Sunday, 12 March 2017

When court can extend time for deposit of balance consideration in suit for specific performance of contract?

 The   Hon'ble   Supreme   Court   in  Sardar   Mohar   Singh
(supra) has held that under provisions of Section 28(1) of the said
Act, after the decree for specific performance is passed, the Court
does not lose its jurisdiction nor does it become functus officio. Till
the period the sale deed is executed in execution of the decree, the
trial Court retains its powers and jurisdiction to deal with the
decree.  The Court has the power to enlarge the time despite an
application for rescission of the decree being filed by the judgment
debtor.  The prayer for extension of time is distinct from a prayer
for condonation of delay. In the aforesaid case, the delay of about
seven and half years was extended for complying with the decree
of specific performance.
In the light of the aforesaid legal position, if the facts
of   the   present   case   are   considered,   it   can   be   seen   that   the
respondents had applied for certified copy on 7-­1­2-012.  The same
was received on 13­-4­-2012. Immediately thereafter on 19­-4-­2012,
the application for enlargement of time came to be moved.  While

considering this application, the trial Court found that though the
said application was filed under Section 148 of the Code, it would
be treated as an application seeking extension of time to deposit
the balance consideration.   The application was treated as one
filed under Section 28 of the said Act.   In para 21 of its order, the
trial   Court   has   found   the   reasons   mentioned   therein   to   be
justifiable,   bonafide   and   convincing.     If   the   application   for
extension of time  to deposit balance consideration is to be treated
differently from an application for condontation of delay and if
within   a   short   period   from   receiving   certified   copy,   such
application for extension of time had been moved, I do not find
that by accepting the prayer for extension of time the trial Court
acted in any manner contrary to law.  The trial Court not having
become  functus officio  it acted within its jurisdiction in allowing
the application moved by the respondents.
10. Though   the   learned   Counsel   for   the   petitioner   is
justified in submitting that the knowledge of the decree ought to
be   attributed   to   the   parties   on   the   day   the   judgment   is
pronounced, in the facts of the present case when the time of two
months   was   granted   to   make   the   balance   payment   and   the
application for extension was moved within a period of a month
and half thereafter, it cannot be said that in this situation there

was any deliberate delay on the part of the respondents in seeking
extension   of   time   to   deposit   the   balance   consideration.   The
discretion in that regard was rightly exercised by the trial Court
especially when it did not lose seisin of the matter.   The judgment
of the learned Single Judge in Bhujangrao Ganpati (supra) cannot
be relied upon in the light of the subsequent judgment of the
Hon'ble   Supreme   Court   in  Sardar   Mohar   Singh   (supra).   The
judgments   relied   upon   by   the   learned   Senior   Counsel   for   the
respondents support his submissions.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR.
WRIT PETITION NO.6716 OF 2015
M/s   Armor's   Developers   Pvt.   Ltd.,

                                                                                                 
­V
  Smt.   Asha   W/o   Rajendra   Paigwar,

           CORAM: A.S. CHANDURKAR, J.
                            DATED:  11th  AUGUST,  2016.
Citation:2017(2) MHLJ 324

1. In view of notice for final disposal, the learned Counsel
for the parties have been heard at length.

2. The challenge in the present writ petition is to the
order   dated   4­-12-­2015   passed   by   the   trial   Court   whereby   the
respondents herein were permitted to deposit the balance amount
of consideration in terms of the decree for specific performance
passed in Special Civil Suit No.706/2003 by extending the period
of such deposit by one month.
3. Brief facts giving rise to the present writ petition are
that the respondents are the original plaintiffs who had filed suit
for specific performance of agreement dated 1-­9-­1997.  The trial
Court on 6­-1­2-012 decreed the suit and granted relief of specific
performance.     The   respondents   were   directed   to   deposit   the
balance   consideration   of   Rs.96,000/­   within   a   period   of   two
months from the said judgment. The petitioners were consequently
directed to execute the sale deed of plot no.13 within a period of
two months of the said judgment.  It was further stipulated that in
case   the   respondents   failed   to   deposit   the   amount   of   balance
consideration within the stipulated time, the suit shall be treated
as dismissed.
4. The   respondents   on   19-­4-­2012   filed   an   application
under Section 148 of the Code of Civil Procedure, 1908 (for short,
the  Code)  seeking  enlargement  of time  to  deposit  the  balance
consideration.   It was stated in the application that the Counsel

representing   the   respondents   fell   ill   after   the   judgment   was
delivered.  An application for grant of certified copy was made on
7­1­2012 and the same was received on 13­4­2012. After receiving
the   certified   copy,   the   respondents   got   knowledge   about   the
direction to deposit the balance consideration within a period of
two months from the date of the order. Hence, it was prayed that
the respondents be permitted to deposit the balance consideration.
This   application   was   opposed   by   the   petitioners   denying   the
averments made therein.  It was stated that despite knowledge of
the judgment, the balance consideration had not been deposited.
The   petitioners   then   moved   a   separate   application
under Section 28 of the Specific Relief Act, 1963 (for short, the
said Act) on 28­9­2012.  In the said application, it was stated that
as there was default on the part of the decree holder in complying
with the decree for specific performance, the contract was liable to
be rescinded.  This application was opposed by the respondents by
filing reply.  
5. The trial Court decided both the applications together
and   by   the   impugned   order   dated   4­12­2015   allowed   the
application moved by the respondents and extended the time to
deposit the balance consideration by one month. It rejected the
application   moved   by   the   petitioners   by   treating   the   same   as

premature.   Being   aggrieved,   the   original   defendants   have
challenged the aforesaid order.
6. Shri Anjan De, the learned Counsel for the petitioners
submitted that the trial Court was not justified in allowing the
application moved by the respondents and treating the application
moved by the petitioners as premature.   He submitted that the
application moved by the respondents under Section 148 of the
Code was not maintainable inasmuch as the time prescribed under
the provisions of Section 148 of the Code permitted enlargement
of time not exceeding thirty days before expiry of the actual period
of deposit.  According to him, as the respondents moved the said
application after the expiry of the period of two months, the same
was   not   maintainable.     He   then   submitted   that   though   the
provisions of Section 148 of the Code were not applicable, the said
application was entertained by  the trial Court by treating the same
as being filed under Section 28 of the said Act.   Such course
without   due   notice   to   the   petitioners   was   not   maintainable.
According to him, even otherwise, the reasons assigned by the
respondents   in   their   application   were   not   sufficient   to   justify
extension   of   time.     Without   leading   any   cogent   evidence,   the
statements made in the application were sought to be justified. He
urged that as the judgment was delivered on 6-­1­-2012, it was

deemed that the parties had full knowledge about the operative
part of the judgment in view of provisions of Order XX Rules 1 and
2 of the Code.
7. It was then urged that the decree passed by the trial
Court was self operative and on the failure of the respondents to
deposit the balance consideration within a period of two months,
the suit was liable to be dismissed.  Considering this stipulation in
the decree, there was no question of extension of time to deposit
the balance consideration as the Court had become functus officio.
In support of his submission, the learned Counsel placed reliance
upon the judgment of learned Single judge in Bhujangrao Ganpati
Vs.   Sheshrao   Rajaram 1973   Mh.   L.   J.   1034.   It   was   further
submitted   that   in   the   subsequent   decision   in  Vatsala Shankar
Bansole Vs. Sambhaji Nanasaheb Khandare AIR 2003 Bombay 57, it
has been observed that a decision in Bhaujangrao Ganpati (supra)
was not good law, but this conclusion was debatable.  He further
submitted  that   as   the   respondents   had   not   led   evidence,   their
pleadings could not act as a substitute for evidence.
As regards the order of the trial Court treating the
application filed by the petitioners under Section 28 of the said Act
as premature, it was submitted that considering the nature of the
decree the application could not be treated as premature.   The

provisions of Section 28 of the said Act were clear and on failure
on the part of the plaintiffs to deposit the balance consideration,
the contract was liable to be rescinded. The said application ought
to have been allowed by the trial Court.
8. Shri A. S. Jaiswal, the learned Senior Counsel for the
respondents supported the impugned order.  According to him, the
application seeking extension of time to deposit the the balance
consideration was moved within a short period after completion of
two months as permitted by the trial Court.  He submitted that the
trial Court was justified in invoking the provisions of Section 151
of the Code while treating the application filed by the respondents
under Section 28 of the said Act for extending the time to deposit
the balance consideration.  According to him, under Section 28 of
the said Act, a discretion was vested with the trial Court to extend
the time to deposit the balance consideration.   After considering
the   reasons   mentioned   in   the   application,   this   time   had   been
extended.  He submitted that the certified copy though had been
applied immediately on 7­1­2012, the same was received on 13­4­
2012.  The application in question was moved shortly thereafter on
19­4­2012.   Considering the short period within which the said
application was moved, the trial Court was justified in extending
the period for depositing the balance consideration.

In so far as the application moved by the petitioners
under Section 28 of the said Act is concerned, it was urged that the
petitioners had filed a reply to the application for enlargement of
time on 28­9­2012. On the same day, the petitioners had filed the
application under Section 28 of the said Act.   Till the prayer for
extension of time was not considered by the trial Court, moving of
the application under Section 28 of the said Act was premature.
He, therefore, submitted that this order passed by the trial Court
was   also   justified   in   the   facts   of   the   case.     In   support   of   his
submissions the learned Senior Counsel placed reliance upon the
following judgments:
[1] Vatsala   Shankar   Bansole   Vs.   Sambhaji   Nanasaheb
Khandare  and another 2002 (6) Bom. C. R. 126.
[2] Hari Ramji Vs. Mahadu Tekale 2006(6) Mh. L. J. 110.
[3] Gopal   Samarth   Vs.   Mukundrao   Gedam,   2012   (2)
Mh.L.J. 602.
[4] Sardar Mohar Singh Vs. Mangilal (1997) 9 SCC 217.
[5] Salem Advocate Bar Association T. N. Vs. Union of India
(2005) 6 SCC 344.
9. I have heard the respective Counsel for the parties at
length and I have given due consideration to their submissions.
The facts narrated above indicate that as per the decree passed on

6­-1­2-012, the respondents were required to deposit the balance
amount of consideration within a period of two months thereafter.
The   period   of  two   months   came   to   an   end   on   5­-3­-2012.   The
application   for   enlargement   of   time   was   moved   on   19­4­2012
which is about a month and half after expiry of period of the two
months.     The   Hon'ble   Supreme   Court   in  Sardar   Mohar   Singh
(supra) has held that under provisions of Section 28(1) of the said
Act, after the decree for specific performance is passed, the Court
does not lose its jurisdiction nor does it become functus officio. Till
the period the sale deed is executed in execution of the decree, the
trial Court retains its powers and jurisdiction to deal with the
decree.  The Court has the power to enlarge the time despite an
application for rescission of the decree being filed by the judgment
debtor.  The prayer for extension of time is distinct from a prayer
for condonation of delay. In the aforesaid case, the delay of about
seven and half years was extended for complying with the decree
of specific performance.
In the light of the aforesaid legal position, if the facts
of   the   present   case   are   considered,   it   can   be   seen   that   the
respondents had applied for certified copy on 7-­1­2-012.  The same
was received on 13­-4­-2012. Immediately thereafter on 19­-4-­2012,
the application for enlargement of time came to be moved.  While

considering this application, the trial Court found that though the
said application was filed under Section 148 of the Code, it would
be treated as an application seeking extension of time to deposit
the balance consideration.   The application was treated as one
filed under Section 28 of the said Act.   In para 21 of its order, the
trial   Court   has   found   the   reasons   mentioned   therein   to   be
justifiable,   bonafide   and   convincing.     If   the   application   for
extension of time  to deposit balance consideration is to be treated
differently from an application for condontation of delay and if
within   a   short   period   from   receiving   certified   copy,   such
application for extension of time had been moved, I do not find
that by accepting the prayer for extension of time the trial Court
acted in any manner contrary to law.  The trial Court not having
become  functus officio  it acted within its jurisdiction in allowing
the application moved by the respondents.
10. Though   the   learned   Counsel   for   the   petitioner   is
justified in submitting that the knowledge of the decree ought to
be   attributed   to   the   parties   on   the   day   the   judgment   is
pronounced, in the facts of the present case when the time of two
months   was   granted   to   make   the   balance   payment   and   the
application for extension was moved within a period of a month
and half thereafter, it cannot be said that in this situation there

was any deliberate delay on the part of the respondents in seeking
extension   of   time   to   deposit   the   balance   consideration.   The
discretion in that regard was rightly exercised by the trial Court
especially when it did not lose seisin of the matter.   The judgment
of the learned Single Judge in Bhujangrao Ganpati (supra) cannot
be relied upon in the light of the subsequent judgment of the
Hon'ble   Supreme   Court   in  Sardar   Mohar   Singh   (supra).   The
judgments   relied   upon   by   the   learned   Senior   Counsel   for   the
respondents support his submissions.
11. As regards the order passed by the trial Court treating
the application under Section 28 of the said Act to be premature,
this conclusion of the trial Court is also justified.  The application
for   extension   of   time   was   moved   on   19­-4-­2012   while   the
application   under   Section   28   of   the   said   Act   was   moved   on
28-­9­-2012.     Unless   the   prayer   for   enlargement   of   time   was
decided,   there   was   no   question   of   considering   the   prayer   for
rescinding the contract.  Once the prayer for extension of time was
granted, it is obvious that the application moved under Section 28
of the said Act would have to be treated as having been filed
prematurely.
12. As a result of the aforesaid discussion, I do not find
any   case   to   interfere   in   writ   jurisdiction.   There   being   no

jurisdictional error committed by the trial Court, the writ petition
is liable to be dismissed.  The same is accordingly dismissed with
no order as to costs.
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