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Issues: (i) Whether the appellant had an accrued right to seek rescission under section 35 of the Specific Relief Act, 1877 after its repeal, and whether the application was maintainable under section 28 of the Specific Relief Act, 1963 or otherwise; (ii) Whether the decree for specific performance could be rescinded when the purchaser failed to pay within a reasonable time after the decree and after removal of the stay on execution; (iii) Whether the appellant could seek rescission instead of executing the decree as a money decree or was precluded by alleged attachments and asserted lien claims.
Issue (i): Whether the appellant had an accrued right to seek rescission under section 35 of the Specific Relief Act, 1877 after its repeal, and whether the application was maintainable under section 28 of the Specific Relief Act, 1963 or otherwise.
Analysis: The right to rescind under section 35 of the Specific Relief Act, 1877 arose only on the purchaser's default in paying the purchase money ordered under the decree. No such default had occurred when that Act was repealed, because a reasonable time for performance had not elapsed and execution of the decree had in any event been stayed for a substantial period. The saving provision of the General Clauses Act therefore did not preserve any accrued right. Section 28 of the Specific Relief Act, 1963 was also inapplicable because it dealt only with decrees for specific performance relating to immovable property. However, the Specific Relief Act is not exhaustive, and the court passing a decree for specific performance retains control over the decree and may grant further relief when a party evinces refusal or default in performance.
Conclusion: The application was not maintainable under section 35 of the Specific Relief Act, 1877 as a saved accrued right, and not under section 28 of the Specific Relief Act, 1963, but it was maintainable under the court's continuing control over the decree.
Issue (ii): Whether the decree for specific performance could be rescinded when the purchaser failed to pay within a reasonable time after the decree and after removal of the stay on execution.
Analysis: Where no time is fixed in a decree for specific performance, the law implies performance within a reasonable time. A decree for specific performance does not extinguish the contract, and the parties remain bound to complete it within a reasonable time unless one party clearly evinces unwillingness to perform. After the stay on execution ended, the purchaser declined to pay even when called upon to do so and when the shares were available through the receiver. The purchaser's conduct showed an unwillingness to complete the bargain, and the absence of a fixed date in the decree did not prevent a finding of default.
Conclusion: The purchaser was in default, and rescission of the contract and decree was justified.
Issue (iii): Whether the appellant could seek rescission instead of executing the decree as a money decree or was precluded by alleged attachments and asserted lien claims.
Analysis: A decree for specific performance is not a money decree, and its enforcement is governed by Order 21 Rule 32 of the Code of Civil Procedure, 1908 rather than by execution as a money decree. The attachments obtained by creditors did not absolve the purchaser from his obligation to perform, since his own inability to pay brought about the attachments. The asserted lien claim also did not defeat rescission in the present proceedings.
Conclusion: The appellant was not confined to execution as a money decree, and the alleged attachments did not bar rescission.
Final Conclusion: The appeal succeeded, the judgment of the High Court was set aside, and the decree for specific performance was rescinded.
Ratio Decidendi: A decree for specific performance remains under the control of the court that passed it, and where the purchaser fails to perform within a reasonable time and manifests unwillingness to complete the contract, the court may rescind the contract and decree notwithstanding the absence of a fixed time in the decree.
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