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Second Appeal No. 261 of 1961, decided on 15th June 1965.

‑Suit for specific performance of contract of sale‑Decree with condition that plaintiff should deposit certain amount within specified time failing which suit "shall stand dismissed''‑Decree passed, held, preliminary in nature‑Court has power to extend time under S. 148, C. P. C. even after period specified for payment has expired.

The decree in an action for specific performance of contract, no matter whatever may be the form in which it may be drawn up is, in the eye of law, a preliminary decree and as such, even when a default clause is attached thereto, is not dead but pending, though in a comatose condition. Necessarily the Court retains control over the action and has, therefore, jurisdiction to enlarge time regardless of the default clause con tained in the decree.

Where, therefore, a decree for specific performance of a contract of sale has been passed with a condition that the plaintiff should deposit the purchase amount within a specified time and the plaintiff makes default in payment of the sum which the Court has ordered him to pay, the Court retains the jurisdiction to extend time under section 148 of the Civil Procedure Code, 1908 even though the decree passed contained a default clause providing that in default of the plaintiff to make the requisite payment within the period fixed by the Court the suit shall stand dismissed. Such power to extend time vests not only in the original Court but can be exercised by the appellate Court as well.

Shaikh Ayezuddin v. Priya Sankar Choudhury 6 D L R 595 considered.

Abdul Shaker Sahib v. Abdul Fahiman Sahib I L R 46 Mad. 148: Jyotish Chandra Sen v. Rukmini Ballav Sen and others 62 C W N 588 and Goku Prasad v. Fattelal A I R 1946 Nag. 29 ref.

K. Hossain for Appellants.

Md. Fazlul Karim for Respondents.

This appeal is by the plaintiffs and it arises out of a suit instituted by them for specific performance of a contract of sale in respect of some lands. The Court of first instance ultimately decreed the suit in the following terms:

"that the suit be decreed on contest with costs against the defendants 1 and 2 only and dismissed for want of cause of action against defendants 3 series. Plaintiffs be entitled to sp. performance of the contract upon deposit of Rs. 250 within 15 days. Upon the deposit, defendant No. 1 shall execute and register the kobala within one month from the date of deposit failing which the Court shall execute the deed which shall be binding on him. In case plaintiffs fail to make the deposit by 15‑5‑60 the suit shall stand dismissed."

It so happened that the date fixed for deposit, I.e., 15th May 1960 was a Sunday. So, on the next following day, i.e., the 16th May 1960, the plaintiffs instead of making the deposit filed a petition praying for time for deposit of the requisite amount, to wit, Rs. 250. Thereon the learned Munsif passed the following orders:‑

"Plaintiff files a petition praying for time to deposit Rs. 250 on the ground stated in the petition. The prayer is rejected. The suit is dismissed on contest in terms of the judgment passed on 30‑4‑60."

Against this an appeal was taken before the learned District Judge, who, however, dismissed the appeal and maintained the judgment and decree of the learned trial Court.

Thus the main point or for the matter of that the only point arising and actual canvassed for decision is whether the time fixed by the Court with a default clause in a suit for specific per formance of a contract can be extended after the default clause has come into operation.

Mr. K. Hossain, appearing on behalf of the plaintiffs- appellants, contends that even in the contingency referred to above, the Court retains jurisdiction to extend time and the fact that there was a default clause to the effect that the suit would stand dismissed in case the plaintiff failed to deposit the requisite sum within the period fixed by the Court and that the plaintiff has actually brought himself within the mischief of the said default clause in consequence of his failure to comply with its requirement can make no difference with regard to the said jurisdiction conferred upon the Court under section 148 of the Code of Civil Procedure. This section provides:

"Enlargement of time where any period is fixed or granted by the Court for the doing of any act prescribed or allowed by this Code, the Court may, in its discretion, from time to time, enlarge such period even though the period originally fixed or granted may have expired."

Mr. Md. Fazlul Karim, appearing on behalf of the defend ants‑respondents, does not dispute that the Court has power under section 148 of the Code of Civil Procedure to extend time in the circumstances contemplated therein. His contention, however, is that where the Court imposes a default clause couched in terms of finality, i.e., to the effect that the suit shall stand dismissed in default of compliance with the condition imposed, that completely exhausts the said power vested in it so that it is no longer available for further exercise so as to nullify the earlier final order that has already come into force. In support of this contention he relises on the case of Shaikh Ayezuddin v. Priya Shankar Choudhury (6 D L R 595) where in it has been held:‑

"Where a party is required to do something under a decree or order and a time limit is prescribed for doing it, the Court which passed the decree or order has no juris diction to extend the time. That is undoubtedly the general rule, but it is subject to the qualification that where the decree or order which fixes the time is not intended to be final and the Court still retains control over the proceed ings, the Court may extend time under section 148, Civil Procedure Code. A distinction is to be drawn between a case when the proceeding has terminated and one in which it has not terminated and the Court still retains control over it. Whether the Court still retains control over the proceed ing or not must be determined upon the nature of the proceeding and the order passed therein. If that order is a final order, the Court is functus officio and it cannot enlarge time."

As I read it, the afore‑cited proposition, too, clearly contemp lates an exception with regard to proceedings which do not terminate with the order in question and the law permits some further action to be taken by one party or the other therein. In other words, there is a distinction between a case in which the proceeding is terminated and a case in which the proceeding does not terminate so that the Court still retains control over it. With respect to the former category, the order is final in the sense that Court becomes functus officio and thus ceases to have jurisdiction to grant any more extension. In regard to the latter, however, the position appears to be otherwise, for the simple reason, as shall be presently seen, that a default clause of the nature, referred to above, in such a case is as a matter of fact in conflict with the prescribed procedure applicable thereto.

It may be worthwhile to pause here for a moment to see whether a suit for specific performance of contract comes under the first or the second category, i.e., whether the action is alive or dead. The decree passed in an action under consideration merely declared the rights of the parties and the failure of the plaintiff to pay as directed the amount declared to be payable does not automatically determine the contract. For such determination in the event of the said failure the party concerned has to take further action provided by the relevant statute and it is only upon a further order made by the Court thereon that the action may be said to come to an end, i.e., terminate. This is clearly indicated by section 35 of the Specific Relief Act, which says:‑

"Any person interested in a contract may sue to have it rescinded, and such rescission may be adjudged by the Court in any of the following cases, namely:‑

(a) where the contract is voidable or terminable by the plaintiff ;

(b) where the contract is unlawful for causes not apparent on its face, and the defendant is more to blame than the plaintiff;

(c) where a decree for specific performance of a contract of sale, or of a contract to take a lease has been made, and the purchaser or lessee makes default in payment of the purchase‑money or other sums which the Court has ordered him to pay.

When the purchaser or lessee is in possession of the subject‑matter, and the Court finds that such possession is wrongful, the Court may also order him to pay to the vendor or lessor the rents and profits, if any, received by him as such possessor.

In the same case, the Court may, by order in the suit in which the decree has been made and not complied with, rescind the contract, either so far as regards the party in default, or altogether as the justice of the case may require."

As to the import of this provision, I think I can do no batter than quote the relevant observations of Wallace, J. In his separate judgment in Abdul Shaker Sahib v. Abdul Rahiman Sahib (I L R 46 Mad. 148). These appearing on pages 159‑161 of the report are as follows:‑

"The form of decree drawn up in the trying Court is the general form adopted in this Presidency for such decree. 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 1 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. . . . . . . . . . . . . . . . . . .

I take it then that where specific performance of sale has not been effected within the period laid down by the decree, it is open, (a) to the purchaser to apply to the Court for an extension of time for payment of the purchase money and (b) to the vendor to apply either for a final and peremptory order for specific performance or for an order rescinding the contract either immediately or to follow autocratically on the expiry of the period peremptorily granted. The original action is thus open until a final decree or order of such a nature and scope is passed, and the original Court has until then ample power to extend the time for specific performance."

In the same case Schwabe, C. J., having referred to the various a remedies open to the vendor in default of payment of the purchase money by the purchaser has observed:‑

"It would seen to be absurd to hold that the mere fact that a date of completion is fixed in the original decree puts an end to the action and that the control of the Original Court expires on the expiration of that date and thus substitute in effect for all the known remedies stated above the simple expedient of treating the action and the decree as dead for all purposes and leaving the vendor in undisturbed possession of property which is not his and may, as in the present case, be of a greater value than the contract purchase money, which perhaps by some accident the purchaser has failed to produce on the date fixed . . . . . . . . . . . .

In my judgment, it was not intended by this decree that the payment of the Rs. 4,000 by the date named should be a condition, failing to comply with which would deprive the successful plaintiff of all his rights under the decree. 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. If I am wrong in this and the proper interpretation of this decree is as contended for by the appellant, then, in my judgment, this decree is wrong and I should, if necessary, order that it be set right by eliminating the condition which ought not to have been imposed upon the successful plain tiffs, except at a much later date and upon definite refusal by him to complete. Even in that case such condition could only be imposed at the request of the defendant who, as I pointed out, has other various remedies. As long as this form of decree is understood to be of a preliminary nature and the Court still retains full power over the action, I do not see any particular harm in the continuance of its use. Some words such as "further consideration reserved" should be added; but, personally, I should be prepared to say that the appropriate forms are those set out in Setor (sic)."

It is thus clear that the decree in an action for specific performance of contract, no matter whatever may be the form in which it may be drawn up, is, in the eye of law, a preliminary decree, and as such, even where a default clause is attached thereto, is not dead but pending, though in a comatose condition. Necessarily the Court retains control over the action and has therefore, jurisdiction to enlarge time regardless of the said default clause.

Reference may also be profitably made here to some other authorities cited by Mr. Kamal Hossain.

One of them is the case of Jyotish Chandra Sen v. Rukmini Ballav Sen and others (62 C W N 588). In this case upon an additional written statement filed by a pro‑defendant the Court ordered Payment by him of a certain sum as cost to the plaintiff by a fixed date subject to the condition that "in default of payment of costs the additional written statement will stand rejected." Costs were not paid by the date fixed and an application was made praying for extension of time. Ultimately the learned Court in spite of the objection of the plaintiff passed an order extending the time for payment of the costs and on deposit of the requisite amount within the extended date the additional written statement was accepted. In these circumstances, it was held:‑

"Order VIII, rule 9 of the Code of Civil Procedure provides that an additional written statement may be accepted by the leave of the Court on such terms as the Court may think fit. Where one of the terms is that certain amount would be paid within a fixed time that is an act allowed by the Code and when a period is fixed by the Court for doing that act, section 148 of the Code, in terms applies. It is then open to the Court to enlarge this period even though the period originally fixed or granted might have expired.

The fact that there was a default clause that if the payment be not made within a specified time, the applica tion will stand dismissed, does not take away from the Court's power to enlarge the time under section 148 of the Code of Civil Procedure."

It, however, appears rather difficult to reconcile the view taken in this case with the proposition laid down in the above mentioned decision of this Court in Shaikh Ayezuddin v. Priya Shankar Chowdhury arid in that view of the matter, I cannot, I am afraid, follow this.

The next case relied upon in this behalf is Goku Prasad v. Fattelal (A I R 1946 Nag. 29). In this case the order passed by the learned lower Court concerned was exactly similar to the one with which I am concerned in this case. It ran thus:

"It is ordered and decreed that on plaintiff's depositing Rs. 6,664 in Court for payment to defendant on or before 21st September 1942, the defendant shall execute a sale‑deed in respect of his 0‑8‑0 share of mouza Palode with all rights appertaining thereto including the Khudkasht lands (consisting of Patti No. 1) together with occupancy and absolute occupancy (fields) and that the sum of Rs. 1,022 only be paid by the defendant to the plaintiff on account of costs of this suit . . . . if the defendant fails to execute the sale‑deed the plaintiff will get the same executed through Court according to law. If the plaintiff fails to deposit the amount in Court in time, his suit shall stand dismissed with costs."

In these circumstances it was held:

"The decree in a suit for specific performance of a contract for sale fixing time for payment of purchase‑money is in the nature of a preliminary decree and therefore the Court has power to extend the time fixed by the decree."

In reaching the above conclusion it was observed inter alia:‑

"Ordinarily the Court should avoid passing a decree in the form of a final decree but leave it to the vendor to move the Court for an order rescinding the contract . The lower Court apparently saw its mistake at later stage and corrected it by extending time."

I may also refer back to the case of Abdul Shaker Sahib v. Abdul Rahiman Sahib and another already noticed above, in which, too, the relevant proposition has been laid down in these terms:

"that the appellate Court had power to extend the time limited by the original decree, and that the original Court had still jurisdiction in the matter and had full powers to deal with any point that might arise, including, if necessary, an application for further time." .

In view of the law, as embodied under section 148 of the Code and section 35 of the Specific Relief Act, as well as the authorities discussed above, I am inclined to accept the con tention of Mr. K. Hossain that in the case of a decree for specific performance of contract the Court retains the jurisdiction to extend time under section 148 of the Code of Civil Pro cedure, even though the decree contains a default clause b providing that in default of the plaintiff to make the requisite payment within the period fixed by the Court the suit shall stand dismissed. In other words, the present case does not, in my view, come within the mischief of the decision in the case of Shaikh Ayezuddin v. Priya Sankar Chowdhury.

As has also been incidentally made clear above, the afore said power of extending the time can be exercised by the appellate Court as well as much as the original Court. In my opinion, therefore, the appeal must succeed.

The appeal is accordingly allowed and the judgment and decree of the learned lower appellate Court as well as the order dated 16‑5‑60 passed by the learned Court of first instance are set aside. The plaintiffs appellants are allowed two months' time from date to deposit the amount in question. Upon deposit so made the defendant No. 1 shall execute and register the kabala within one month from the date of deposit failing which the Court shall execute the document which shall be binding on the defendant.

Having regard to the facts and circumstances of the case I leave the parties to bear their own costs in this Court.

Leave under clause 15 of the Letters Patent, prayed for is refused.

K. B. A.

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