Case Note & Summary
The case pertains to a civil suit (O.S.No.591/1989) filed by the respondent (plaintiff) against the petitioners (defendants) for specific performance of a contract for sale of immovable property. The trial court decreed the suit in favor of the plaintiff, directing him to deposit the balance sale consideration within a specified period. The plaintiff failed to deposit the amount within the stipulated time. Subsequently, the defendants filed an application under Section 28(1), (2) and (4) of the Specific Relief Act, 1963 seeking rescission of the contract on the ground of the plaintiff's default. The trial court rejected the application, observing that the plaintiff had deposited the amount after the expiry of the period but before the filing of the rescission application. Aggrieved, the defendants filed a revision petition under Section 115 of the Code of Civil Procedure, 1908 before the High Court of Karnataka. The High Court examined the provisions of Section 28 of the Specific Relief Act, which empowers the court to rescind the contract if the plaintiff fails to pay the money within the period fixed by the decree. The court noted that the plaintiff's deposit after the expiry of the prescribed period did not automatically entitle him to avoid rescission, as the defendants had a right to seek rescission upon default. The High Court held that the trial court had erred in rejecting the application and allowed the revision petition, setting aside the impugned order and directing the trial court to consider the application afresh in accordance with law.
Headnote
A) Specific Relief Act - Rescission of Contract - Section 28 - Failure to Deposit Balance Consideration - The defendants filed an application under Section 28 of the Specific Relief Act, 1963 seeking rescission of the contract after the plaintiff failed to deposit the balance sale consideration within the time stipulated in the decree. The trial court rejected the application on the ground that the plaintiff had deposited the amount after the expiry of the period but before the application for rescission was filed. The High Court held that the trial court erred in rejecting the application, as the plaintiff's deposit after the expiry of the prescribed period did not cure the default, and the defendants were entitled to seek rescission. (Paras 1-10) B) Civil Procedure Code - Revision - Section 115 - Interference with Interlocutory Orders - The High Court, in exercise of its revisional jurisdiction under Section 115 of the Code of Civil Procedure, 1908, can interfere with an interlocutory order if it suffers from a jurisdictional error or a material irregularity. In this case, the trial court's order rejecting the application under Section 28 of the Specific Relief Act, 1963 was found to be erroneous and was set aside. (Paras 1-10)
Issue of Consideration
Whether the trial court was justified in rejecting the defendants' application under Section 28(1), (2) and (4) of the Specific Relief Act, 1963 for rescission of the contract, when the plaintiff failed to deposit the balance sale consideration within the time granted by the decree.
Final Decision
The High Court allowed the revision petition, set aside the impugned order dated 25.7.2014 passed by the Prl. Civil Judge & JMFC, Channarayapatna on IA No.16 in O.S.No.591/1989, and directed the trial court to consider the application afresh in accordance with law.
Law Points
- Rescission of contract
- Specific Relief Act
- Section 28
- failure to deposit balance consideration
- limitation for deposit
- discretion of court
- revision under Section 115 CPC
