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Issues Involved
1. Rescission of Agreement and Decree for Specific Performance 2. Appellant's Right to Apply for Rescission under Specific Relief Act, 1877 3. Maintainability of Application under Specific Relief Act, 1963 4. Appellant's Right to Rescind Contract and Decree 5. Execution of Decree 6. Attachments and Their Impact on Performance of Decree Detailed Analysis 1. Rescission of Agreement and Decree for Specific Performance The primary issue was whether the appellant could rescind the agreement dated October 30, 1956, and the decree dated February 25, 1964, for specific performance of the agreement. The appellant argued that Mundhra was not keen on paying the purchase money and getting the transfer of the 51% shares because the injunction granted by the Court made him virtually the owner of 100% shares in Turner Morrison without paying for the 51% shares. 2. Appellant's Right to Apply for Rescission under Specific Relief Act, 1877 The appellant contended that the application was maintainable under Section 35 of the Specific Relief Act, 1877, despite the repeal of that Act by the Specific Relief Act, 1963. The Court found that the appellant had no accrued right on the date of the repeal to file an application under Section 35 of the Specific Relief Act, 1877, which was saved under Section 6 of the General Clauses Act, 1891. The mere right to take advantage of the provisions of an Act is not an accrued right. 3. Maintainability of Application under Specific Relief Act, 1963 The Court agreed with the Division Bench that since Section 28 of the Specific Relief Act, 1963, only provided for rescission of a decree for specific performance of a contract for the sale or lease of immovable property, the application was incompetent under the section. 4. Appellant's Right to Rescind Contract and Decree The Court held that it retained control over the decree even after it was passed and could entertain an application for rescission if the party moved against had positively refused to complete the contract. The Court found that Mundhra committed a breach of the contract, making it practically impossible for him to perform his part of the obligation under the decree. The Court adjudged that the contract and the decree must be rescinded. 5. Execution of Decree The Court discussed the execution of a decree for specific performance, stating that it can only be in the manner prescribed by Order 21, Rule 32 of the Code of Civil Procedure. The appellant could not have executed the decree against Mundhra as a money decree and realized the purchase money from him. Therefore, if Mundhra refused to pay the purchase money, the appellant was justified in applying for rescission of the decree. 6. Attachments and Their Impact on Performance of Decree The Court found no substance in the contention that the attachments of the decree by the creditors of Mundhra prevented him from tendering the purchase money to the appellant. The inability to pay off the creditors was the proximate cause of the attachments, and the responsibility for the same was that of Mundhra. The attachments did not prevent the appellant from delivering the shares to Mundhra, as the attachment order directed that the 51% shares should be produced before the Calcutta High Court for delivery to Mundhra against payment of the consideration mentioned in the decree. Conclusion The appeal was allowed, and the judgment under appeal was set aside. The Court ordered the rescission of the decree for specific performance passed in Suit No. 600 of 1961. The receiver was directed to produce the 2,295 shares before the Court and give custody of the same to the Registrar, who would then hand them over to the appellant. The appellant was awarded costs.
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