Right To Seek Contract Rescission Accrues Upon Expiry Of Time In Decree, Not Upon Receiving Notice Of Subsequent Proceedings: Kerala High Court

The Kerala High Court has held that that right to seek rescission of a contract accrues upon the expiry of the time stipulated in the decree for deposit of balance consideration and not upon the receipt of notice of the subsequent proceedings.Justice P. Krishna Kumar, delivered the judgment in an original petition in a suit for specific performance of an agreement for sale of an immoveable property. A suit was decreed on 21.11.2011, directing the petitioner to execute the sale deed upon the plaintiff depositing the balance sale consideration of ₹10,000/- within one month. The respondent failed to deposit the amount within the stipulated period but deposited the amount later and got the sale deed executed through the Court. The present petition was filed alleging the non-compliance for the time stipulation in the decree and it was further contended that no extension of time has been granted by the Court. The Court held that the limitation period for filing an application for rescission is governed by Article 137 of the Limitation Act, 1963, prescribing a three-year period. It further noted that the right to apply accrues upon expiry of the time fixed in the decree for performance, not upon notice of subsequent execution proceedings.Rejecting the petitioner's contention that limitation should run from the date of knowledge or notice, the Court emphasized that a decree for specific performance is in the nature of a preliminary decree, and the court retains jurisdiction even after its passing. Therefore, a judgment-debtor need not await any action by the decree-holder and can independently seek rescission once default occurs.“Therefore, the petitioner was not required to await notice in any application filed by the respondent and could have independently sought rescission.” Court held. The Court noted that the petitioner's application for rescission was filed nearly eight years after the expiry of the stipulated period and hence it was hopelessly barred by limitation.Relying on Prem Jeevan v K.S Venkata Raman [AIR 2017 SC 623], the petitioner contended that the time stipulated in the decree does not stand automatically extended merely because the defendant (petitioner) has not sought rescission of the contract and thus decree is not executable. The High Court observed that extension of time need not always be explicit. Relying on Ishwar v. Bhim Singh [AIR 2024 SC 4232], it Court held that when a decree-holder files an application seeking execution along with deposit of the balance consideration, and the court, after notice to the judgment-debtor, permits such deposit and proceeds to execute the sale deed, the extension of time is implicit in the court's order.“Once the court has acted upon the request of the plaintiff on merit and has even executed the sale deed, it cannot be contended that the absence of an express order extending time renders the decree inexecutable.” Court heldThe Court thus upheld the impugned order and dismissed the original petition. Case Title: Puthuparambil Raju v Kachiriyil JosephCase No: OP(C) 853/ 2016Citation: 2026 LiveLaw (Ker) 170Counsel for Petitioner: Sunil Nair Palakkat, K.N Abhilash, M/A Ahammad SaheerCounsel for Respondent: V.T. Madhavanunni, V.A SatheeshClick Here To Read/ Download Judgment

Right To Seek Contract Rescission Accrues Upon Expiry Of Time In Decree, Not Upon Receiving Notice Of Subsequent Proceedings: Kerala High Court

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