A specific-performance decree may be rescinded for unreasonable delayed deposit despite no stipulated payment period.

The suit property formed part of a larger property originally owned by Arumuga Gramani and devolved upon his grandsons, S. Vinayagamurthy and S. Rajamanickam. They executed three sale agreements in 1980, 1980 and 1982 in favour of the first defendant and her husband.

Upon the vendors’ failure to execute the sale deed, the vendees instituted O.S. No.5500 of 1983 for specific performance, which was decreed ex parte on 16 November 1983 without fixing a time for payment of the balance consideration.

The vendees deposited the balance consideration only on 22 December 1987 and thereafter initiated execution proceedings.

During the pendency of those proceedings, Rajamanickam and Pushpa conveyed the remaining 4,049 sq. ft. to the plaintiffs by a registered sale deed dated 19 September 1988.

Rajamanickam subsequently applied under Section 28 of the Specific Relief Act, 1963, for rescission of the specific-performance decree. The application was allowed, the decree was rescinded, the review application was dismissed, and the execution petition failed.

The plaintiffs then filed O.S. No.6774 of 1996 seeking declaration of title, a declaration that the ex parte decree was invalid and not binding on them, recovery of possession, and permanent injunction. The Trial Court decreed the suit, and the First Appellate Court affirmed the decree.

Whether the vendors, after suffering an ex parte decree for specific performance in favour of the appellants, could validly convey their right, title and interest in the suit property to the plaintiffs?

Whether the specific-performance decree could be rescinded after the appellants deposited the balance sale consideration?

Whether delayed payment or deposit of the balance sale consideration could justify rescission where the decree did not stipulate a time limit for such deposit?

The Court applied Section 28 of the Specific Relief Act, 1963, under which the court passing a decree for specific performance retains jurisdiction until execution of the sale deed and may, depending on the circumstances and conduct of the decree-holder, either extend the time for compliance or rescind the contract/decree.

Under Order XX Rule 12-A CPC, a decree for specific performance involving payment of purchase money must specify the period for payment; where no period is specified, payment must nevertheless be made within a reasonable time.

Relying on Hungerford Investment Trust Ltd. v. Haridas Mundhra, (1972) 3 SCC 684, Sardar Mohar Singh v. Mangilal alias Mangtya, (1997) 9 SCC 217, and Bhupinder Kumar v. Angrej Singh, (2009) 8 SCC 766, the Court held that a decree for specific performance is in the nature of a preliminary decree and that the contract continues until completion or lawful rescission.

It also relied on Narasimhan v. Balammal, 1988 SCC OnLine Mad 297, for the proposition that a deposit made several years after the decree may be beyond reasonable time, depending on the facts.

The principles summarised in Anand Narayan Shukla v. Jagat Dhari, 2026 SCC OnLine SC 827, were also applied: rescission is not automatic, extension is discretionary, and the court must consider the parties’ conduct, attending circumstances, equity, and whether the delay indicates wilful negligence or lack of intention to perform.

Although the ex parte decree did not prescribe a period for depositing the balance consideration, the appellants were required to comply within a reasonable time. Their deposit occurred approximately four years after the decree, and no satisfactory explanation for the delay was established.

More importantly, the competent court had already exercised its discretion under Section 28 of the Specific Relief Act and rescinded the decree. That order was unsuccessfully challenged in review and revision and therefore attained finality; its correctness, including the limitation objection, could not be reopened in the present title suit.

Once the specific-performance decree and the underlying agreements were rescinded, no enforceable right remained in favour of the appellants.

Consequently, although the plaintiffs’ 1988 sale was a pendente lite transaction subject to the outcome of the earlier litigation, the eventual rescission of the decree removed the impediment to the vendors’ title and rendered the sale deed legally effective.

The concurrent findings that the plaintiffs had established title and were entitled to possession and injunction were therefore not shown to suffer from any legal error.

The Second Appeal was dismissed, the judgments and decrees of the Trial Court and First Appellate Court were confirmed, and there was no order as to costs.

The appellants were left at liberty to seek, in accordance with law, the amounts deposited towards the balance consideration and interest, which had subsequently lapsed into the Government account.