Case Note & Summary
The appellant, Surinder Pal Soni, filed a suit for specific performance of an agreement to sell dated 8 December 2003 for agricultural land in Panchkula. The trial court decreed the suit on 20 March 2012, directing the judgment debtor to execute the sale deed within two months upon receipt of the balance sale consideration. Both parties appealed. The appellate court issued notice on the appeal and stay application but did not stay the decree. The appellant filed execution proceedings on 15 June 2012, before the first appeal was decided. The judgment debtor filed objections. On 17 January 2015, the appellate court dismissed both appeals, confirming the trial court decree. On 19 February 2015, the appellant deposited the balance consideration of Rs. 1,15,864/-. The executing court allowed the execution petition on 23 February 2015, rejecting the objections. The judgment debtor filed a civil revision before the High Court, which set aside the executing court's order, holding that the decree had become inexecutable due to the appellant's failure to deposit the balance within two months from the trial court decree. The Supreme Court allowed the appeal, holding that the doctrine of merger applies: the trial court decree merged with the appellate decree dated 17 January 2015, and the time for deposit ran from that date. The appellant deposited the balance within a reasonable time after the appellate decree. The High Court erred in applying Section 28 of the Specific Relief Act without the judgment debtor seeking rescission. The Supreme Court set aside the High Court's order and restored the executing court's order, directing execution of the decree.
Headnote
A) Specific Relief Act - Section 28 - Rescission of Contract - Doctrine of Merger - Where a decree for specific performance is confirmed by the appellate court without modification, the trial court decree merges with the appellate decree, and the time for compliance runs from the date of the appellate decree, not the trial court decree. The appellate court's decree becomes the operative decree, and the decree holder is entitled to deposit the balance consideration within a reasonable time after the appellate decree. (Paras 12-15) B) Civil Procedure Code - Order 41 Rule 5 - Stay of Execution - Mere filing of an appeal does not operate as a stay of the decree under Order 41 Rule 5 CPC. However, the doctrine of merger applies regardless of whether a stay was granted, and the appellate decree supersedes the trial court decree. (Paras 13-14) C) Specific Relief Act - Section 28 - Power of Court to Extend Time - The court has equitable power under Section 28 to extend time for deposit of balance consideration, and the judgment debtor must apply for rescission under Section 28(1) to have the contract rescinded. In the absence of such application, the decree remains executable. (Paras 16-17)
Issue of Consideration
Whether the decree for specific performance became inexecutable due to the appellant's failure to deposit the balance sale consideration within two months from the date of the trial court decree, given that the first appellate court confirmed the decree without modifying the time limit.
Final Decision
The Supreme Court allowed the appeal, set aside the High Court's judgment dated 1 June 2018, and restored the order of the executing court dated 23 February 2015. The executing court is directed to proceed with the execution of the decree for specific performance in accordance with law.
Law Points
- Doctrine of merger
- Section 28 Specific Relief Act 1963
- Order 41 Rule 5 CPC
- Time for deposit of balance sale consideration
- Execution of decree for specific performance
