Commercial Execution Proceedings Withdrawn Following Settlement – Liberty Granted to Restore on Breach of Terms

The High Court allowed the withdrawal of commercial execution proceedings following a settlement agreement between the parties, while granting liberty to restore the proceedings in the event of any breach or non-compliance with the terms of the settlement.

The Bombay High Court, through a Single-Judge Bench comprising Justice R.I. Chagla, while addressing an Interim Application in a Commercial Execution Application, held that where parties to an execution proceeding enter into a Settlement Agreement, the Court may permit withdrawal of the execution proceedings with liberty to restore them in the event of a breach—thereby reinforcing the enforceability of consensual settlements while safeguarding the parties’ right to judicial recourse upon non-compliance.

The Bombay High Court, in an interim application filed in connection with a commercial execution proceeding, permitted the withdrawal of the said Commercial Execution Application (L) No. 24448 of 2021 and the connected interim applications, in light of a Settlement Agreement executed between the parties on 31st August 2024. The Court granted liberty to the applicants to restore or revive the execution proceedings, including interim applications, in case of breach, non-completion, or non-compliance with the terms of the Settlement Agreement.

The Commercial Execution Application was initially filed on 22nd October 2021 seeking enforcement of a consent award dated 19th January 2021 passed by Hon’ble Mr. Justice C.K. Thakker (Retd.), acting as the Sole Arbitrator, based on the consent terms dated 25th November 2020. Under the award, a sum of ₹120 crores along with interest was held to be due and payable by the Judgment Debtors to the Judgment Creditors.

Pursuant to an order dated 8th December 2021, the Court had appointed the Court Receiver in respect of a land located at Bhugaon, Pune, owned inter alia by Respondent No. 2. The Court Receiver had taken symbolic possession of the subject property on 20th December 2021. Subsequently, on 13th October 2022, the Court directed the sale of the subject property through the Receiver.

While the execution proceedings remained pending, a settlement proposal was offered by Respondent No. 2, and the parties, including Respondent Nos. 2 to 5 and other relevant stakeholders, executed a Settlement Agreement on 31st August 2024. The Settlement Agreement underwent certain amendments, and an addendum was noted to be in the process of execution.

In view of the said settlement, the Court allowed the withdrawal of the execution proceedings with liberty to restore in case of breach. The Court further directed the Court Receiver to release the symbolic possession of the subject property within two weeks and discharged the Receiver from their role upon such release. Any costs or charges payable to the Receiver were directed to be paid within the same period.

Mr. Aditya Shiralkar, a/w Ms. Nanki Grewal, Ms. Manasi Joglekar, and Ms. Krisha Thakkar, i/b Wadia Ghandy & Co., appeared for the Applicants/Judgment Creditors.

Ms. Laveena Tejwani, a/w Ms. Neha Bhosale, i/b NDB Law, appeared for Respondent Nos. 1 to 5.

Mr. S.K. Dhekale, Court Receiver, High Court, Bombay, was present.

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