1. Court’s Decision
The Supreme Court allowed the appeal and set aside the High Court’s order. This means that the Supreme Court restored the Trial Court’s decision, which had originally rejected the request to condone the delay in setting aside the ex-parte decree. The Court emphasized a key principle: “The law favors the diligent and not the indolent”—meaning, those who do not act in a timely manner cannot expect relief from the courts.
In essence, the Supreme Court ruled that the delay in filing the application to set aside the ex-parte decree was unjustified, and therefore, the High Court’s decision to condone the delay was incorrect.
2. Facts
- A civil suit was filed for specific performance of a contract related to a property sale.
- The property was jointly owned by two individuals. One of them gave a power of attorney to the other, who then entered into a sale agreement with the plaintiff.
- The sale agreement required the buyer (plaintiff) to pay ₹20 lakhs, out of which ₹5 lakhs was already paid.
- When the defendant failed to execute the sale deed, the plaintiff filed a suit for specific performance.
- The first defendant appeared in the case but did not file a written statement. The second defendant did not appear at all.
- As a result, an ex-parte decree (a judgment given in the absence of the defendants’ proper participation) was issued on April 13, 2016 in favor of the plaintiff.
- After this decree, the first defendant passed away in 2017, and his legal heirs (respondents) inherited his rights in the case.
- The plaintiff then filed an execution petition in 2018 to enforce the decree and transfer ownership of the property.
- The legal heirs (respondents) appeared in the execution court in August 2018 but did not take immediate steps to challenge the ex-parte decree.
- Much later, in January 2020, they filed an application to set aside the ex-parte decree, claiming that they were unaware of it earlier.
- This application was filed after a delay of 1312 days (more than three and a half years).
3. Issues Before the Court
- Was the delay of 1312 days in filing the application to set aside the ex-parte decree justified?
- Did the respondents have valid reasons for the delay, such as their lawyer allegedly misplacing case files?
- Did the High Court err in condoning the delay and allowing the case to be reopened?
- Should the ex-parte decree for specific performance remain in force?
4. Petitioner’s (Plaintiff’s) Arguments
- The High Court wrongly overruled the Trial Court’s well-reasoned decision that refused to condone the delay.
- The first defendant had appeared in the case but did not file a written statement, meaning he had every opportunity to contest the case but chose not to.
- The claim that the first defendant was hospitalized does not justify his failure to contest the suit because the hospitalization occurred after the decree was passed.
- The claim that the legal heirs were unaware of the decree until 2018 was false, as they appeared before the execution court in August 2018 but did nothing for over a year.
- The argument that the lawyer misplaced the files is baseless because the same lawyer was still representing one of the legal heirs in other matters.
- The plaintiff had already deposited the balance sale consideration of ₹15 lakhs at the time of filing the suit, proving that he was always willing to fulfill his contractual obligations.
- The delay was intentional and caused prejudice to the plaintiff, who had been waiting to take possession of the property for almost a decade.
5. Respondent’s (Defendants’ Legal Heirs) Arguments
- The agreement to sell the property was fraudulent and collusive, and the first defendant was not aware of it.
- The first defendant had revoked the power of attorney, and the sale agreement was made without his knowledge or consent.
- The legal heirs only learned about the ex-parte decree in 2018 and were unable to act earlier because the case files were misplaced by their lawyer.
- The property was sold for a very low price (a “pittance”) and should not be enforced.
- The respondents were willing to return the advance money paid by the plaintiff and should be allowed to contest the case.
6. Analysis of the Law
- The Supreme Court referred to Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors. (1987) 2 SCC 107, which says that courts should adopt a liberal approach when deciding whether to condone delay.
- However, the Court emphasized that even under this liberal approach, delays must be justified with bona fide and credible reasons.
- The Court also cited H. Dohil Constructions Company Pvt. Ltd. v. Nahar Exports Ltd. (2015) 1 SCC 680, which dealt with condonation of delay and equitable relief.
7. Precedent Analysis
- The Supreme Court has, in the past, condoned delay in genuine cases of hardship.
- However, in this case, the delay was not justified, and the respondents had ample opportunities to act but failed to do so.
- The claim that the case files were misplaced was not supported by any evidence.
8. Court’s Reasoning
- The first defendant was aware of the case but did not contest it.
- His legal heirs were also aware of the ex-parte decree by August 2018 but still waited over a year to act.
- The argument that the case files were misplaced is not convincing. The respondents could have obtained certified copies of court records and acted sooner.
- The execution proceedings had already taken place, and setting aside the decree would unfairly affect the plaintiff.
- The respondents’ delay was deliberate, and courts should not reward negligent litigants.
9. Conclusion
- The High Court’s decision to condone the delay was incorrect.
- The Trial Court’s decision rejecting the condonation of delay was restored.
- The respondents failed to prove genuine hardship or valid reasons for the delay.
- The plaintiff’s right to enforce specific performance of the contract was upheld.
- The appeal was allowed, and the case will not be reopened.
10. Implications of the Judgment
- This ruling reinforces the principle that delays in legal proceedings must be justified with solid reasons.
- It prevents litigants from misusing the legal process by seeking to reopen settled cases without valid grounds.
- It protects buyers in specific performance cases, ensuring that sellers or their legal heirs cannot indefinitely delay contract enforcement.
- It serves as a warning that courts will not tolerate negligence or strategic delays.