Default Clause in Mediated Settlement MOU Enforceable Despite Delayed Payment; Judgment Debtor Cannot Escape Consequences of Contractual Default: Karnataka HC
Karnataka High Court enforced a mediated-settlement default clause after judgment-debtors paid nearly two years late, allowing execution consequences to stand.Summary
The Karnataka High Court dismissed a writ petition under Article 226 challenging execution proceedings arising from a mediated settlement MOU dated 27 November 2019 between the petitioners, who were judgment-debtors, and the respondent, the decree-holder. The MOU required payment of ₹4,50,000 by 26 June 2020 and provided that, if payment was not made on time, the judgment-debtors would execute a registered sale deed in favour of the decree-holder for the suit property. Although the petitioners later deposited the payment in March 2022 and cited COVID-19-related delay, the Court found no agreement to extend the deadline and held that delayed compliance did not erase the agreed consequences of default. The Court declined to interfere with the trial court's dismissal of the judgment-debtors' objection to execution, noting that the MOU had been signed and confirmed by the parties and counsel, and that the respondent decree-holder had complied with the relevant balance-consideration requirement.
(Source：Scconline)