Summary
The Supreme Court held that a court of first instance executing an appellate decree for specific performance has jurisdiction under Section 28 of the Specific Relief Act, 1963, read with Section 37 CPC, to rescind the contract or extend time for deposit. It should, however, decide such an application in the suit and not on the execution side. Since the decree holders had always shown readiness to pay and the extension did substantial justice, the Court declined under Article 136 to interfere on that procedural ground.
Issues
- Whether the Execution Court, being the court of first instance, had jurisdiction to decide applications under Section 28 of the Specific Relief Act, 1963 for rescission of the contract and for extension of time to deposit the balance consideration, when the decree was passed by the appellate court.
- Whether such applications must be decided as applications in the suit rather than in execution proceedings, and if so, whether the impugned order should be set aside under Article 136 on that ground alone.
- Whether the Execution Court rightly extended time and permitted deposit of the balance consideration despite the two-month period in the decree and the absence of a separate application for extension.
Provisions considered
- Section 28(1), Specific Relief Act, 1963The words 'may apply in the same suit in which the decree is made' were given an expansive meaning that covers the court of first instance even where the decree was passed in appeal. The application must be dealt with in the suit, not in execution. The power to rescind or extend time is discretionary and turns on whether the default was intentional. (¶¶ 15, 18, 20, 22, 25)
- Section 37, Code of Civil Procedure, 1908For execution, 'the Court which passed a decree' includes the court of first instance where the decree was passed in appellate jurisdiction. So the Execution Court, being the court where the suit was instituted, could entertain the Section 28 application. (¶¶ 16, 18, 19)
- Article 136, Constitution of IndiaThe jurisdiction is discretionary and exercised to advance justice. The Court may decline to interfere with an order that has a legal error if it does substantial justice, and it may take the parties' conduct into account. (¶¶ 24, 30)
Held
- An application under Section 28 of the Specific Relief Act, 1963, whether for rescission or for extension of time, may be entertained by the Execution Court if it is the court that passed the decree within the meaning of Section 37 CPC. That includes the court of first instance where the decree under execution was passed by the appellate court. (¶ 18)
- Here the suit was instituted, and the execution application filed, in the court of first instance at Kaithal, so the Execution Court had jurisdiction to decide the Section 28 applications. (¶ 19)
- An application under Section 28(1) must be decided as an application in the original suit, even though the suit has been disposed of. Even where the Execution Court is the court of first instance, it must transfer the application to the file of the suit before dealing with it. (¶¶ 20, 21, 22)
- The power under Section 28 is discretionary. The court may extend time even after the date fixed by the decree, and may refuse rescission where the default was not intentional, for example where the decree holder was not at fault. (¶ 25)
- The decree neither specified how the balance was to be paid nor stated what would follow if it was not paid within two months. The decree holders promptly sought execution and permission to deposit, renewed that request after the second appeal was dismissed, and deposited once permitted. A prayer for extension of time was implicit in the request for permission to deposit, so the absence of a separate application did not bar the extension. (¶¶ 27, 28, 29)
- Since substantial justice had been done, and the judgment debtors had themselves sought rescission before the Execution Court without raising the jurisdictional point there or in the High Court, the Court declined under Article 136 to interfere merely because the application was decided on the execution side. (¶¶ 24, 30)
Result
Appeal dismissed. The order permitting the decree holders to deposit the balance consideration and rejecting rescission was upheld, any interim order was discharged, and the parties were left to bear their own costs.