Time For Payment of Sale Consideration Can Be Extended Even In Consent Decree of Specific Performance

Judge gavel Law Insider

Khushi Gupta

Published on: May 26, 2022 at 18:40 IST

The Supreme Court observed that the time for payment of sale consideration can be extended even in a consent decree of specific performance.

The Court added that Section 28 of Specific Relief Act, 1963, not only permits the judgment ­debtors to seek rescission of the contract but also permits extension of time by the Court to pay the amount.

Justices S. Abdul Nazeer and Vikram Nath observed, “This Section seeks to provide complete relief to both the parties in terms of a decree of specific performance in the said suit without having resort to a separate proceeding.”

“Therefore, a suit for specific performance does not come to an end on the passing of a decree and the court which has passed the decree for specific performance retains control over the decree even after the decree has been passed.”

“Section 28 not only permits the judgment ­debtors to seek rescission of the contract but also permits extension of time by the court to pay the amount. The power under this section is discretionary and the court has to pass an order as the justice of the case may require”.

During the pendency of a specific performance suit, a compromise was arrived at between the parties and accordingly the Trial Court decreed the suit in terms of the compromise. As per the compromise decree, the defendant agreed to sell the suit land for a total consideration of Rs.8,78,500.

The plaintiff paid a sum of Rs.7,31,000 immediately to the defendant. He was required to pay the remaining amount of Rs.1,47,500 within a period of one month from the date of the compromise decree. There was a delay of about five days in payment of balance of the amount.

After a passage of nearly 3 years, the application filed by the defending seeking rescission of the contract was dismissed by the Trial Court. This order of the Trial Court was set aside by the High Court and therefore the plaintiff approached the Apex Court.

Allowing the appeal, the Bench observed that the the Trial Court in its discretion has granted extension of time for depositing the balance of sale consideration assigning cogent reasons. Therefore, it restored the order of the Trial Court permitting the appellant to deposit the balance amount of Rs.1,47,500.

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