Holding

A court may extend the time for deposit under Section 148 CPC even when the time is stipulated in a compromise, as the court’s order incorporates the time and confers jurisdiction to extend it in appropriate cases.

Summary

The respondent obtained a decree for recovery of money, which was executed by the sale of the appellant's property. The sale was later set aside on appeal, and during the second appeal the parties entered into a court‑sanctioned compromise whereby the appellants would deposit Rs 60,000 by a specified date, failing which the sale would stand and the respondent’s appeal would be allowed. The appellants could not raise the sum and applied under Sections 148 and 151 of the CPC for an extension of the deposit deadline. The High Court dismissed the application, holding that a time stipulated in the compromise could not be extended by the court. On appeal, the Supreme Court held that once the compromise is incorporated into a court order, the stipulated time becomes the time allowed by the court, and the court retains jurisdiction to extend it in appropriate cases to prevent manifest injustice. Accordingly, the High Court’s view was reversed and the matter was remanded for the High Court to decide the extension application. The appeal was allowed.

Issues considered

Whether a court can extend the time for deposit of money under Section 148 CPC when the time limit is stipulated in a compromise incorporated into a court order.

Legislation cited

Code of Civil Procedure, 1908s. Order XXI Rule 90, s. Order XXI Rule 92, s. Order XXXIV Rule 5, s. Section 148, s. Section 151

Subjects

compromiseextension of timeSection 148 CPCexecution of decreesale of propertycivil proceduremanifest injustice

Judgment

467 A

SMT. PBRIYAKKAL & OTHERS

v.
..
SMT. DAKSHYANI B
March 2, 1983

[R. $.PATHAK AND 0. CHINNAPPA REDDY, JJ,J

Code of Civil Procedure-Order XX!, Rule 90-Scope of-PartitJ entered C
into a compromise with leave of Court that appellants should pay in Court be/on
the stipulated datt a sum of money in full and final settlement of the decree-
rf.ppellants failed to deposit the money in terms of compromise-Ma" an appUca~
tionfor extension of time-High Court, if competent to utend time.

_)
The respondent's suit for the recovery of money from the fi,.t appellant's
husband was decreed and in the execution of the decree certain property of the D
appellant was brought to sale. The decree-bolder purchased that prooerty.
The appellant's husband having died in the meanwhile bis legal representatives
filed an application under Order XXI, Rule 90 of the C.P.C. for setting aside
the sale. That application was· dismissed by the executing court. On the
appellant's appeal, the sale was set aside. At the stage of second appeal
filed by the respondent the parties entered into a compromise with the leave of
the court which after granting leave made an order in terms of the compromise. B
Under a term of the compromise, the appellants agreed to deposit, and the res-
pondent agreed to receive a sum of Rs. 60,000/- · in full and fl.Dal settlement
of the decree. It was also stated that if the deposit was not made on or before
the stipulated date, the sale was to stand confirmed and the second appeal of the
respondent was to stand. Having found it difficult to deposit the money in
terms of the compromise, the appellants filed an application-under Ss. 148 ·and
151 Of tho C.P.C. praying that the time for depositing the money in terms or F
the compromise be extended. The H;igh Court disf!]issed this application on
~- the ground that the Court couJd not extend time where time had been stipu-
lated by tho parties in the compromise arrived at between them.

In appeal to this Court it was contended on behalf-Of the apP.llanlll that
where a compromise bad been made the order of the Court, it was open to the
'- Court to extend the time under s. 148 C.P.C.

Allowing the appeal and remanding the case to the High Court to
dispose of the execution second appeal afrosh in accordance-with the law.
r
HELD : As there was no statutory compulsion to dismiss tho application H
under Order XX!, Rule 90, C.P.C, in the absence of an agreement between the
parties, tbe C9urt would have decided the appeal arising out 9f the application
... :.

,
468 SUPREM'B COURT REPORTS J1983J 2 s.c.a.

A on the merits. The parties in tbe instant case however entered into a compro-
mise and invited the court to make an order in terms of the compromise, which
the Court did. The time for deposit stipulated by the pajies became the timo )...
allowed by the Court and this gave the Court the jurisdiction to extend time in
appropriate cases. Time would not be extended ordinarily, nor for the mere
asking but would be granted in rare cases to prevent manifest injustice. Where
the contract of the parties has merged in the order of the Court the Court's
8 freedom to act to further the ends of justice would not stand curtailed. The
High Court was in error in thinking that they bad no power to extend time.
[472 B-F]

Hukumchand v. Bansi/al and Ors., A.I.R. 1968 SC 86, held inappli- -)..-·-
cable.
c . CIVIL APPELLATE JURISDICTION Civil Appeal No. 3527 Of
1979.

Appeal by Special leave from tbe Judgment and Order dated .\.,.
the 15th January, 1979 of the Karnataka High Court in Executive ~

D Second Appeal No. 89 of 1974,

Dr. Y. S. Chitale, R. B. Datar and Miss Madhu Moo/
Chandani for the Appellants.

S. C. Javali, Ranjit Kumar and B. P. Singh for the Respon-
E
dent.
---:
...
The Judgment of the Court was delivered by

CHINNAPPA REDDY, J. The respondent Dakshyani sued to
r~ovef a sum of Rs. 7,324.86 paise from Narayana Swami, hus-
band of the first appellant and father of the rest of the appellants.
F The suit was decreed with costs and, in execution of the decree,
certain property situated in Bangalore City was brought to sale. The ·._,_
decree·holder purchased the property at the execution sale held on ~
August 19, 1969, for a sum of Rs. 28,000, Narayana Swanii having
died in the meanwhile, his legal representatives, the present· appel-
lants, filed an application under the provisions of Order 21 Rule
G 90 for setting aside the ~ale on · various grounds. The Executing
Court dismissed the application on March 28, 1973 but on an
appeal preferred by the appellants the sale was set aside on July 31,
I 974. The respondent .filed a s&ond appeal to the High Court of
Karnataka. At the hearing of the second appeal the parties entered •
H into a compromise with the leave of the Court, such leave being
necessary since many of the present appellants were minors then
SMT. Pl!RIYAKKAL v. SMT. DAKSHYANI (Chinnappa Re~dy, J.) 469

and are minors even now. The Court granted leave and made an
order in terms of the compromise. The term of the compromise which
we are concerned is that the present appellants agreed to deposit
and the present respondent agreed to receive a sum of Rs. 60,000/-
in full and final settlement of the decree. If the deposit was made
on or before November 30, 1976, the sale which though confirmed B
by the Trial Court but set aside by the Appellate Court was to stand
set aside and the second appeal of the respondent was to stand
dismissed. If the amount of Rs. 60,000/- was not deposited on or
before November 30, 1976 the second appeal was to st~nd allowed
and the sale was to stand confirmed. Time was stated to be the
essence of the contract between the parties., The. applellants were
permitted under the compromise, to raise funds by sale, mortgage
c \
etc. of the property in question. The appellants failed to deposit
the amount in terms of the compromise. It appears that they were
unable to raise the necessary funds as they could not evict the
)
tenant who was in occupation of the property. Finally
the appellants filed an application purporting to be under ss. 148 D
and 151 of the Civil Procedure Code to extend the time for
depositing the sum of Rs. 60,000 in terms of the compromise dated
June 24, 1976. The High Court dismissed the application on the
ground that the Court could not extend tim'e where time had been
stipulated by the parties themselves in the compromise arrived at
between them. The High Court purported to rely upon the deci- I
sion of this,Court in Hukumchand v. Bansilal and Ors.(')

Shri R. B. Datar Learned Counsel for the appellants
urged that there was no limitation on the power of the Court to
extend time under s. 148, c, P. C. and that where a compromise
had been made an order of the Court, it was certainly open to the
Court to extend time under s. 148 C. P. C. He relied upon the
decision of the High Courts of Bombay and Calcutta in Marketing
and Advertising Associates Pvt. Ltd. v. Telerad Pvt. Ltd.(')
Jadabendra Nath Mishra v. Manorama Debya(3 ). He -distingui-
shed the decision of this Court in Hukum Chand v. G
Bansi/a/. Shri Javali Learned Counsel for the respondent, on the
other hand urged that time should not be extended by the Court,

(I) A.I.R. 1968 S.C. 86. ff
(2) A.I.R. 1969 Bom. 323.
(3) A.I.R. 1970 Cal. 199,
. '

470 SUPREME COURT REPORTS [1983l 2 s.c.a..
A in law and on principle, where the parties themselves bad agreed
upon the time within which the amount was to be deposited. ,

In Hukamchand v. Ban$i/al the real question which was
B considered was, if a mortgaged property was sold in execution of
a mortgage decree and if the application to set.. aside the sale under
Order 21 Rule 90 was dismissed but time was granted by consent
of parties for depositing the decretal amount etc. could time be
extended for depositing the decretal amount etc. to avert the coo;
firmatioo of sale under Order 34. Rule 5, except with the consent
c of the parties. The answer was 'no'. The Court said on the
dismissal of an application under Order 21 Rule 90, confir-
mation of sale under Order 21 Rule 92 had to · folio w
as a matter of course. Order 34 Rule 5 merely permitted
the deposit to be made at any time before confirmation
of the sale and there could be ''no ·question of extending
D the time for such deposit. If parties agreed to have the con-
.' firmation of sale postponed, further postponement would be possi-
ble by agreement of parties only. The Court would have no say in
t.he matter. Sec. 148 C. P. C. would have no application. The posi-
tion was cll!rified by the Court thus :-

E
:'The judgment-debtor mortgagor had the right to de-
posit the amount at any time bfore confirmation of sale
within 30 days after the sale or even more than 30 days
after the sale under Order XXXIV, Rule (5) (!) so long
as the sale was not confirmed. If the amouat had been
F deposited~before the confirmation of sale, the judgment--
debtors had the right to•w ask for an order in terms of
Order XXXIV, Rule 5 (I) in their favour. In this case
.an application under Order XXI Rule 90 had been made
and, therefore, the sale could not be confirmed immedia-
tely after 30 days which would be the normal course; the
G confirmation had to await the disposal of the application
under Order XX!, Rule 90. That application was dispos-
ed of on October 7, 1958 and was dismissed. It is ob-
vious from the order sheet of October 7, 1958 that an
oral compromise was arrived at between the parties in
H court on that day. By that compromise time was granted
to the respondents to deposit the entire amount due to
the decree-holder and the auction-purchaser by November
SMT. PBRIYAKKAL v. SMT. DAKSHYANJ (Chlnnappa Reddy, J.) 411

~1, 1958. Obviously, the basis of the compromise was A
that respondents withdrew 1heir application, under
Order XXI, Rule 90 while the decree-bolder society and
the auction-purchaser appellant agreed that time might
be given to deposit the amount upto November, 21,1958.
If this agreement had not been arrived at and if the
application under Order XX!, Rule 90 had been dismis· B
sed (for example, on merits) on October 7, 1958, the
court was bound under Order XXI, Rule 92 (I) to con·
firm the sale at once. But because of the compromise
between the parties by which the respondents were given
time upto November 21, 1958 the court rightly post·
poned the question of confirmation of sale till that date
c
by consent of parties. · But the fact remains that the
application under Order XXI, Rule 90 had been dismissed
on October 1; 1958 and thereafter, the court was bound
to confirm the sale but for the compromise between the
parties giving time upto November 21, 1958". D

.The Court then referred to the refusal of the Court to ex-
tend time by a fortnight on . November 22, 1958 and further
observed :-
E
"The executing court refused that holding that time
upto Nov. 21, 1958 bad been granted by consent and it
was no longer open to it to extend that time. The execu-
ting court has not referred to Order XXI, Rule 92 in
its order, but it is obvious that the executing court held
that it could not grant time in the absence of an agree- F
ment between the parties because Order XX!, Rule 92
reqnired that as the application under Order XX!, Rule
90 bad been dismissed the sale must be confirmed.
We are of the view that in the circumstances it was not
open to the executing court to extend time without con-
sent of parties, for time between October 7, 1958 to
G
November 21, 1958 was granted by consent of parties.
Section 148 of the Code of Civil Procedure would not
apply in these circumstances, and the executing court
was. right in holding that it could not extend time.
H
Thereafter, it rightly confirmed the sale as required under
Order XX!, Rule 92 there being·no question of the appli-
472 SUPRF.MB COURT. REPORTS [1983] 2 s.c.R.

A cation of Order XXXIV, Rule 5 for the money had not
been deposited on November 22, 1958 before the order
of confirmation was passed. In this view of the matter,
we are of opinion that the order of the executing court
refusing grant of time and confirming the sale was
correct".
B
In the case before us, the situation is totally different. Unlike
the case of Hukam Chand v. Bansilal where there was a statuory
compulsion to confirm the _sale on the dismissal of the
application under Order XXI Rule 90 and, therefore, postponement
c and further postponement of the confirmation of the sale could
only be by the consent of the parties in the case before us, there was
no statutory compulsion to dismiss the application under order XXI,
Rule 90 in the absence of an agrreement between the parties. The
court would have then deciped the appeal arising out of the applica-
tion on the merits. The parties, however, entered into a compromise
D and invited the court to make an order in terms of the compro-
mise, which the court did. The time for deposit stipulated by the
parties became the time allowed by . the court and this gave the
court the jurisdiction to extend time in appropriate cases.
Of course, time would not be extended ordinarily, nor for the mere
asking. It would be granted in rare cases to prevent manifest
injustice. True the court would not rewrite a contract between the
parties but the court would ·relieve against a forfeiture clause;
And, where the contract of the parties has merged in the order of
the court, the court's freedom to act to .further the ends of justice
. would surely not stand curtailed. Nothing said in Hukamchand' s
case militates-against this view, We ar~. therefore, of the view that
the High Court was in error in ~thinking that they had no power to
F extend time. Even so, Shri Jawali submitted that this was not an
appopriate case for granting any extension of time. We desire to ex-
press no opinion on that .question. The High Court will decide
that question. We accordingly, set aside that judgment dated 15th
January, 1979, of the High Court and direct the High Court to
dispose of I. A. No. VIII in IExecution Second Appeal No. 89/74
G
in accordance with law. The parties will bear their own costs.

P.B.R. Appeal allowed.