Report No. 147

Chapter 8

Rescission of Contract

8.1. Section 28(1) of the Act provides for rescission of certain contracts of sale or lease of immovable property where the purchase or lease money is not paid within a specified period. Sometimes, the Court may pass a "self-operative" final decree: that is to say, one that provides that, if the payment is not made within the time fixed by the decree, the suit shall stand dismissed. On the question whether, in such cases also, the Court can extend the time originally fixed for payment notwithstanding the terms of the decree, there is a difference of judicial opinion.1

Strictly speaking, it appears, such a "self-operative" decree would be against the law and in any event, would clearly run contrary to the express provisions of section 28. Whatever that might be, we think that it should be clarified that section 28 would be applicable even in such cases. We, therefore, recommend that a new sub-section (1A) be inserted, after sub-section (1), in section 28 as follows:-

"(1A) An application under sub-section (1) for the extension of the period within which the purchase money or other sum was payable under the decree or for the rescission of the contract may be made by vendor or lessor at any time and may be made notwithstanding that the decree may have provided that certain consequences should follow automatically on the default of the purchaser or lessee to pay the said sums within the period specified in the decree or otherwise allowed by the Court."

1. Bhujangrao Ganpat v. Seshrao Rajaram, AIR 1974 Bom 101 and Suryanarayana v. Sydiah, 1972 1 Andhra WR 367; contra: Saraswathy v. Samasundaram, 1977 2 MIJ 68 and Chalapathi v. Subha Reddy, (1980) 3 Current Civil Cases 431 (433, 435) (AP).