Court not empowered to grant extension for payment of purchase money in specific implementing decree based on compromise agreement: High Court of Kerala

The Kerala High Court recently ruled that the court did not have the power to extend the time limit for payment of the purchase money in a specific implementing decree based on a compromise agreement containing autonomous clauses between the parties .

Judge VG Arun also pointed out that such an extension would lead to rewriting the terms of the compromise:

“The petitioner had neither paid the amounts on time nor requested an extension before the expiry of the deadline stipulated in the decree. By the time the request for extension was filed, the autonomous clause had entered into force. The time will return. certainly to rewrite the terms of the compromise, which the court cannot do even in the exercise of power under article 28 (1) of the law on specific relief. “

Background:

An action was brought in the court of first instance for a specific execution decree requiring the respondent to execute a deed of sale under the agreement between the parties.

During the course of the trial, the parties reached a settlement and the lower court issued a judgment and decree in terms of settlement. In accordance with the terms of the compromise decree, the sale price was set at Rs.70 lakhs, of which Rs.5 lakhs had already been paid to the defendant.

The consideration for the sale of the balance was to be paid by depositing Rs.25 lakhs into the Respondent’s account no later than 01/30/2018 and Rs.40 lakhs no later than 03/31/2018.

Thereupon, the deed of sale had to be registered in favor of the applicant. It was also stipulated that in the event of the applicant’s failure to deposit the balance amount, the defendant could adjust the advance amount of Rs. 5 lakhs depending on the loss suffered by him and the applicant’s right to recover the amount will be lost.

The claimant later failed to pay the consideration for the sale of the balance within the time limit. Instead, he had a solicitor’s opinion issued, requiring the respondents to turn over the original documents of the property to raise funds.

The Respondents issued a Notice of Response stating that delivery of the original documents was not part of the Agreement and that the Applicant had already violated the terms of the Agreement.

Subsequently, the claimant filed a claim under section 28 (1) of the Specific Relief Act, 1963, requesting an extension of the time limit for payment of the consideration for the sale of the balance.

The respondent opposed the request for an extension, arguing that since the court had issued a compromise decree, extending the deadline at the request of a party would be tantamount to unilaterally changing the decree.

The Respondent also drew attention to the stipulation in the agreement that non-payment of the balance of the sale consideration would result in the adjustment of the advance sale consideration of Rs. 5 lakhs received by the respondent based on the loss suffered by him and the claimant not entitled to recover the amount. In light of the said self-employment stipulation, it was argued that the Grievor was not entitled to an extension of time.

By the contested order, the court of first instance rejected the request for extension, holding that a compromise decree is adopted on the basis of the agreement between the parties and that the terms of the said agreement cannot be changed without the consent. of both parties.

Lawyer Mr. Satheesan Alakkadan represented the petitioner and Lawyer Kaleeswaram Raj appeared for the respondent in the request for review.

Observations of the Court:

On reading article 28 of the law on specific relief, the court noted that the court which adopted the decree has the power to extend the time limit for payment of the purchase price.

The main question before the Court was whether such a power could be exercised in cases where the specific implementing decree is based on a compromise agreement containing autonomous clauses between the parties.

From the facts of the case, it was evident that the applicant had neither paid the sums on time nor requested an extension before the expiry of the time limit stipulated in the decree.

By the time the extension request was filed, the self-operation clause had entered into force, resulting in the loss of the anticipated amount of Rs.5 lakhs paid by the petitioner.

“In this case, an extension of the deadline will certainly amount to rewriting the terms of the compromise, which the court cannot do even in the exercise of the power under article 28 (1) of the law on the specific relief. . “

Therefore, it was found that the general proposition that the court which adopted the specific enforcement decree does not become function function and has the power to extend the term of payment of the purchase price, will not apply.

As a result, the civil review application was dismissed and the lower court was found to be justified in dismissing the application for an extension of time.

Case title: MK Raghavan v. Seerakath Mariyam Beevi

Click here to read / download the order

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