Tuesday, February 13, 2024

𝗝𝘂𝗱𝗶𝗰𝗶𝗮𝗹𝗗𝗿𝗲𝗮𝗺™

𝙰𝙵𝙵𝙾𝚁𝙳𝙰𝙱𝙻𝙴 & 𝙰𝙲𝙲𝙴𝚂𝚂𝙸𝙱𝙻𝙴

MODEL ANSWERSPECIFIC RELIEF

RECISSION

Briefly discuss the provisions relating to rescission of contract in the light of Specific Relief Act, 1963.

Section 27 to 30 of the Specific Relief Act, 1963, deals with the provisions of rescission of contract. According to section 27 of the Specific Relief Act, 1963, if any contract is voidable or terminable in nature because of fraud, coercion, mistake, mis-representation or undue- influence or is unlawful, then any aggrieved person can file a suit for rescission of the abovesaid contract.

In the leading case of Ravji vs. Gangadharbhat, the Hon’ble court held that according to section 27, not only parties to the contract can file a suit for rescission of the contract but also any person who is interested in a contract can apply for the recission of the court.

According to section 27 of the Specific Relief Act, 1963, it is a discretion of the court whether to rescind the contract or not, but it is a duty of court to exercise this discretion judiciously.

According to this section, if the plaintiff has ratified the contract or it is impossible to restore the parties to the previous position at which they were at that time when the contract was made or if any third person has acquired any right in that contract in good faith and for value or if any part of the contract which any of the parties seeks to rescind cannot be separated from another part of the contract, then in such a situation, court cannot exercise its discretion and rescind the contract.

Whereas, according to section 28 of the Specific Relief Act, 1963,if any suit has been filed for the specific performance of the contract regarding sale or lease of an immovable property and if the specific performance has been granted by the court and court asks the purchaser or lessee to pay the purchase money or other sum and if the purchaser or lessee does not pay the requisite amount, then in the same suit in which decree for specific performance has been granted, the seller or lessor can file an application for the rescission of the contract.

If the seller or lessor applies for the rescission of the contract, the court may allow the application and ask the purchaser or lessee to restore the possession of the property to the seller or lessor and pay him the rent or profit which the purchaser or lessee has earned from the date of possession.

But, if the purchaser or lessee pays the requisite amount, then in such a case, the court will not rescind the contract. In this case, the court will execute the contract and direct the seller or lessor to give possession to the purchaser or lessee.

According to section 29 of the Specific Relief Act, 1963, if a party files a suit and claim specific performance, then in that suit, in alternative, he can ask for the rescission of the contract and if the contract cannot be specifically performed, then in such a situation, court can rescind the contract.

In the leading case of Prem Raj vs. D.L.F.H. Co. Ltd., the Hon’ble court held that a person can in alternative claim the rescission of the contract alongwith specific performance of the contract. But, if he claims rescission of contract, then in alternative, he cannot claim specific performance of court.

Section 30 of the Specific Relief Act, 1963, is based upon the principle of equity, justice and good conscience and founded upon public policy. According to this section, if the court grants rescission of contract, then the party on whose behalf the contract has been rescinded can be directed to restore any benefit to opposite party which he has taken from another party and to pay the opposite party reasonable amount of compensation.

In the leading case of Hanumant vs. Sita Ramaya, the Hon’ble court held that section 30 of the Specific Relief Act, 1963, is based upon the principle that one who seeks equity must do equity and if the court grants rescission of the contract in favour of one party then that party can be asked to pay compensation to another party and also to restore any benefit which he has taken from opposite party.

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