The challenge as raised by the applicant is principally on the aspect of lack of diligence and delayed steps taken by the non-applicant to pay the balance amount of consideration pursuant to the decree for specific performance. Though it is true that the relief of rescission of contract can be sought by a transferee pendente lite and while deciding such application, the Court only decides antecedent rights, the fact that such right of rescission is sought to be exercised after execution of sale-deed in favour of the original plaintiff is a fact fatal for the applicant. The sale-deed having been executed on 19th January, 2009, the executing Court lost its jurisdiction to consider the prayer for rescission of the contract. It is relevant to note that initially on 28th December, 2009, the applicant sought review of the order dated 10th February, 2009, by which the warrant of possession came to be issued and the order dated 13th November, 2009, by which the warrant of possession was claimed to have been executed. It is only after the challenge to the decree for specific performance attained finality on 4th August, 2014, that the applicant for the first time attempted to seek rescission of the contract under Section 28 of the said Act. The application in that regard is dated 25th September, 2014. This is more than five years after execution of the sale-deed in favour of the non-applicant. In view of this admitted position on record, I find that the prayer for rescission of the contract as made by the applicant under Section 28 of the said Act was not at all tenable. In fact, the executing Court lost its jurisdiction to consider the prayer for rescission of the contract after the sale-deed came to be executed. For the purposes of the record, it may also be mentioned that the applicant himself pleaded in Ground A of the review application dated 28th December, 2009 that the Court had become functus officio on execution of the sale-deed.
IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)
Civil Revision Application No. 95 of 2016
Decided On: 07.04.2017
Vinod Vs. Chandulal
Hon'ble Judges/Coram:
A.S. Chandurkar, J.
Citation: AIR 2017 Bom 237
1. Admit. Heard finally with consent of learned counsel for the parties.
2. The order passed by the executing Court refusing to review its earlier order, by which the execution proceedings were disposed of by treating the decree for specific performance of an agreement to be duly satisfied is the subject matter of challenge in this Civil Revision Application.
3. For deciding the challenge as raised to the impugned order, it would be first necessary to refer to the facts on record, which are :
"Land bearing Khasra No. 146/3 admeasuring 69 Gunthas was owned by one Suresh Mankar. On 22nd March, 190, he entered into an agreement for selling said land to the non-applicant for a consideration of Rs. 22,000/-. Earnest amount of Rs. 18,000/- was immediately paid while the balance consideration of Rs. 4,000/- was to be paid within a period of eleven months when the sale-deed was to be executed. The non-applicant - plaintiff filed suit for specific performance of the aforesaid agreement on 12th December, 1991. During pendency of that suit, the defendant - Suresh Mankar sold the suit property to one Smt. Ratnamala Fopare. Thereafter, on 17th December, 1993, the defendant in the suit for specific performance was proceeded without his written statement. On 24th January, 1995, the trial Court decreed the suit for specific performance and directed execution of the sale-deed on payment of balance amount of Rs. 4,000-00. There was no time stipulated for paying the balance consideration. The plaintiff then put the decree for execution. On 13th January, 1997, he sought permission to deposit the balance consideration before the executing Court. This permission came to be granted on 24th June, 1999. The said amount, however, was not deposited and hence on 13th August, 1999, the plaintiff-decree holder moved another application seeking time to make the aforesaid deposit. This application was granted on the same day and on 20th August, 1999, the balance amount of Rs. 4,000-00 came to be deposited."
4. On 3rd March, 2000, the applicant herein purchased the suit property from Smt. Ratnamala Fopare for Rs. 2,80,000-00. In the execution proceedings, the executing Court on 18th November, 2008, directed the Nazar to execute sale-deed in favour of the decree holder. Accordingly, on 19th January, 2009, a sale-deed came to be executed in favour of the plaintiff. On 10th February, 2009, the executing Court issued a warrant of possession and this warrant was claimed to have been executed on 13th November, 2009 by putting the plaintiff in possession. Thereafter, the applicant challenged the decree for specific performance by filing an appeal under Section 96 of the Code of Civil Procedure, 1908 [for short, "the Code"]. He also filed a review application before the executing Court seeking review of the order dated 10th February, 2009, by which the warrant of possession had been issued and prayed for restoration of his possession. The appellate Court on 14th December, 2011 allowed the appeal filed by the applicant and after setting aside decree passed by the trial Court, remanded the suit for fresh adjudication. This order passed by the appellate Court was challenged by the plaintiff by filing Appeal from Order No. 11 of 2012 in this Court. This appeal, however, came to be dismissed on 17th July, 2012. The plaintiff being aggrieved by this order challenged the same before the Honourable Supreme Court. On 4th August, 2014, the appeal filed by the plaintiff was allowed and after setting aside the orders passed by the learned Single Judge in the Appeal from Order as well as the order of remand passed by the first appellate Court, the decree passed by the trial Court was restored. Thereafter, the applicant moved an application below Exh. 6 seeking to amend the review application. The plea that the agreement dated 22nd March, 1990 stood rescinded under Section 28 of the Specific Relief Act, 1963 [for short, "the said Act"] was sought to be raised. This application was opposed by the plaintiff and by the impugned order dated 5th December, 2014, the executing Court rejected said application. Being aggrieved, the applicant has filed the present Civil Revision Application.
5. Shri M.G. Bhangde, learned Senior Advocate for the applicant, submitted that the executing Court was not justified in refusing to rescind the contract dated 22nd March, 1990 under Section 28 of the said Act. He submitted that though no time was stipulated in the decree for specific performance for paying the balance consideration of Rs. 4,000/-, this amount was required to be deposited by the decree holder within reasonable time. As per the agreement dated 22nd March, 1990, the balance consideration was to be paid within eleven months of the agreement; but, in fact, the said amount had been paid after almost four years and seven months of the decree being passed by the trial Court. The decree holder having failed to deposit the balance consideration within reasonable time, the contract stood rescinded. He then submitted that the civil Court did not become functus officio after passing the decree for specific performance and it retained seisin over the proceedings even thereafter. Passing of the decree for specific performance would not mean that a final decree had been passed. The Court after considering the delay on the part of the decree holder in depositing the balance consideration ought to have rescinded the contract. It was pointed out that the conduct of the decree holder was such that even after permission to deposit the balance consideration was granted on 24th June, 1999, the said amount came to be deposited only on 20th August, 1999. Moreover, the request of the decree holder for permission to deposit the balance consideration and grant of time to do the same was permitted without giving any notice to the judgment debtor. By passing orders on Exhs.7 and 8, the executing Court acted in contravention of the principles of natural justice, thereby vitiating those orders. It was submitted that as a transferee pendente lite, the applicant was within his rights in making the prayer for rescission of the contract and the executing Court by not considering this request in its proper perspective caused prejudice to the rights of the applicant. It was urged that the agreement dated 22nd March, 1990 already stood rescinded and it was only antecedent rights of the parties that were being adjudicated. It was urged that merely because the decree for specific performance had become final, the executing Court did not consider the prayer for rescission of the agreement as made by the applicant. In support of his submissions, the learned Senior Advocate placed reliance upon the following decisions:-
"[a] Narinder S. Chadha & others v. Municipal Corporation of Greater Mumbai & others [MANU/SC/1126/2014 : (2014) 15 SCC 689],
[b] Pagadala Pedda Yadaiah v. K. Annapurna K. Prasad & others [MANU/AP/1154/2001 : 2001 (5) ALT 417],
[c] Hungerford Investment Trust Ltd. (in voluntary liquidation) v. Haridas Mundhra & others [MANU/SC/0684/1972 : (1972) 3 SCC 684],
[d] Raj Kumar v. Sardari Lal & others [MANU/SC/0058/2004 : (2004) 2 SCC 601],
[e] Government of Andhra Pradesh v. Y.S. Parkashrao & another [MANU/SC/0155/1982 : (1982) 2 SCC 385],
[f] Asit Kumar Kar v. State of West Bengal & others [MANU/SC/0062/2009 : (2009) 2 SCC 703],
[g] Azhar Sultana v. B. Rajamani & others [MANU/SC/0231/2009 : (2009) 17 SCC 27], and
[h] Prem Jeevan v. K.S. Venkata Raman & another [MANU/SC/0117/2017 : 2017 (1) SCALE 666],"
6. These submissions were opposed by Shri R.R. Rathod, learned counsel for the non-applicant. According to him, the plaintiff had complied with the decree for specific performance within reasonable time. After the suit was decreed on 24th January, 1995, permission to deposit the balance consideration was sought on 13th January, 1997 and the said amount came to be deposited on 20th August, 1999. He submitted that the applicant as a subsequent purchaser had challenged the decree for specific performance, but this challenge was turned down by the Honourable Supreme Court by observing that the applicant was not a bona fide purchaser of the suit property. He then submitted that the decree for specific performance was sought to be executed against the original defendant - Suresh Mankar. The original defendant was duly served in the execution proceedings, after which the decree came to be executed. The plaintiff had been put in possession on the basis of the sale-deed executed in his favour by the executing Court. The knowledge of the aforesaid proceedings to the judgment debtor would imply that even the transferee pendente lite had knowledge of the same. According to learned counsel, all the grounds raised by the applicant had been considered by the executing Court while passing the impugned order. He referred to the provisions of Order-XXI, Rule 100 of the Code to urge that a subsequent purchaser was not entitled to be heard while executing the decree. He, therefore, submitted that the decree having been executed and the plaintiff having been put in possession, there was no question of now rescinding the contract. He, therefore, submitted that the Civil Revision Application deserves to be dismissed.
In reply, it was submitted on behalf of the applicant that the objections raised by the applicant were also under Section 47 of the Code and hence these objections deserve to be considered on merits. It was pointed out that there was no finding recorded by the executing Court with regard to notice being issued to the judgment debtor while deciding applications at Exh. 7 and 8. The executing Court took into consideration the aspect of service on the original defendant in the suit and not in the execution proceedings.
7. I have heard the learned counsel for the parties at length and I have given anxious consideration to the respective submissions.
8. As the challenge to the impugned order revolves around the provisions of Section 28 of the said Act, the scope of said provision would be required to be first examined. Under Section 28 of the said Act, the Court has been granted the power to rescind in certain circumstances contract of sale or lease of immovable property wherein decree for specific performance has been passed. Section 28 finds place in Chapter-IV of the said Act which deals with rescission of contracts. It is well settled, as observed in Hunger Ford Investment Trust Ltd. [supra], that after a decree for specific performance has been passed, the Court retains control over the decree even thereafter. The decree for specific performance is treated to be in the nature of a preliminary decree. These powers have to be exercised as "justice of the case may require", as stipulated in Section 28 (1) of the said Act. As held in Rajinder Kumar v. Kuldeep Singh & others [MANU/SC/0085/2014 : (2014) 15 SCC 529, the parties on approaching the Court must get the feeling that justice has been done in the facts and circumstances of the case.
What is required to be emphasized is the conferment of power to rescind contracts. In other words, this power can be exercised only till the stage the contract is executed. This view derives support from the observations of the Honourable Supreme Court in Sardar Mohar Singh through Power of Attorney Holder, Manjit Singh v. Mangilal alias Mangtya [MANU/SC/1381/1997 : (1997) 9 SCC 217] wherein, in Para 4 of said decision, it was observed thus:-
"4. From the language of sub-section (1) of Section 28, it could be seen that the court does not lose its jurisdiction after the grant of the decree for specific performance nor it becomes functus officio. The very fact that Section 28 itself gives power to grant order of rescission of the decree would indicate that till the sale deed is executed in execution of the decree, the trial court retains its power and jurisdiction to deal with the decree of specific performance. ....."
[emphasis supplied by me].
It is, thus, clear that though after passing a decree for specific performance, the Court does not become functus officio and the power is so retained till the sale-deed is executed in execution of the decree. Once such sale-deed is executed, the contract stands completed on account of execution of the document of conveyance and there remains nothing to be rescinded.
The matter can be viewed from another angle. Section 28 (2) of the said Act provides that if a contract is rescinded, possession obtained under the contract is required to be restored. On the other hand, if the purchaser is permitted to pay the purchase money, then, as per Section 28 (3) of the said Act, the vendor can be directed to execute a proper conveyance. There is no power conferred to set aside or rescind the document of conveyance in Section 28 of the said Act. The operation of Section 28 of the said Act would, therefore, cease after execution of the sale-deed. It is to be noted that after execution of the sale-deed, the same would be required to be cancelled which relief could be sought under Chapter-V of the said Act which deals with cancellation of instruments besides any other remedy available in law.
9. The facts of the present case indicate that the suit for specific performance filed by the non-applicant was decreed on 24th January, 1995. Pursuant to the orders passed by the executing Court, the balance consideration was deposited by the non-applicant on 20th August, 1999. The applicant purchased the suit property on 30th March, 2007 and in the execution proceedings, sale-deed came to be executed through the Court in favour of the non-applicant on 19th January, 2009. The warrant of possession is claimed to have been executed on 13th November, 2009. The attempts made by the applicant to challenge the decree for specific performance were unsuccessful and the Honourable Supreme Court by its judgment dated 4th August, 2014 while restoring the decree for specific performance held that the applicant was not a bona fide purchaser of the suit property.
In the light of the legal position referred to herein above and also in the light of the ratio of the decisions in Raj Kumar and Azhar Sultana [supra], the challenges as raised would be required to be answered.
10. The challenge as raised by the applicant is principally on the aspect of lack of diligence and delayed steps taken by the non-applicant to pay the balance amount of consideration pursuant to the decree for specific performance. Though it is true that the relief of rescission of contract can be sought by a transferee pendente lite and while deciding such application, the Court only decides antecedent rights, the fact that such right of rescission is sought to be exercised after execution of sale-deed in favour of the original plaintiff is a fact fatal for the applicant. The sale-deed having been executed on 19th January, 2009, the executing Court lost its jurisdiction to consider the prayer for rescission of the contract. It is relevant to note that initially on 28th December, 2009, the applicant sought review of the order dated 10th February, 2009, by which the warrant of possession came to be issued and the order dated 13th November, 2009, by which the warrant of possession was claimed to have been executed. It is only after the challenge to the decree for specific performance attained finality on 4th August, 2014, that the applicant for the first time attempted to seek rescission of the contract under Section 28 of the said Act. The application in that regard is dated 25th September, 2014. This is more than five years after execution of the sale-deed in favour of the non-applicant. In view of this admitted position on record, I find that the prayer for rescission of the contract as made by the applicant under Section 28 of the said Act was not at all tenable. In fact, the executing Court lost its jurisdiction to consider the prayer for rescission of the contract after the sale-deed came to be executed. For the purposes of the record, it may also be mentioned that the applicant himself pleaded in Ground A of the review application dated 28th December, 2009 that the Court had become functus officio on execution of the sale-deed.
In the light of the aforesaid findings, the ratio of the decisions relied upon by the learned Senior Counsel for the applicant with regard to Section 28 of the said Act cannot be made applicable to the case in hand.
11. As regards the other ground of challenge based on the aspect of absence of due notice to the judgment debtor by the executing Court while extending and granting time to deposit the balance consideration, said aspect would have to be considered in the light of the facts of the case. The trial Court while passing the decree for specific performance did not stipulate any time for paying the balance consideration. Though it is true that such payment of balance consideration has to be made within reasonable period, said aspect loses its significance in the facts of the present case when it is found that the applicant is not entitled to the relief of rescission of the contract under Section 28 of the said Act. Further, in absence of any time being stipulated in the decree for paying the balance consideration, the case would be one for extending the time to deposit such amount. As observed in Sardar Mohar Singh [supra], extension of time is distinct from condonation of delay and grant of such extension is within the discretion of the executing Court. Application at Exh. 7 for permission to deposit Rs. 4,000/- was moved on 13th January, 1997 and it was allowed on 24th June, 1999. Application at Exh. 8 seeking time to make the payment was moved on 13th August, 1999 and it was granted on the same day. Though it was urged that orders dated 13th January, 1997 and 13th August, 1999 were passed without issuing notice to the judgment debtor and hence were a nullity in the eyes of law as per the decisions in Government of Andhra Pradesh and Pagadala Pedda Yadaiah [supra], said contention cannot be accepted. The suit was not contested by the original defendant and it was decreed on 24th January, 1995. Execution proceedings were filed thereafter in the year 1996. The balance consideration though was deposited on 20th August, 1999, the sale-deed was got executed through Court on 19th January, 2009 and warrant of possession was executed on 13th November, 2009. At no point of time did the original defendant or the subsequent purchaser, Ratnamala Fopare, make any grievance with regard to non-service of any notice. The applicant herein has been found not to be a bona fide purchaser by the Honourable Supreme Court and it has now been held that he is also not entitled to the relief of rescission of the contract under Section 28 of the said Act. In these facts, the discretion exercised by the executing Court in granting time to deposit the balance consideration has rightly not been interfered with at the instance of the applicant in its review jurisdiction. In this factual background, therefore, I am not inclined to exercise revisional jurisdiction in the matter. Moreover, as held by Honourable Supreme Court in Dwarika Prasad v. Nirmala & others [MANU/SC/1921/2009 : 2010 (3) Mh. L.J. 417 (SC)], the supervisory jurisdiction of the High Court as incorporated in Section 115 of the Code is intended to ensure that justice is done between the parties.
12. As a sequel to the aforesaid discussion, I am of the considered view that the trial Court did not commit any error, whatsoever, when it had passed the impugned order. The Civil Revision Application, therefore, stands dismissed with no order as to costs.
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