Section 28 Specific Relief Act - Time To Deposit Balance Sale Consideration Cannot Be Extended As A Matter Of Course : Supreme Court

Highlighting that the power under section 28 of the Specific Relief Act is discretionary, a Bench of Justices MR Shah and CT Ravikumar observed that it was not correct on the part of the Trial Court to condone a delay of 853 days which the plaintiff took to move an application seeking extension of time to pay the balance amount of a sale consideration.

“Therefore, as observed by this Court, the power under Section 28 of the Specific Relief Act is discretionary and the Court has to pass an order as the justice may require…..The application filed by the plaintiff under Section 148 CPC and Section 28 of the Specific Relief Act seeking extension of time to deposit the balance sale consideration was hopelessly delayed. As observed hereinabove, Section 28 of the Specific Relief Act seeks to provide complete relief to both the parties in terms of a decree of specific performance. Therefore, the trial Court failed to exercise the discretion judiciously in favour of the defendant and erred in exercising the discretionary power in favour of the plaintiff, that too with a delay of 853 days.”

Factual Matrix

The original plaintiff instituted a Civil Suit against the mother of the appellant – original defendant for specific performance of an agreement to sell dated May 9, 2012. In the agreement, the late mother of the appellant agreed to sell the suit property for a total sale consideration of Rs. 23 Lakhs; plaintiff had already paid Rs. 8 Lakhs as advance. The trial Court passed an ex-parte judgment and a decree for specific performance of the agreement to sell.

While decreeing the suit, the trial Court directed the respondent – original plaintiff to deposit the balance sale consideration of Rs. 15 Lakhs within two weeks.

However, the respondent – original plaintiff failed to pay the balance sale consideration as ordered. After 853 days, the original plaintiff filed an application under Section 148 of the Code of Civil Procedure and Section 28 of the Specific Relief Act seeking extension of time to deposit the balance sale consideration. The Trial Court allowed the plaintiff to deposit the balance amount with an interest of 18%, within one month. Revision petitions moved before the High Court also came to be dismissed. Therefore, the appellant moved the Top Court.

Advocate Mithun Shashank for the appellant argued that the trial Court committed a serious error in allowing the application seeking extension of time. The delay of 853 days to file the application seeking extension of time to deposit the balance amount was also highlighted.

Advocate Harshit Tolia for the original plaintiff argued that the order passed by the trial Court in an application under Section 148 CPC and Section 28 of the Specific Relief Act is discretionary in nature. When the trial Court and High Court had exercised its discretion in favour of the plaintiff, it need not be interfered with. Further, he contended that the delay of 853 days was owing to party’s medical difficulties such as jaundice, high blood pressure, etc.

What the Court observed

The Supreme Court did not deem these reasons as good-enough for not moving the application in a timely manner.

“The explanation which was given by the plaintiff, narrated hereinabove, can hardly be said to be a sufficient explanation as to why the plaintiff did not pay the balance sale consideration as per the judgment and decree or even did not make an application within a reasonable time under Section 148 CPC and Section 28 of the Specific Relief Act seeking extension of time for making payment.”

If the plaintiff was ready with the money, he could have got the sale deed executed through power of attorney after effecting payment, the Court said while adding that the Trial Court was wrong to condone the huge delay of 853 days without sufficient explanation.

Referring to V.S. Palanichamy Chettiar judgement, the Court said that the provisions to grant specific performance of an agreement are quite stringent.

“Equitable considerations come into play. The Court has to see all the attendant circumstances including if the vendee has conducted himself in a reasonable manner under the contract of sale. It is further observed that therefore, the Court cannot as a matter of course, allow extension of time for making payment of balance amount of consideration in terms of a decree”, the court reiterated in its judgement.

But in order to strike a balance between the parties, the Court ordered the respondent to pay back the advance amount of Rs. 8 Lakhs to the plaintiff with 12% interest till the actual payment, within six weeks. With these observations, the Court set aside the judgements passed by the Trial Court and High Court.

Case Title: P. Shyamala Versus Gundlur Masthan | Civil Appeal Nos. 1363-1364 OF 2023

For Appellant(s) Mr. Krishna Dev Jagarlamudi, AOR

For Respondent(s) Mr. Shrey Kapoor , AOR Mr. Harshit Tolia, Adv. Mr. Sitesh Narayan Singh, Adv.

Citation : 2023 LiveLaw (SC) 151

Specific Relief Act 1963- Section 28- The Court cannot as a matter of course, allow extension of time for making payment of balance amount of consideration in terms of a decree-The Court has to see all the attendant circumstances including if the vendee has conducted himself in a reasonable manner under the contract of sale-the power under Section 28 of the Specific Relief Act is discretionary and the Court has to pass an order as the justice may require - Para 7- Followed V.S. Palanichamy Chettiar Firm v. C. Alagappan and Another, reported in (1999) 4 SCC 702