Time For Payment Of Sale Consideration Can Be Extended Even In A Consent Decree Of Specific Performance: Supreme Court

The Supreme Court observed that the time for payment of sale consideration can be extended even in a consent decree of specific performance.

The court added that Section 28 of Specific Relief Act, 1963, not only permits the judgment ­debtors to seek rescission of the contract but also permits extension of time by the court to pay the amount.

A suit for specific performance does not come to an end on the passing of a decree and the court which has passed the decree for specific performance retains control over the decree even after the decree has been passed, the bench comprising Justices S. Abdul Nazeer and Vikram Nath observed.

Background

During the pendency of a specific performance suit, a compromise was arrived at between the parties and accordingly the Trial Court decreed the suit in terms of the compromise. As per the compromise decree, the defendant agreed to sell the suit land for a total consideration of Rs.8,78,500/­. The plaintiff paid a sum of Rs. Rs.7,31,000 immediately to the defendant. 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. There was a delay of about five days in payment of balance of the amount. Therefore, the plaintiff filed an application seeking permission of the court to deposit the balance of the amount which was allowed by the trial court on the same day. Accordingly, he deposited the said amount and the sale deed was executed in favour of the plaintiff. Subsequently, the application filed by the plaintiff seeking extension of time was also allowed by the Trial Court. After a passage of nearly 3 years, the application filed by the defending seeking rescission of the contract was dismissed by the Trial Court. This order of the Trial Court was set aside by the High Court and therefore the plaintiff approached the Apex Court.

Section 28 of the Special Relief Act

While considering the appeal, the bench noted that the Section 28 of the Special Relief Act, 1963 provides for rescission of the contract for sale or lease of immovable property, the specific performance of which has been decreed. The court noted that 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 lessee fails to pay the purchase money within the period fixed.

Permits extension of time by the court to pay the amount

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. Therefore, a suit for specific performance does not come to an end on the passing of a decree and the court which has passed the decree for specific performance retains control over the decree even after the decree has been passed. Section 28 not only permits the judgment ­debtors to seek rescission of the contract but also permits extension of time by the court to pay the amount. The power under this section is discretionary and the court has to pass an order as the justice of the case may require.

The court also observed that the time for payment of sale consideration may be extended even in a consent decree. 

Allowing the appeal, the bench observed that the the Trial Court in its discretion has granted extension of time for depositing the balance of sale consideration assigning cogent reasons. Therefore, it restored the order of the Trial Court permitting the appellant to deposit the balance amount of Rs.1,47,500.

Case details

Kishor Ghanshyamsa Paralikar (D) Balaji Mandir Sansthan Mangrul (Nath) | 2022 LiveLaw (SC) 528 | CA 3794 OF 2022 | 9 May 2022

Coram: Justices S. Abdul Nazeer and Vikram Nath

Headnotes

Specific Relief Act, 1963 ; Section 28 - Consent Decrees - Time for payment of sale consideration may be extended even in a consent decree - Referred to Smt. Periyakkal and ors. Vs. Smt. Dakshyani  (1983) 2 SCC 127 (Para 11)

Specific Relief Act, 1963 ; Section 28 - A suit for specific performance does not come to an end on the passing of a decree and the court which has passed the decree for specific performance retains control over the decree even after the decree has been passed. Section 28 not only permits the judgment ­debtors to seek rescission of the contract but also permits extension of time by the court to pay the amount. The power under this section is discretionary and the court has to pass an order as the justice of the case may require.

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