SUPREME COURT EXAMINES CONDITIONS FOR COMPLIANCE OF A DECREE OF SPECIFIC PERFORMANCE

A two Judge Bench of the Hon’ble Supreme Court consisting of Justice J.B Pardiwala and Justice R. Mahadevan; in the judgement of Balbir Singh & Anr. etc. v Baldev Singh (D) through his Lrs. Civil Appeal Nos. 563-566 Of 2025 (Petitions For Special Leave To Appeal (C) Nos. 22802-22805 Of 2022); addressed the issue of whether the High Court of Punjab & Haryana committed an error in affirming the executing court’s decision allowing the Respondent to deposit the balance sale consideration despite a delay, and rejecting the Appellant’s application for rescission of the contract under Section 28 ( Rescission in certain circumstances of contracts for the sale or lease of immovable property, the specific performance of which has been decreed) of the Specific Relief Act, 1963

FACTS

Four identical conditional decrees for grant of specific performance of agreement to sell were passed by the learned Trial Court dated 16.08.1994. The Trial Court had also ruled that the Respondent No.1 in this case (i.e. Baldev Singh) was granted the permission to deposit the balance sale consideration within a period of 20 days before the Court while the Appellant No.1 (i.e. Balbir Singh) was directed to get the sale deed executed in favour of the Respondent. Before the Respondent could deposit the balance sale consideration , the Appellants went in appeal before the learned District Court whereby which the appeal was preferred on 26.08.1994. This led to the First Appellate Court allowing the appeals vide judgement and order dated 16.08.1994 which subsequently set aside the judgement and decree passed by the learned Trial Court granting specific performance of agreement to sale. On being aggrieved , the Respondents filed Regular Second Appeals before the learned High Court of Punjab & Haryana. The first three regular second appeals were allowed by the learned High Court on 03.05.2018, while the fourth regular second appeal was allowed as on  24.05.2018, whereby the decrees passed by the learned Trial Court was restored. This led the Appellants to file SLPs (Special Leave Petition) before the Hon’ble Supreme Court, which was subsequently dismissed dated 18.01.2019. Late, four execution petitions were filed by the Respondent dated 04.09.2018 and the applications to deposit the amount to be decreed as on 07.09.2018. On being aggrieved , the Respondents filed an Application under Section 28 of the Specific Relief Act, 1963 dated 04.04.2019 for rescinding the contract for failing to deposit the amount within the stipulated period of 20 days. The amount to be decreed was subsequently deposited by the Respondent as on 07.09.2018 and consequently, the Executing Court dismissed the application for rescinding the contract. As a result , the Appellants filed four revision petitions have been filed for setting aside the orders dated 07.09.2018 and 16.08.2019 before the learned High Court of Punjab & Haryana. The High Court , upon perusal of the facts on record , passed the judgement and order Civil Revision No. 6706 of 2019, Civil Revision No. 6952 of 2019, Civil Revision No. 6980 of 2019 and Civil Revision No. 7053 of 2019  respectively as a common order date dated 09.09.2022 whereby which the four revision petitions were dismissed. It was also held that Section 28 of the Specific Relief Act, 1963 permits the Executing Court to extend the period for depositing the amount on the basis of the conduct of the parties and that the decree of the Trial Court has been merged with the decree passed by the learned Appellate Court.

ISSUES

1. Whether the High Court erred in passing the impugned judgment and order ?
2. What is the effect of the merger of the learned Trial Court’s decree with the decree passed by the High Court in the Regular Second Appeal ?
3. whether the Appellants could have applied for rescission of the contract on the ground that the Respondents had failed to deposit the balance sale consideration within the stipulated period of time ?

DECISION OF THE HON’BLE SUPREME COURT

The Hon’ble Supreme Court examined Section 28 of the Specific Relief Act, 1963 in depth along with interpreting judgements that probe into its provisions. The Supreme Court also explained that by observing that any order passed within its appellate jurisdiction would be an appellate order and would thereby attract the doctrine of merger without any discernment in terms of reversal orde, modification order, speaking or non-speaking orders. Therefore , the Court claimed that once the learned High Court has allowed second appeals in favour of the Plaintiffs i.e. the Respondent in this case, then a merger occurs between the decision rendered by the Trial Court and High Court. The High Court finally assumes the position of an appellate court in second appeal and any decree passed by such second appellate court becomes executable hence. The Court further clarified that the extension of time for payment of money does not indicate that the decree has been modified. It was held by the Hon’ble Supreme that the learned Trial Court had the authority and jurisdiction to extend time for specific performance of a decree under Section 28 of the Specific Relief Act,1963.

The Supreme Court while examining the facts on record and precedents under the doctrine of merge, the latter of which explains that the original decision of the Trial Court merges with the decision of the High Court i.e. the appellate authority, thus presuming operability; reached the conclusion that the Appellant erred in praying that since the Trial Court had directed that the balance sale consideration be deposited within a time period of 20 days, the same direction would be applicable even in the case of the High Court during the second appeal as the High Court has not determined any particular time period within which the amount needs to be deposited.  Thus, the appeals were dismissed.

CONCLUSION

The Hon’ble Supreme Court, upon examination of Section 28 of the Specific Relief Act,1963 and the doctrine of merger held that the decision taken by an appellate authority maybe merged with the operative part of the original decision and therefore the Appellants committed an error in understanding that the direction of the Trial Court has to be applicable for the High Court, even in its second appeal.

PARVATI ARUN

INTERN

INDIAN LAWYER AND ALLIED SERVICES