Konakalla Rama Rao vs Yarlagadda Venkata Subbamma and Others

Syed Shah Mohammed Quadri , J.—These Civil Revision Petitions arise out of the same facts and raise the same questions of law.

The petitioner in these revision petitions is the decree-holder in O.S.101 of 1975 on the file of the Subordinate Judge, Eluru. The said suit was filed for specific performance of the agreement for the sale of the suit property, against judgment-debtor No. 1 and his two minor sons judgment debtors 2 and 3. On 27-2-1976 the suit was decreed granting time to the decree-holder to deposit purchase money on or before 31-5-1976. However, the amount was not deposited within the period specified by the Court, but was deposited long thereafter on 29-8-1977. The decree-holder find 1 E.P.No. 160 of 1978 against all the three judgment-debtors for execution and registration of the sale-deed pursuant to the decree. Judgment-debtor No. 1 filed E.A.No. 995 of 1982 and judgment-debtors 2 and 3 filed E.A.No. 988 of 1982, in the said execution petition, u/s 28 of the Specific Relief Act, praying to grant rescission of the contract for sale dated 9-11-1974 stating that the purchase money was not deposited by the decree-holder within the time specified in the decree. The decree-holder contended that the agreement could not be rescinded in execution proceedings and that the Court had no jurisdiction to entertain the petitions. It was further stated that the judgment-debtors filed application for setting aside the ex parte decree and after the same was dismissed they took the matter in appeal to the High Court, which was also dismissed as not pressed. Therefore the decree had become final and it could not be challenged or set aside. The executing Court allowed the said petitions (E.As.) on 31-3-1987. Against the order of the learned Subordinate Judge in E.A.No. 995 of 1982, C.R.P.No. 1985 of 1987 is preferred and against the order in E. A. 988 of 1982, C.R.P.No. 2531 of 1987 is preferred. When these C.R.Ps. came up before Ramanujulu Naidu, J., the learned Judge framed the following questions:

(1) Whether the successful plaintiff in a suit for specific performance of an agreement of sale of Immovable property can deposit into the Court, that passed the decree in his favour, the balance of consideration due under the agreement after expiry of the date stipulated under the agreement without filing an application for extention of time.

(2) In case he chooses to make an application, is he bound to make the application to the Court that passed the decree and not to the Court where he seeks to execute the decree?

(3) Even if no such deposit is made by him, is not this Court empowered to grant extension of time without an application when the matter comes up before this Court and when this Court is satisfied that all the equities are in his favour?

(4) In any event once the deposit is made after expiry of the period prescribed under the decree, would not this Court be justified when the matter comes up before this Court to condone the delay and refuse to assist the unsuccessful seller to rescind the decree when once this Court is satisfied that there are no equities in favour of the seller?

The learned Judge observed that in view of the importance of the questions the revisions required to be decided by a Division Bench of this Court. Accordingly these C.R.Ps. have come up before us.

Sri T. Veerabhadraiah, the learned counsel for the petitioner in these revision petitions, contends that the applications filed by the judgment-debtors in the execution petition to rescind the contract for the sale of suit property are misconceived and that the learned Subordinate Judge had no jurisdiction to entertain much less to allow them in execution proceedings.

Sri V.L.N.G.K. Murthy, on the other hand, contends that no application was filed extending the time for payment of the amount, therefore, no notice can be taken of depositing of amounts by the decree holder after due date. He further contends that the executing Court is the same as the Court which granted the decree, therefore, the Court had jurisdiction to entertain the application of the judgment-debtors filed u/s 28 of the Specific Relief Act.

To appreciate the contention of the learned counsel for the parties , it would be useful to read Section 28 of the Specific Relief Act, 1963 (for short "the Act") which is in the following terms:-

"28. Rescission in certain circumstances of contracts for the sale or lease of immovable property, the specific performance of which has been decreed:- (1) Where in any suit a decree for specific performance of a contract for the sale or lease of the immovable property has been made and purchaser or lessee does not within the period allowed by the decree or such further period as the Court may allow, pay the purchase money or other sum which the Court has ordered him to pay, the vendor or lessor may apply in the same suit in which the decree is made, to have the contract rescinded and on such application the court may, by order, rescind the contract either so far as regards the party in default or altogether, as the justice of the case may require.

(2) Where a contract is rescinded under Sub-section (1), the Court-

(a) shall direct the purchaser or lessees, if he has obtained possession of the property under the contract, to restore such possession to the vendor or lessor, and

(b) may direct payment to the vendor or lessor of all the rents and profits which have accrued in respect of the property from the date on which possession was so obtained by the purchaser or lessee until restoration of possession to the vendor or lessor, and, if the justice of the case so requires, the refund of any sum paid by the vendee or lessee as earnest money or deposit in connection with the contract.

(3) If the purchaser or lesee pays the purchase money or other sum which he is ordered to pay under the decree within the period referred to in Sub-section (1), the Court may. on application made in the same suit, award the purchaser or lessee such further relief as he may be entitled to, including in appropriate cases all or any of the following reliefs, namely-

(a) the execution of a proper conveyance or lease by the vendor or lessor;

(b) the delivery of possession, or partition and separate possession, of the property on the execution of such conveyance or lease.

(4) No separate suit in respect of any relief which may be claimed under this section shall lie at the instance of a vendor, purchaser, lessor or lessee, as the case may be.

(5) The costs of any proceedings under this section shall be in the discretion of the Court."

This is a new section introduced by Specific Relief Act of 1963. Sub-sections (1) and (2) deal with the situation arising out of non-compliance of condition regarding deposit of purchase money by the purchaser or the lessee contained in the decree granting specific performance of contract for the sale or lease of immovable properly and Sub-section (3) deals with the reliefs to be provided if the purchase money is deposited by the purchaser or lessee. Under Sub-section (1) of Section 28 of the Act, discretion is given to the Court to rescind the contract which formed the basis of the decree. It provides that where in any suit a decree for specific performance of a contract for the sale or lease of immovable property has been made allowing time to the purchaser or the lessee to pay purchase money or other sums and the purchaser or the lessee failed to pay the amount within the period specified in the decree or within such further period as the Court may allow, the Court in its discretion may by order rescind the contract either so far as regards the party in default or altogether as the justice of the case may require. Such an order can be passed by the Court on an application made by the vendor or the lessor in the same suit in which the decree is made. Subsection (2) deals with consequential orders that may be passed on rescission of contract for the sale or lease of immovable property under Sub-section (1). Reliefs specified in Sub-section (3) can be granted by the Court on application made in the same suit if the purchaser or the lessee pays the purchase money or other sum in terms of the decree granting specific performance of contract for the sale or lease of immovable property. Sub-section (4) bars separate suit in respect of any of the reliefs which may be claimed u/s 28 at the instance of the vendor, purchaser, lessor or lessee, as the case may be. The option of bringing a separate suit for rescission of a contract or to apply for rescission in the same suit which was available u/s 35(c) of the Specific Relief Act of 1987, does not exist under the 1963 Act.

Now we shall consider the question of maintainability of the applications filed by the judgment-debtors under Sub-section (1) of Section 28 in the execution petition. On the ground that the executing Court is the same which granted the decree, it is contended that the applications filed in execution proceedings maintainable as it would amount to filing the applications in the same suit.

From a combined reading of Sub-sections (1) and (4) of Section 28 it is plain that the relief of rescission of the contract for the sale of the suit property has to be claimed in the same suit and that no separate suit in respect of the reliefs which may be claimed u/s 28 shall lie at the instance of vendor, purchaser, lessor or lessee. Can it be said that as the reliefs cannot be claimed by way of separate suit, the same can be claimed in execution proceedings? We think that the answer should be ''no''. In a suit for specific performance of contract for the sale of immovable property the decree granted by the Court directing the vendor to execute the sale-deed on depositing the purchase money, if any due, within the time specified therein, is in the nature of a preliminary decree and the original Court does not cease to have control of the suit. This being the position, an application either for the relief of extension of time granted in the decree for deposit of purchase money or for the relief of rescission of the contract for the sale of the suit property must be filed in the same suit, not in other proceedings. It would be appropriate to mention here that appeal is a continuation of a suit, but execution proceedings are not. They are independent proceedings. The execution proceedings cannot be regarded as continuation of the suit. The executing Court is concerned with the execution of the decree as it exists and cannot go behind the decree unless such a power is specifically conferred on it under the statute. The applications filed by the judgment-debtors are in the execution proceedings and not in the suit. As stated above, the application had to be filed in the same suit.

However, the learned counsel for the judgment-debtor relied on the judgment of the Supreme Court in Dokku Bhushayya Vs. Katragadda Ramakrishnayya, . In that case the question was whether the provisions of Order 32, Rule 7 C.P.C. which are designed to safeguard the interests of a minor during the pendency of a suit against hostile, negligent or collusive acts of a guardian, would apply to execution proceedings. It is in that context the Supreme Court observed that for purposes of Order 32, Rule 7 C.P.C. the execution proceeding is a continuation of a suit and the rule would apply to an agreement or compromise with reference to an execution proceeding. It was held:

"Though the rule would also apply to an agreement or compromise with reference to an execution proceedings; but just like in the case of a suit, in the case of execution proceedings also, the agreement or compromise shall be one affecting rights of liabilities ascertained or declared by the decree put in execution. As in the case of a suit, so also in the case of an execution of a decree, mere procedural steps not affecting the rights or liabilities so declared are not governed by the provisions."

From a perusal of the above judgment, it is clear to us that the Supreme Court did not lay down a general principle that the execution proceedings are continuation of the suit. Therefore, it follows that the applications filed for rescission of the contract for the sale of the property in question should have been filed by the judgment debtors in ''the same suit, that is, in the suit for specific performance and the application filed in execution proceedings can not be treated as one filed in the same suit.

In Abdul Shaker Sahib v. Abdul Rahiman Sahib, AIR 1923 Madras 284 the question before a Division bench of the Madras High Court was whether default in complying with the condition in the decree with regard to payment of the purchase money within the specified time, would result in dismissal of the suit. The Division Bench of the Madras High Court took the view that the decree passed in a suit for specific performance is in the nature of preliminary decree and that the original Court keeps control over the action and has full power to make just and necessary orders therein including, in appropriate cases, extension of the time. Chief Justice Schwabe pointed out the practice in England and the position u/s 35 of the Specific Relief Act, 1877 in the following words:-

"After the original judgment for specific performance it is the definite practice in England that all consequential relief by reason of any party failing to comply with the terms of the judgment must be sought by application to the Court by which the judgment was passed. Such applications are made by motion in the action showing that in England, after the original judgment the action is by no means ended but remains under the control of the same Court. If the default is made by the purchaser in paying the purchase-money there are several remedies open to the vendor. (1) He may on motion in the action obtain an order fixing a definite time and place for payment and delivery over of the conveyance and title-deed and can, after the expiration of that time, levy execution for the amount, if not paid. (2) He may apply by motion in the action for an order rescinding, not the judgment but the contract, and in order to succeed in such a motion he has to satisfy the Court that there has been a positive refusal to complete, which it may be observed in the present case, the respondent has certainly not proved. A similar right is given by Section 35 of the Specific Relief Act of 1877."

The learned Chief Justice further observed:

"In my judgment this decree is in the nature of a preliminary decree, the original Court keeping control over the action and having full power to make any just and necessary orders therein, including in appropriate cases the extension of the time."

In his concurring judgment Wallace,J., observed:

"But that it is in the nature of a preliminary and not a final decree is, I think, placed beyond doubt by Section 35 of the Specific Relief Act. As I read that �section, it lays down that when a decree for specific performance of a contract of sale has been passed and the purchaser makes default in payment of the sum which the Court has ordered him to pay, the vendor may either file a fresh suit for rescission of the contract or may, in the specific performance suit itself, apply to the Court to rescind the contract. It is perfectly clear that the contract is not determinable or determined by the mere failure to comply with the terms of the decree. It is not determined until the Court orders that it is determined. By the decree for specific performance the Court sets out what it finds the real contract between the parties was, and declares that such a contract exists and gives what it considers a reasonable time within which the contract shall be carried out."

In M. Sakuntala Devi Vs. V. Sakuntala and Others, a Division Bench of our High Court had to consider the question whether an application for execution of the decree for specific performance of the contract for the sale of immovable property was maintainable when the deposit of purchase money was made after the date fixed by the decree. In a suit filed for specific performance of an agreement of reconveyance the parties entered into a compromise in terms of which a decree was passed. According to the terms of the compromise, the amount was to be deposited before the specified date and thereupon the defendant was to execute the sale-deed for the property in question. It was held that Section 28 of the Act did not expressly confer any power on the Court to extend time nor did it prescribe the conditions subject to which the Court might allow further time than that prescribed in the decree for payment of the purchase money. It however expressed the view that after the time has been fixed for payment of purchase money, it cannot be extended later. In that case, it may be noticed, the agreement was one of reconveyance and the time was held to be the essence of the contract. Further, no application was filed in the court, praying for extension of time, which passed the decree which was a compromise decree. The Bench was of the view that the time could not be extended.

K. Kalpana Saraswathi Vs. P.S.S. Somasundaram Chettiar, is a case arising out of the suit filed for specific performance of an agreement for the sale of immovable property subject to mortgage; the Supreme Court granted extension of time to deposit money. While decreeing the suit for specific performance the trial court directed the plaintiff to deposit mortgage amount within certain period. Instead of complying with the direction, the plaintiff got impleaded in the mortgage suit filed by the Bank and got the decree in the suit assigned to herself. The assignment was obtained by her with the intention to swallow up the property in the event of losing the litigation with regard to specific performance. The Supreme Court held that even at the stage of appeal before the Supreme Court the time to make deposit could be extended to enable the plaintiff to get advantage of the agreement to sell in her favour, and accordingly granted time for depositing the amount.

In Smt. Periyakkal and Others Vs. Smt. Dakshyani, the question before the Supreme Court was whether the enlargement of time can be granted u/s 148 C.P.C. when the time was fixed by consent decree. The Supreme Court took the view that on making an order in terms of the compromise, the time for deposit stipulated by the parties became the time allowed by the Court and that gave the Court the jurisdiction to extend the time in appropriate cases. In view of the above pronouncements of the Supreme Court, the judgment of the Division Bench in M. Sakuntala Devi''s case (2 supra) cannot be regarded as good law.

In the instant case the learned Subordinate Judge noted that the decree holder did not deposit the balance of the sale-consideration within the time given in the decree and he did not also file any application for extension of time. He further held that the judgment-debtors need not file application on the original side and that their applications on the execution side were maintainable.

For the above reasons, we hold that the execution applications filed by the judgment-debtors in the execution petition are not maintainable.

The decree-holder filed CM.P.17107 of 1991 in this Court to extend the time granted under decree dated 27-2-1976 in O.S.No. 101 of 1975 on the file of the Subordinate Judge, Eluru, till 29-8-1977 (the date on which the balance of the sale consideration was deposited) and Sri Veerabhadrayya prays that the C.M.P. may be allowed.

In so far as the questions framed by the learned Judge are concerned, we will deal with them here. From the above discussion it is evident that once a decree is passed granting time to the plaintiff-decree holder for deposit of purchase money or any other amount and the decree has become final, the plaintiff-decree holder has to comply with the conditions specified in the decree. Section 148 C.P.C. provides that where any period is fixed or granted by the Court for the doing of any act prescribed or allowed by the Court, the Court may in its discretion enlarge such period from time to time even though the period originally fixed or granted may have expired. If any decree-holder could not deposit the amount directed in a decree for specific performance of the contract for sale and the time so fixed has expired, the appropriate course of action would be to seek extension of time from the Court that passed the decree. Deposit of amount into the Court after the period fixed by the Court would not be in terms of the decree. Even if the amount is received by the Court, that cannot be treated as in compliance with the decree. Having regard to the provisions of Section 148 C.P.C., we answer question No. l referred to above in the negative. In other words, the plaintiff-decree holder in a suit for specific performance of an agreement for sale of immovable property cannot deposit into the Court that passed the decree in his favour the balance of consideration due under the agreement pursuant to the direction in the decree to deposit the amount within the period fixed therein, after the expiry of the date stipulated in the decree without the leave of the Court.

From the above discussion it is also clear that the executing Court is bound by the decree and it cannot alter the terms of the decree, therefore, an application to extend the time for depositing the amount or to condone the delay in depositing the amount, has to be made to the Court that passed the decree and not to the Court where the decree is sought to be executed. The second question is accordingly answered.

In our view, the third and the fourth questions are somewhat widely worded. The power of the High Court depends upon the nature of the jurisdiction which this Court is exercising. For example, the powers of this Court under appeal filed u/s 96 C.P.C. and the powers exercised under Sections 100 and 115 C.P.C. or under Article 227 or under Art. 226 of the Constitution widely differ. What would be open to this Court in appeal u/s 96 C.P.C. would not be open in appeal u/s 100 C.P.C. or proceedings u/s 115 C.P.C. In the present revision petitions u/s 115 C.P.C. which arise out of execution proceedings, this Court will correct only jurisdictional error. In such proceedings, even if this Court is satisfied that the equities are in favour of the plaintiff-decree holder, this Court does not have power to alter the decree in the suit by granting extension of time whether on or without an application. For the above said reasons, we hold that this Court will not be justified in condoning the delay if the amount is deposited after the expiry of the period prescribed by the decree, with a view to refuse to assist the unsuccessful seller to rescind the decree, when the matter comes up before this Court, u/s 115 C.P.C. from execution proceedings as in revisions this Court will correct only errors of jurisdiction committed by the trial Court but will not go into the questions of equities in favour of the parties.

For the reasons stated above, we set aside the orders under revision and allow the revision petitions accordingly. No costs.

C.M.P. 17107/1991:- Having regard to the answers to the questions referred to us, we direct the office to return the civil miscellaneous petition to the petitioner with liberty to file the same in the suit in which the decree for specific performance of contract for the sale of suit property, was passed. Time for presentation is four weeks from the date of returning of the application.