Full Judgment Text
2024 INSC 651
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO . 10193_ OF 2024
(Arising out of SLP (C) No.29899 OF 2017)
ISHWAR (SINCE DECEASED)
THR. LRS & ORS. …APPELLANTS
VERSUS
BHIM SINGH & ANR. …RESPONDENTS
J U D G M E N T
MANOJ MISRA, J.
1. Leave granted.
This appeal impugns an order of the High Court of
2.
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passed in Civil Revision No.8105 of 2016, whereby the
revision preferred by the appellant(s) against the order of
2
the Civil Judge (Senior Division), Kaithal dated 03.11.2016
was dismissed.
FACTUAL MATRIX
3. A suit for specific performance was instituted by the
respondents against the appellant(s) (which would include
their predecessor in interest) for enforcement of an
agreement to sell dated 18.05.2005. In the plaint, inter alia ,
it was alleged that the appellant(s) had agreed to sell the
property in dispute at a total consideration of Rs.18 lacs,
out of which Rs.9.77 lacs was paid in advance, yet, despite
service of notice requesting execution of sale deed, the
appellants failed to execute the same.
4. The trial court (i.e., the Court of Additional Civil
Judge (Senior Division), Kaithal), vide judgment and decree
dated 28.02.2011, decreed the suit in part whereunder the
appellant(s) were directed to refund the earnest money with
interest, etc.
2 Execution Court
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5. Aggrieved by rejection of the prayer for specific
performance of the agreement, the respondents went in
appeal. The appellate court (i.e., the Court of Additional
District Judge, Kaithal (for short ADJ)) allowed the appeal
vide judgment and decree dated 12.01.2012 and accepted
the prayer for specific performance of the agreement. While
doing so, it directed the appellants herein to execute the
sale deed in favour of the respondents herein on payment of
balance sale consideration within a period of two months
from the date of the decree, failing which, liberty was given
to the decree holder(s) to get the sale deed executed
through Court.
6. On 20.03.2012, the respondents (i.e. decree holders)
filed an execution application before the Court of first
instance (i.e., the trial court) praying thus:
“It is therefore, prayed that the sale deed as
per the decree passed in Civil Appeal No.53 of
2011 may kindly be got executed and registered in
favour of the decree holders by the appointment of
the local commissioner and possession may kindly
be got delivered to the decree holder and the
balance sale price may kindly be got deposited in
the Court for payment to the J.Ds and cost for the
suit and the appeal and this execution may also be
got recovered from the J.Ds.”
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7. While the application for execution of the decree
was pending, the appellant(s) (i.e., the judgment debtor(s))
challenged the appellate court decree by filing Second
Appeal No.3730 of 2012 before the High Court, which came
to be dismissed on 07.11.2013.
Upon dismissal of the Second Appeal, the
8.
respondents (i.e., decreeholders) filed an application before
the Execution Court on 24.03.2014 seeking permission to
deposit the balance consideration in Court. Opposing this
prayer of the decree holder, in the execution proceeding
itself, the appellant(s) (i.e. the judgmentdebtors) submitted
3
an application under Section 28 of the Specific Relief Act,
3 28. Rescission in certain circumstances of contracts for the sale or lease of
immovable property, the specific performance of which has been decreed.—
( 1) Where in any suit a decree for specific performance of a contract for the sale or
lease of immovable property has been made and the purchaser or lessee does not, within
the period allowed by the decree or such further period as the court may allow, pay the
purchase money or other sum which the court has ordered him to pay, the vendor or lessor
may apply in the same suit in which the decree is made, to have the contract rescinded and
on such application the court may, by order, rescind the contract either so far as regards the
party in default or altogether, as the justice of the case may require.
(2) Where a contract is rescinded under sub-section (1), the court—
(a) shall direct the purchaser or the lessee, if he has obtained possession of
the property under the contract, to restore such possession to the vendor or
lessor, and
(b) may direct payment to the vendor or lessor of all the rents and profits
which have accrued in respect of the property from the date on which possession
was so obtained by the purchaser or lessee until restoration of possession to the
vendor or lessor, and, if the justice of the case so requires, the refund of any sum
paid by the vendee or the lessee as earnest money or deposit in connection with
the contract.
(3) If the purchase or lessee pays the purchase money or other sum which he is
ordered to pay under the decree within the period referred to in sub-section (1), the court
may, on application made in the same suit, award the purchaser or lessee such further relief
as he may be entitled to, including in appropriate cases all or any of the following reliefs,
namely:—
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1963 (in short “the 1963 Act”) to rescind the contract on
the ground that decreeholder(s) had failed to make deposit
within two months, as directed by the first appellate court.
9. The Execution Court, however, rejected the
application of the judgmentdebtor(s) for rescission of the
contract order dated 03.11.2016 and, simultaneously,
vide
permitted the decreeholder(s) to make deposit of the
balance consideration.
10. Aggrieved by the aforesaid order of the Execution
Court, the appellant(s) (i.e., the judgmentdebtors) filed a
Civil Revision before the High Court, which came to be
dismissed by the impugned order.
We have heard Shri Subhasish Bhowmick for the
11.
appellant(s); Mr. Devendra Singh for the respondents; and
have perused the materials on record.
SUBMISSIONS ON BEHALF OF THE APPELLANT(S)
(a) the execution of a proper conveyance or lease by the vendor or lessor;
(b) the delivery of possession, or partition and separate possession, of the
property on the execution of such conveyance or lease.
(4) No separate suit in respect of any relief which may be claimed under this section
shall lie at the instance of a vendor, purchaser, lessor or lessee, as the case may be.
(5) The costs of any proceedings under this section shall be in the discretion of the
court.
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12. The learned counsel for the appellants submitted:
(i) The Execution Court held no jurisdiction to
extend the time for depositing the balance
consideration as the decree under execution was
passed by the appellate court.
(ii) The decree was executable on payment of
balance sale consideration within two months. No
application for extension of time to make deposit
was made within the aforesaid period, therefore the
Court had no power to extend the time for deposit.
(iii) The Execution Court committed grave error in
extending the time to make deposit of the balance
amount after four years of the appellate court’s
decree, when, otherwise, it was to be paid within
two months from the date of the decree.
SUBMISSIONS ON BEHALF OF RESPONDENTS
13. Per contra , the learned counsel for the respondents
submitted:
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(i) The execution application was filed in the
same Court where the original suit was instituted,
therefore, the Court had jurisdiction to extend the
time to make deposit;
(ii) The decree under execution did not specifically
fix the mode of payment and there was no direction
to deposit the balance consideration in Court,
therefore, except to file for execution of the decree
and seek permission of the Court to deposit the
balance consideration, there was no other method
by which decree holder could have paid the balance
amount, more so, when the judgment debtor was
not interested in abiding by the decree;
(iii) The judgment – debtor(s) were offered balance
consideration within time, and the execution
application was also filed within time, but, instead
of executing the sale deed, the judgment– debtor(s)
chose to prefer a second appeal before the High
Court. Not only that, after the second appeal was
dismissed, the judgmentdebtor(s) preferred a
Special Leave Petition (in short SLP) before this
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Court, which, too, was dismissed on 07.11.2016.
Thus, it is clear that the decreeholders were
throughout ready and willing to perform their part
under the contract / decree whereas the judgment
debtor(s) avoided execution of the sale deed. In
these circumstances and having regard to the facts
of the case, the Execution Court was justified in
allowing the application for extension of time and
rejecting the application for rescission of the
contract.
ISSUES
14. Having noticed the rival contentions, in our view,
the following issues arise for our consideration:
(i) Whether the Execution Court had jurisdiction
to deal with the application(s) for (a) recission of
contract and (b) extension of time to deposit the
balance sale consideration?
(ii) If Execution Court had the jurisdiction,
whether those applications ought to have been
decided as one in the suit (i.e., original side)? If yes,
then, whether, in the facts of the case, on that
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ground alone, the impugned order warrants
interference in exercise of jurisdiction under Article
136 of the Constitution of India?
ANALYSIS
A. The Execution Court had jurisdiction
15. A bare reading of Section 28(1) of the 1963 Act gives
an impression that the power to extend time to deposit, or
to rescind the contract on failure of deposit, vests in the
Court which passed the decree in as much as the words
used in Section 28 (1) are:
“The vendor or lessor may apply in the same suit
in which the decree is made, to have the contract
rescinded and on such application the court may,
by order, rescind the contract either so far as
regards the party in default or altogether, as the
justice of the case may require.”
4
16. In Ramankutty Guptan Vs. Avara , this Court
answered two questions. One, whether an application
under Section 28 of the 1963 Act is maintainable in the
Court of first instance when the decree has been passed by
the appellate court. Second, whether the Execution Court
4 (1994) 2 SCC 642
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in which the original suit was filed can entertain an
application under Section 28 of the 1963 Act. After taking
5
note of the provisions of Section 37 of the CPC, this Court
held:
“8. …………..Therefore, it is clear that the decree of
the appellate court would be construed to be the
decree passed by the court of first instance. It is
settled law that an appeal is a continuation of the
suit. Therefore, when a decree for specific
performance has been dismissed by the trial court,
but decreed by the appellate court, it should be
construed to be in the same suit. When the decree
specifies the time for performance of the
conditions of the decree, on its failure to deposit
the money, Section 28(1) itself gives power to the
court to extend the time on such terms as the
Court may allow to pay the purchase money or
other sum which the court has ordered him to
pay. In K. Kalpana Saraswathi Vs. P.S.S.
6
Somasundaram Chettiar , this Court held that on
an oral prayer made by the counsel for the plaintiff
for permission to deposit the entire amount as
directed by the trial court this Court directed the
appellant to deposit the amount within six months
from that date together with interest and other
conditions mentioned therein. An application for
extension of time for payment of balance
consideration may be filed even in the court of first
instance or in the appellate court in the same suit
5 37. Definition of the court which passed a decree – The expression “Court which
passed a decree”, or words to that effect, shall, in relation to the execution of decrees,
unless there is anything repugnant in the subject or context, be deemed to include-
(a) Where the decree to be executed has been passed in the exercise of appellate
jurisdiction, the Court of first instance, 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.
6 (1980) 1 SCC 630
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as the decree of the trial court stands merged with
that of the appellate court which decree is under
execution. It is to be seen that the procedure is the
handmaid for justice and unless the procedure
touches upon jurisdictional issue, it should be
moulded to subserve substantial justice.
Therefore, technicalities would not stand in the
way to subserve substantive justice. Take a case
where the decree is transferred for execution to a
transferee executing court, then certainly the
transferee court is not the original court and
execution court is not the “same court” within the
meaning of Section 28 of the Act. But when an
application has been made in the court in which
the original suit was filed and the execution is
being proceeded with, then certainly an
application under Section 28 is maintainable in
the same Court.”
(Emphasis supplied)
Following the view taken in
17. Ramankutty Guptan
in V.S. Palanichamy Chettiar Firm Vs. C.
(Supra),
7
Alagappan and Anr. this Court held:
“16. In view of the decision of this Court in
Ramankutty Guptan case when the trial court and
the executing court are the same, the executing
court can entertain the application for extension of
time though the application is to be treated as one
filed in the same suit. On the same analogy, the
vendor judgmentdebtor can also seek rescission
of the contract of sale or take up this plea in
defence to bar the execution of the decree.
………….”
(Emphasis supplied)
7 (1999) 4 SCC 702
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18. Having regard to the aforesaid decisions, 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. This is so,
because the decree is in the same suit and, 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
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provided it is the Court which passed the decree in terms
of Section 37 of the CPC.
19. In the instant case, the Court of first instance (i.e.,
where the civil suit was instituted) was the Court of
Additional Civil Judge (Senior Division), Kaithal, as would
appear from the decreesheet placed on record as
Annexure P1. The execution application was also filed
before the Court of Additional Civil Judge (Senior
Division), Kaithal, as would appear from Annexure P2.
Paragraph No.1 of the impugned order indicates that the
order dated 03.11.2016 by which the application under
Section 28 was disposed of was passed by the Court of
Civil Judge (Senior Division), Kaithal. Thus, by virtue of
Section 37 of the CPC, the Execution Court being the
Court of first instance with reference to the suit in which
the decree was passed had jurisdiction to deal with the
application under Section 28 of the 1963 Act. We,
therefore, reject the objection as regards jurisdiction of
the Execution Court to deal with the application for
extension of time / rescission of the contract under
Section 28 (1) of the 1963 Act. Issue (i) is decided in the
aforesaid terms.
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B. Execution Court ought to have decided the
Application under Section 28 of the 1963 Act as an
application in the Suit
20. The next question which falls for our consideration
is whether the application under Section 28 of the 1963
Act ought to have been dealt with as an application on
the original side (i.e., as an application in the suit) or on
the execution side (i.e., as an application in the execution
proceedings). This issue is no longer res integra as it has
been answered by this Court in Ramankutty Guptan
(Supra) in the following terms:
“9. The question then emerges is whether
it should be on the original side or execution side.
Section indicates that it should be “in the same
suit”. It would obviously mean in the suit itself
and not in the execution proceedings. It is equally
settled law that after passing the decree for
specific performance, the Court does not cease to
have any jurisdiction. The Court retains control
over the decree even after the decree has been
passed. It was open to the Court to exercise the
power under Section 28(1) of the Act either for
extension of time or for rescinding the contract as
claimed for. Since the execution application has
been filed in the same court in which the original
suit was filed, namely, the court of first instance,
instead of treating the application on the execution
side, it should have as well been numbered as an
interlocutory application on the original side and
disposed of according to law. In this view, we feel
that the judgment of the Bombay High Court laid
down the law correctly and that of the Andhra
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Pradesh High Court is not correct. The High Court,
therefore, is not right in dismissing the application
treating it to be on execution side, instead of
transferring it on the original side for dealing with
it according to law.”
(Emphasis supplied)
21. The above view was followed in Sanjay
Shivshankar Chitkote Vs. Bhanudas Dadarao Bokade
8
(Died) through L.Rs. wherein, upon finding that the
applications under Section 28 were dealt with on the
execution side, this Court set aside the order of the
execution court and directed that the applications shall
be transferred to the file of the civil suit so that they
could be numbered as an application in the suit.
22. 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
8 Civil Appeal No.8022 of 2023 @ SLP (C) No.24720 of 2023 decided on 08.12.2023
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before dealing with it. Issue (ii) is partly decided in the
aforesaid terms.
C. Not a Fit Case for Interference Under Article136 of
the Constitution
23. Now, the question which survives for our
consideration is whether, in the facts of the case, the
order impugned is liable to be interfered with only
because the Court which passed the order dealt with the
application on the execution side and not on the original
side (i.e., as an application in the suit).
24. Before we examine facts relevant to the issue, we
must reiterate that the jurisdiction of this Court under
Article 136 of the Constitution is a discretionary
jurisdiction to advance the cause of justice. The Court
does not exercise its jurisdiction under Article 136 only
9
because it is lawful to do so . For the purpose of doing
complete justice to the parties, the Court may not
interfere with the order even if it suffers from some legal
error. Not only that, the Court may deny relief to a party
having regard to its conduct and may, in a given
9
9 See C.K. Prahalada v. State of Karnataka, (2008) 15 SCC 577
Civil Appeal @ SLP (C) No.29899/2017 Page 16 of 22
situation, mould the relief to do complete justice to the
10
parties .
11
25. In Chanda v. Rattni , this Court held that the
power to rescind the contract under Section 28 of the
1963 Act is discretionary in nature and is to do complete
justice to the parties. The Court does not cease to have
the power to extend the time even though the decree may
have directed that payment of balance price is to be made
by a certain date. While exercising discretion in this
regard, the Court is required to take into account facts of
the case so as to ascertain whether the default was
intentional or not. If there is a bona fide reason for the
delay/ default, such as where there appears no fault on
the part of the decree holder, the Court may refuse to
rescind the contract and may extend the time for deposit
of the defaulted amount.
26. We shall now consider whether the impugned order
does substantial justice to the parties. For this end, it
would be apposite to have a close look at the facts of the
case as it would help us in determining whether
discretion to extend the time for depositing the balance
10
10 See Lajpat Rai Mehta v. Govt. of Punjab (Deptt. of Irrigation & Power), (2009) 3 SCC 260
11
11 (2007) 14 SCC 26
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consideration was justifiably exercised in favour of the
decree holder.
27. In the instant case, the agreement, of which specific
performance was sought, is of the year 2005. The suit
for specific performance was filed in the year 2006. The
trial court partly decreed the suit, inter alia , for refund of
the earnest money in the year 2011. The plaintiff(s)
(respondents herein) being aggrieved by rejection of their
prayer for specific performance of the agreement, filed an
appeal before the appellate court. The appellate court
allowed the appeal on 12.1.2012 and directed the
defendants (appellants herein) to execute the sale deed
on payment of balance consideration within two months
from the date of the appellate court order, failing which
the plaintiff(s) were entitled to get the sale deed executed
through Court. Notably, the mode of payment of the
balance consideration was not specified in the decree and
there was no direction upon the plaintiff(s) to deposit the
balance consideration in Court. Further, the decree did
not spell out consequences of nonpayment within the
stipulated period. Rather, right was given to the decree
holder to get the sale deed executed through Court if it
was not executed upon payment within two months. As
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the mode of payment was not specified in the decree,
what course the decree holder could have adopted in case
the judgmentdebtor refused to abide by the decree
becomes a relevant consideration for the purposes of
exercise of discretion in one way or the other.
28. In the instant case, admittedly, the decree attained
finality upon dismissal of second appeal on 7.11.2013,
and, finally, SLP on 7.11.2016. In between, pursuant to
the order of the Execution Court dated 3.11.2016, as
claimed by the respondents in their written submission,
the balance sale consideration was deposited on
13.11.2016. Before that, the decreeholder(s) had
promptly filed for execution of the decree immediately
after expiry of 60 days from the date of the appellate
court decree. Not only that, as no specific mode for
payment/ deposit of the balance consideration was
provided for in the decree, the decree holder(s) sought a
direction from the Court to permit them to deposit the
amount in Court so as to get the decree executed through
its intervention. This application, however, remained
pending as challenge to the decree was being considered
by higher courts. In the meantime, as soon as the Second
Appeal was dismissed, the decreeholder(s) applied for
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fresh permission to deposit the balance consideration.
Ultimately, when permission was granted by the
Execution Court, the deposit was made, as noted above.
In these circumstances, the decree holder(s) had all
throughout displayed their intention to pay the balance
consideration and there appears no intentional or
deliberate fault on their part so as to deprive them of the
fruits of the decree.
29. The contention of the learned counsel for the
appellant(s) that there was no proper prayer for
condonation of delay in making the deposit of the balance
consideration, or that there was no proper application for
extension of time to make deposit, is unworthy of
acceptance. Because, in the execution application itself,
which was promptly filed after expiry of 60 days from the
date of the appellate court decree, the decree holder had
sought permission to make deposit. Not only that, the
application filed after dismissal of second appeal also
sought permission to make deposit. The prayer to extend
the time to make deposit was therefore implicit in the
prayer to permit the decree holder to make deposit of the
balance consideration. In this view of the matter, we
reject the submission of the appellants that as there was
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no proper application for extension of time to make
deposit, the Court held no jurisdiction to extend the
same.
In light of the discussion above and on an
30.
overall assessment of the facts, we are of the considered
view that the respondents had all throughout shown
their intention to pay the balance consideration for
execution of the sale deed whereas the appellants
appeared interested only in challenging the decree before
higher Courts. In these circumstances, taking note of all
the events, the Execution Court justifiably exercised its
discretion in favour of the decreeholder(s) by allowing
them to deposit the balance consideration. In our view,
therefore, substantial justice has been done to the parties
and if we interfere with the impugned order only on the
technical ground that the application was not dealt with
as one on the original side, grave injustice would be
caused to the decree holder(s). More so, when the
judgmentdebtor(s) themselves applied to the Execution
Court for rescinding the contract under Section 28(1) of
the 1963 Act, and raised no such jurisdictional issue
either before the Execution Court or the High Court.
Therefore, in our view, no interference with the impugned
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order is called for in exercise of our discretionary
jurisdiction under Article 136 of the Constitution.
31. For the reasons above, the appeal is dismissed.
Interim order, if any, stands discharged. Parties to bear
their own costs.
32. Pending application(s), if any, stands disposed of.
……………………………….. J.
(J. B. PARDIWALA)
……………………………….. J.
(MANOJ MISRA)
NEW DELHI;
September 03, 2024.
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