DATE: 19.03.2026
COURT: High Court of Kerala
BENCH: Justice P. Krishna Kumar
FACTS:
The petitioner, who was the defendant in a
suit for specific performance of an agreement for sale of immovable property,
faced a decree dated 21.11.2001 directing him to execute a sale deed in favour
of the respondent/plaintiff upon the latter depositing the balance sale
consideration of ₹10,000 within one month. The respondent failed to comply with
this time stipulation but subsequently deposited the amount after a delay and
obtained execution of the sale deed through the court process.
Several years later, the petitioner filed
an application seeking rescission of the contract on the ground that the
respondent had not complied with the time condition in the decree and that no
formal extension of time had been granted by the court. The Sub Court dismissed
this application as barred by limitation. Aggrieved, the petitioner approached
the High Court, contending that he had not been served notice in the earlier
proceedings and that the delay in seeking rescission should not be attributed
to him.
ISSUES:
The central issues before the Court were
whether the petitioner’s application for rescission of the contract was barred
by limitation under Article 137 of the Limitation Act, and whether the
respondent’s failure to deposit the balance sale consideration within the
stipulated time rendered the decree inexecutable in the absence of an explicit
extension of time by the court.
JUDGEMENT WITH REASONING:
The High Court dismissed the petition and
upheld the order of the Sub Court, holding that the application for rescission
was clearly barred by limitation. It further ruled that the decree did not
become inexecutable merely because the deposit was made beyond the stipulated
time, as the court’s subsequent actions in permitting execution of the sale
deed amounted to an implicit extension of time.
The Court held that the petitioner’s
application for rescission was filed far beyond the prescribed limitation
period of three years under Article 137 of the Limitation Act. It clarified
that in cases of specific performance, the right to seek rescission accrues
upon the expiry of the time stipulated in the decree for payment of the balance
consideration, not upon receipt of notice in subsequent proceedings. In this
case, the petitioner had knowledge of the proceedings, as records showed that
notice had been duly served and he had entered appearance. Therefore, his
contention based on lack of notice and the doctrine of actus
curiae neminem gravabit was rejected. The Court emphasized that the
petitioner could have independently sought rescission within the limitation
period and was not required to wait for subsequent execution proceedings.
On the issue of executability of the
decree, the Court distinguished the reliance placed on precedent and held that
although the respondent had failed to deposit the amount within the stipulated
time, he had simultaneously filed an application seeking execution of the sale
deed, which was allowed by the court after notice to the petitioner. The Court
reasoned that even in the absence of an explicit order extending time, such
permission inherently amounts to an extension of time under Section 28 of the
Specific Relief Act. Relying on settled legal principles, it held that courts
retain jurisdiction even after passing a decree for specific performance and
may extend time, including implicitly or ex post facto, particularly where the
decree has been acted upon. Consequently, once the court accepted the delayed
deposit and executed the sale deed, the petitioner could not later challenge
the decree’s validity on the ground of absence of an express extension order.
ANALYSIS:
This case underscores the importance of
limitation principles in proceedings arising out of decrees for specific
performance, particularly in relation to applications for rescission under Section
28 of the Specific Relief Act. The Court reaffirmed that such decrees are in
the nature of preliminary decrees, keeping the proceedings alive and enabling
parties to seek appropriate reliefs post-decree. However, this continuing
jurisdiction does not dilute the applicability of limitation. The judgment
clarifies that the right to seek rescission accrues immediately upon the expiry
of the time stipulated in the decree for performance, and any application must
be filed within the prescribed three-year period under Article 137 of the
Limitation Act. By rejecting the petitioner’s plea based on lack of notice, the
Court emphasized that litigants cannot rely on procedural excuses to overcome
statutory limitation, especially when they had knowledge of the proceedings and
the opportunity to act within time.
Further, the decision highlights a
pragmatic and purposive approach to the enforcement of decrees for specific
performance. The Court recognized that while time stipulations in such decrees
are significant, they are not rigidly inflexible, and courts retain the power
to extend time even implicitly. By treating the trial court’s act of accepting
the delayed deposit and executing the sale deed as an implied extension of
time, the judgment prevents technical objections from defeating substantive
justice. It reinforces that once a court has exercised its discretion to permit
performance and the decree has been substantially acted upon, its validity
cannot be challenged on the mere absence of an express order extending time.
This approach balances procedural discipline with equitable considerations,
ensuring that the enforcement of contractual obligations is not derailed by
hyper-technical interpretations.
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