Case Note & Summary
The dispute arose from a civil appeal concerning the specific performance of a contract for the sale of agricultural land. The appellant filed a suit in 2007 for specific performance based on an agreement executed in 2002. A compromise was reached, and the Trial Court decreed the suit in 2010, allowing the appellant to pay a total consideration of Rs.8,78,500, of which Rs.7,31,000 was paid immediately, with a balance of Rs.1,47,500 due within one month. The appellant sought permission to deposit the balance amount, which was allowed, and the sale deed was executed in January 2011. However, after nearly three years, the first respondent sought cancellation of the sale deed, which the Trial Court dismissed. The High Court later set aside this dismissal, leading to the present appeal. The Supreme Court examined Section 28 of the Specific Relief Act, 1963, which allows for rescission of contracts if the purchaser fails to pay within the stipulated time. The Court noted that the Trial Court had exercised its discretion appropriately in allowing an extension for payment to prevent injustice. Consequently, the Supreme Court allowed the appeal, restoring the Trial Court's order and setting aside the High Court's judgment.
Headnote
A) Specific Relief - Rescission of Contract - Right to Rescind - Specific Relief Act, 1963, Section 28 - The vendor has the right to rescind the contract for sale if the purchaser fails to pay the purchase money within the period allowed by the decree. The court retains control over the decree for specific performance and may extend time for payment to prevent manifest injustice. Held that the High Court erred in cancelling the sale deed and setting aside the Trial Court's order (Paras 10-13).
Issue of Consideration
Whether the High Court was justified in setting aside the Trial Court's order allowing extension of time for payment of sale consideration.
Final Decision
The Supreme Court allowed the appeal, set aside the High Court's order, and restored the Trial Court's order permitting the appellant to deposit the balance amount of Rs.1,47,500.
Law Points
- Specific performance
- rescission of contract
- extension of time
- compromise decree
- discretion of court
