Supreme Court Quashes Extension of Time for Deposit in Specific Performance Case

In a significant ruling today, the Supreme Court of India quashed the extension of time granted to a plaintiff to deposit the balance sale consideration in a specific performance case. The judgment, delivered by Justice M.R. Shah, emphasized the importance of reasonable explanations for delays and the discretionary power of the court under Section 28 of the Specific Relief Act.

The court held, "Equitable considerations come into play when granting specific performance. The Court cannot allow extensions of time for payment of balance consideration as a matter of course." It further stated, "In the absence of any reasonable explanation, the trial court should not have condoned the huge delay of 853 days in filing the application for extension."

The case involved a civil suit filed by the respondent against the appellant's mother for specific performance of an agreement to sell a property. The trial court had passed a decree in favor of the respondent, directing the payment of the balance sale consideration within a specified time frame. However, the respondent failed to comply within the stipulated period, leading to the appellant's application seeking rescission of the agreement.

The Supreme Court found that the delay of 853 days was not adequately explained by the respondent. It noted the absence of efforts to pay the balance consideration or execute the sale deed within the prescribed time. The court stated, "The appellant was disentitled to an extension due to their failure to perform their part of the contract."

Highlighting the discretionary nature of the court's power under Section 28 of the Specific Relief Act, the judgment emphasized the need for the court to pass orders in line with the justice of the case. The court held that the trial court erred in exercising discretion in favor of the respondent, given the unexplained delay.

Supreme Court allowed the appellant's application to rescind the agreement, while directing the appellant to refund the advance amount paid by the respondent with interest. The court clarified that failure to comply within the specified time would attract a higher interest rate.

Date of Decision: February 24, 2023

Shyamala VS Gundlur Masthan