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IN THE HIGH COURT OF BOMBAY
H. Suresh, J.
Daxa N. Gandhi another... Plaintiffs.
Versus
Indira Maruti Varadkar another... Respondents.
Chamber Summons No. 380 of 1990 in Suit No. 2971 of 1987, decided on 17-4-1990.
Advocates appeared :
R.T. Walawalkar with M.D. Naik, for the defendants in support.
J.I. Mehta with Shekhar Naphade and M.K. Nesari, for the plaintiffs to show cause.
Sections 148 and 151-Specific performance of Contract-Consent decree-Defendant defaulting in payment by specified date-Application for extension of time-Unjust enrichment of one party on default of and the -Interference by Court- When no enrichment Court may extend time by consent of both parties.
It can be said that if the clause concerned is in the nature of a penalty or a forfeiture, the Court is always competent to give relief against it. The test is whether by allowing the decree-holder to enforce the default clause, would he get more than what he deserves. If the Court in its conscience considers that he would unjustly enrich himself by holding On to the default clause, it would interfere, be it a consent decree or otherwise. For example, in the present case, if the decree was for cancellation of the agreement on the defendants paying a certain amount within a certain time, failing which the entire property were to pass on to the plaintiffs, and if the defendants were to apply for extension of time on facts mentioned herein, the Court would not hesitate to grant such a relief. That, in essence, is the meaning of granting relief against forfeiture and penalty. But on the other hand, in the present case the decree itself is one for specilic performance and under the decree, the plaintiffs are entitled to get possession of the that, as they have paid the price for the same. However, the decree provides for a concession namely, if the defendants pay a sum of Rs. 3,50,000/- by a certain date, the plaintiffs would not insist upon the decree being carried out and they would have the decree marked fully satislied. In such a case, if the default takes place, the plaintiffs get no more than what they are entitled to get under the decree. There is no question of granting any relief against forfeiture or penalty. In such circumstance, if time has to be extended it can only be done by consent of both the parties.
2. The plaintiffs filed the above suit for specific performance of an agreement dated 6th April, 1984 executed between the plaintiffs and the defendants for sale of Flat No. 5, situated on the second floor of the Samarath Nagar Tenants Co-operative Housing Society Ltd., Bombay-22, and for certain other reliefs. The defendants had contested the suit. However, during the pendency of the suit, the parties arrived at consent terms. Accordingly, a consent decree was passed in terms of the consent terms on 21st September, 1989. Clause 1 of the consent terms provides for decree in terms of prayers (a)--for declaration that the agreement is valid and subsisting and the defendants are bound and liable to specifically perform the same; (b) for completing the sale and for delivering vacant possession and for doing all other necessary things for the purpose of completion of the sale; and (f) for costs. Clause 2 of the consent terms, which is the relevant clause in this Chamber Summons, is as follows:
"2. In the event of the defendants 1 and 2 paying to the plaintiffs a sum of Rs. 3,50,000/- (Rupees Three Lakhs Fifty Thousand only) on or before 1st April, 1990 (time being of the essence), the decree in terms of prayers (a) and (b) and (f) to be marked satisfied."
The rest of the clauses are not relevant.
3. The defendants state that for the purpose of compliance with Clause 2 of the consent terms, they had to take loan from their friends and relatives. They collected a sum of Rs. 1,20,000/- by 31st March, 1990 and for payment of the balance sum of Rs. 2,30,000/- they were seeking a loan from a married daughter of the 1st defendant, who, in turn, had to get the same from a bank. The defendants say that the bank had sanctioned the loan and they wanted about 30 days time, that is to say, upto 1-5-1990 to pay the balance. It is in these circumstances, they seek an extension of time to pay the said sum of Rs. 3,50,000/-. This Chamber Summons was taken out on or about 2nd April, 1990 and they moved the Court first with the request that they be permitted to deposit a sum of Rs. 2,00,000/- by 4th April, 1990, as by that time they could collect that much amount. They deposited the said sum of Rs. 2,00,000/- on 4th April, 1990. The Chamber Summons was argued on 10th April, 1990 and on that day, Mr. Walawalkar stated that they could arrange the balance of Rs. 1,50,000/- also and that they were in a position to deposit the amount. Immediately on the Court passing an order in their favour. Mr. Walawalkar stated further that they could collect the entire amount by 6th April, 1990.
4. Mr. Walawalkar submitted that this is a proper case where time should be extended for the purpose of depositing the said sum of Rs. 3,50,000/-. He submitted that if no extension is given, the defendants would suffer great hardship and prejudice.
5. The plaintiffs objected to this. They would not agree to any pursuation on the part of the defendants. Hence the Chamber Summons had to be argued.
6. In support of the Chamber Summons, Mr. Walawalkar submitted that the courts have always given reliefs against forfeiture, even if the decree was a consent decree. In this connection, he drew my attention, firstly, to the case of (Jadabendra Nath Mishra v. Smt. Manorama Debya)1, reported in A.I.R. 1970 Calcutta 199. Relying on this case, Mr. Walawalkar submitted that if a question of forfeiture arises, the Court has ample power, in an appropriate case, to grant relief against forfeiture even without the consent of the parties. That was a case where the original suit for partition had been decree ex parte. The petitioner, who was the defendant in the said suit, made an application for setting aside the said ex parte decree. In that, the parties eventually came to a compromise, under which the petitioner was to pay a certain amount within a certain time to have the applicatio
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