Translate
Text Highlighter

Bookmark

PDF

Share

Report a problem
AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
Are you a practicing lawyer?
Enhance your digital presence and reach by creating a Casemine profile.
Upload pleading to use the new AI search
Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
Smart Summary

Factual and Procedural Background

The revision petitioners, defendants in a suit for specific performance, entered into an agreement on 22-6-1982 to sell 26.5 cents of land to the respondent, their brother, for Rs. 8,612.56. Rs. 734/- was adjusted against a loan previously given by the respondent to the first petitioner. The respondent paid Rs. 7,400/- on the date of agreement and was put in possession of the property. The respondent filed a suit for specific performance, which was decreed on 31-3-1987, directing the plaintiff to pay Rs. 1,212.50, after which the defendants were to execute the sale deed by 30-6-1987.

Alleging failure by defendants to execute the conveyance despite the plaintiff offering the money, an Execution Petition was filed on 6-8-1986, which was allowed in the absence of objections. During the pendency of the Execution Petition, the plaintiff deposited the balance amount on 11-2-1997. The defendants then filed an interlocutory application (I.A No. 494/97) invoking Section 28 of the Specific Relief Act, seeking rescission of the agreement. The plaintiff filed another application (I.A No. 1959/97) seeking condonation of delay in depositing the balance consideration. The lower Court dismissed the defendants' application and condoned the delay as prayed for.

Legal Issues Presented

  1. Whether the defendants are entitled to rescind the contract under Section 28 of the Specific Relief Act due to the plaintiff's delay in depositing the balance sale consideration?
  2. Whether the delay in depositing the balance sale consideration can be condoned by the Court, thereby precluding rescission of the contract?

Arguments of the Parties

Revision Petitioners' Arguments

  • The Court below erred in not considering the absence of a plausible explanation from the plaintiff for the delay in depositing the balance sale consideration.
  • In the absence of timely deposit, rescission of the contract under Section 28 should have been granted.
  • The plaintiff’s claim of issuing a notice in 1987 to receive the balance amount lacks documentary evidence.

Respondent's Arguments

  • The major part of the sale consideration was paid on the date of agreement, and possession was delivered then, which has continued for 18 years.
  • Allowing rescission would upset the long possession held by the plaintiff.
  • The defendants did not take timely steps to recover the balance consideration or seek rescission until the plaintiff moved for execution after depositing the balance.
  • There are no grounds for rescission under the circumstances.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
H.I Trust v. Haridas Mundhra, AIR 1972 SC 1826 Contract subsists after decree; if time for performance is not specified, performance must be within reasonable time; reasonableness of delay to be considered based on circumstances. Supported the principle that deposit of balance sale consideration after decree must be within reasonable time and that delay can be condoned.
Kanhaiyalal v. Abdul Hussain, AIR 1985 Madh. Pra. 24 Delay (even nine months) in deposit of balance sale consideration may be unjustified depending on circumstances. Emphasized that the length and circumstances of delay are crucial in deciding rescission under Section 28.
K. Kalpana Saraswathi v. P.S.S Somasundaram Chettiar, AIR 1980 SC 512 Time for deposit can be extended even at appeal stage to enable plaintiff to benefit from agreement. Supported the Court's discretion to condone delay and extend time for deposit post-decree.
Joseph George v. Chacko Thomas, (1992) 1 Ker. LT 6 Failure to deposit in time does not automatically lead to rescission; wilful refusal to deposit is relevant for rescission; Court has control post-decree. Reinforced that mere delay is insufficient for rescission and Court may extend time under Section 28 and Order XXI Rule 32 CPC.

Court's Reasoning and Analysis

The Court examined Section 28 of the Specific Relief Act, which allows rescission of a contract when the purchaser fails to pay the purchase money within the period allowed by the decree or extended by the Court. Here, the decree was silent on the time for deposit, implying that the deposit must be made within a reasonable time. The Court referred to Supreme Court and other authoritative decisions establishing that the contract survives post-decree and that delay must be judged by surrounding circumstances.

The Court noted that the plaintiff was given possession on the date of agreement, which has continued for 18 years, and that the major portion of the sale consideration was paid immediately. The defendants delayed their application for rescission by many years and only filed after the plaintiff deposited the balance amount. The Court found the defendants failed to provide evidence supporting their claims, including documentary proof of notice to receive the balance amount.

Considering these factors and the precedents, the Court held that the delay in deposit was justifiably condoned and that the application for rescission under Section 28 was rightly dismissed. The Court emphasized that mere failure to deposit in time does not automatically rescind the contract, especially when the plaintiff had possession and had paid the bulk of the consideration.

Holding and Implications

The Court’s final decision was to dismiss the revision petition, thereby upholding the lower Court’s order dismissing the rescission application and condoning the delay in deposit of the balance sale consideration.

The direct effect of this decision is that the contract for sale remains valid and enforceable, with the plaintiff entitled to specific performance. No new precedent was set, and the ruling reaffirms the discretionary power of Courts under Section 28 of the Specific Relief Act to condone delay and refuse rescission where justified by the facts.

    Ouseph And Another v. Devassy .

    The revision petitioners are the defendants in a suit for specific performance. The first petitioner and the respondent are brothers. The former had obtained a loan of Rs. 734/- from the latter. While so, on 22-6-1982 an agreement was entered into between them whereby the revision petitioners, who are man and wife agreed to sell 26.5 cents of land to the respondent for consideration at the rate of Rs. 325/- per cent. Out of the total sale consideration of Rs. 8,612.56 so due, Rs. 734/- was adjusted towards the loan amount. The total consideration paid and received on the date of agreement was Rs. 7,400/- and with regard to the balance, provision was made in the agreement. The respondent was also put in possession. In due course, the respondent moved for specific performance and the suit was decreed in his favour on 31-3-1987. It was directed that the plaintiff should pay a sum of Rs. 1,212.50 on receipt of which the defendants should execute the sale deed before 30-6-1987. Alleging that the defendants have failed to execute the conveyance on receipt of the money offered by the plaintiff, Execution Petition was filed on 6-8-1986 and in the absence of any objection to the Execution Petition, the execution of document was allowed as prayed for.

    2. During the pendency of the E.P the plaintiff deposited the balance amount due to the defendants on 11-2-1997. On the next day i.e, 12-2-1997 the defendants filed I.A No. 494/97 on the trial side invoking S. 28 of the specific Relief Act and seeking rescission of the agreement to sell. The application was resisted and during the pendency of this application plaintiff filed I.A No. 1959/97 also on the trial side seeking condonation of the delay involved in the deposit of the balance sale consideration. The Court below considered the two petitions together and passed the impugned order dismissing the defendants' application I.A No. 494/97 and condoning the delay in the deposit as prayed for in I.A No. 1959/97.

    3. The learned counsel for the revision petitioners submitted that the Court below has not approached the question from the proper perspective and that in the absence of any plausible explanation on the part of the plaintiff in not making the deposit of the balance sale consideration within reasonable time, the Court below should have upheld rescission of the contract as prayed for in I.A 494/97. Case law was also relied on in this regard. As regards the contention of the plaintiff, deposed to by him when he went to the box, that in the year 1987 he had issued a notice calling upon the defendants to receive the balance sale consideration at the Sub-Registrar's office and also waited for the defendants there, on that day though in vain, it was argued that there is no documentary evidence adduced in support of the said plea.

    4. On behalf of the respondent herein it was contended that here is a case where the lion's share out of the total sale consideration was received by the vendors on the date of agreement itself and the plaintiff was also given possession of the property on the date of agreement and that the consequence of allowing I.A No. 494/97 would be upsetting the long possession held by the plaintiff for the past 18 years. It is also argued that the defendants did not take any step for getting the balance of sale consideration through any petition and even failed to seek rescission at any time until the plaintiff moved for execution of the sale deed through Court on deposit of the entire balance sale consideration. According to him, there are no grounds for allowing rescission in the circumstances.

    5. I have considered the submissions as above. Section 28 of the Specific Relief Act relied on by the revision petitioners reads as follows:

    “28. Recission 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-sec. (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 purchaser 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-sec. (1), the Court may on application made in the same suit, award the purchaser or lessee such further reliefs as he may be entitled to, including in appropriate cases all or any of the following reliefs, namely:—

    (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.”

    6. Here is a case where the decree was silent as to the date by which the plaintiff should deposit the balance of sale consideration. It was argued by the learned counsel for the revision petitioner that in such circumstances, the deposit has to be made within a reasonable time.

    7. The Hon'ble Supreme Court has found in the decision in H.I Trust v. Haridas Mundhra, AIR 1972 SC 1826 that for the purpose of S. 28 the contract between the parties does not get extinguished by the passing of the decree; it subsists even thereafter and that if a contract does not specify the time for performance, the law will imply that the parties intended that the obligation under the contract should be performed within a reasonable time. Even extending the said finding with regard to the deposit for the period after the decree where the decree is silent with regard to the relevant date, the reasonableness of the delay has to be considered based on the surrounding circumstances.

    8. The learned counsel for the revision petitioners relied on a decision in Kanhaiyalal v. Abdul Hussain AIR 1985 Madh. Pra. 24 where even nine month's delay was found unjustified. However, whether it is 9 months or longer period what is crucial on the point is the circumstances in which the delay occurred. K. Kalpana Saraswathi v. P.S.S Somasundaram Chettiar AIR 1980 SC 512 took the view that even at the stage of appeal before the Supreme Court, the time to make deposit could be extended to enable the plaintiff to get the advantage of the agreement to sell. In Joseph George v. Chacko Thomas (1992) 1 Ker. LT 6 a Bench of this Court also had occasion to consider the question of delay and its impact on an application under S. 28 of the specific Relief Act. It was found that the fact that S. 28 enable the Court to extend time itself would imply that mere failure to deposit need not result in the rescission of the contract. The Specific Relief Act, it was held, is not an exhaustive enactment and it does not consolidate the whole law on the subject and despite the passing of the decree in a suit for specific performance, the Court retains the control and it is open to the Court to entertain an application for rescission of the decree if it is shown that the plaintiff ‘positively refused’ to complete the contract. It was further held that the wilful refusal by the plaintiff to make the deposit would be a relevant circumstances to rescind the contract under S. 28 of the Act. In the context of S. 28 of the Act and also Order XXI Rule 32 C.P.C, it would not be possible to hold that a decree passed for specific performance can be effaced for the mere failure to deposit amount in time. This is particularly so since under S. 28 of the Act and under S. 148 of the C.P.C the Court can extend the time for deposit.

    9. In the present case there are certain circumstances which are in favour of the decree holder; the first of them being, that on the date of agreement itself the plaintiff was given possession and such possession has continued for 18 years by now. The motion for rescinding the contract actually comes 15 years after the execution of the contract and 10 years after the passing of the relevant decree. It is very important that before the defendant's petition was filed, the decree holder had already deposited the entire balance sale consideration before court, though the difference between two events is only one day. It is also important that in the instant case out of the total sale consideration of Rs. 8,612.56 the lion's share, namely, Rs. 7,400/- was paid on the date of agreement itself and the defendants have had the benefit of utilisation of this fund during all these years. It is also seen that the defendants have failed to adduce evidence in support of their contention when the matter was posted for evidence in the trial Court. On the other hand, the decree holder went to the box and deposed about circumstances. It is true that documentary evidence is not forthcoming to show that the plaintiff had actually issued a notice in the year 1987 calling upon the defendants to come to the Sub-Registry and to receive the balance amount. But then it is also to be remembered that the defendants have not chosen to go to the box and deny the said averment.

    10. In the circumstances, I am of the view that the impugned order allowing the condonation of delay in the matter of deposit of the balance amount and dismissing the application filed under S. 28 of the specific Relief Act does not suffer from any irregularity or impropriety justifying interference in exercise of the revisional power of this Court.

    The C.R.P is without merit it is dismissed.

    Revision dismissed.

    Use AI to get other relevant cases.

    Comments

    Ouseph And Another v. Devassy .
    (Oct 27, 2000)