Disputes About Properties Which Are Not Subject Matter Of Litigation Can Be Settled In Mediation: SC [Read Judgment]

The Supreme Court has observed that Settlement Agreement which has become part of a Court's order is executable irrespective of the fact whether the Agreement is with respect to the properties which was/were the subject matter of the proceedings before the Court or not.

The bench of Justice Ashok Bhushan and Justice MR Shah observed that, in the Mediation proceedings, it is always open for the parties to explore the possibility of an overall amicable settlement including the disputes which are not the subject matter of the proceedings before the Court.

In this case, the litigation was between a father and his daughter with respect to some properties. When the matter reached the Apex Court, it referred them to mediation. A settlement agreement was reached between them and the Court disposed of the Special Leave Petition in terms of the Settlement Agreement. As the court order was not complied with, the parties again approached the Apex Court.

The contention taken in the contempt petition [Kaushaliya vs. Jodha Ram] was that, as the disputed properties in question were not the subject matter of original suit proceedings and therefore the same could not have been the subject matter of Settlement Agreement entered into between the parties. In this regard, the bench said:

In the Mediation it is always open for the parties to explore the possibility of an overall amicable settlement including the disputes which are not the subject matter of the proceedings before the Court. That is the benefit of the Mediation. In the Mediation parties may try for amicable settlement, which is reduced into writing and/or a Settlement Agreement and thereafter it becomes the part of the Court's Order and the Court disposes of the matter in terms of the Settlement Agreement. Thereafter the order in terms of the Settlement Agreement is executable irrespective of the fact whether the Settlement Agreement is with respect to the properties which was/were not the subject matter of the proceedings before the Court. Thereafter the order passed by the Court in terms of the Settlement is binding to the parties and is required to be acted upon and/or complied with and as observed above the same is executable.

It closed the contempt petition observing that the order passed in terms of settlement agreement is executable. 

Agreement to Sell does not confer any right, title or interest in the property. 

The Court also dismissed an application filed by two persons who claimed ownership of some of the properties mentioned in Settlement Agreement. They claimed to be the owners and in possession pursuant to an Agreement to Sell. In this regard, the bench said:

As per the settled preposition of law, Agreement to Sell does not confer any right, title or interest in the property. Therefore, as such on the basis of the Agreement to Sell, only Ramu Ram and Rampal cannot claim any ownership and/or right title or interest in the disputed properties.

Senior Advocate Aishwarya Bhati, Advocates Charu Mathur and Archana Pathak Dave argued for parties.

Click here to Read/Download Judgment