The power under Section 28 of the Specific Relief Act, 1963 to rescind a contract is discretionary, requiring the court to consider the conduct of parties and all circumstances, including readiness and willingness of the decree holder, and not merely the failure to deposit balance consideration within the stipulated period.

Headnote:(A) Specific Relief Act, 1963 - Section 28 - Rescission of contract - Power under Section 28(1) is discretionary - Court must consider all attendant circumstances including conduct of parties - Decree holder’s readiness and willingness to perform is crucial - Mere delay in depositing balance consideration does not automatically entitle rescission if opposite party’s conduct shows lack of - (Para 15)

(B) Civil Procedure Code, 1908 - Order 41 Rule 5 - Stay of execution - Filing of appeal and stay order does not absolve decree holder of obligation to tender balance consideration within stipulated period if no extension sought - However, if decree holder shows readiness and willingness and delay is attributable to judgment debtor’s appeals, court may decline rescission - (Paras 12-13)

Facts of the case:
The petitioners/judgment debtors filed applications under Section 28 of the Specific Relief Act, 1963 seeking rescission of the contract for sale of immovable property. The suit for specific performance was decreed on 16.08.2000 directing the defendants (legal representatives of Jagjit Singh Mann) to execute sale deed within two months on receipt of balance sale consideration of Rs.5 lakhs. The decree was upheld in first appeal on 19.09.2003, again granting two months’ time. The judgment debtors filed Regular Second Appeal which was dismissed on 26.10.2018. The decree holders filed execution petition on 05.12.2018 along with a draft for the balance consideration. The judgment debtors argued that the decree holders failed to deposit the balance within the original stipulated period and the contract thus stood rescinded.

Findings of Court:
The court found that the decree holders were always ready and willing to perform. They had served notice on the judgment debtors on 18.11.2003 within the two-month period from the appellate decree. The judgment debtors themselves admitted this notice in their stay application. The subsequent stay by the High Court prevented execution. Immediately after the RSA was dismissed, the decree holders filed execution with the draft. The delay in depositing the draft in the treasury (03.01.2019) was due to court procedure, not default. The court emphasized that the power under Section 28 is discretionary and must be exercised based on the conduct of parties.

Issues: Whether the failure of the decree holders to deposit the balance sale consideration within the two months from the appellate decree (19.09.2003) or seek extension of time automatically rescinds the contract under Section 28 of the Specific Relief Act, 1963?

Ratio Decidendi: The power under Section 28 of the Specific Relief Act is discretionary. The court must examine the conduct of parties and all surrounding circumstances. If the decree holder has demonstrated readiness and willingness throughout, even if the actual deposit occurred after the stipulated period but before the filing of the rescission application, and the delay is attributable to the judgment debtor’s appeals and stay orders, the court may decline to rescind the contract in the interest of justice. Result : Revision petitions dismissed.

Table of Content
1. introduction to the revision petitions against dismissal of section 28 applications (Para 1)
2. contentions of judgment debtors and decree holders (Para 2 , 3 , 4)
3. procedural background and court's preliminary view (Para 5 , 6 , 9)
4. arguments of parties on readiness and willingness (Para 7 , 8)
5. details of decrees, appeal and stay orders (Para 10 , 11 , 12)
6. court's analysis on section 28 and discretion (Para 13 , 14 , 15)
7. final order dismissing revision petitions (Para 16)

Yashvir Singh Rathor, J.

1. Both the revision petitions have been instituted by the petitioners against the order dated 03.01.2026 vide which the applications under Section 28 of Specific Relief Act, 1963 (hereinafter to be referred as 'Act’) moved by them/ JD No.1(i) and JD No.1(ii) have been dismissed.

2. It is submitted by petitioner- Charanbir Singh in the application under Section 28 of the Act that the decree holders/ respondents have filed the present execution petition for execution of judgment and decree dated 16.08.2000 passed by the then Additional Civil Judge (Senior Division), Chandigarh. As per Section 28 of the Act, the vendor is empowered to claim recession of contract on account of default in payment of the balance sale consideration within the stipulated period. It is submitted that the suit was decreed vide judgment and decree dated 16.08.2000 and defendants being the legal representatives of deceased – Jagjit Singh Mann were directed to execute and get registered the sale deed within a period of two months from the date of passing of decree on receipt of balance sale consideration of Rs.5 lakhs. It is further submitted that after passing of the judgment and decree dated 16.08.2000, defendants- JDs filed appeal before First Appellate Court which was dismissed vide judgment and decree dated 19.09.2003. Thereafter, a Regular Second Appeal No.5867 of 2003 was preferred before the High Court and the High Court stayed the execution of judgment and decree and finally the Regular Second Appeal was also dismissed vide judgment dated 26.10.2018. It is further alleged that as per decree passed by the trial Court, the decree holders were required to deposit balance sale consideration of Rs.5 lakhs within two months from the date of decree but the decree holders neither approached the JDs nor they deposited the balance sale consideration of Rs.5 lakhs in the Court. The execution of sale deed by JDs in favour of decree holders was subject to receipt of balance sale consideration which was never deposited by the DHs till 03.01.2019 when the draft of the balance sale consideration was deposited before the executing court by the decree holders. The decree holders have also not filed any application for extension of time before the recession of the contract/ agreement. It is further submitted that payment of balance sale consideration was a condition precedent in the decree for specific performance and since decree holders have not deposited the balance sale consideration as per directions of the Court, the contract in question is liable to be rescinded as per Section 28 of the Act.

3. Decree holders/ respondents filed reply to the application submitting that the powers and scope of this Court in execution proceedings are circumscribed to execute the decree as a whole. The decree for specific performance of the agreement has been upheld upto the Hon’ble Supreme Court and all the objections qua the specific performance of the agreement to sell have been rejected upto the Hon’ble Supreme Court. The application in hand is not maintainable and the same has been filed only to delay the execution of the decree. It is further submitted that as per law, the judgments passed by the trial Court, learned First Appellate Court and the High Court stand merged in terms of doctrine of 'merger' and as such, decree is to be considered for the purpose of execution ipso facto as to be the judgment of the Punjab and Haryana High Court dated 26.10.2018. T

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARHYashvir Singh Rathor, JBIRINDER PAL SINGH SINCE DECEASED THROUGH LRS – AppellantVersusMAJ. GENERAL (RETD) GANDHARAV SINGH NAGRA(DECEASED) THRU LRS AND OTHERS – RespondentCR-... (Civil Revision Petitions)

Cases Referred (2)

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Yashvir Singh Rathor, J
BIRINDER PAL SINGH SINCE DECEASED THROUGH LRS – Appellant
Versus
MAJ. GENERAL (RETD) GANDHARAV SINGH NAGRA(DECEASED) THRU LRS AND OTHERS – Respondent
CR-... (Civil Revision Petitions)