THE HON’BLE SRI JUSTICE SANJAY KUMAR CIVIL REVISION PETITION NO.4557 OF 2006 DATED AUGUST, 2010 BETWEEN Suggula Venkata Subrahmanyam And others. … Petitioners And Desu Venkata Rama Rao And others. … Respondents THE HON’BLE SRI JUSTICE SANJAY KUMAR CIVIL REVISION PETITION NO.4557 OF 2006 O R D E R Arising from the order dated 05.06.2006 passed by the Principal Senior Civil Judge, Tenali, in E.A.No.525 of 2001 in E.P.No.70 of 2000 in O.S.No.250 of 1989, this Civil Revision Petition focuses on the powers of the executing Court under Section 47 of the Code of Civil Procedure, 1908 (CPC). Facts germane to this adjudication: The first respondent herein filed the suit O.S.No.250 of 1989 for specific performance of agreement of sale dated 19.10.1987 executed by the petitioners. The said suit was decreed on 14.07.1994 directing the petitioners to execute a sale deed in favour of the first respondent in respect of the plaint schedule property within three months and if they failed to do so, the first respondent was given the liberty to get the sale deed executed through due process of law. The first respondent had to pay a total sale consideration of Rs.1,10,000/- as per the terms of the agreement. Out of the same, admittedly he had paid only Rs.43,000/- by the date of institution of the suit and the balance of Rs.67,000/- remained outstanding. The first respondent filed E.P.No.70 of 2000 on 31.01.2000 seeking execution of the aforestated decree. He died thereafter and his legal representatives, respondents 2 to 6, were brought on record. The petitioners filed I.A.No.871 of 2001 in O.S.No.250 of 1989 under Section 28 of the Specific Relief Act, 1963 (for brevity, ‘the Act of 1963’) seeking rescission of the agreement of sale on the ground that the decree holder had failed to deposit the balance sale consideration and obtain execution of the sale deed within the three month period stipulated in the decree dated 14.07.1994. However, the trial Court by order dated 02.09.2004 dismissed the said application, leading to the filing of C.R.P.No.1878 of 2005 before this Court. By order dated 20.09.2005 this Court dismissed the C.R.P. confirming the order of the trial Court. Simultaneously, the petitioners filed an application in E.A.No.525 of 2001 in E.P.No.70 of 2000 under Section 47 CPC seeking dismissal of the E.P. It was the case of the petitioners that the E.P. was not maintainable on three grounds, viz., that it was not filed after the expiry of the three month period stipulated in the decree, no notice was ordered under Order XXI Rule 22 CPC and thirdly, no calculation memo was filed along with the draft sale deed indicating as to how the amount of Rs.57,785/- was arrived at by the decree holder. The petitioners contended that the decree holder should have deposited the balance sale consideration along with interest, which was not done and on the other hand, he had deposited the sum of Rs.57,785/- only upon the direction of the Court, which fell far short of the actual balance consideration along with interest payable by that date. Urging these grounds the petitioners sought dismissal of the E.P. By order dated 05.06.2006 the executing Court allowed the execution petition itself while passing an order in the E.A. It held that the present decree holders were entitled to get the regular sale deed executed after depositing the balance sale consideration along with interest at 24% per annum from 19.11.1987 and on such deposit, if the petitioners failed to execute the sale deed the decree holders were given the liberty to obtain the sale deed as per law. Thirty days time was given to the decree holders to deposit the balance amounts due as aforestated and obtain the sale deed. Hence, the present Civil Revision Petition under Section 115 CPC. By order dated 15.09.2006, this Court granted interim stay of all further proceedings pursuant to the aforestated order. Heard Sri Ravi Shankar Jandhyala, learned counsel for the petitioners and Sri J.U.M.V.Prasad, learned counsel for the respondents. Be it noted that after the conclusion of the hearing in the case it came to light that the Office had misplaced the Vakalat filed by Sri J.U.M.V.Prasad for respondents 2 to 5. The subsequent Vakalat filed by him for respondent 6 was the only one available in the file. The matter was therefore adjourned after the judgment was reserved to enable the learned counsel to file his Vakalat for respondents 2 to 5 afresh. Though Sri Ravi Shankar Jandhyala, learned counsel, sought to assail the decree dated 14.07.1994 in O.S.No.250 of 1989 on merits stating that the decree holder failed to discharge the mortgage debt of the petitioners which resulted in the sale of the mortgaged property, it is not open to the petitioners to reopen or challenge the decree in the execution proceedings. The ex parte decree dated 14.07.1994 in O.S.No.250 of 1989 attained finality and it is not for this Court, in execution proceedings, to examine the validity of the said decree. It is however to be noticed that the said decree required the execution of the sale deed to be obtained within three months, i.e., by 14.10.1994. Liberty was given to the decree holder to get the same executed through due process of law in the event the petitioners, being the judgment debtors in the suit, failed to do so. It is an admitted fact that the sale consideration was not paid fully by the date of institution of the suit. Further, the fifth respondent, being the son of the deceased decree holder, speaking as R.W.1 in these proceedings admitted that neither he nor his father had deposited the balance sale consideration along with interest in Court within the time stipulated by the decree for obtaining the regular sale deed. He further stated that it was only upon the direction of the Court that his father deposited the sum of Rs.57,785/- in the execution proceedings in February, 2000 towards sale consideration. He also admitted that the balance amount was yet to be paid. It is relevant to note that under Section 28(1) of the Act of 1963 it was open to the decree holder to seek enlargement of the time for paying the purchase money. However, no such steps were taken. It was only in the year 2000, six years after the decree, that the decree holder straightaway initiated execution proceedings by filing E.P.No.70 of 2000. Though Section 28(3) of the Act of 1963 provides for an application being made in the same suit by the purchaser for obtaining specific performance pursuant to the decree, Order XXI Rule-32(5) CPC continues to remain on the statute book. Therefore, an execution petition for obtaining specific performance pursuant to a decree cannot be said to be not maintainable. The finding of the executing Court that E.P.No.70 of 2000 was maintainable having been filed within 12 years after the decree is therefore unassailable. However, the approach of the executing Court in holding that the execution petition should be ordered automatically as it was filed within time, i.e. within 12 years from the date of the decree, is incorrect. When the decree dated 14.07.1994 specifically stipulated a three month time period and there was no petition seeking enlargement of that time it is perverse on the part of the executing Court to order the execution petition without considering whether it was filed within ‘reasonable time’. All the more so, when the decree holder did not deny the fact that the balance sale consideration had not been deposited within the time stipulated, which would be a condition precedent for obtaining the sale deed in terms of the agreement of sale dated 19.10.1987. Merely because payment of the balance consideration was not explicitly spelt out in the decree it can hardly be assumed that execution of the sale deed could be obtained by the decree holder without complying with his part of the bargain, i.e., payment of the balance consideration. I n CHERUKURI VENKATA RAO V/s. BRAHMOJOSYULA BALA GANGADHARA SHARMA[1] a Division Bench of this Court while dealing with a decree for specific performance which did not prescribe any time limit held that even where no time is prescribed in the decree, it must be read as ‘reasonable time’; the length of reasonable time being a question of fact in each case, having regard to the facts and circumstances in that case. On consideration, the Division Bench was of the opinion that if no time is fixed, a period of three years should be the outer limit being the time specified for enforcing such agreement of sale. In fact, the Division Bench was of the opinion that though three years is the outer limit, it should be much sooner. The construction placed by the executing Court upon the decree that the decree holder could not obtain execution of the decree till expiry of three months from the date of the decree is opposed to the language of the decree itself. The decree holder was directed to obtain the execution of the sale deed ‘within three months’ from the date of the decree. Therefore, there was no temporal proscription with regard to the execution as construed by the executing Court. The further observation of the executing Court that there was no specific time fixed for deposit of the balance sale consideration and that there was no direction to the decree holder to pay the balance sale consideration, is opposed to the admitted facts of the case demonstrating that the decree holder had to pay the balance sale consideration along with interest in accordance with the agreement of sale dated 19.10.1987. It can hardly be expected that the judgment debtors or even the Court would allow the decree holder to obtain the execution of the sale deed in respect of the plaint schedule property without the decree holder paying the sale consideration. The finding of the executing Court that if at this juncture the decree holder is not permitted to deposit the balance sale consideration equity would not be done, results in a travesty of justice. It is to be noticed that the decree holder came forward with the paltry sum of Rs.57,785/- only upon the direction of the executing Court and paid the same in February, 2000, well after the expiry of the time stipulation in the decree. The decree holder was liable to pay a substantial sum by that date, running into over a lakh taking into account the interest burden computed at 24% per annum as per the terms of the agreement of sale. It is stated that pursuant to the order under challenge a sum of nearly Rs.2,00,000./- was deposited by the respondents in September, 2006. Be that as it may, the fact remains that even by the date of the filing of the execution petition, the decree holders failed to deposit the entire sale consideration along with interest. I n K.KALPANA SARASWATHI V/s. P.S.S.SOMASUNDARAM CHETTIAR[2], the Supreme Court observed that specific performance was an equitable relief and that he who seeks such equity can be put on terms to ensure equity is done to the opposite party while granting the relief. In the facts obtaining in that case, the Supreme Court permitted enlargement of time for making the deposit so as to permit the plaintiff in the suit to get the advantage of the agreement of sale. However, in V.S.PALANICHAMY CHETTIAR FIRM V/s. C.ALAGAPPAN[3]; the Supreme Court, while dealing with an agreement of sale executed 19 years prior thereto, taking note of the fact that there was no explanation forthcoming as to why the balance amount of consideration had not been deposited within the time granted by the Court and where no application had been made under Section 28 of the Act of 1963 for extension of such time, held that discretion could not be exercised in favour of such decree holders and no extension of time could be granted to them to comply with the decree. The observations of the Supreme Court in this regard are relevant: “When the trial Court and the executing Court are same, the executing Court can entertain the application for extension of time though the application is to be treated as one filed in the main suit. On the same analogy, the vendor judgment-holder can also seek rescission of the contract of sale or take up this plea in defence to bar the execution of the decree. The agreement of sale in question was entered into about 19 years ago. No explanation was forthcoming as to why the balance amount of consideration could not be deposited within time granted by the Court and why no application was made under Section 28 of the Act seeking extension of time of this period. Extension of time for making payment of balance amount of consideration in terms of a decree was sought only after 5 years of passing of the decree by the trial Court and 3 years of its confirmation by the appellate Court. ………. Under Article 54 of the Limitation Act, 3 years period is prescribed for filing the suit for specific performance of a contract of sale from the date of the agreement or when the cause of action arises. Merely because a suit is filed within the prescribed period of limitation does not absolve the vendee-plaintiff from showing as to whether he was ready and willing to perform his part of agreement and if there was non- performance was that on account of any obstacle put by the vendor or otherwise. Provisions to grant specific performance of an agreement are quite stringent. Equitable considerations come into play. Court has to see all the attendant circumstances including if the vendee has conducted himself in a reasonable manner under the contract of sale. That being the position of law for filing the suit for specific performance, can the court as a matter of course allow extension of time for making payment of balance amount of consideration in terms of a decree after 5 years of passing of the decree by the trial Court and 3 years of its confirmation by the appellate Court? It is not the case of the respondent decree-holder that on account of any fault on the part of the vendor- judgment-debtor, the amount could not be deposited as per the decree. That being the position, if now time is granted, that would be going beyond the period of limitation prescribed for filing of the suit for specific performance of the agreement though this provision may not be strictly applicable. It is nevertheless an important circumstance to be considered by the Court. That apart, no explanation whatsoever is coming from the decree-holder-respondents as to why they did not pay the balance amount of consideration as per the decree except what the High Court itself thought fit to comment which is certainly not borne out from the record. Equity demands that discretion be not exercised in favour of the decree-holder-respondents and no extension of time be granted to them to comply with the decree.” I n KUMAR DHIRENDRA MULLICK V/s. TIVOLI PARK APARTMENTS (P) LTD.[4], the decision in C.ALAGAPPAN3 was distinguished by the Supreme Court on facts and the Court held that where the decree holder was vigilant, which was not the case in C.ALAGAPPAN3, it would have the power to enlarge the time in favour of the decree holder to pay the amount or perform the conditions mentioned in the decree for specific performance. In PAGADALA PEDD YADAIAH V/s. K.ANNAPURNAMMA[5], a learned Judge of this Court was dealing with a decree which was somewhat similar in terms to the one on hand. The defendants therein were directed to execute the regular sale deed in respect of the suit schedule property on receipt of the balance sale consideration within three months. The learned Judge held that once the decree holder failed to adhere to the time frame fixed by the decree and failed to seek extension of time, the Court below ought not to have enlarged the time for making such deposit in executing proceedings. Sri J.U.M.V.Prasad, learned counsel, contended that the said judgment is distinguishable on facts as there was a stipulation therein with regard to the payment of balance sale consideration which is missing in the present case. However, notwithstanding such omission the Court would hardly have directed the petitioners herein to execute the sale deed in favour of the decree holder within three months without their receiving the balance sale consideration which was admittedly due. The mere lack of stipulation in express terms in the decree with regard to payment of the balance sale consideration does not mean that the petitioners herein were bound to execute the decree without receiving such consideration. Sri J.U.M.V.Prasad, learned counsel, sought to rely on facts anterior to the filing of the suit to prove his clients’ bona fides. Apart from the fact that these details do not form part of the record in the present case, these factual aspects being prior in point of time to the filing of the suit itself, have no bearing or significance as regards the glaring inaction on the part of the decree holders after the passing of the decree. Further, the reliance placed by the learned counsel on select extracts from KUMAR DHIRENDRA MULLICK4 is of no avail to him as those observations have to be read contextually. Relevant to note, the Supreme Court in KUMAR DHIRENDRA MULLICK4 only distinguished the ratio in C.ALAGAPPAN3 on facts and the same was not disagreed with. Reference may also be made to the judgment of the Division Bench of this Court in CHERUKURI VENKATA RAO1. In that case, the decree did not provide the time stipulation for depositing the balance sale consideration. The execution of the sale deed was to follow the said deposit. The decree was dated 22.03.1973. The execution petition was filed in 1981 and the balance consideration was paid just prior thereto. Faced with these facts, the Division Bench observed: “9. Treating the petitioner’s application as E.P. too does not mean automatically that since it is filed within twelve years, it ought to be ordered automatically. Can it be said that inasmuch as the decree did not prescribe the time for depositing the balance consideration, it is open to the purchaser to deposit at any time within twelve years? Cannot the concept of 'reasonable period' (be, sic) imported in such a context? This is the question that we have to answer. On this question it is well to remember that the relief of specific performance is an equitable remedy. Indeed, the Specific Relief Act itself is based upon equity, fair play and good conscience. It has been held by the Supreme Court in H.I.Trust vs. Haridas Mundhra (AIR 1972 SC 1826) that the contract between the parties is not extinguished by the passing of a decree for specific performance, and that the contract subsists notwithstanding the passing of the decree; (vide paragraph-22). The purchaser cannot, and should not be allowed to take unfair advantage of the situation. He must act with reasonable diligence. The application for execution of the sale-deed and/or for delivery of possession, whether by way of an E.P. or an application under Section 28(3), must therefore be made within a reasonable time. What is 'reasonable time' is a question of fact to be decided in the facts and circumstances of a given case. No hard and fast rule can be enunciated in that behalf. However, it may be borne in mind that the period of limitation prescribed by the Limitation Act for enforcing an agreement of sale is three years from the date fixed for the purpose, or, if no such date is fixed, when the plaintiff has notice that performance is refused; (Art.54). The said period must be treated as the outer limit, generally speaking. Indeed, it should be much sooner.” Viewed thus, the facts of the present case demonstrate that the decree holder being bound by a time frame of three months stipulated in the decree dated 14.07.1994, failed to pay the balance sale consideration and obtain execution of the sale deed from the petitioners voluntarily within the said time or thereafter, through process of Court. He did not seek enlargement of time to make the deposit under Section 28(1) of the Act of 1963. Till the filing of the execution petition nearly six years thereafter in the year 2000, the decree holder did not deposit any amount towards the balance sale consideration. Even then, it was only upon the direction of the executing Court that he deposited the sum of Rs.57,785/- which was not commensurate with the sale consideration along with the interest payable by that date. As pointed out in CHERUKURI VENKATA RAO1, when law stipulates a three year limitation for seeking specific performance of an agreement of sale it can hardly be accepted that a party who obtained a decree for such specific performance can enlarge the time for such performance without performing his side of the bargain, by merely filing an execution petition anytime within 12 years from the date of such decree. Permitting the same would be nothing short of abusing this equitable remedy. It is no doubt true that the application filed by the petitioners seeking rescission of the agreement of sale stood dismissed and was confirmed by this Court in C.R.P.No.1878 of 2005. However, the same does not bar the executing Court from examining all the questions relating to the execution of the decree under Section 47 of the CPC. As pointed out in CHERUKURI VENKATA RAO1 even if no application is filed seeking rescission of an agreement owing to the failure of the decree holder, the decree holder still has to apply by way of an execution petition or an application under Section 28(3) of the Act of 1963 for execution of a sale deed and it is for the executing Court to consider whether any relief could be granted in such petition notwithstanding the filing of and the result in the application, if any, seeking rescission of the agreement. The decree dated 14.07.1994 in O.S.No.250 of 1989 was rendered incapable of execution in the light of the facts obtaining and the application filed by the petitioners under Section 47 CPC rightly beseeched acceptance. The order dated 05.06.2006 passed by the executing Court in E.A.No.525 of 2001 in E.P.No.70 of 2000 in O.S.No.250 of 1989 holding to the contrary is therefore liable to be set aside and is accordingly so done. The Civil Revision Petition is allowed holding that E.P.No.70 of 2000 seeking execution of the decree dated 14.07.1994 in O.S.No.250 of 1989 was not maintainable. The said E.P. shall stand dismissed. In the circumstances of the case, there shall be no order as to costs. ____________________ SANJAY KUMAR, J. _________AUGUST, 2010 PGS/VGSR *THE HON’BLE SRI JUSTICE SANJAY KUMAR +CIVIL REVISION PETITION NO.4557 OF 2006 % 20-08-2010 # Suggula Venkata Subrahmanyam And others. … Petitioners Vs. $ Desu Venkata Rama Rao And others. … Respondents <GIST: >HEAD NOTE: ! Counsel for petitioners : Sri Ravi Shankar Jandhyala ^ Counsel for respondents : Sri J.U.M.V.Prasad ? CASES REFERRED: 1) 1987 (2) ALT 229 2) AIR 1980 SC 512 3) AIR 1999 SC 918 4) (2005) 9 SCC 262 5) 2001 (5) ALT 417 [1] 1987 (2) ALT 229 [2] AIR 1980 SC 512 [3] AIR 1999 SC 918 [4] (2005) 9 SCC 262 [5] 2001 (5) ALT 417