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SUPREME COURT OF INDIA
S. ABDUL NAZEER, VIKRAM NATH, JJ.
Kishor Ghanshyamsa Paralikar (Dead) – Appellant
Versus
Balaji Mandir Sansthan Mangrul (Nath) And Anr. – Respondents
Civil Appeal No(S). 3794 of 2022 (Arising out of S.L.P. (Civil) No.16942 of 2018
Decided on : 09-05-2022
Specific Performance - Extension of Time for Payment of Sale Consideration - Section 28 of the Specific Relief Act, 1963 - [Specific Performance] - [Section 28 of the Specific Relief Act, 1963] - [Section 28 of the Specific Relief Act, 1963 provides for rescission of the contract for sale or lease of immovable property, the specific performance of which has been decreed. It gives the vendor or the lessor the right to rescission of the contract for the sale or lease of the immovable property in the same suit, when after a suit for specific performance is decreed, if the vendor or the lessor fails to pay the purchase money within the period fixed. This section seeks to provide complete relief to both the parties in terms of a decree of specific performance in the said suit without having resort to a separate proceeding. The court which has passed the decree for specific performance retains control over the decree even after the decree has been passed. The power under this section is discretionary and the court has to pass an order as the justice of the case may require. Time for payment of sale consideration may be extended even in a consent decree. The court may enlarge the time in order to prevent manifest injustice, and to give relief to the aggrieved party against a forfeiture clause. The court would relieve against a forfeiture clause; And, where the contract of the parties has merged in the order of the court, the court's freedom to act to further the ends of justice would surely not stand curtailed.]
Fact of the Case:
The appellant filed a suit for specific performance of an agreement for the sale of agricultural land. A compromise was reached, and the Trial Court decreed the suit. The appellant paid a sum and was required to pay the remaining amount within a month. The Trial Court allowed an extension of time for payment, and the sale deed was executed. The first respondent later sought cancellation of the sale deed, which was dismissed by the Trial Court but allowed by the High Court.
Finding of the Court:
The Trial Court's discretion in granting an extension of time for depositing the balance of the sale consideration was justified. The High Court was not justified in setting aside the Trial Court's order and cancelling the sale deed.
Issues: The main issue was whether the Trial Court's decision to grant an extension of time for payment of the balance sale consideration was justified, and whether the High Court was justified in setting aside the Trial Court's order and cancelling the sale deed.
Ratio Decidendi: The court's discretion in granting an extension of time for payment of sale consideration is discretionary and aims to prevent manifest injustice and provide relief against a forfeiture clause. The court's freedom to act to further the ends of justice is not curtailed when the contract of the parties has merged in the court's order.
Final Decision: The appeal succeeded, and the High Court's judgment and order were set aside. The Trial Court's order permitting the appellant to deposit the balance amount of Rs.1,47,500/- was restored. No costs were awarded.
ORDER :
S. ABDUL NAZEER, J.
Leave granted.
2. Delay in filing the application for substitution is condoned and abatement is set aside. The application for substitution is allowed.
3. This appeal is directed against the order dated 30.01.2018 in W.P.NO.1637 of 2016 whereby the High Court of Judicature at Bombay, Nagpur Bench, has allowed the Writ Petition filed by the first respondent-Trust and set aside the orders passed by the Trial Court granting extension of time for depositing the balance of the sale consideration.
4. On 12.03.2007, the appellant herein filed a suit for specific performance of an agreement dated 20.09.2002 executed by the first respondent in his favour for the sale of agricultural land bearing Survey No.3, admeasuring 10 H (Hactor), 50 R (Are) situated at Village Murtizapur, Mangrulpir Taluk, District Washim, State of Maharashtra.
5. During the pendency of the suit, a compromise was arrived at between the parties and accordingly the Trial Court vide Order dated 06.12.2010 decreed the suit in terms of the compromise. As per the compromise decree, the respondent agreed to sell the suit land for a total consideration of Rs.8,78,500/-. The appellant paid a sum of Rs. Rs.7,31,000/- immediately to the first respondent. He was required to pay the remaining amount of Rs.1,47,500/- within a period of one month from the date of the compromise decree.
6. The appellant moved an application on 11.01.2011 seeking permission of the court to deposit the balance of Rs.1,47,500/- as per the decree. The said application was allowed by the Trial Court, and accordingly, the said amount was deposited by the appellant in the court on the same day. On 12.01.2011, the first respondent executed the sale deed in respect of the suit property in favour of the appellant. On 15.01.2011, the appellant filed an application for extension of time for payment of balance of the sale consideration which was allowed by the Trial Court vide Order dated 02.12.2015.
7. After a passage of about three years from the date of execution of the sale deed, the first respondent filed an application for cancellation of the aforesaid sale deed and for a direction to recover possession of the suit property from the appellant. The Trial Court vide Order dated 13.01.2016 dismissed the said application.
8. Being aggrieved, the first respondent filed a writ petition before the High Court. As noticed above, the High Court has allowed the writ petition and cancelled the sale deed dated 12.01.2011.
9. We have heard learned counsel for the parties and perused the materials placed on record.
10. Section 28 of the Specific Relief Act, 1963 provides for rescission of the contract for sale or lease of immovable property, the specific performance of which has been decreed. Subsection (1) of Section 28 is relevant for this case, which is as under:
“28. Rescission in certain circumstances of contracts for the sale or lease of immovable property, the specific performance of which has been decreed.—
(1) Where in any suit a decree for specific performance of a contract for the sale or lease of immovable property has been made and the purchaser or lessee does not, within the period allowed by the decree or such further period as the court may allow, pay the purchase money or other sum which the court has ordered him to pay, the vendor or lessor may apply in the same suit in which the decree is made, to have the contract rescinded and on such application the court may, by order, rescind the contract either so far as regards the party in default or altogether, as the justice of the case may require.”
(Emphasis supplied)
11. This section gives to the vendor or the lessor the right to rescission of the contract for the sale or lease of the immovable property in the same suit, when after a suit for specific performance is decreed, if the vendor or the lessor fails to pay the purchase money within the period fixed. This section seeks to provide complete relief to both the parties in terms of a
The court's discretion in granting an extension of time for payment of sale consideration is discretionary and aims to prevent manifest injustice and provide relief against a forfeiture clause.
Section 28 of the Specific Relief Act provides the vendor with a statutory right to apply for rescission of the contract if the purchaser fails to pay the amount within the period allowed by the cour....
Applications for rescission of specific performance decrees must be filed in the original suit, not in execution proceedings, as per Section 28 of the Specific Relief Act.
The court reiterated that non-compliance with specific performance decrees justifies rescission of the contract, but also mandates refund of advance payments, reflecting equitable principles.
Point of law : Courts would be slow to unilaterally interfere in, modify, substitute or modulate terms of a consent decree, unless it is done with consent of all parties thereto.
The right to seek rescission of a contract accrues upon the expiry of the stipulated deposit period, not upon receipt of notice in subsequent proceedings, and courts can implicitly extend time throug....
The main legal point established in the judgment is the court's interpretation of the power to grant extension of time for compliance with a decree for specific performance and the justification for ....
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