Specific Relief Act | S.28 Application Can Be Filed In Trial Court Even If Decree Was Passed By Appellate Court : Supreme Court

The Supreme Court reiterated that an application under Section 28 of the Specific Relief Act, 1963, can be filed before the trial court even if the decreee for specific performance was passed by the appellate Court.

Referring to the precedent Ramankutty Guptan Vs. Avara (1994) 2 SCC 642 and V.S. Palanichamy Chettiar Firm Vs. C. Alagappan and Anr (1999) 4 SCC 702, the Court observed :

"in our view, the expression “may apply in the same suit in which the decree is made” as used in Section 28 of the 1963 Act must be accorded an expansive meaning so as to include the court of first instance even though the decree under execution is passed by the appellate court."

The Court further held that the Execution Court has the power to grant extension of time stipulated by the appellate court for a property buyer to pay the amount provided that the Execution Court is also the court which tried and decided the original specific performance suit.

“according to Section 37 of the CPC, the expression “the court which passed a decree”, or words to that effect, in relation to the execution of decrees, unless there is anything repugnant in the subject or context, would include: (a) the court of first instance even though the decree to be executed has been passed in the exercise of appellate jurisdiction; and (b) where the court of first instance has ceased to exist, or to have jurisdiction to execute it, the Court which, if the suit wherein the decree was passed was instituted at the time of making the application for the execution of the decree, would have jurisdiction to try such suit. Thus, an application under Section 28 of the 1963 Act, either for recission of contract or for extension of time, can be entertained and decided by the Execution Court provided it is the Court which passed the decree in terms of Section 37 of the CPC”, the Court reasoned.

A bench of Justice JB Pardiwala and Justice Manoj Misra further held that the application under section 28(1) of the Specific Relief Act, 1963 has to be filed as an application in the original suit.

“The law is, therefore, settled that an application seeking rescission of contract, or extension of time, under Section 28 (1) of the 1963 Act, must be decided as an application in the original suit wherein the decree was passed even though the suit has been disposed of. As a sequitur, even if the Execution Court is the Court of first instance with reference to the suit wherein the decree under execution was passed, it must transfer the application filed under Section 28 to the file of the suit before dealing with it.”

The Court dismissed an appeal challenging an order of the Punjab and Haryana High Court which had upheld the Execution Court's order granting extension of time to the respondents to deposit balance consideration of a sale.

The respondents had filed a suit for specific performance against the appellants to enforce an agreement to sell a property. However, the trial court directed the appellants to refund the earnest money with interest.

The appellate court allowed the respondents' appeal, directing the appellants to execute the sale deed in favor of the respondents upon payment of the remaining sale consideration within two months.

The respondents filed an execution application before the trial court seeking the execution and registration of the sale deed and delivery of possession. Meanwhile, the appellants challenged the appellate court's decree before the High Court, which was dismissed.

Following the dismissal of the second appeal, the respondents sought permission from the Execution Court to deposit the remaining balance in court. The appellants opposed this request and filed an application under Section 28 of the 1963 Act seeking rescission of the contract on the ground that the respondents failed to deposit the balance within the stipulated two-month period.

The Execution Court rejected the appellants' application and allowed the respondents to deposit the balance consideration. The HC dismissed the appellants' revision application, leading to the present appeal before the Supreme Court.

The appellants contended that the Execution Court had no jurisdiction to extend the time for depositing the balance consideration since the decree under execution was passed by the appellate court.

As per Section 28(1) of the Act, if a court has issued a decree for specific performance of purchase or lease of property, and the buyer does not pay the required amount within the time specified by the court (or any additional time the court may grant), the seller can apply before the same court to rescind the contract.

The Court emphasized that under Section 37 of the CPC, the appellate court's decree is considered a continuation of the original suit, and the court of first instance is deemed to have passed the decree.

Thus, the Supreme Court concluded that the Execution Court had the jurisdiction to deal with the applications under Section 28 of the Specific Relief Act, 1963. However, it also held that the Execution Court should have treated the application as part of the original suit rather than on the execution side.

However, the Court decided not to interfere with the impugned order despite the procedural irregularity. The Court observed that the respondents had consistently demonstrated their readiness and willingness to perform their part of the contract, while the appellants had delayed execution by pursuing multiple appeals. The Court declined to interfere with the order under Article 136, noting that doing so would cause grave injustice to the decree holders.

Case no. – Civil Appeal No. 10193 of 2024

Case Title – Ishwar (Since Deceased) Thr. Lrs and Ors. v. Bhim Singh and Anr.

Citation : 2024 LiveLaw (SC) 651