Paragraph numbers below are the court’s original numbering, recovered from the source text.
17. Following the view taken in Ramankutty Guptan (Supra), in V.S. Palanichamy Chettiar Firm Vs. C. Alagappan and Anr.7 this Court held: “16. In view of the decision of this Court in Ramankutty Guptan case when the trial court and the executing court are the same, the executing court can entertain the application for extension of time though the application is to be treated as one filed in the same suit. On the same analogy, the vendor judgment-debtor can also seek rescission of the contract of sale or take up this plea in defence to bar the execution of the decree. ………….” (Emphasis supplied)
18. Having regard to the aforesaid decisions, in our view, the expression “may apply in the same suit in which the decree is made” as used in Section 28 of the 1963 Act must be accorded an expansive meaning so as to include the court of first instance even though the decree under execution is passed by the appellate court. This is so, because the decree is in the same suit and, according to Section 37 of the CPC, the expression “the court which passed a decree”, or words to that effect, in relation to the execution of decrees, unless there is anything repugnant in the subject or context, would include: (a) the court of first instance even though the decree to be executed has been passed in the exercise of appellate jurisdiction; and (b) where the court of first instance has ceased to exist, or to have jurisdiction to execute it, the Court which, if the suit wherein [1999] 1 SCR 349 : (1999) 4 SCC 702 [2024] 9 S.C.R. Ishwar (Since Deceased) Thr. Lrs & Ors. v. Bhim Singh & Anr. the decree was passed was instituted at the time of making the application for the execution of the decree, would have jurisdiction to try such suit. Thus, an application under Section 28 of the 1963 Act, either for recission of contract or for extension of time, can be entertained and decided by the Execution Court provided it is the Court which passed the decree in terms of Section 37 of the CPC.
19. In the instant case, the Court of first instance (i.e., where the civil suit was instituted) was the Court of Additional Civil Judge (Senior Division), Kaithal, as would appear from the decree-sheet placed on record as Annexure P-1. The execution application was also filed before the Court of Additional Civil Judge (Senior Division), Kaithal, as would appear from Annexure P-2. Paragraph No.1 of the impugned order indicates that the order dated 03.11.2016 by which the application under Section 28 was disposed of was passed by the Court of Civil Judge (Senior Division), Kaithal. Thus, by virtue of Section 37 of the CPC, the Execution Court being the Court of first instance with reference to the suit in which the decree was passed had jurisdiction to deal with the application under Section 28 of the 1963 Act. We, therefore, reject the objection as regards jurisdiction of the Execution Court to deal with the application for extension of time / rescission of the contract under Section 28 (1) of the 1963 Act. Issue (i) is decided in the aforesaid terms. Execution Court ought to have decided the Application under Section 28 of the 1963 Act as an application in the Suit
20. The next question which falls for our consideration is whether the application under Section 28 of the 1963 Act ought to have been dealt with as an application on the original side (i.e., as an application in the suit) or on the execution side (i.e., as an application in the execution proceedings). This issue is no longer res integra as it has been answered by this Court in Ramankutty Guptan (Supra) in the following terms: “9. The question then emerges is whether it should be on the original side or execution side. Section indicates that it should be “in the same suit”. It would obviously mean in the suit itself and not in the execution proceedings. It is equally settled law that after passing the decree for specific performance, the Court does not cease to have 12 any jurisdiction. The Court retains control over the decree even after the decree has been passed. It was open to the Court to exercise the power under Section 28(1) of the Act either for extension of time or for rescinding the contract as claimed for. Since the execution application has been filed in the same court in which the original suit was filed, namely, the court of first instance, instead of treating the application on the execution side, it should have as well been numbered as an interlocutory application on the original side and disposed of according to law. In this view, we feel that the judgment of the Bombay High Court laid down the law correctly and that of the Andhra Pradesh High Court is not correct. The High Court, therefore, is not right in dismissing the application treating it to be on execution side, instead of transferring it on the original side for dealing with it according to law.” (Emphasis supplied)
21. The above view was followed in Sanjay Shivshankar Chitkote Vs. Bhanudas Dadarao Bokade (Died) through L.Rs.8 wherein, upon finding that the applications under Section 28 were dealt with on the execution side, this Court set aside the order of the execution court and directed that the applications shall be transferred to the file of the civil suit so that they could be numbered as an application in the suit.
22. The law is, therefore, settled that an application seeking rescission of contract, or extension of time, under Section 28 (1) of the 1963 Act, must be decided as an application in the original suit wherein the decree was passed even though the suit has been disposed of. As a sequitur, even if the Execution Court is the Court of first instance with reference to the suit wherein the decree under execution was passed, it must transfer the application filed under Section 28 to the file of the suit before dealing with it. Issue (ii) is partly decided in the aforesaid terms. Not a Fit Case for Interference Under Article 136 of the Constitution
23. Now, the question which survives for our consideration is whether, in the facts of the case, the order impugned is liable to be interfered Civil Appeal No.8022 of 2023 @ SLP (C) No.24720 of 2023 decided on 08.12.2023 [2024] 9 S.C.R. Ishwar (Since Deceased) Thr. Lrs & Ors. v. Bhim Singh & Anr. with only because the Court which passed the order dealt with the application on the execution side and not on the original side (i.e., as an application in the suit).
24. Before we examine facts relevant to the issue, we must reiterate that the jurisdiction of this Court under Article 136 of the Constitution is a discretionary jurisdiction to advance the cause of justice. The Court does not exercise its jurisdiction under Article 136 only because it is lawful to do so.9 For the purpose of doing complete justice to the parties, the Court may not interfere with the order even if it suffers from some legal error. Not only that, the Court may deny relief to a party having regard to its conduct and may, in a given situation, mould the relief to do complete justice to the parties.10
25. In Chanda v. Rattni,11 this Court held that the power to rescind the contract under Section 28 of the 1963 Act is discretionary in nature and is to do complete justice to the parties. The Court does not cease to have the power to extend the time even though the decree may have directed that payment of balance price is to be made by a certain date. While exercising discretion in this regard, the Court is required to take into account facts of the case so as to ascertain whether the default was intentional or not. If there is a bona fide reason for the delay/ default, such as where there appears no fault on the part of the decree holder, the Court may refuse to rescind the contract and may extend the time for deposit of the defaulted amount.
26. We shall now consider whether the impugned order does substantial justice to the parties. For this end, it would be apposite to have a close look at the facts of the case as it would help us in determining whether discretion to extend the time for depositing the balance consideration was justifiably exercised in favour of the decree holder.
27. In the instant case, the agreement, of which specific performance was sought, is of the year 2005. The suit for specific performance was filed in the year 2006. The trial court partly decreed the suit, inter alia, for refund of the earnest money in the year 2011. The plaintiff(s) (respondents herein) being aggrieved by rejection of their prayer for specific performance of the agreement, filed an appeal See C.K. Prahalada v. State of Karnataka (2008) 15 SCC 577 See Lajpat Rai Mehta v. Govt. of Punjab (Deptt. of Irrigation & Power) (2009) 3 SCC 260 [2007] 4 SCR 402 : (2007) 14 SCC 26 14 before the appellate court. The appellate court allowed the appeal on 12.1.2012 and directed the defendants (appellants herein) to execute the sale deed on payment of balance consideration within two months from the date of the appellate court order, failing which the plaintiff(s) were entitled to get the sale deed executed through Court. Notably, the mode of payment of the balance consideration was not specified in the decree and there was no direction upon the plaintiff(s) to deposit the balance consideration in Court. Further, the decree did not spell out consequences of non-payment within the stipulated period. Rather, right was given to the decree holder to get the sale deed executed through Court if it was not executed upon payment within two months. As the mode of payment was not specified in the decree, what course the decree holder could have adopted in case the judgment-debtor refused to abide by the decree becomes a relevant consideration for the purposes of exercise of discretion in one way or the other.
28. In the instant case, admittedly, the decree attained finality upon dismissal of second appeal on 7.11.2013, and, finally, SLP on 7.11.2016. In between, pursuant to the order of the Execution Court dated 3.11.2016, as claimed by the respondents in their written submission, the balance sale consideration was deposited on 13.11.2016. Before that, the decree-holder(s) had promptly filed for execution of the decree immediately after expiry of 60 days from the date of the appellate court decree. Not only that, as no specific mode for payment/ deposit of the balance consideration was provided for in the decree, the decree holder(s) sought a direction from the Court to permit them to deposit the amount in Court so as to get the decree executed through its intervention. This application, however, remained pending as challenge to the decree was being considered by higher courts. In the meantime, as soon as the Second Appeal was dismissed, the decree-holder(s) applied for fresh permission to deposit the balance consideration. Ultimately, when permission was granted by the Execution Court, the deposit was made, as noted above. In these circumstances, the decree holder(s) had all throughout displayed their intention to pay the balance consideration and there appears no intentional or deliberate fault on their part so as to deprive them of the fruits of the decree.
29. The contention of the learned counsel for the appellant(s) that there was no proper prayer for condonation of delay in making the deposit [2024] 9 S.C.R. Ishwar (Since Deceased) Thr. Lrs & Ors. v. Bhim Singh & Anr. of the balance consideration, or that there was no proper application for extension of time to make deposit, is unworthy of acceptance. Because, in the execution application itself, which was promptly filed after expiry of 60 days from the date of the appellate court decree, the decree holder had sought permission to make deposit. Not only that, the application filed after dismissal of second appeal also sought permission to make deposit. The prayer to extend the time to make deposit was therefore implicit in the prayer to permit the decree holder to make deposit of the balance consideration. In this view of the matter, we reject the submission of the appellants that as there was no proper application for extension of time to make deposit, the Court held no jurisdiction to extend the same.
30. In light of the discussion above and on an overall assessment of the facts, we are of the considered view that the respondents had all throughout shown their intention to pay the balance consideration for execution of the sale deed whereas the appellants appeared interested only in challenging the decree before higher Courts. In these circumstances, taking note of all the events, the Execution Court justifiably exercised its discretion in favour of the decree-holder(s) by allowing them to deposit the balance consideration. In our view, therefore, substantial justice has been done to the parties and if we interfere with the impugned order only on the technical ground that the application was not dealt with as one on the original side, grave injustice would be caused to the decree holder(s). More so, when the judgment-debtor(s) themselves applied to the Execution Court for rescinding the contract under Section 28(1) of the 1963 Act, and raised no such jurisdictional issue either before the Execution Court or the High Court. Therefore, in our view, no interference with the impugned order is called for in exercise of our discretionary jurisdiction under Article 136 of the Constitution.
31. For the reasons above, the appeal is dismissed. Interim order, if any, stands discharged. Parties to bear their own costs.
32. Pending application(s), if any, stands disposed of. Result of the Case: Appeal dismissed. †Headnotes prepared by: Nidhi Jain