lieu of the reliefs claimed
in the suit, a decree is passed, in favour of the
plaintiff and against the defendant no.1
HUDCO Ltd., for recovery of
Rs.35,75,40,000/- with interest at the rate of
16.48% per annum from 30th November, 1994
till 30th January, 1995 amounting to
Rs.98,91,594/- and at the rate of 6% per
annum with effect from 30th January, 1995 till
the date of payment.

32. It is further clarified that the interim
orders restraining the defendant No.1
HUDCO Ltd. from dealing with the property is
vacated save that defendant no.1 HUDCO
Ltd., before executing a document of transfer
with respect to the property or any part thereof

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and before receiving the entire transfer
consideration of the property, shall clear the
dues under this decree and this decree would
be a first charge on the consideration to be
received by defendant no.1 HUDCO Ltd. for
transfer of the property.”

2.41. It is important to note here that in terms of paragraph 35 of the
impugned judgment dated 13.01.2017, the Decree was to remain
inexecutable till 30.06.2017 to enable the appellant to arrange for the
monies to be paid under it.

2.42. By an Office Memorandum dated 31.01.2017, the L&DO
reiterated that it cannot be made liable for making any payment vis-a-
vis its contractual obligations or on account of court orders and there
was no reason for L&DO to give its NOC to the appellant for making
any payment to any third party nor was there any question of releasing
funds from the AGP account for such purpose. It opined that there
also was no question of converting the property to freehold.
2.43. On the other hand, the appellant, vide their communication
dated 24.03.2017, again sought NOC of the Government to
refund/release the payment in terms of the impugned judgment and to
either release a sum of Rs. 338.67 crores to the „No Lien AGP
Account‟ or to allow the appellant to make payment out of its own
resources and book the same to the said account. In this
communication, the appellant also gave a reference to the decision
taken by its Board in the meeting held on 23.02.2017. We quote from
the letter as under:

“In terms of Hon’ble High Court order
/decree dated 13.01.2017 passed by the
Delhi High Court regarding refund of

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first installment paid by M/s MS Shoes
East Ltd. for Guest House Blocks at
Andrewsganj Project and Ministry letter
dated 31st January, 2017 and 2nd Feb.,
2017, the matter was considered by
HUDCO Board in its 575th Meeting held
on 23.2.2017 (Item No. 575.21) copy of
the Board Minutes is enclosed at
Annexure-VI.

The Board deliberated the entire
proposal and decided that necessary
approval from MoUD may be obtained
for refund/ release of payment of first
installment paid by MS Shoes East
Limited and the Ministry may also be
requested to release the aforesaid
payment to HUDCO for onward release
to MSSEL in view of the advice of
Hon’ble High Court of Delhi;

Further, the Board unanimously passed the
following resolution(s):

1. “RESOLVED THAT the Board took
serious concern over the contents of the
L&DO letter dated 31st January, 2017
and the Joint Secretary, Ministry of
Urban Development, D.O. Letter dated
2nd February 2017, wherein certain
issues relating to overall development of
Andrewsganj Project (AGP) have been
raised like declining to give NOC to
HUDCO (Lessee) for making any
payment to any third party and to
convert the property into freehold, as it
required Cabined approval etc. etc.
ETC. and directed that the matter be
taken up with the MoUD on top priority
by the WD Wing by giving point-wise
HUDCO stand on the Issues raised by
MoUD in terms of the Hon’ble High
Court directions given vide its orders
dated 13th January 2017.

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2. RESOLVED FURTHER THAT
claim/bill be lodged with MoUD
immediately for outstanding balance in
the ‘No Lien Account’ which is presently
in a deficit of Rs. 338.67 crore as on 31st
December, 2016 alongwith upto date
interest @ 10.75 p.a. and the vigorous
follow up be made by WD Wing with the
MOUD for immediate
settlement/payment of account
outstanding balance in the ‘No Lien
Account’.

3. RESOLVED FURTHER THAT
MoUD be approached on priority for
seeking an amount of Rs. 84,83,22,894/-

(Rs. 35,75,40,000/- being the principal
amount plus Rs. 98,91,594/- being the
Interest @ 16.48% p.a. from 30th
November, 1994 till 30th January, 1995
plus interest @ 6% after 30th January
1995 till June 2017) for making payment
to the MSSEL in terms of Hon’ble High
Court decree dated 13th January 2017.

4. RESOLVED FURTHER THAT in
case MoUD does not provide funds for
making payment to the MSSEL in terms
of Hon’ble High Court orders dated
13th January 2017, MoUD be requested
to give specific direction for making
payment of the same from ‘No Llen
AGP’ Account, which shall continue to
attract interest @ 10.75% p.a. on the
outstanding balance in the account till
its final settlement by MoUD or by sale
of assets/or otherwise.

5. RESOLVED FURTHER THAT
approval of the Board be and is hereby
accorded in principle accepting the final
order/decree dated 13th. January 2017
passed by the Hon’ble High Court of
Delhi In the case of M/s MS Shoes East
Limited regarding refund of first

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Installment paid by MSSEL alongwith
Interest In terms of decree for 9 guest
house blocks at Andrews Ganj Project.

6. RESOLVED FURTHER THAT in
case MoUD do not provide necessary
funds for making payment to MSSEL as
per orders of Hon’ble High Court dated
13th January, 2017; however, gives its
specific directions for making payment
from ‘No Lien Account’, approval of the
Board be and is hereby acoorded for
making the payment to MSSEL as per
approval granted by MoUD.

7. RESOLVED FURTHER THAT the
Ministry of Housing & Urban & Poverty
Alleviation, (MoHUPA) be requested to
Intervene and take-up the issues related
to AGP at the highest level of MoUD for
amicable resolution of the pending
issues including payment of outstanding
balance in the ‘No Lien AGP Account’
with update Interest @ 10.75% p.a.

7 In view of the above, the action required on
part of HUDOO has been taken as per the
direction of the Hon’ble High Court of Delhi
and MOUD is requested to consider, the
approval of the following decisions for
complying with the court direction :-

i. Issue ‘No Objection Certificate’
(NOC) to refund/ release the payment of
first Installment paid by MS Shoes East
Limited excluding Earnest Money and
the interest of the delayed payment i.e.
Rs. 84,83,22,894/- principal amount
plus Rs. 98,91,594/- being the interest
@ 16.48% (Rs. 35,75,40,000/- being the
p.a. from 30th November, 1994 till 30th
January, 1995 plus interest @6% after
30th January 1995 till June 2017) and
release the aforesaid payment to
HUDCO for onward release to MSSEL

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In view of the direction of Hon’ble High
Court of Delhi,

ii. Release the accumulated outstanding
deficit balance of Rs.338.67 crore in the
‘No lien AGP Account’ (as on
31.12.2016).

iii. In case funds are not released by
MoUD, a direction to make the due
payment out of HUDCO’s own
resources and book the same Into the
‘No lien AGP Account’ of Govt. of India,
being maintained by HUDCO, be
issued.”

2.44. As far as the decree denied refund of the Earnest Money
Deposit and curtailed the interest, aggrieved by the same, the
respondent preferred Special Leave Petition (Civil) No. 9648/2017
before the Supreme Court. The Supreme Court, vide order dated
07.04.2017, permitted the respondent to withdraw the SLP with liberty
to file a review petition before the learned Single Judge and gave
liberty to the respondent to challenge the Decree dated 13.01.2017 as
also the order dismissing its review, in case the review is dismissed.
2.45. Accordingly, the respondent had preferred Review Petition No.
313/2017 before this Court, which was dismissed vide order dated
12.12.2017, observing that the impugned decree was a Consent
Decree. We quote from the order as under:

“9. The circumstances leading to the disposal
of the suit vide order dated 13th January, 2017
of which review is sought are set-out in the
order itself as well as in the order sheet in the
suit w.e.f. 10th August, 2016. The proposal for
settlement of the dispute subject matter of the
suit which had then been pending since 1997
with an earlier litigation having commenced in

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the year 1995, had emanated from the senior
counsel for the plaintiff / review applicant
during the hearing on 10th August, 2016. It
was stated on that date that subject to the
entire amount paid by the plaintiff / review
applicant to the defendant no.1 HUDCO Ltd.
being refunded to the plaintiff / review
applicant with interest at such rate as may be
fixed by the Court, the plaintiff / review
applicant was willing to settle the matter. The
proceedings w.e.f. 10th August, 2016 resulted
in a settlement on most of the issues being
reached between the plaintiff / review
applicant on the one hand and the defendant
no.1 HUDCO Ltd. on the other hand, leaving
some aspects on which no settlement could
emerge. It was in this context that the decision
on the said aspect was left to this Court and
which onus this Court took up on itself finding
that valuable immovable property comprising
of nine Guest House Blocks, nine Restaurants
and twenty five shops in Andrews Ganj Project
of defendant no.1 HUDCO Ltd. was lying
waste since 1995. The order dated 13th
January, 2017 thus, though not recorded to be
a consent order was in the nature of consent
order in the circumstances reflected in the
order sheet of this suit w.e.f. 10th August,
2016.”

2.46. By the said order, the learned Single Judge also recorded the
submissions of the learned Senior Counsel appearing for the appellant
and the learned counsel appearing for the UOI on their respective
stands on the execution of the Decree, and clarified that the consent of
the appellant shall not affect the proceedings as recorded in the orders
dated 10.08.2016 and 13.01.2017. We quote from the order as under:

“15. The senior counsel for the defendant no.1
HUDCO Ltd. has drawn attention to an
affidavit dated 8th November, 2017 of Ms. Arti
Tygai, Joint General Manager (Projects) of

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the defendant no.1 HUDCO Ltd. filed in this
proceeding. It is contended that the defendant
no.2 UOI has now issued a notice to the
defendant no.1 HUDCO Ltd. to show cause as
to why the compromise was entered into. It is
further stated that owing to the circumstances
created by the defendant no.2 UOI and as
detailed in the said affidavit, the defendant
no.1 HUDCO Ltd. is unable to pay the monies
which were to be paid by the defendant no.1
HUDCO Ltd. to the plaintiff / review applicant
under the order dated 13th January, 2017 of
which review is sought.

16. I have enquired from the counsel for the
defendant no.2 UOI also present in the Court
and in whose presence the entire proceedings
resulting in the order dated 13th January, 2017
took place.

17. The counsel for the defendant no.2 UOI
states that the said aspect has no relevance as
far as the present Review Petition is
concerned.

18. The senior counsel for the defendant no.1
HUDCO, Ltd. also states that she will take
appropriate remedies with respect thereto.

19. In view of the aforesaid, all that can be
clarified is that the observations in para 9
hereinabove of the defendant no.1 HUDCO
Ltd. having consented to the order shall not
affect the proceedings as recorded in the order
sheet of this Court w.e.f. 10th August, 2016 and
as recorded in the order dated 13th January,
2017.”

2.47. We must note that in the meantime, vide letter dated
21.04.2017, the L&DO had already advised the appellant to urgently
explore the possibility of seeking an appropriate legal remedy/file
appeal against the Decree dated 13.01.2017. Further, in a Meeting

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held on 21.09.2017 under the Chairmanship of Secretary (HUPA), it
was decided to issue a Show Cause Notice to the appellant to explain
as to what prompted it to compromise the dispute with the respondent.
It was also decided that neither the NOC will be issued nor will any
amount be given by the Ministry, and the appellant will also not book
the expenditure from „No Lien AGP Account‟.

2.48. On dismissal of the review application filed by the respondent,
the appellant filed a Recall Application bearing I.A. No. 15619/2017
in CS(OS) 1551/2005, seeking recall of the impugned decree dated
13.01.2017 on the ground that the appellant was not in a financial
condition to pay the decretal amount to the respondent and in order to
pay the said decretal amount, Union of India would have to first
disburse the said amount to the appellant pursuant to which the
appellant would be able to comply with the impugned decree. It was
contended that the stand of the Government of India and the
respondent after the passing of the Decree, had resulted in „fractured
consent‟.

2.49. The recall application was dismissed by the learned Single
Judge vide order dated 28.08.2018 wherein the learned Single Judge
observed that the ground regarding appellant not having any monies to
pay the decretal amount and the appellant not being able to raise funds
for the same, cannot constitute a valid ground to recall the impugned
decree as it is up to the respondent to execute the impugned decree by
the remedies as available in law. The learned Single Judge also
dismissed the second ground raised by the appellant, wherein the
appellant had contended that the Union of India had refused to give a

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No Objection Certificate for transfer or conversion of the subject
properties from leasehold to freehold in favour of the appellant, while
observing that the executing Court would consider all these aspects
while adjudicating the attempt to release the said amount for
satisfaction of the impugned decree. The learned Single Judge also
observed that the compromise decree as arrived at between the
contesting parties, which was later crystalized into a decree by the
Court, cannot be opted out from, as the said compromise decree was
in the nature of a binding contract.

2.50. The appellant challenged the above order as also the impugned
Decree before the Supreme Court by way of SLP (Civil) Diary No.
34720/2018, which was permitted to be withdrawn vide the order
dated 18.09.2018, with liberty to the appellant to raise objections to
the executability of the decree before the Executing Court/learned
Single Judge, as in the meantime, the respondent had filed Execution
Petition No. 19/2018 seeking execution of the impugned decree dated
13.01.2017 passed by the learned Single Judge.
2.51. As far as the Execution Petition is concerned, the learned
Single Judge, vide order dated 03.05.2018, directed attachment of the
Head Office of the appellant herein, however, the said attachment was
said to be kept in abeyance till the next date of hearing.
2.52. The appellant had filed its objections by way of E.A. No.
482/2018 in the Execution Petition No. 19/2018. The said objections
were rejected by the learned Single Judge, vide order dated
29.10.2018.

2.53. Aggrieved by the order dated 29.10.2018, the appellant has filed

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EFA(OS) No. 19/2018 seeking setting aside of the said order. The
appellant has also filed RFA (OS) 79 of 2018 challenging the Decree
dated 13.01.2017.

2.54. The respondent had also preferred Special Leave Petitions
(Civil) No. 10752-10753/2018 before the Supreme Court challenging
the impugned decree dated 13.01.2017 as well as the order dated
12.12.2017 passed by the learned Single Judge wherein the review
petition filed by the appellant challenging the impugned decree was
dismissed. The Supreme Court, vide order dated 10.12.2024, directed
that these Special Leave Petitions be transferred to this Court and to
be re-numbered as Regular First Appeals, as the appellant had already
filed a RFA(OS) No. 79/2018 which was pending adjudication before
this Court. The Special Leave Petitions, on their transfer, have been
re-numbered as RFA(OS) No. 1-2/2025.

III. SUBMISSIONS MADE BY THE LEARNED COUNSEL
FOR THE APPELLANT:

3.1. In support of the appeals filed by the appellant as also for
seeking condonation of delay in filing of RFA(OS) 79/2018, Mr.Rohit
Sharma, the learned counsel for the appellant, submits that though
couched as a consent decree, there was no consent of the appellant
before the learned Single Judge for passing the same. In fact, the
impugned judgment and decree itself records the objections of the
appellant to refund any amount to the respondent from its own funds.

He submits that the same is also evident from the meetings that
preceded the passing of the impugned decree. He submits that once

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there was no consent, the learned Single Judge has erred in law in
passing the impugned decree, purportedly on consent of the parties.
3.2. He submits that a suit can be disposed of on basis of consent
only after drawing up of a written compromise agreement signed by
the parties, as mandated in Order XXIII Rule 3 of Code of Civil
Procedure, 1908 (hereinafter referred to as „CPC‟). In absence of the
same, the Suit can be disposed of only by following the due process
provided under the CPC, that is, framing of issues, leading of evidence
and issue-wise adjudication. In support, he places reliance on the
judgments of the Supreme Court in Gurpreet Singh v. Chatur Bhuj
Goel, (1988) 1 SCC 270 and Pushpa Devi Bhagat v. Rajinder Singh
& Ors., (2006) 5 SCC 566.

3.3. He submits that the appeal, that is, RFA(OS) 79/2018 is,
therefore, maintainable in terms of Order XLIII Rule 1A(2) of the
CPC and not hit by Section 96(3) of the CPC, and the impugned
judgement and decree is liable to be set aside.
3.4. He submits that the learned Single Judge, while dismissing the
review application filed by the respondent vide order dated
12.12.2017, had also observed that the impugned decree is not passed
by consent, as would be evident from reading of paragraph 9 and
paragraph 19 thereof. He submits that the impugned decree is,
therefore, passed not in accordance with law and is liable to be set
aside on this short ground itself as being without jurisdiction.
3.5. He submits that as far as the delay in filing of the same is
concerned, it would be evident from a reading of the decree itself that
the learned Single Judge had premised it on the Government of India

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taking active part in ensuring that the amount payable under the same
is made available to the appellant. The Government of India, however,
refused to release the necessary funds nor permitted the suit property
to be transferred or converted to free hold. This forced the appellant to
file an application seeking recall of the decree before the learned
Single Judge, being I.A. No. 15619/2017. The same was dismissed by
the learned Single Judge vide order dated 28.08.2018. In the
meantime, the respondent was also in challenge to the impugned
decree, by first filing a Special Leave Petition being SLP(C)
No.9648/2017 and thereafter, Review Petition No.313/2017 and
finally, SLP(C) No.10752-53/2018. In all these proceedings, the
appellant maintained that the impugned decree is not passed by
consent and its execution can be forced only if the Government of
India gives its support to the same. Instead, the Government of India
had, in fact, issued Show Cause Notice to the appellant to explain how
the impugned decree came to be passed on basis of the purported
consent.

3.6. Placing reliance on the judgments of the Supreme Court in
Bhivchandra Shankar More v. Balu Gangaram More & Ors., (2019)
6 SCC 387 and Inder Singh v. State of Madhya Pradesh, 2025 SCC
OnLine SC 600, he submits that there was no negligence or want of
bona fide on part of the appellant in filing of the present appeal, and,
therefore, the delay should be considered to have been explained on
„sufficient cause‟. In any case, the appeal involves public money,
therefore, this Court should adopt a liberal approach in condoning the
delay.

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3.7. On the objection of the learned senior counsel for the
respondent that the Special Leave Petition filed by the appellant, that
is, SLP(C) Diary No.34720, being dismissed as withdrawn by the
Supreme Court vide its order dated 18.09.2018 reserving liberty only
to raise objections to the executability of the decree before the
Executing Court thereby making the challenge to the impugned
decree, that is, RFA(OS) 79/2018, as not maintainable, he submits that
as the SLP had been dismissed at a preliminary stage, it cannot be said
to be an expression of opinion by the court nor can act as a res
judicata. Therefore, it can also not bar the maintainability of the
present appeal. In support, he places reliance on the judgments of the
Supreme Court in Indian Oil Corp. Ltd. v. State of Bihar & Ors.,
(1986) 4 SCC 146 and Kunhayammed & Ors. v. State of Kerala &
Anr., (2000) 6 SCC 359.

3.8. As far as the appeal filed by the respondent is concerned, he
submits that, on one hand, the respondent has contended that the
impugned decree is passed by consent while on the other hand,
challenges the same as an „adjudication‟ by the learned Single Judge.
He submits that the impugned decree cannot be an adjudication of
dispute on merits as has been contended hereinabove.
3.9. On merits, he submits that the claim of the respondent was not
maintainable inasmuch as the cancellation of the allotments took place
on 01.01.1996 due to own default of the respondent in payment of the
second instalment, even in violation of the order of the High Court
dated 15.12.1995 in Civil Suit No.1062/1995. The Suit, that is,
CS(OS) 1551/2005, in which the impugned decree has been passed,

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was itself not maintainable in terms of Order XXIII Rule 1(4) of the
CPC, as an earlier suit had been withdrawn without taking any liberty
to file the second suit. He submits that even the requisite court fee for
the prayer of specific performance had not been affixed by the
respondent and there was no prayer for refund of any amount even in
the amended plaint. Placing reliance on the judgment of the Supreme
Court in K.R. Suresh v. R. Poornima & Ors., 2025 SCC OnLine SC
1014, he submits that in absence of a specific prayer for refund, the
learned Single Judge has erred in granting the same in favour of the
respondent.

3.10. As far as EFA(OS) 19/2018 is concerned, he submits that the
decree dated 13.01.2017 was a conditional decree wherein the land
was to be converted into free hold and the amount to be refunded was
to be generated from the transfer of the suit property and not from the
own funds of the appellant. These pre-conditions/contingencies are
inseparable from the obligation of the appellant to pay any amount to
the respondent, and as these could not be fulfilled, the occasion to
execute the decree never arose. He submits that the learned Single
Judge, while dismissing the objections filed to the execution by the
impugned order dated 29.10.2018, has held that the judgment dated
13.01.2017 does not impose any reciprocal obligations nor makes it
contingent on the conversion of the suit property into free hold. The
learned Single Judge has held that the only remedy of the appellant is
to seek enforcement of its right against the Government of India,
however, that cannot be a ground to reject the enforcement of the
decree. He submits that this is an erroneous finding of the learned

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Single Judge. In support, he places reliance on the judgments of the
Supreme Court in Yeswant Deorao Deshmukh v. Walchand
Ramchand Kothari, 1950 SCC 766; Chen Shen Ling v. Nand
Kishore Jhajharia, (1973) 3 SCC 376 and Jai Narain Ram Lundia v.
Kedar Nath Khetan & Ors., (1956) 1 SCC 75.

3.11. He submits that without the conversion of the property, in fact,
the appellant cannot generate the funds for making payment to the
respondent in terms of the impugned decree.

IV. SUBMISSIONS MADE BY THE LEARNED SENIOR
COUNSEL FOR THE RESPONDENT:

4.1. On the other hand, Mr.Kirtiman Singh, the learned senior
counsel appearing for the respondent, submits that the appeal filed by
the appellant, that is, RFA(OS) 79/2018, is not maintainable as it is
challenging a decree passed by consent as far as the direction to
refund the amount is concerned. In support, he places reliance on the
judgments of the Supreme Court in Parayya Allayya Hittalamani v.
Sri Parayya Gurulingayya Poojari & Ors., (2007) 14 SCC 318 and
Bhavan Vaja & Ors. v. Solanki Hanuji Khodaji Mansang & Anr.,
(1973) 2 SCC 40.

4.2. He submits that the consent of the appellant to refund the
amount to the respondent is evident from various meetings and Board
resolutions that have been referred hereinabove. It is also evident from
the subsequent conduct of the appellant, specifically the minutes of
meeting dated 23.02.2017, 29.06.2017 and 21.09.2017. It is also

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evident from various correspondence addressed by the appellant to the
Government of India and the stand taken by the appellant in other
proceedings between the parties.

4.3. He submits that the appeal is also not maintainable due to the
limited liberty granted by the Supreme Court vide its order dated
18.09.2018 passed in SLP(C) Diary No. 34720, wherein liberty was
limited to raise objections to the executability of the decree and not to
challenge the same by way of a separate appeal. In support, he places
reliance on the judgments of the Supreme Court in Kunhayammed
(supra) and Khoday Distilleries Ltd. v. Sri Mahadeshwara Sahakara
Sakkare Karkhane Ltd., Kollegal, (2019) 4 SCC 376.
4.4. On the issue of delay in filing of the appeal, he submits that the
appellant had, in fact, accepted the appeal, as has been submitted
hereinabove. It is only belatedly that the appellant decided to
challenge the decree because its objections against the executability of
the same were dismissed. Placing reliance on the judgments of the
Supreme Court in Ajit Singh Thakur Singh & Anr. v. State of
Gujarat, (1981) 1 SCC 495; K.B. Lal v. Gyanendra Pratap & Ors.,
2024 SCC OnLine SC 508; Pundlik Jalam Patil v. Executive
Engineer, Jalgaon Medium Project & Anr., (2008) 17 SCC 448;
Postmaster General & Ors. v. Living Media India Ltd. & Ors.,
(2012) 3 SCC 563; Shivamma v. Karnataka Housing Board & Ors.,
2025 SCC OnLine 1969; Mohinder Singh v. Paramjit Singh & Ors.,
(2018) 5 SCC 698 and State of M.P. v. Ramkumar Choudhary, 2024
SCC OnLine SC 3612, he submits that the appellant has shown no
cause, leave alone sufficient cause, for condoning the delay.

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4.5. On the submission of the learned counsel for the appellant that
the impugned decree is conditional in nature, he submits that the same
has no merit. He submits that the learned Single Judge in the
impugned decree has only suggested a potential course of action for
raising money by transferring the property including the liability for
its conversion to a third party. He submits that sub-leasing of the
property was permissible in terms of the lease deed dated 04.07.1997
as well as the minutes of meeting dated 24.07.2018. Instead of raising
the money in this manner, the appellant is expressing its inability to
make payment to the respondent in terms of the impugned decree,
which cannot be accepted. He submits that, in fact, for another
allottee, that is, M/s Leela Hotels Ltd., as far as a five star hotel land is
concerned, the appellant has complied with the decree passed against
it. He submits that for a decree to be conditional, the condition must
be extraneous and beyond the control of the parties; in the present
case, not only was the Government of India a party to the suit, but the
decree was also not conditional on the conversion of the property. In
support of his plea, he places reliance on the judgments of the
Supreme Court in Yeswant Deorao Deshmukh (supra); Antonysami
v. Arulanandam Pillai & Anr., (2001) 9 SCC 658 and Om Prakash
Navani & Anr. v. Juno Changas Pereira & Ors., 2003 SCC OnLine
Bom 308.

4.6. He submits that even assuming that the appellant has any claim
against the Government of India, the only remedy available to it is to
seek enforcement of such condition against Government of India. In
support, he places reliance on the judgments of the Supreme Court in

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Bhaskaran v. Sreedharan, MANU/SC/0554/2002; and Antonysami
(supra).

4.7. He submits that the Executing Court cannot also go behind the
decree and, therefore, the objections to the execution of the same have
rightly been dismissed by the learned Single Judge. In support, he
places reliance on the judgment of the Supreme Court in Deepa
Bhargava & Anr. v. Mahesh Bhargava & Ors., 2009 (2) SCC 294.
4.8. On the own appeals of the respondent, that is, RFAs(OS) 1 and
2/2025, he submits that the learned Single Judge, in passing the
impugned decree, wrongly adjudicated the claim of the respondent for
refund of the earnest money deposit and interest thereon and rejected
the refund of the EMD while restricting the interest. The learned
Single Judge, however, failed to appreciate that the appellant had not
suffered any loss on account of the interim orders passed during the
proceedings of the suit(s) filed by the respondent and in absence of the
same could not forfeit any amount paid by the respondent. There was
no stay on the utilisation of the subject property as the interim order
passed in favour of the respondent had been stayed by this Court in
FAO 129/1998 vide order dated 18.11.2003 on the consent of the
respondent. He submits that the stay on dealing with the property
operated only from 1998 till 2003 whereafter, the appellant was free to
put the property to commercial use and generate funds. The appellant,
however, failed to utilise the property for reasons best known to it and
cannot now pass the alleged loss/damage to the respondent as it has
arisen out of its laxity. He submits that, in fact, no loss would have
been suffered by the appellant as the property prices have increased

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substantially and this was also contended by the appellant before the
learned Single Judge. In support, he places reliance on the judgment of
the Supreme Court in Kailash Nath v. Delhi Development Authority,
(2015) 4 SCC 136.

4.9. For its claim of interest, he submits that even to M/s Leela
Hotels Ltd., interest has been directed to be paid at the contractual
rate, that is, 20%, which was later reduced by the Supreme Court to
18%. He submits that the appellant itself charged interest from the
respondent at the rate of 16.48%, which was stipulated for maximum
delay of 3 months. Therefore, essentially it was compound interest
with quarterly rests. The respondent was entitled to the same on
reciprocal basis.

V. ANALYSIS AND FINDINGS:

5.1. We have considered the submissions made by the learned
counsels for the parties.

5.2. At the outset, we need to consider the question of delay in filing
of the appeal, that is, RFA (OS) No. 79/2018. We would note that the
delay is rather huge, that is, of 620 days.

5.3. The appellant has tried to explain the same by contending that it
first tried to implement the impugned judgment by writing to the
Government of India for the necessary NOC and for the release of
funds, and having failed in this attempt, filed an application seeking
recall of the impugned judgment before the learned Single Judge. It
has been contended that only when the same was dismissed by the
learned Single Judge vide order dated 28.08.2018, the appellant was

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forced to file the present appeal. On the other hand, the learned senior
counsel for the respondent has insisted that the appellant, in fact,
accepted the decree and cannot now challenge the same.
5.4. Section 5 of the Limitation Act, 1963 (hereinafter referred to as
„Limitation Act‟) provides for condonation of delay in filing of the
appeal if the appellant satisfies the Court that it had „sufficient cause‟
for not preferring the appeal within the period of limitation. It has
been held that the term „sufficient cause‟ is to be construed liberally
and in order to meet the ends of justice. Section 5 of the Limitation
Act confers the discretionary power on the Court to condone the
delay, which must be exercised judiciously, however, not where there
is gross negligence or want of diligence on part of the litigant. It must
be remembered that the expiration of period of limitation prescribed
for making an appeal gives rise to rights in favour of the decree holder
to treat the decree as binding between the parties and, therefore, such
right should not be light-heartedly disturbed.
5.5. In Shivamma (supra), the Supreme Court in an exhaustive study
on the subject, held that it is not sufficient to only explain the delay
caused in the period between the last of the dates of limitation and the
date on which the appeal/application is actually filed, rather an
explanation must also be offered for what the concerned party was
doing for the entire period of the prescribed limitation from the date of
actual filing. Events that occurred after the expiry of the period of
limitation till the date of actual filing of appeal or application, as the
case may be, would be of no consequence insofar as condonation is
concerned, if it is unable to explain what came in the way of the party

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in filing the appeal within limitation. It was emphasised that the law of
limitation is founded on public policy and though the rules of
limitation are not meant to destroy the rights of parties, they are meant
to see that parties do not resort to dilatory tactics but seek their remedy
promptly. It was further held that the discretion vested in the Court
under Section 5 of the Limitation Act is two fold; first, for
determining if „sufficient cause‟ existed; and second, where the former
is answered in the affirmative, then whether the case is a fit one for it
to condone the delay. „Sufficient cause‟ for the delay in filing of an
appeal has to be established by some event or circumstance that had
arisen before the limitation expired and the party seeking condonation
of delay has to explain the delay of the entire continuum commencing
from the point at which the limitation period first began to run until
the eventual filing of the appeal. It was further held that the phrase
„sufficient cause‟ is an expression of elastic import, incapable of
precise definition, yet not without boundaries. Its purpose is to
empower courts to advance the cause of justice, however, is not itself
a loose panacea for the ill of pressing negligent and stale claims. It
must be construed in a manner that advances substantial justice while
preserving the discipline of limitation. Length of delay may be
instructive but not determinative of the same. It must also be borne in
mind that rules of procedure are handmade of justice and technical
consideration of limitation, when in conflict with the imperative of
substantial justice, the latter should ordinarily prevail. The court
cautioned that the test of „sufficient cause‟ cannot be substituted by an
examination of the merits of the case.

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5.6. Applying the above principles to the facts of the present case,
and without being in any manner influenced by the merits of the
contentions raised by the parties on the merits of the impugned decree,
and by presuming the same to be a consent decree passed, we shall
now consider whether the appellant has been able to make out
sufficient cause for condoning the delay.

5.7. As noted in the impugned judgment/decree, the court had not
gone into the issue whether the appellant required the consent of the
Government of India to implement the terms of the so-called
agreement. On the plea of lack of resources with the appellant to meet
the liability under the decree, the court opined that the same can be
generated by transferring the subject property, including the
responsibility of getting it converted into free hold.
5.8. From the above sequence of events, what is also evident is that
the appellant first tried to explore its option of making the
Government of India agree to the implementation of the decree in a
manner it wanted, that is by getting an NOC as also release of funds
from the government. In this regard, we would again refer to certain
communications and developments between the appellant and the
L&DO post the impugned Decree, which are as follows:-

(a) The MOUD, Government of India, issued an Office
Memorandum dated 31.01.2017 stating that Government of
India cannot be made liable for the amounts to be paid under
the Decree. It also stated that the Suit Property cannot be
converted into free hold;

(b) The appellant in its Board Meeting held on 23.02.2017,

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again resolved to persuade the Government of India for the
NOC to enter into the compromise terms and also for the
release of funds. The same was communicated to the
Government vide letter dated 24.03.2017;

(c) The L&DO, vide its letter dated 21.04.2017, advised the
appellant to urgently explore the possibility of seeking an
appropriate legal remedy/file appeal against the impugned
Decree;

(d) The Board of Directors of the appellant, vide resolution
dated 29.06.2017, resolved as under:

“That HUDCO should take legal action as
per the legal opinion of its senior advocate in
Guest House matter in the Delhi High Court
as follows:

(i) Contest Review petition of MSSEL on
merits and take all necessary grounds for its
dismissal

(ii) As MSSEL has already filed review
petition for review of the Order/Decree dated
13.01.2017 passed by the Delhi High Court by
resiling back and praying for the award of
higher interest and other reliefs as claimed in
the review petition, HUDCO should also seek
Recall of Order 13.01.2017 and contest the
matter on merits and pray for stay of execution
petition that may be filed by MSSEL in terms
of the High Court Order dated 13.01.2017.

(iii) Resolved further in view of the Review
Petition filed by the MSSEL in the matter of
Guest House case, HUDCO may contest
special leave petition filed by MSSEL in
Supreme Court on merits against the Order
dated 03.06.2016 in Hotel Site Case.”

(e) In a meeting held under the Chairmanship of Secretary,

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HUPA along with the representatives of the appellant on
21.09.2017, a decision was taken that the „No Lien AGP
Account‟ would be thoroughly audited and a show-cause
notice was directed to be issued to the officers of the
appellant to explain under what circumstances consent was
given in the Suit. Accordingly, a show cause notice dated
01.11.2017 was issued, which was later withdrawn.

5.9. Not only the above, even the respondent did not accept the
impugned Decree insofar as it rejected the refund of EMD and
restricted the interest awarded to the respondent. It filed SLP(C)
9648/2017 before the Supreme Court, which was withdrawn by it on
07.04.2017, with liberty to file a review before the learned Single
Judge. It then filed a Review Petition before the learned Single Judge,
which came to be dismissed vide order dated 12.12.2017. The
respondent then challenged the impugned Decree as also the order
dated 12.12.2017 before the Supreme Court by way of SLP(C) 10752-
53/2018, which, on transfer to this Court, have been numbered as RFA
(OS) 1-2/2025. Therefore, it was not as if the respondent had also
accepted the impugned Decree.

5.10. The appellant, having failed to obtain the desired result from the
Government of India, filed an application seeking recall of the
judgment, being I.A. No.15619/2017, before the learned Single Judge,
which came to be dismissed vide order dated 28.08.2018.
5.11. Therefore, the appellant was fighting at multiple fronts; on one
hand, with the Government of India, and on the other hand, the

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respondent itself. In our view, therefore, the appellant has been able to
make out sufficient cause for condoning the delay in filing of the
present appeal.

5.12. The delay in filing of RFA(OS) 79/2018 is accordingly
condoned and C.M. No. 48747/2018 is allowed.
5.13. This now brings us to the merits of the appeals filed by the
parties.

5.14. While considering the merits of the appeals filed by the
appellant, at the outset, we need to determine the nature of the decree
passed by the learned Single Judge as, if it is a consent decree,
different result will ensue inasmuch as the appellant would not be
allowed to challenge the same. Order XXIII Rule 3 of the CPC, so far
as is relevant to the present set of appeals, reads as under:

“3. Compromise of suit.–Where it is proved
to the satisfaction of the Court that a suit has
been adjusted wholly or in part by any lawful
agreement or compromise [in writing and
signed by the parties] or where the defendant
satisfied the plaintiff in respect to the whole or
any part of the subject-matter of the suit, the
Court shall order such agreement,
compromise or satisfaction to be recorded,
and shall pass a decree in accordance
therewith [so far as it relates to the parties to
the suit, whether or not the subject matter of
the agreement, compromise or satisfaction is
the same as the subject-matter of the suit:]

Provided that where it is alleged by one party
and denied by the other that an adjustment or
satisfaction has been arrived at, the Court
shall decide the question; but no adjournment
shall be granted for the purpose of deciding
the question, unless the Court, for reasons to
be recorded, thinks fit to grant such

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adjournment.

Explanation.– An agreement or compromise
which is void or voidable under the Indian
Contract Act, 1872 (9 of 1872), shall not be
deemed to be lawful within the meaning of this
rule.

3A. Bar to suit.–No suit shall lie to set aside
a decree on the ground that the compromise
on which the decree is based was not lawful.”

5.15. A reading of the above provision would show that it is in two
parts. In the first part, the Court has to be satisfied that the suit has
been adjusted wholly or in part by any lawful agreement or
compromise “in writing and signed by the parties”; and in the second
part, the defendant has to satisfy the plaintiff in respect to the whole or
any part of the subject-matter of the suit.

5.16. The decree passed under Order XXIII Rule 3 of the CPC has a
special status inasmuch as the compromise between the parties gets a
sanction of the court and is thereafter enforced like a judgment. It also
acts on a principle of estoppel inasmuch as it cannot be challenged in
an appeal or by another suit. Where the court delivers or pronounces a
judgment by consent, what the court does in effect is to place its
imprimatur on a contractual arrangement between the parties. It is the
agreement between the parties which forms the foundation of the
judgment.

5.17. In Gurpreet Singh (supra), the Supreme Court held that the
court must insist upon the parties to reduce the terms of their
settlement in writing. This was emphasised again in Pushpa Devi
Bhagat (supra).

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5.18. In Amro Devi & Ors. v Julfi Ram & Ors., (2024) 19 SCC 782,
the Supreme Court emphasised the need of the compromise agreement
to be in writing and signed by the parties, by holding as under:

“24. A plain reading of the above provision
clearly provides that for a valid compromise in
a suit there has to be a lawful agreement or
compromise in writing and signed by the
parties which would then require it to be
proved to the satisfaction of the Court. In the
present case there is no document in writing
containing the terms of the agreement or
compromise. In the absence of any document
in writing, the question of the parties signing it
does not arise. Even the question of proving
such document to the satisfaction of the court
to be lawful, also did not arise. Thus, it cannot
be said that the order dated 20-8-1984 was an
order under Order 23 Rule 3 CPC.

26. Additionally, we must also note Som
Dev v. Rati Ram [Som Dev v. Rati Ram, (2006)
10 SCC 788] as presented by the appellants to
clarify the rigors of Order 23 Rule 3CPC. In
this case, it was clarified by this Court that
after the amendment of the Civil Procedure
Code in 1977, a compromise decree can be
passed only on compliance with the
requirements of Order 23 Rule 3; otherwise it
may not be possible to recognise the same as;
compromise decree. When a compromise is to
be recorded and a decree is to be passed,
Order 23 Rule 3 of the Code requires that the
terms of the compromise should be reduced to
writing and signed by the parties.”

5.19. It also needs to be emphasised that in case there is any dispute
between the parties on the terms of the consent, under Order XXIII
Rule 3 of the CPC, it is not for the court to determine the same for the
parties. The Court must, in such an eventuality, proceed to consider
the suit on its own merits, which would be in form of framing of

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issues, recording evidence of the parties, and passing a judgment on
merits, or where the case is made out, pass a decree in terms of Order
XII Rule 6 of the CPC or, in cases of a commercial dispute governed
by the Commercial Courts Act, 2015, under Order XIII A in form of a
summary judgment.

5.20. In the present case, by the order dated 10.08.2016, the learned
Single Judge had highlighted the reasons which should persuade the
parties to settle their disputes amicably. Pursuant thereto, in a meeting
of the Board of Directors of the appellant held on 23.08.2016, while it
was resolved that the appellant shall refund the first instalment
excluding earnest money and interest on delayed payment forfeited by
it, it was further resolved that the necessary No Objection of the
Government of India for the same should be obtained and the amount
be released from „No Lien AGR Account‟. The Government of India,
by its Letter dated 25.11.2016, however, informed the appellant that it
is not necessary to issue the No Objection to the appellant to enter into
a settlement with the respondent. This was brought to the notice of the
learned Single Judge in the hearing held on 28.11.2016. Even on
13.01.2017, as recorded in the impugned judgment, while the
Government of India maintained that the NOC was not required, the
appellant insisted that it has no resources to pay in terms of the offer
without the NOC.

5.21. From the above, what would be evident is that leave alone,
there being no application or a compromise deed signed by the parties
before the learned Single Judge, even the compromise terms as agreed
unilaterally by the appellant, were stated by the appellant to be not

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workable in absence of the NOC from the Government of India.
5.22. The learned Single Judge instead of leaving the matter at that
and proceeding to adjudicate the suit on its own merits, in the
impugned judgment, suggested the means and manner in which the
conditions on which the appellant had agreed to refund the amount of
first instalment to the respondent, could be achieved. In our view, this
was neither the mandate nor the jurisdiction of the learned Single
Judge; especially under Order XXIII Rule 3 of the CPC.
5.23. As noted hereinabove, there was no compromise deed filed
before the learned Single Judge and the entire matter was still under
discussion between the appellant and the respondent with the
Government of India. In case such discussion has not yielded a
concrete settlement result, the learned Single Judge had no option but
to proceed with the adjudication of the suit on its own merits in
accordance with the procedure prescribed by the CPC. It could not
have acted as a mediator or a conciliator to suggest what it felt would
be a viable mode of achieving the settlement.
5.24. What is also important to note here is that the respondent was
not only claiming refund of the EMD but also interest on the amount
to be refunded. As resolved in the minutes of meeting dated
23.08.2016 of the Board of Directors of the appellant, this prayer of
the respondent had been rejected. Therefore, there was, in fact, no
settlement between the parties on the terms of the settlement. The
learned Single Judge could not have presumed and acted on the basis
that while the refund of the first instalment had been agreed and,
therefore, a decree under Order XXIII Rule 3 of the CPC could be

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passed, for the others it was open for adjudication. The offer of
settlement by the appellant was one and could not have been
bifurcated in this manner.

5.25. As the appeal, RFA (OS) No. 79/2018, challenges that there
was in fact, no consent to the passing of the decree and the learned
Single Judge has wrongly invoked its jurisdiction under Order XXIII
Rule 3 CPC, with which we agree, the present appeal is maintainable
in terms of Section 96(3) of the CPC, which we reproduce herein-
below:

“96. Appeal from original decree.–(3) No
appeal shall lie from a decree passed by the
Court with the consent of parties.”

5.26. This brings us to the other objection of the respondent on the
maintainability of the present appeal by contending that the appellant,
when it challenged the order dated 28.08.2018 before the Supreme
Court by way of SLP(C) Diary No.34720/2018, it was permitted to
withdraw the same vide order dated 18.09.2018 with a limited liberty
to raise its objections on the executability of the decree and not on its
merits. It is contended that, therefore, the appeal of the appellant is
barred.

5.27. We do not find any merit in the said objection. The order of the
Supreme Court was at a preliminary stage without leave being
granted. It was by a non-speaking order, and cannot act as a res
judicata or as a bar on the appellant invoking its statutory remedies.
We reproduce the order dated 18.09.2018 as under:

“Mr. Ranjit Kumar, learned Senior Counsel
appearing for the petitioner prays for

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withdrawal of these petition with liberty to
raise all objections as to executability of
decree before the court below in accordance
with law.

Prayer is allowed.

Accordingly, the special leave petitions are
dismissed as withdrawn with the liberty
aforesaid.”

5.28. In this regard, we may usefully refer to the judgments of the
Supreme Court in Indian Oil Corp. Ltd. (supra) and Kunhayammed
(supra).

5.29. Coming back to the merits of the challenge, we reiterate that the
impugned judgment and decree passed by the learned Single Judge
cannot be said to be one passed under Order XXIII Rule 3 of the CPC;
there being no unequivocal consent of the parties to the terms of the
settlement. It is also not a judgment as defined under Section 2(9) of
the CPC or a decree in terms of Section 2(2) of the CPC. The same not
being an adjudication of the issues in dispute between the parties. In
fact, the respondent itself is challenging the judgment as far as the
refusal of the learned Single Judge to direct refund of EMD and also
on the determination of the rate of interest awarded to the respondent
is concerned. The said adjudication has also happened without the
evidence of the parties and only on what appeared to the learned
Single Judge to meet the ends of justice. In our view, the suit cannot
and could not have been determined only on what appears to be just
and proper, but has to be adjudicated on the basis of evidence led by
the parties; that stage had not arisen. The Court cannot decide these
disputes as ex aequo et bono or as amiable compositeur.
5.30. The impugned decree is, therefore, liable to be set aside.

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5.31. In view of the above, we refrain from considering the other plea
raised by the respondent on its claim for refund of the EMD and the
rate of interest, lest it may prejudice the parties in the Suit, which,
because of the impugned judgment and Decree being set aside, shall
be restored to its original number and be commenced from the stage
that it was at before the passing of the impugned Decree.
5.32. To summarise:

(a) We find sufficient cause having been shown by the appellant
to condone the delay in filing of the appeal, that is, RFA(OS)
79/2018. The delay is, accordingly, condoned, and C.M.
48747/2018 filed therein is allowed;

(b) We also find merits in the appeals filed by the parties, that is,
RFA(OS) 79/2018 and RFAs(OS) 1 and 2/2025. The same
are allowed. The impugned judgment and decree, dated
13.01.2017, is hereby set aside and consequently, the order
dated 12.12.2017 dismissing the Review Petition
No.313/2017 filed by the respondent, is also hereby set
aside;

(c) The Suit, that is, CS(OS) 1551/2005 is restored and shall be
taken up by the Roster Bench from the stage that it was at
before the passing of the impugned judgment and Decree.
The parties shall appear before the learned Single Judge on
22nd May, 2026 for further directions;

(d) As the suit had been filed in the year 1997, we request the
learned Single Judge to expedite the hearing of the same. It
is made clear that the learned Single Judge shall hear and

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decide the suit on its own merits, remaining uninfluenced by
any observations made by us in the present judgment; and,

(e) As far as EFA(OS) 19/2018 is concerned, in view of this
judgment setting aside the impugned decree dated
13.01.2017, the same has been rendered infructuous and is,
accordingly, disposed of. The order dated 29.10.2018 passed
in EA No.482/2018 in Ex.P. No.19/2018 is set aside.

5.33. The appeals along with the pending applications are disposed of
in the above terms.

5.34. The parties shall bear their own costs.

NAVIN CHAWLA, J.

RENU BHATNAGAR, J.

MAY 6, 2026/ns/as

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