Summary
A decree for specific performance conditioned on payment of the balance consideration within three months became inexecutable when the decree-holder neither deposited the amount nor sought extension within that time. A later court permission to deposit did not amount to deemed extension, and no application under Section 28 of the Specific Relief Act was needed for the contract to be treated as rescinded. Refund of earnest money with 8% interest was ordered.
Issues
- Whether a decree for specific performance directing execution of the sale deed on payment of the balance consideration within three months becomes inexecutable when the amount is not deposited within that time.
- Whether the second execution application was barred by limitation or not maintainable after the first was dismissed for want of prosecution.
- Whether a later permission by the Executing Court to deposit, and the deposit itself, operated as extension of time or condonation of delay.
- Whether the judgment-debtor had to apply under Section 28 of the Specific Relief Act, 1963 for rescission before the decree could be treated as inexecutable.
Provisions considered
- Order XX Rule 12A, Code of Civil Procedure, 1908Every decree for specific performance must specify the period for paying the purchase money; the three-month period in the decree was read in that light as imposing a reciprocal obligation on the decree-holder to pay within three months. (¶¶ 18, 19, 20, 25)
- Article 136 of the Schedule, Limitation Act, 1963Execution of a decree may be sought within twelve years; the second execution filed on 08.01.2015 against a decree of 31.10.2012 was within time. (¶¶ 22, 24)
- Section 28, Specific Relief Act, 1963The court passing a specific performance decree retains control until the sale deed is executed and may, on equitable considerations, extend time or rescind the contract; an application under Section 28 is not mandatory, and the contract was declared rescinded. (¶¶ 26, 31, 34, 35, 39, 49, 52)
- Sections 16(c) and 20, Specific Relief Act, 1963Specific performance is an equitable and discretionary relief, so the decree-holder must show continuing readiness and willingness, including timely compliance with the decree. (¶¶ 43, 44, 45, 46)
- Sections 148 and 151, Code of Civil Procedure, 1908No application for extension of time was made under these provisions within the three months allowed by the decree. (¶ 26)
Held
- The second execution, filed within twelve years of the decree, was within limitation, and dismissal of the first execution for want of prosecution, not on merits, did not bar a fresh execution. (¶¶ 22, 23, 24)
- The decree was conditional and imposed reciprocal obligations: the sale deed was to be executed on receipt of the balance consideration, so the decree-holder had to pay within the three months fixed. The interim order in the first appeal only restrained alienation, did not bar the deposit, and lapsed within weeks. (¶¶ 18, 25, 26, 27)
- Where the deposit is not made within the time fixed and no extension is sought within that time, the conditional decree is not complied with and becomes inexecutable; a later court permission to deposit, or acceptance of the deposit, is not a deemed extension of time or condonation of delay. (¶¶ 28, 29, 30, 35)
- Moving an application under Section 28 for rescission is not mandatory; the court is not powerless to treat the contract as rescinded for non-compliance with the condition of the decree. (¶¶ 32, 33, 34, 35, 39)
- A decree for specific performance is in the nature of a preliminary decree; the court does not become functus officio and retains control until the sale deed is executed or the decree is rendered inexecutable, exercising its Section 28 power on equitable considerations fair to both sides. (¶¶ 36, 39)
- The decree-holder's failure to deposit or seek extension after the interim order lapsed showed he was not continuously ready and willing; since specific performance is equitable relief, the time fixed by the decree became of the essence and it was not equitable to condone his delay, given the long passage of time since 2005. (¶¶ 41, 42, 46, 48)
- As the appellate courts granted no fresh time, the period fixed by the court of first instance governed, and the Court did not decide the plea based on the doctrine of merger. (¶ 51)
Result
Appeal allowed; High Court order of 24.03.2025 and Executing Court order of 07.09.2015 set aside; objections upheld and execution closed; decree held inexecutable and contract rescinded under Section 28; appellant to refund Rs. 80,000 with simple interest at 8% per annum from 19.10.2005, with liberty to sell part of the land to raise the sum within three months.