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Code of Civil Procedure, 1908: s.47 – Execution of decree – Executing court – Jurisdiction of – Scope – Held: Executing court has no jurisdiction to modify a decree – It cannot go behind the decree and must execute the decree as it is. Default clause contained in a compromise decree – Nature of – Held: It is not penal in nature – s.74 of the Contract Act is not attracted – Stipulation to pay interest @ 18% p.a. for default in payment within agreed period not unreasonable. In a suit for declaration and permanent injunction between brothers and sisters in respect of ancestral property, compromise petition was filed by the parties which was accepted by the Court. A decree was passed thereupon. Some of the terms of compromise decree were that the respondents-defendants would pay Rs.10 lakhs to the appellants-plaintiffs and in case of failure of payment within stipulated time, appellant would be entitled to claim interest thereon @ 18% p.a. and that respondents would be at liberty to alienate/sell the suit property. As payment was not made in terms of the consent decree, the appellants filed an application for execution. Respondents filed objection under s.47 CPC before the executing Court, which was rejected. A revision petition was filed thereagainst contending that the respondents were not liable to pay interest @ 18% p.a. The High Court rejected the objection holding that the consent decree was beyond the subject matter of the suit. Moreover, it opined that the question as to whether the stipulation of payment of interest @ 18% p.a. on the judgment debtors is in the nature of penalty and is unreasonable within the purview of s.74 of the Contract Act, 1872 or not, should be considered afresh by the Executing Court. The Executing Court directed payment of interest @ 14% p.a. Respondents filed writ petition. High Court reduced the rate of interest to 9% p.a. holding that the litigating parties were real brothers and sisters, the consent decree was not in respect of any commercial transaction and in the circumstances, the stipulation of interest in default of payment within the agreed period was by way of penalty, and thus the rate of interest of 18% p.a., looking at the nature of decree, was unreasonable and excessive. Hence the present appeal. =Allowing the appeal, the Court HELD: 1. A decree remains valid unless set aside. Respondents never challenged the validity or otherwise of the said consent decree. It was acted upon. They disposed of the suit property pursuant thereto and, thus, took advantage of a part thereof. It was, therefore, impermissible for them to resile therefrom. There is no doubt or dispute as regards interpretation or application of the said consent terms. [Paras 10 and 11] [643-d-e] 2. An executing court cannot go behind the decree. It has no jurisdiction to modify a decree. It must execute the decree as it is. A default clause contained in a compromise decree even otherwise would not be considered to be penal in nature so as to attract the provisions of Section 74 of the Indian Contract Act. [Para 11] [643-f] Sova Ray & Anr. v. Gostha Gopal Dey & Ors. AIR (1988) SC 981, referred to. 3. Interest becomes leviable either under a statute or under a contract. The stipulation to pay interest at the rate of 18% per annum cannot, by itself, be said to be unreasonable. [Para 14] [645-d] P. D’Souza v. Shondrilo Naidu (2004) 6 SCC 649, distinguished Yogesh Mehta v. Custodian appointed under the Special Court & Ors. (2007) 2 SCC 624, held inapplicable. 4. The question as to whether the executing court had any jurisdiction to travel beyond the decree was not raised. The executing court had no such jurisdiction. The High Court while exercising the revisional jurisdiction also had no jurisdiction to invoke the provisions of Section 74 of the Contract Act which for all intent and purport amounts to modification of a valid decree passed by a competent court of law. The decision of the High Court, therefore, was wholly without jurisdiction. Furthermore, the High Court did not hold that Section 74 of the Contract Act will have application. It only remitted the matter to the executing court. [Para 17] [646-d-e] 5. No legal principle was adverted to by the executing court in reducing the rate of interest to 14 per cent and the High Court in reducing the same further to 9 per cent. In a large number of decisions, interest has been directed to be paid even at the rate of 18 per cent or 21 per cent per annum. The executing court is directed to proceed to execute the decree as it is. [Paras 18 and 19] [646-f] Case Law Reference: AIR (1988) SC 981 referred to Para 12 (2004) 6 SCC 649 distinguished Para 15 (2007) 2 SCC 624 held inapplicable Para 16 CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 7310-11 of 2008. From the Judgment and final Order dated 29.9.2006 of the High Court of Madhya Pradesh at Jabalpur in Writ Petition Nos. 4112 of 2006 & 4173 of 2006. Arvind Kumar Shukla, Alok Shukla, G.P. Mishra, Purcham Mubarak and Irshad Ahmad for the Appellants. Shiv Sagar Tiwari, Varun Thakur and Rajesh Singh for the Respondent. =, , , 2008(16 )SCALE305 , 2009(1 )JT151

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 IN THE SUPREME COURT OF INDIA

 CIVIL APPELLATE JURISDICTION

 CIVIL APPEAL NOS. 7310-7311 OF 2008
 (Arising out of SLP (C) Nos.19271-19272 of 2007)

Deepa Bhargava & Anr. ... Appellants

 Versus

Mahesh Bhargava & Ors. ... Respondents

 JUDGMENT

S.B. Sinha, J.

1. Leave granted.

2. Whether the terms of a consent decree can be varied by the executing

court is the question involved in this appeal which arises out of a judgment

and order dated 29.9.2006 passed by a learned Single Judge of the Madhya

Pradesh High Court at Jabalpur in Writ Petition No.4141 of 2006.

3. Appellants herein filed a suit in the Court of Additional District

Judge, Jabalpur for declaration and permanent injunction in respect of their
 2

share in the suit property which they are said to have inherited from their

mother.

 In the said suit the parties settled their disputes and differences. A

compromise petition in terms of Order XXIII Rule 3 of the Code of Civil

Procedure, 1908 was filed which was accepted by the Court by an order

dated 12.5.1995, some of the terms whereof are as under :

 "(i) & (ii) ...
(iii) That the Plaintiffs have claimed a declaration to the suit
 properties which were given to them by dint of Will
 executed by the late Smt. Parmeshwari Devi in favour of
 the Plaintiffs. It is now agreed between the Plaintiffs and
 Defendants 3 to 5 that in respect to the above the
 Plaintiffs shall remain entitled to a sum of Rs.10 (Rs.
 Ten) Lakhs each only and rest of sale money shall be
 exclusive property of the Defendant 3 to 5.
(iv) That the defendant No.3 to 5 shall be at liberty to
 alienate the properties in any manner they like.
(v) (a) That the Defendant No.3 to 5 have paid Rs.1 Lakh
 (Rs. One Lakh) each to the plaintiffs and the remaining
 balance shall be paid within six months from the date the
 decree is passed by the Court. In case of failure of
 payment within the stipulated time, the Plaintiffs shall be
 entitled to claim interest on the above mentioned amount
 at the rate of 18% per annum and the total balance
 amount along with interest will be first charge on the suit
 property.
 (b) That if after the expiry of the period
 of six months from the date of decree, the
 full payment of Rs.Ten Lakhs each could
 not be made to the Plaintiffs then the same
 made within the extended period of three
 3

 months together with interest,. Till then the
 charge on the property will continue.
 (vi) That out of the sale proceeds or earnest
 money received by the Defendant No.3 to 5
 by the sale of the suit/will properties amount
 due to the Plaintiffs shall be paid first."

4. A decree was directed to be prepared on the said basis, stating :

 "1. The suit is for declaration and possession.
2. The parties have moved compromise petition on the
 ground that the Plaintiffs and the Defendant happened to
 be real brother and sisters and to maintain the harmony
 in the families they come forward with this compromise
 petition regarding the property in disputes.
3. Shri O.P. Sahni (PW1) counsel for the Plaintiff had
 deposed thereof the parties have come to a compromise
 in accordance with EXC1 wherein his signature from 1
 to 1 and accordingly the decree be granted also Shri V.R.
 Rao (DW1) counsel for the Defendant had deposed that
 they agrees to EXC1 where in his signatures are from B
 to B and therefore, decree be granted accordingly.
4. On perusal of EXC 1 the compromise petition the
 pleading and deposition I am of the view that all the
 necessary conditions of the complaint are adjusted in the
 compromise petition hence accordingly the decree be
 awarded.
 I accordingly, order that the decree be
 drawn in accordance with EXC 1
 compromise petition."
 4

5. The compromise petition was to form part of the decree. Payment

having not been made in terms of the said consent decree the appellants

filed an application for execution. Respondents deposited a sum of Rs.18

lacs in the year 1998. An objection was also filed by them under Section 47

of the Code before the Executing Court in 2002. The said objection petition

was rejected.

6. A Civil Revision Application was filed thereagainst, inter alia,

contending that the respondents were not liable to pay interest at the rate of

18% per annum.

 The High Court, by reason of a judgment and order dated 5.8.2005,

rejected the objection that the consent decree was beyond the subject matter

of the suit. It furthermore rejected the contention that the suit should not

have been decreed as adequate court fee had not been paid. The contention

relying upon Sections 59 to 61 of the Indian Contract Act that the amount

deposited in the court must be first adjusted towards the principal amount

was also dismissed. The contention raised that the interest at the rate of 18

per cent per annum being excessive is hit by the provisions Usurious Loans

Act was also rejected. However, the High Court opined that the question as

to whether the stipulation of payment of interest at the rate of 18 per cent

per annum on the judgment debtors come within the purview of Section 74
 5

of the Indian Contract Act or not, should be considered afresh by the

Executing Court, directing:

 "On a perusal of the impugned order, it is found
 that the learned executing Court has not adverted
 itself to the applicability of Section 74 of the
 Indian Contract Act. Though, the provisions of
 Usurious Loans Act, may not be applied so as to
 relieve the judgment debtors from the rate of
 interest when the same is excessive, Section 74 of
 the Contract Act does empower even an executing
 Court to consider whether the same is in the nature
 of penalty and is unreasonable. In such a
 situation, the executing Court has got ample power
 to pass suitable order on the parameters of
 reasonableness. The executing Court having
 failed to take this into consideration has
 committed an error and the executing Court is,
 therefore, liable to be directed to decide only the
 last objection taking into consideration the scope
 of Section 74 of the Indian Contract Act.
 In the result, the civil revision is partly allowed
 and the case is remitted back to the executing
 court to decide whether the stipulation about the
 interest @ 18% per annum is in the nature of
 penalty and further whether it is unreasonable
 within the meaning of Section 74 of the Indian
 Contract Act. The executing Court shall pass an
 order in accordance with the law within a period
 of three months."

7. The Executing Court, pursuant thereto and in furtherance thereof, by

an order dated 23.12.2005 directed that the amount of interest payable

should be calculated at the rate of 14 per cent per annum, opining :
 6

 "Now the question arises is, if the interest at the
 rate of 18% is unreasonable and not in accordance
 with law, then what rate of interest would be
 reasonable and in accordance with law? In this
 context, after perusing all the contentions as long
 pendency of the matter, the grant of amount of
 Rs.1 lakh to the plaintiffs, the benefits of the
 property to the parties, and stage of the objection,
 the interest at the rate of 14% may be said to be
 reasonable and in accordance with law. Therefore,
 it is appropriate and hereby decided to charge
 interest at the rate of 14% per annum instead of
 interest at the rate of 18% per annum on the
 remaining principal amount."

8. A writ petition was filed thereagainst by the respondents. By reason

of the impugned judgment, the High Court reduced the rate of interest

payable to the decree holder to 9% per annum, stating :

 "... In the circumstances, it has to be seen as to
 whether the stipulating about the interest @ 18%
 per annum in default of payment within the time
 fixed, is in the nature of penalty and whether it is
 unreasonable within the meaning of section 74 of
 the Act. The litigating parties are real brothers
 and sisters. Having regard to the nature of the suit
 and the terms of the compromise enumerated in
 clause (v)(a) and (b) it is clear that the decree is
 not in respect of any commercial transaction. In
 the circumstances, in my view, the stipulation of
 interest @ 18% per annum in defaults of payment
 within the agreed period is by way of penalty, the
 rate of interest of 18% per annum looking to the
 nature of the decree is unreasonable and excessive.
 Considering the entire facts and circumstances of
 the case, the compromise decree passed, I am of
 the view that the reasonable rate of interest would
 7

 be 9% per annum and not 18% as per the decree or
 even 14% per annum as held by the Executing
 Court."

9. Appellant is, thus, before us.

10. The parties had claimed their interest in the lands in suit from a

common ancestor.

 They entered into a compromise. A decree was passed thereupon. A

decree, as is well known, remains valid unless set aside. Respondents never

challenged the validity or otherwise of the said consent decree. It was acted

upon. They had disposed of a property pursuant thereto and, thus, took

advantage of a part thereof. It was, therefore, impermissible for them to

resile therefrom.

11. There is no doubt or dispute as regards interpretation or application of

the said consent terms. It is also not in dispute that respondents-judgment

debtors did not act in terms thereof.

 An executing court, it is well known, cannot go behind the decree. It

has no jurisdiction to modify a decree. It must execute the decree as it is. A

default clause contained in a compromise decree even otherwise would not
 8

be considered to be penal in nature so as to attract the provisions of Section

74 of the Indian Contract Act.

12. In Sova Ray & Anr. v. Gostha Gopal Dey & Ors. [AIR 1988 SC 981],

this Court held :

 "We do not find any merit in the argument that the
 impugned Clause 6 of the agreement is illegal
 being penal in nature and has, therefore, to be
 ignored. It has to be noted that the plaintiffs had in
 the trial court obtained a decree for partition for
 1/3rd share in the suit properties and there was
 presumption in favour of correctness of the decree.
 At the appellate stage one of the three branches
 represented by the heirs of Brajgopal was satisfied
 with the share allotted to them and the interest of
 Gostha Gopal (defendant No. 9) was identical to
 their interest. The situation was acceptable to the
 defendant No. 9 also but he wanted to acquire half
 the share of the plaintiffs on payment of
 consideration. The plaintiffs agreed and the sum of
 Rs. 40,000 was fixed as the price. In Clause 2 of
 the agreement, as mentioned below, it was
 expressly stated thus:
 The sum of Rs. 40,000 agreed to be paid by
 defendant No. 9 to the plaintiffs as
 compensation for the 1/6th share shall be
 paid in two instalments:....
 (Emphasis added)
 The amount was to be paid by way of price was
 reiterated by the use of the word "consideration" in
 Clause 3. It is significant to note that the defendant
 No. 9 in the court below or his heirs (after his
 death) before us have not suggested that the entire
 compromise should be ignored on account of the
 impugned Clause 6. They have been relying upon
 the compromise except the default clause which
 9

 alone is sought to be ignored. They insist that
 under the compromise the shares allotted to the
 different branches should be treated as final and
 further half of the share of the plaintiffs, i.e. 1/6th
 share in the suit properties should have gone to the
 defendant No. 9 (and after him, to them, i.e. his
 heirs) for Rs. 40,000. This part of the compromise
 is in substance an agreement for transfer by the
 plaintiffs of half their share for a sum of Rs.
 40,000 to be paid within the time indicated. It is
 true that the market price of the property was
 higher, and a beneficial right was bestowed on the
 defendant No. 9 to acquire the same for an amount
 considerably low. In this background the
 defendant was subjected to the condition that if he
 had to take the advantage of the bargain he was
 under a duty to pay the stipulated amount by the
 time mentioned in the agreement. On failure to do
 so within time, he was to be deprived of this
 special benefit. Such a clause cannot be
 considered to be a penalty clause. The expression
 'penalty' is an elastic term with many different
 shades of meaning but it always involves an idea
 of punishment. The impugned clause in the present
 case does not involve infliction of any
 punishment; it merely deprives the defendant No.
 9 of a special advantage in case of default."

13. Even assuming that the term stipulating payment of interest in the

event the entire amount was not paid within a period of six months is penal

in nature, the Executing Court was bound by the terms of the decree.

14. Interest becomes leviable either under a statute or under a contract.

The stipulation to pay interest at the rate of 18% per annum cannot, by

itself, be said to be unreasonable.
 10

15. Mr. Tiwari, learned counsel appering on behalf of respondents, has

relied upon a decision of this Court in P. D'Souza v. Shondrilo Naidu

[(2004) 6 SCC 649] to contend that even in a case of this nature, Section 74

of the contract Act would be applicable. In P. D'Souza, this Court was

concerned with a suit for specific performance of contract. It was in the

facts and circumstances of that case held that the time was not the essence

of contract in that case. There existed a mortgage which was required to be

redeemed. The question as to whether Section 74 of the Indian Contract Act

was attracted in that case was considered from the point of view of grant of

equitable remedy.

16. Reliance has also been placed on Yogesh Mehta v. Custodian

appointed under the Special Court & Ors. [(2007) 2 SCC 624]. In that case,

this Court was concerned with the forfeiture of earnest money where the

special court held a bidding, as therein one of the conditions, namely, grant

of sanction of Special Court was not complied with, it was opined that the

penal clause as regards forfeiture of the earnest money was not attracted. It

was, therefore, held that the forfeiture of earnest money in the

aforementioned situation could not have been directed, stating :

 "While directing forfeiture of the `earnest money'
 the provisions of the Contract Act, 1872 are to be
 kept in mind. Forfeiture is permissible only when
 a concluded contract has come into being and not
 11

 prior thereto. {See Maula Bux v. Union of India
 [(1969( 2 SCC 554] and Saurabh Prakash v. DLF
 Universal Ltd. [(2007) 1 SCC 228]."

 The said decision has also no application.

17. Mr. Tiwari submitted that the appellant having not challenged the

correctness of the order dated 12.5.1997 and, thus, the same having attained

finality, the question of applicability of Section 74 of the Contract cannot be

revisited. We are not able to persuade ourselves to accept the said view.

The question as to whether the executing court had any jurisdiction to travel

beyond the decree was not raised. The executing court had no such

jurisdiction. The High Court while exercising the revisional jurisdiction

also had no jurisdiction to invoke the provisions of Section 74 of the

Contract Act which for all intent and purport amounts to modification of a

valid decree passed by a competent court of law. The decision of the High

Court, therefore, was wholly without jurisdiction. Furthermore, the High

Court did not hold that Section 74 of the Contract Act will have application.

It only remitted the matter to the executing court.

18. We do not find that any legal principle has been adverted to by the

executing court in reducing the rate of interest to 14 per cent and the High

Court in reducing the same further to 9 per cent. There are a large number
 12

of decisions where interest has been directed to be paid even at the rate of

18 per cent or 21 per cent per annum.

19. For the reasons aforementioned, the impugned judgment cannot be

sustained. It is set aside accordingly. The executing court is directed to

proceed to execute the decree as it is. The appeals are allowed with costs.

Counsel's fee assessed at Rs.25,000/-.

 .............................J.
 [S.B. Sinha]

 .............................J.
 [Cyriac Joseph]
New Delhi;December 16, 2008

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