Holding

An executing court cannot enlarge a decree to include terms, such as the loan amount, that were not part of the parties' consent; ambiguity does not permit addition of unagreed terms.

Summary

The appellants and respondents entered into a 2017 joint venture for a hospital, each contributing a Rs 10 crore interest‑free loan. In 2019 the respondents bid for the appellants' 50% shareholding, agreeing via email on a consideration of Rs 36.75 crore, which the parties argued did not include the loan amount. The respondents obtained a decree on admission for specific performance of the share sale, but the execution court, and later the High Court, construed the decree to include the loan amount by examining pleadings and email exchanges, despite the appellants' explicit rejection of that inclusion. The Supreme Court held that an executing court may interpret an ambiguous decree but cannot expand its terms beyond the parties' consent, and therefore the loan amount could not be added to the consideration. The impugned judgments were set aside and the appeals were allowed, with no order as to costs.

Issues considered

The decree for specific performance was ambiguous as to whether the Rs 36.75 crore consideration included the Rs 10 crore loan.
Whether an executing court may enlarge a decree by referring to pleadings and extraneous communications.
Whether the parties' silence or adverse inference can be treated as acquiescence to a term not agreed upon.

Legislation cited

Code of Civil Procedure, 1908s. Order XII Rule 6, s. Section 2(2)

Subjects

decreeexecution proceedingsspecific performanceambiguityjoint ventureloan inclusionCPC Order XII Rule 6interpretation of decreeconsent of parties

Judgment

[2023] 2 S.C.R. 497 497

SANWARLAL AGRAWAL & ORS. A
v.
ASHOK KUMAR KOTHARI & ORS.
(Civil Appeal No(s). 1312-13 of 2023)
FEBRUARY 21, 2023 B
[KRISHNA MURARI AND S. RAVINDRA BHAT, JJ.]
Decree – Execution of – Expansion of decree – Impermissibility
of – Parties entered into a joint venture agreement for a project –
Each party brought in 10 crores as loans to finance the project –
C
Respondents bid for the entire 50% shareholding of the appellants
for consideration of 36.75 crores which was accepted, reduced
in writing by way of email dtd. 28.03.19 – However, disagreement
arose as to whether this amount was inclusive of the loan of 10
crores – Suit filed by respondents for declaration that the agreement
dtd. 28.03.19 was binding on the appellants and for specific D
performance – Decree on admission passed – In execution
proceedings, Single Judge construed the decree by looking into the
pleadings and held that 36.75 crores was inclusive of the loan
amount – Upheld by Division Bench – Held: An Executing Court
can construe a decree if it is ambiguous – However, in the present
E
case, this cannot result in additions (to the terms of the consent,
embodied in the email dtd. 28.03.19) which were not agreed upon
by the parties, since the decree was drawn on by consent of both
parties at admissions stage itself – There was a clear lack of
consensus on the inclusion of the loan amount into the agreement
consideration – Both the Courts have, by selectively perusing the F
emails, altered the terms of the decree to include the loan amount
into the agreement consideration – Impugned judgment set aside –
Code of Civil Procedure, 1908 – Order XII, r.6.
Allowing the appeals, the Court
HELD: The decree awarded (on agreement by both parties) G
captures, in essence, parts (A) to (D) of the prayer made by the
Respondents in their suit. They are analogous to the terms of
the agreement dated 28.03.2019, which allude only to the ‘sale
of the 50% shareholding of the defendants’ (i.e., of the appellants),
and do not mention anything separately regarding the outstanding H
497
498 SUPREME COURT REPORTS [2023] 2 S.C.R.

A loan amount. The single judge has described the decree as
‘ambiguous’ simply on the absence of its engagement with the
loan amount, and proceeded to go behind it by looking into the
pleadings (of only the respondents, as appellants had not filed
any – which has been adversely inferred by the Court) – and relied
on the term, ‘free of all claims of the defendants’ contained in the
B
decree, to enlarge its scope to include the contested amount.
Affirming the same, the Division Bench of the High Court has
laid emphasis on the exchange of emails pursuant to the one
containing the agreement, especially the email dated 29.03.2019
sent by Respondents outlining the break-up of the amount for
C the first time, which was expressly rejected by appellants in their
response dated 11.04.2019. There was a clear lack of consensus
on this inclusion. Both the Courts’ interpretation of reading the
appellants’ consent into the same is clearly an exercise in
overreach. Both Courts have, by selectively perusing the emails,
altered the terms of the decree to include the loan amount into
D
the agreement consideration. Such a reading was despite the
clauses in the joint venture agreement entered into between the
parties in 2017 which provided for separate mechanism of settling
all outstanding loans. The joint venture agreement also
contemplated a clear distinguishment between the bidding
E process and subsequent repayment of loan. An Executing Court
can construe a decree if it is ambiguous. However, as in the facts
of the case herein, this cannot result in additions (to the terms of
the consent, embodied in the email dated 28.03.2019) which were
not agreed upon by the parties, since the decree was drawn on by
consent of both parties at admissions stage itself. Both the single
F
judge and Division Bench of the High Court have interpreted
the appellants’ silence (manifest in their not filing any written
statement) as acquiescence to the inclusion of the loan amount,
which, is although worthy of adverse inference, cannot be the
reason to justify expansion of the decree. [Paras 13, 14, 16, 17
G and 19][506-C-G; 507-E; 508-C; 509-F-H; 510-A]
S. Satnam Singh & Ors. v. Surender Kaur & Anr.,
(2009) 2 SCC 562 : [2008] 16 SCR 904 – distinguished.
Topanmal Chhotamal v. Kundomal Gangaram, AIR 1960
SC 388; Meenakshi Saxena v. ECGC Ltd., (2018) 7 SCC
H 479 : [2018] 5 SCR 421 – relied on.
SANWARLAL AGRAWAL v. ASHOK KUMAR KOTHARI 499

Meenakshi Saxena v. ECGC Ltd., (2018) 7 SCC 479; A
Rajinder Kumar v. Kuldeep Singh, (2014) 15 SCC 529
: [2014] 2 SCR 356; Bhavan Vaja and Ors. v. Solanki
Hanuji Khodaji Mansang, (1973) 2 SCC 40 – referred
to.
Case Law Reference B
[2018] 5 SCR 421 relied on Para 7
[2014] 2 SCR 356 referred to Para 11
[2008] 16 SCR 904 distinguished Para 18
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.1312- C
1313 of 2023.
From the Judgment and Order dated 14.06.2022 of the High Court
of Judicature at Bombay in APL Nos.3075 and 3079 of 2021.
Shyam Divan, Sr. Adv., Bhavin Bhatiya, Amog Singh, Shreya
D
Bhojnagarwala, Udayaditya Banerjee, Advs. for the Appellants.
Shekhar Naphade, Pallav Shishodia, Sr. Advs., Jatin Zaveri, Harsh
Mehta, Ms. Aishwarya Dash, Ms. Farah Hashmi, Kumar Mitakshar,
Neel Kamal Mishra, Dr. Prashant Pratap, Advs. for the Respondents.
The Judgment of the Court was delivered by E
S. RAVINDRA BHAT, J.
1. Leave granted. These two appeals are preferred against the
common impugned judgment and final order of the High Court of
Judicature at Bombay, dated 14.06.2022,1 in which the order of the single
judge dated 04.01.2021,2 was affirmed. F
I. Factual Background
2. The parties entered into a joint venture agreement in 2017 to
operate a multi-specialty hospital in Malad, Mumbai. As equal
shareholders, each brought in 10 crores as interest-free loans to finance
G
the project. On 27.03.2019, the respondents (hereafter, ‘Kotharis’) bid
for the entire 50% shareholding of the appellants (hereafter, ‘Agrawals’),
1
Sanwarlal Agrawal v Ashok Kumar Thakur, Appeal (L) No. 3075/2021 and 3079/
2021.
2
Ashok Kumar Kothari v Sanwarlal Agrawal, Execution Application (L) No. 1713/
2019 and 139/2020 in Commercial Suit No. 844/2019. H
500 SUPREME COURT REPORTS [2023] 2 S.C.R.

A which was accepted, and reduced in writing by way of an email dated
28.03.2019, which stated the terms as follows:
“The te(r)ms and conditions agreed by you are also agreeable
to us, which are as follows,
l. consideration- 36.75 crores
B
2. token 5 percent of the consideration
3. Further 50 percent of consideration within 45 days, after
which Kothari group will be allowed to start work on the
project.
C 4. remaining 45 percent of consideration within 120 days.
Failure to pay 50 percent amount within 45 days will lead to
forfeiture of token amount of 5 percent and automatic sale of
50 percent shares of Kothari group to Agrawal group at their
bid price of 35 crore on same terms and condition starting
D 45th day. Failure to pay the final 45 percent in time will lead
to forfeiture of 5 percent of the consideration and automatic
sale of 50 percent shares of Kothari group to Agrawal group
at their bid price of 35 crore on same terms and condition
sta1iing 120th day. There will be no interest paid by Agrawal
group on the balance consideration.
E
Deal date march 27, 2019.”
3. Thereafter, token amount of 1,83,75,000/- (or 5%) was paid
(of which 1,25,000/- was contested as having never been received in
the account of Agrawals). However, on 29.03.2019, Kotharis, by way
F of email, provided a break-up of the consideration of 36.75 crores, as
under:
“At the outset, please note that the total consideration of Rs.
36.75 Crores payable to you comprises of:
a. the total value of your 50% shareholding in the company
G being the sum of Rs. 26,45,45,000/- (Rupees Twenty-Six Crores
Forty-Five Lakh Forty-Five Thousand Only)
b. re-payment of your group’s interest free loan lying with the
company of the sum of Rs. 10,29,55,000/- (Rupees Ten Crores
Twenty-Nine Lakhs and Fifty-Five Thousand) which will be
H
SANWARLAL AGRAWAL v. ASHOK KUMAR KOTHARI 501
[S. RAVINDRA BHAT, J.]

paid and discharged to you through the bank account of the A
company.”
(emphasis supplied)
This inclusion of the loan amount was not acceptable to Agrawals,
who expressly rejected the same in an exchange of emails thereafter,
dated 03.04.2019, 11.04.2019, 19.04.2019 and 20.04.2019. B

4. On 30.04.2019, Kotharis filed Commercial Suit No. 844/2019,
for declaration that the agreement dated 28.03.2019 was binding on the
Agrawals, and for specific performance. This was followed by a Notice
of Motion No. 1619/2019, dated 29.07.2019, under Order XII Rule 6 of
the Code of Civil Procedure, 1908 (hereafter, “CPC”), seeking decree C
on admission, which was awarded by order dated 05.08.2019 in the
following terms:
“1. Mr. Saraogi and Mr. Hakani on instructions from Dr. Vikas
Agarwal, Defendant no.2, who says that he has instructions
on behalf of other defendants to make the statement, state D
that they are submitting to a decree in terms of prayer clauses
(a) to (d), which read as under:
(a) That this Hon’ble Court be pleased to declare that the
said agreement arrived at on March 27, 2019 which is reduced
to writing by the defendant no.2 and is recorded by the email E
dated March 28, 2019 in respect of the 50% shares held by
the Agarwal Group in the capital of the plaintiff no. 6 is valid,
subsisting and binding upon the defendants and upon persons
claiming by, through or under the defendants;
(b) That this Hon’ble Court be pleased to order and decree F
the defendant to specifically perform the said agreement
arrived at on March 27, 2019 for sale of the 50% shareholding
of the defendants in the plaintiff no.6 as reduced into writing
and as recorded by the email dated March 28, 2019 of the
defendant no.2 inter alia by:
G
(i) executing, signing and attesting all necessary deeds and
documents necessa1y to transfer, assign and vest the fifty
percent shareholding of the defendants in the plaintiff no.6
in favour of the plaintiffs or their nominees;
H
502 SUPREME COURT REPORTS [2023] 2 S.C.R.

A (ii) handing over original title deeds, documents and writings
in respect of the suit plot which are lying with the defendant
no.2 and in the locker to be operated jointly by the defendant
no.2 and the plaintiff no.2 to the plaintiffs.
(iii) doing or causing to be done all acts, deeds, matters and
B things and to sign, execute and register all deeds, documents
and writings as may be necessary for the transfer of the said
50% shares of the Agarwal Group to the plaintiff nos. l to 5
and/or to their nominees free of all claims of the defendants.
(iv) Tendering their resignation from Directorship of the
C plaintiff no. 6 company.
(c) That this Hon’ble Court be pleased to order and decree
the defendants to do or cause to be done all acts, deeds,
matters and things and to sign and execute all deeds,
documents or writings necessary under the supervision of this
D Hon’ble Court for the purposes of the order of specific
performance or to give effect to the reliefs sought in terms of
prayer (b) above.
(d) That for the purposes aforesaid all inquiries be made,
awards be made, orders be passed, directions be given and
E accounts be taken as this Hon’ble Court may deem just and
proper in the facts and circumstances of the case.”
2. Time mentioned in the agreement will begin from today.
3. Suit accordingly stands disposed. Notice of motion
accordingly also stands disposed.
F
4. Refund of court fees, if any, in accordance with rules.
5. Drawn up decree dispensed with.
6. All to act on authenticated copy of this order.
(K.R. SHRIRAM, J.)”
G
5. After the suit was thus decreed, the counsels of the parties
engaged in further correspondence, without much success. Consequently,
Kotharis filed an execution proceeding3 on 13.09.2019 - as did the
Agrawals,4 on 16.01.2020. Several interim applications were also filed.
3
Execution Application (L) No. 1713/2019.
H 4
Execution Application (L) No. 139/2020.
SANWARLAL AGRAWAL v. ASHOK KUMAR KOTHARI 503
[S. RAVINDRA BHAT, J.]

The single judge, by a common order dated 04.01.2021, held that the A
decree was ambiguous. While noting that the Agrawals had neither filed
any reply to the Notice of Motion, nor any written statement, the Executing
Court held that in exercise of its jurisdiction, it was competent to construe
the decree by looking into the pleadings. The Court laid emphasis on
part B (iii) of the prayer in the suit, which stated as follows:
B
“B. That this Hon’ble Court be pleased to order and decree
the Defendant to specifically perform the said agreement
arrived at on March 27, 2019 for sale of the 50% shareholding
of the Defendants in the Plaintiff No. 6 as reduced into writing
and as recorded by the email dated March 28, 2019 of the
Defendant No.2 inter alia by: C

***
(iii) doing or causing to be done all acts, deeds, matters and
things and to sign, execute and register all deeds, documents
and writings as may be necessary for the transfer of the said D
50% shares of the Agarwal Group to the Plaintiff Nos. 1 to 5
and/or to their nominees free of all claims of the Defendants.”
(emphasis supplied)
And held thus:
E
“34. I have, therefore, no hesitation in holding that absent a
written statement or denial of averments in the plaint and by
submitting to a decree in terms of prayer clause (B)-(iii), the
price payable was inclusive of the loan inasmuch as after
payment of the agreed price or agreed consideration and
transfer of the shares, the Agrawals would not have any F
further claims”.
(emphasis supplied)
6. On appeal, by way of the impugned judgment, the Division
Bench concurred with the single judge. The Court held that the single
judge’s discretion of looking into the pleadings in no way constituted G
going ‘behind the decree’, relying on a catena of judgments, and paid
emphasis on the email exchange between the parties, particularly the
one made on 29.03.2019, on the bifurcation of the amount (as stipulated
above in paragraph 3 above), which was also replicated in Kothari’s suit
(at paragraph 12 of the suit), and held that the total consideration of H
504 SUPREME COURT REPORTS [2023] 2 S.C.R.

A 36.75 crores was thus inclusive of the loan amount:
“20. It does seem to us in conclusion that the approach of the
Agrawals in contesting the nature of the decree after submitting
to it, without any denial or traverse of the plaint’s averments,
is perhaps a piece of cleverness that should not be
B countenanced by any equity-minded court. The Agrawals knew
perfectly well what the Kotharis were saying in paragraph
12 of the plaint. They knew exactly what the Kotharis meant
when they said that the email of 28th March 2019 was in
terms of the oral agreement of the day before. Any ambiguity
about this is eliminated by the Kotharis’ email of 29th March
C 2019 at page 545, which explicitly set out in paragraph 3
what ‘consideration’ meant. To this, too, there is no denial.
To say now that the decree is not what it was but something
else is a case of not of the Kotharis but of the Agrawals
wanting the court to go behind the decree. It is an attempt to
D alter the decree completely to something it never intended to
be.”
(emphasis supplied)
Hence, the present appeal.

E II. Contentions of the Parties
7. Mr Shyam Divan, Ld. Senior Advocate for the appellants,
submitted that the Executing Court went behind the decree by enlarging
its scope, through an analysis of the pleadings, which it was not
empowered to do, as held by several judgments of this Court, such as
F Meenakshi Saxena v. ECGC Ltd. 5 It was emphasised that the
agreement entered into by the parties orally on 27.03.2019 was facilitated
by a mediator, Shri Pawan Didwania, and affirmed that very evening in
the presence of a second mediator, Shri Satyanarayan N. Shrimali, and
recorded in writing on the next day, i.e., 28.03.2019 via email, with no
discussion on inclusion of outstanding loans. The Agrawals agreed to
G only the terms of the e-mail dated 28.03.2019 and not any later
correspondence, even though there was a mention of such
correspondence and letters in the plaints and averments. Therefore, this
was a clear case where the parties consciously chose to embody only
the terms agreed upon, and reduced to writing, as the terms of the decree.
5
H Meenakshi Saxena v. ECGC Ltd., (2018) 7 SCC 479.
SANWARLAL AGRAWAL v. ASHOK KUMAR KOTHARI 505
[S. RAVINDRA BHAT, J.]

8. It was submitted that the High Court fell into error in taking A
note of selective emails / letters while considering the pleadings even if
arguendo it were permissible for it to do so. It was pointed out that the
suit averments clearly recounted in an elaborate manner the exchange
of e-mails and was not confined to e-mail dated 29.03.2019, rather also
other e-mails such as the one addressed by the respondent / plaintiff i.e.,
B
Kotharis on 03.04.2019, the e-mail from Agrawals to this email, on
11.04.2019 clearly disputing the Kotharis’ interpretation with respect to
the conditions of the settlement. The suit also referred to another e-mail
dated 19.04.2019, which reiterated Kotharis’ position that the sum of
36.75 cores was a ‘composite amount’, and nothing further was payable
to the Agrawals. In the same way, learned counsel also relied upon C
other e-mails exchanged after Kotharis filed the suit, i.e., dated 19.07.2019
and 23.07.2019. In these circumstances, the Court could not have relied
only on two or three e-mails while interpreting the decree to mean
something more than what its terms stated.
9. Mr Diwan relied upon the affidavit of the first mediator, Shri D
Pawan Didwania, wherein he clearly stated that there was never any
discussion or agreement on adjustment of any loan, and that the Agrawals
would receive 36.75 crores from the Kotharis for their 50% shareholding
only.
10. On the other hand, Mr Shekhar Naphade and Mr. Pallav E
Shishodia, learned senior counsels appearing on behalf of the Kotharis,
urged that that impugned judgment did not warrant any interference.
The decree for specific performance was passed on admission by the
Agrawals in terms of the agreement reflected in the email dated
28.03.2019. The expressions used in the email i.e., ‘consolidated price’;
that the settlement would provide ‘full control’; that the agreement F
was for purchase of the Agrawal’s ‘stake’; and was for ‘smooth
transition’, clearly pointed to a complete separation of the groups.
Consequently, the amount of 36.75 crores was a composite one, meant
to discharge all claims by the Agrawals on the company. The Kotharis
had clearly stated that the amount offered by them was, if accepted, to G
settle ‘all claims’, as was also worded in the prayer in their suit (see
paragraph 5 above).
11. Learned counsel argued that the so-called ambiguity created
in this case was an afterthought, meant to escape and evade the decree
drawn. Further, the fact that the Agrawals did not file a written statement
H
506 SUPREME COURT REPORTS [2023] 2 S.C.R.

A to the plaint, or reply to the Notice of Motion, contesting the pleadings of
the Kotharis with respect to the meaning of the emails dated 28.03.2019
onwards, clearly points to their acceptance of the suit averments.
Reliance was placed on the judgments of this Court in Rajinder Kumar
v. Kuldeep Singh, 6 S. Satnam Singh & Ors. v. Surender Kaur &
Anr., 7 and Bhavan Vaja and Ors. v. Solanki Hanuji Khodaji
B
Mansang,8 to reinforce these submissions.
III. Analysis
12. The only issue for consideration is whether the sum of 36.75
crores stipulated in the agreement by email dated 28.03.2019 was
C inclusive of the loan amount of 10,29,55,000/- or not.
13. The decree awarded (on agreement by both parties) captures,
in essence, parts (A) to (D) of the prayer made by the Kotharis in their
suit. They are analogous to the terms of the agreement dated 28.03.2019,
which allude only to the ‘sale of the 50% shareholding of the
defendants’ (i.e., of the Agrawals), and do not mention anything
D
separately regarding the outstanding loan amount.
14. The single judge has described the decree as ‘ambiguous’
simply on the absence of its engagement with the loan amount, and
proceeded to go behind it by looking into the pleadings (of only the
respondents, as appellants had not filed any – which has been adversely
E inferred by the Court) – and relied on the term, ‘free of all claims of
the defendants’ contained in the decree, to enlarge its scope to include
the contested amount. Affirming the same, the Division Bench of the
High Court has laid emphasis on the exchange of emails pursuant to the
one containing the agreement, especially the email dated 29.03.2019
F sent by Kotharis outlining the break-up of the amount for the first time,
which was expressly rejected by Agrawals in their response dated
11.04.2019. There was a clear lack of consensus on this inclusion. Both
the Courts’ interpretation of reading the Agrawals’ consent into the same
is clearly an exercise in overreach.
15. This Court has time and again cautioned against the Execution
G
Court adopting such an approach. In Topanmal Chhotamal v. Kundomal
Gangaram,9 a three-judge bench held as follows:
6
Rajinder Kumar v. Kuldeep Singh, (2014) 15 SCC 529.
7
S. Satnam Singh & Ors. v. Surender Kaur & Anr., (2009) 2 SCC 562.
8
Bhavan Vaja and Ors. v. Solanki Hanuji Khodaji Mansang, (1973) 2 SCC 40.
9
H Topanmal Chhotamal v. Kundomal Gangaram, AIR 1960 SC 388.
SANWARLAL AGRAWAL v. ASHOK KUMAR KOTHARI 507
[S. RAVINDRA BHAT, J.]

“It is a well-settled principle that a Court executing a decree A
cannot go behind the decree: it must take the decree as it
stands, for the decree is binding and conclusive between the
parties to the suit”.
Yet again, in Meenakshi Saxena (supra) it was reiterated that:
“The whole purpose of execution proceedings is to enforce B
the verdict of the court. Executing court while executing the
decree is only concerned with the execution part of it but
nothing else. The court has to take the judgment in its face
value. It is settled law that executing court cannot go beyond
the decree. But the difficulty arises when there is ambiguity in C
the decree with regard to the material aspects. Then it becomes
the bounden duty of the court to interpret the decree in the
process of giving a true effect to the decree. At that juncture
the executing court has to be very cautious in supplementing
its interpretation and conscious of the fact that it cannot draw
a new decree. The executing court shall strike a fine balance D
between the two while exercising this jurisdiction in the
process of giving effect to the decree.”
16. As is commonly known, the stream cannot rise above its source.
Both Courts have, by selectively perusing the emails, altered the terms
of the decree to include the loan amount into the agreement consideration. E
It is also imperative to note that such a reading was despite the clauses
in the joint venture agreement entered into between the parties in 2017,
which provided for a separate mechanism of settling all outstanding loans:
“Clause 4: In case of a deadlock, there will be bidding between
the groups for sale of shares to each other, and the group F
offering higher valuation for shares (successful bidder/buyer)
will retain the company, preferably by making onetime payment
or as per terms agreed by both groups, but not exceeding
180 days from the date of bidding/agreement in any case.
Clause 5: Whatever consideration and payment time line is G
decided mutually between the groups for share transfer, will
be adhered strictly by buyer for smooth exit of seller, payable
directly to the seller account, and in case of any delay in
payment, compounding interest @ 18% p.a. will be payable
by buyer. There will be a lien of the seller group on their
H
508 SUPREME COURT REPORTS [2023] 2 S.C.R.

A shares till payment is completed with interest, if any. The loans
and advances of the seller will have to be repaid by the buyer
separately within 15 days of bidding/agreement, failing which
compounding interest @ 18% p.a. from date of bidding/
agreement both principle and interest being routed through
company account. Upon completion of both payments, the
B
shares of seller group will be deemed to be transferred to
buyer group, and seller cannot delay the transfer on any
pretext.”
(emphasis supplied)
C 17. Thus, the joint venture agreement also contemplated a clear
distinguishment between the bidding process and subsequent repayment
of loan. The argument of the respondent – that the use of words
‘consolidated price’ denotes inclusion of the loan amount – cannot be
accepted ipso facto, considering that from the pleadings, it is clear that
only the 50% shareholding valuation was discussed by the parties
D throughout, which was pegged at 70 crores by the Kotharis. Repayment
of the loan amount in no manner constitutes a disruption of the ‘smooth
transition’ envisioned as an aim of this transaction – thus its interpretation
as such is erroneous.
18. The case law relied on by the respondents too, is distinguishable
E from the facts herein. In S. Satnam Singh v. Surender Kaur,10 the
question for consideration was whether the trial court’s order was in
error in amending its preliminary decree in a partition suit to make an
addition to the list of properties. This Court held that the mere act of
rectifying such a mistake did not constitute an infirmity of the amended
F decree. The counsel’s reliance on the definition of a ‘decree’, as held in
this judgment,11 does little to support the respondent’s submissions, as
10
S. Satnam Singh v. Surender Kaur, (2009) 2 SCC 562.
11
Id., “15. A “decree” is defined in Section 2(2) of the Code of Civil Procedure to mean:
“2. (2) … the formal expression of an adjudication which, so far as regards the
Court expressing it, conclusively determines the rights of the parties with regard to all
G or any of the matters in controversy in the suit and it may be either preliminary or
final.”
It may partly be preliminary and partly be final. The court with a view to
determine whether an order passed by it is a decree or not must take into consideration
the pleadings of the parties and the proceedings leading up to the passing of an order.
The circumstances under which an order had been made would also be relevant”.
12
Rajinder Kumar v. Kuldeep Singh, (2014) 15 SCC 529.
H
SANWARLAL AGRAWAL v. ASHOK KUMAR KOTHARI 509
[S. RAVINDRA BHAT, J.]

clearly the Courts below have not looked into the facts leading up to the A
passing of the decree in a holistic manner.
19. With respect to Rajinder Kumar v. Kuldeep Singh,12 the
counsel has placed reliance on the following paragraph:
“If the suit for specific performance is not decreed as prayed
for, then alone the question of any reference to the alternative B
relief would arise. Therefore, there is no question of any
ambiguity. As held by this Court in Topanmal Chhotamal v.
Kundomal Gangaram [Topanmal Chhotamal v. Kundomal
Gangaram, AIR 1960 SC 388, p. 390, para 4:”4. At the worst
the decree can be said to be ambiguous. In such a case it is C
the duty of the executing court to construe the decree. For
the purpose of interpreting a decree, when its terms are
ambiguous, the court would certainly be entitled to look into
the pleadings and the judgment….”] and consistently followed
thereafter, even if there is any ambiguity, it is for the executing
court to construe the decree if necessary after referring to D
the judgment. If sufficient guidance is not available even from
the judgment, the court is even free to refer to the pleadings
so as to construe the true import of the decree. No doubt, the
court cannot go behind the decree or beyond the decree. But
while executing a decree for specific performance, the court, E
in case of any ambiguity, has necessarily to construe the
decree so as to give effect to the intention of the parties. Thus,
there is no question of any alternate relief regarding the
damages, etc. in the present case since the suit for the specific
performance for the conveyance of the property has been
decreed.” F

This elucidation of the law is unexceptionable. It is undeniable
that an Executing Court can construe a decree if it is ambiguous.
However, as in the facts of the case herein, this cannot result in additions
(to the terms of the consent, embodied in the email dated 28.03.2019)
which were not agreed upon by the parties, since the decree was G
drawn on by consent of both parties at admissions stage itself. Both the
single judge and Division Bench of the High Court have interpreted the
appellants’ silence (manifest in their not filing any written statement) as
acquiescence to the inclusion of the loan amount, which, is although
12
Rajinder Kumar v. Kuldeep Singh, (2014) 15 SCC 529. H
510 SUPREME COURT REPORTS [2023] 2 S.C.R.

A worthy of adverse inference, cannot be the reason to justify expansion
of the decree.
20. Thus, the appeals are allowed. The impugned judgment is set
aside. There will be no order as to costs.

B Divya Pandey Appeals allowed.
(Assisted by : Roopanshi Virang, LCRA)

C

D

E

F

G

H