Seller’s Bid To Rescind 1983 Sale Agreement Gets Fresh Review Over Delayed ₹10,000 Balance Deposit: Karnataka HC

The respondent obtained a decree for specific performance on 1 September 2008, directing the petitioner to execute a sale deed within one month and permitting the respondent to deposit the balance consideration of ₹10,000 if the petitioner failed to do so

The respondent filed an execution petition on 2 September 2014 and sought permission to deposit the balance consideration on 6 December 2018.

The petitioner applied under Section 28 of the Specific Relief Act, 1963, for rescission of the contract on 23 February 2019.

On 12 April 2022, the Executing Court rejected the rescission application and permitted the deposit.

The petitioner challenged those orders in the revision petition and connected writ petition.

Section 28 of the Specific Relief Act, 1963 gives the court discretion, after a decree for specific performance, to rescind the contract or extend the time for payment or deposit; neither rescission nor extension follows automatically from expiry of the stipulated period.

The court must assess the decree-holder’s conduct, bona fides, reasons for and length of delay, any wilful negligence or positive refusal to perform, and equities arising in the meantime.

Order XX Rule 12A of the Code of Civil Procedure requires the court to specify the time for payment under a decree for specific performance, while Section 37 CPC is relevant to the court competent to entertain an extension application where the decree is passed by an appellate court.

The Court relied on Ram Lal v. Jarnail Singh (now deceased) through its LRs & Ors., 2025 SCC OnLine SC 584, for the principle that delay alone does not establish abandonment or justify rescission, and on Anand Narayan Shukla v. Jagat Dhari, 2026 SCC OnLine SC 827, for the governing principles under Section 28, including that permission to deposit does not extinguish the judgment-debtor’s right to seek rescission.

The decree-holder’s application to deposit was made several years after the decree, making the delay a relevant circumstance, but not a sufficient ground by itself to determine whether the contract should be rescinded.

The Executing Court needed to examine the reasons for the delay, the decree-holder’s conduct and bona fides, whether the delay reflected wilful negligence or a positive refusal to perform, and whether intervening equities favoured the judgment-debtor.

Because those matters required fresh consideration, the High Court remitted both applications without expressing a view on their merits.

It remitted both the petitioner’s application for rescission and the respondent’s application to deposit the balance consideration for fresh consideration, directing the Executing Court to hear the parties and apply the relevant principles in Ram Lal and Anand Narayan Shukla.

All merits contentions were left open.