Specific Performance – Decree for specific performance of contract based on an agreement of sale – Delay in filing execution petition and seeking permission of executing court to deposit the balance sale consideration – If rendered the decree of specific performance inexecutable:
Held: In the present case, once the appellate court affirmed the judgment and decree of the trial court, there was evidently a merger of the judgment of the trial court with the decision of the appellate court – Once the appellate court renders its judgment, it is the decree of the appellate court which becomes executable – In the considered view of this Court, the Appellate Court, after deciding the appeal on merits, could have called upon the plaintiff to deposit the balance sale consideration by fixing a time limit – This would have at least given an opportunity to the plaintiff to fulfil his obligation – It is too much to say that since the trial court had granted two months time to the decree holder to deposit the balance sale consideration the same time period would apply even to the decree that may be drawn by the appellate court – What is executable is the decree passed by the appellate court – The appellate court owes a duty to specify the time period – In the case on hand, undoubtedly, there was a delay on the part of the decree holder in filing the execution petition and thereby seeking permission to deposit the balance sale consideration – Also, just because a decree of specific performance can be executed within
12 years from the date of original decree or from the date the appellate court affirms such decree that, by itself, does not mean that a decree holder deposits the balance sale consideration at his own sweet will – If the appellate court had failed to stipulate any particular time period then it is expected of the decree holder to deposit the same within a reasonable period of time – However, notably, the balance sale consideration of Rs. 4,87,000/- came to be deposited by the decree holder way back in 2019 – In the overall facts and circumstances of the case, the High Court should not have interfered with the order passed by the executing court – Since there was a delay of 2 years in filing the execution petition and delay of 4 years in depositing the balance sale consideration of Rs. 4,87,000/- the respondents-herein (judgment-debtors) are entitled to simple interest at the rate of 9 per cent per annum from the date of the judgment and order passed by the appellate court till the date the balance consideration was deposited i.e. 20.05.2019. [Paras 43, 49, 50, 51, 52, 53, 55]
Specific Relief Act, 1963 – s.28 – Decree for specific performance – Is in the nature of a preliminary decree – Contract between parties is not extinguished by passing of a decree for specific performance and it subsists despite the decree – Court does not become a functus officio after grant of decree for specific performance and it retains its power and jurisdiction to deal with the decree till the sale deed is executed. [Paras 44, 45]
Specific Relief Act, 1963 – s.28 – Decree for specific performance of contract based on an agreement of sale – Time-limit for deposit of money by decree-holder – Court has the power and discretion to extend the time to pay the amount – Such power can be exercised even in the appellate stage – Factors that should weigh with the court concerned while permitting the decree holder to deposit the balance sale consideration beyond the time period prescribed by the trial court in its final decree:
Held: The trial court has jurisdiction to fix time-limit for depositing the money by the decreeholder under Section 28 of the Specific Relief Act, 1963 – The decree is preliminary in nature and the court retains control over it – The Court has been conferred with the power to extend the time to pay the amount and while taking into consideration the delay that is sought to be condoned by the plaintiff, the Court does not adjudge the same like an application under Section 5 of the Limitation Act, where each day’s delay must be explained – The Court is given the discretion to extend the time and the provision therefore seeks to provide complete relief to both the parties in terms of the decree for specific performance – If during the specified time period the decree holder is not in a position to deposit the balance sale consideration or, in other words, fails to deposit the balance sale consideration and later upon expiry of the specified time period seeks permission to deposit, then it would be within the discretion of the trial court to grant further time to deposit the balance sale consideration or decline – This discretion has to be exercised judiciously keeping in mind various factors like bona fide of the decree holder, the cause for failure to deposit the balance sale consideration in time, the length of delay and also the equities that might have been created during the interregnum period in favour of the judgment debtor – It is the cumulative effect and considerations of such factors that should weigh with the court concerned while permitting the decree holder to deposit the balance sale consideration beyond the time period that might have been prescribed by the trial court in its final decree – Further, appeal is a continuation of the original proceedings and the power of the Court to extend the time for depositing the amount can be exercised even in the appellate stage by the Court. [Paras 34, 46, 47, 48, 50]
Specific Relief Act, 1963 – s.28 – Decree for specific performance of contract – Non-payment of the balance sale consideration within time period fixed by trial court – If amounts to abandonment of the contract and consequent rescinding of the same – Real test must be to see if the conduct of the plaintiff will amount to a positive refusal to complete his part of the contract – There must be an element of wilful negligence on the part of the plaintiff before a Court proceeds to invoke s.28 and rescind the contract. [Para 49]
Code of Civil Procedure, 1908 – Order XX, r.12A - Decree for specific performance of contract for sale - Rule 12A makes it obligatory for the court to specify in the decree the date by which purchase money should be paid by the vendee – Where an appeal is filed against the decree passed by the trial court and the appeal is disposed of, the appellate court should specify time to deposit the balance sale consideration. [Paras 34, 50] Doctrines/ Principles – Doctrine of Merger – The doctrine is founded on the rationale that there cannot be more than one operative decree at a given point of time – Doctrine of merger applies irrespective of whether the appellate court has affirmed, modified or reversed the decree of the trial court. [Paras 36, 37]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Bibhuti Bhushan Bose. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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