Vinod S/O Radheshyam Dubey vs Chandulal Ladhaji Tilwa
2017 Latest Caselaw 1523 Bom

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          IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                    NAGPUR BENCH : NAGPUR
                Civil Revision Application No. 95 of 2016


 Vinod son of Radhyeshyam Dubey,
 aged 54 years,
 occupation - Agriculturist/Business,
 resident of 78, Income
 Tax Colony, Pratap Nagar,
 Nagpur.                                    .....           Applicant

                                 Versus


 Chandulal son of Ladhaji Tilwa,
 aged major,
 resident of Badkas Chowk,
 Nagpur also at Jankibai Dharmashala,
 near Unity Security Force,
 New Shukrawari,
 Mahal, Nagpur.                             .....   Non-Applicant.


                              *****
 Mr. M.G. Bhangde, Senior Adv., with Mr. Rahul Bhangde, Adv., for
 the Applicants.

 Mr. R. R. Rathod, Adv., for the Non-applicant.

                                  *****




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                                 CORAM :        A.S. CHANDURKAR, J.

               Arguments heard on           :    20th March, 2017


         Judgment pronounced on             :    07th April, 2017

 J U D G M E N T:

01. Admit. Heard finally with consent of learned counsel for the

parties.

02. 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.

03. 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

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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.

04. On 3rd March, 2000, the applicant herein purchased the suit

property from Smt. Ratnamala Fopare for Rs.2,80,000-00. In the

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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

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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.

05. 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

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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

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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 Vs. Municipal Corporation of Greater Mumbai & others [(2014) 15 SCC 689], [b] Pagadala Pedda Yadaiah Vs. K. Annapurna K.

               Prasad & others [ 2001 (5) ALT 417],
 [c]           Hungerford Investment Trust Ltd (in voluntary
               liquidation)    Vs.    Haridas   Mundhra       &     others
               [ (1972) 3 SCC 684],
 [d]           Raj Kumar Vs. Sardari Lal & others [(2004) 2 SCC
               601],
 [e]           Government        of   Andhra    Pradesh        Vs.      Y.S.
               Parkashrao & another [ (1982) 2 SCC 385],
 [f]           Asit Kumar Kar Vs. State of West Bengal &
               others [ (2009) 2 SCC 703],
 [g]           Azhar Sultana Vs. B. Rajamani & others [ (2009)
               17 SCC 27], and
 [h]           Prem Jeevan Vs. K.S. Venkata Raman & another
               [ 2017 (1) SCALE 666],

06. These submissions were opposed by Shri R. R. Rathod,

learned counsel for the non-applicant. According to him, the plaintiff

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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

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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.

07. I have heard the learned counsel for the parties at length

and I have given anxious consideration to the respective submissions.

08. 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

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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 Vs. Kuldeep Singh & others [ (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 Vs. Mangilal alias Mangtya [(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].

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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.

09. 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,

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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 Honourble 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

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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

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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

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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

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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 Vs. Nirmala

& others [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.

Judge

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