The Supreme Court of India upheld the jurisdiction of an Execution Court to entertain applications for extension of time or rescission of contract under Section 28 of the Specific Relief Act, 1963.

In addressing to the question in case of Ishwar (Since Deceased) Thr. LRS & Ors vs Bhim Singh & Anr the Supreme Court examines whether the Execution Court had the authority (jurisdiction) to handle applications for both the cancellation of the sale contract (rescission) and the granting of more time for the buyer to pay (extension of time), particularly when those requests stemmed from a decree issued by a higher court.

Case Background: The respondents filed a suit for specific performance of an agreement to sell against the appellants. The trial court decreed the suit in part, directing the appellants to refund the earnest money. The appellate court allowed the respondents' appeal and directed the appellants to execute the sale deed upon payment of the balance sale consideration within two months. Following the dismissal of their appeal against the appellate court's decree, the appellants sought rescission of the contract under Section 28 of the Specific Relief Act, 1963, while the respondents sought permission to deposit the balance consideration.

The Supreme Court further elaborated the jurisdiction based on CPC and observed the following, "Thus, an application under Section 28 of the 1963 Act, either for rescission 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."

On the expansive Interpretation of Section 28 of the Act the Apex court held that "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."

Keeping the Substantial Justice Paramount the Court conclusively held that "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."

The Court, invoking its discretionary jurisdiction under Article 136 of the Constitution, dismissed the appeal, finding that substantial justice had been served. The Court highlighted the respondents' consistent display of intent to fulfill their contractual obligations and the absence of any deliberate fault on their part.4 The Court concluded that interfering solely on the technicality of the application being handled on the execution side would result in a grave injustice to the decree holders, particularly as the judgment debtors themselves had approached the Execution Court for relief under Section 28(1).

The Court decided that the Execution Court does have the authority and observed that it is based on the reasoning as follows:

The Specific Relief Act of 1963: The Court interpreted Section 28 of this Act broadly. They ruled that the phrase "may apply in the same suit" means that the initial court that handled the case can manage these types of applications, even if a higher court ultimately issued the final ruling.

The Code of Civil Procedure: The Court referenced Section 37 of this Code, which defines the "court which passed a decree." They determined that this definition encompasses the original trial court, giving it the power to address matters like extensions of time or contract cancellations.... The Court acknowledged that, ideally, these applications should be handled as formal parts of the original lawsuit. However, they decided not to overturn the lower court's ruling in this specific case.

The Buyers Acted In Good Faith: The Court found that the buyers consistently demonstrated their willingness to pay the remaining money for the property. They were only prevented from doing so because of the ongoing legal challenges.

The Sellers Contributed To The Delays: The sellers repeatedly appealed the case, which prolonged the process and made it difficult for the buyers to finalize the purchase1213. Therefore, overturning the lower court's decision on a technicality would have unfairly penalized the buyers who were ready to fulfill their side of the agreement.

Important Observations:

**"It is settled law that an appeal is a continuation of the suit."

"The procedure is the handmaid for justice and unless the procedure touches upon jurisdictional issue, it should be moulded to subserve substantial justice."

"Technicalities would not stand in the way to subserve substantive justice."

**"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." ** In essence, the Supreme Court emphasized practicality and fairness over rigid adherence to procedure when it came to ensuring that justice was served.

Coram: J. B. Pardiwala and Manoj Misra.
Between: Ishwar (Since Deceased) Thr. LRS & Ors vs Bhim Singh & Anr.
DOJ: 03-09-2024