Surinder Pal Soni vs Sohan Lal (D) Thru Lrs .

2 karnals – The appellant-decree holder and respondents-judgment debtors filed appeals challenging the order of trial court – Appellate court issued notice on the appeal and the application for stay filed by respondents while the appellant moved for execution of decree – Objections to the execution of decree filed by the respondents – Appellate court dismissed both the appeals – Objections by respondent were dismissed – Revision petition by respondents – High Court allowed the revision and directed refund of earnest money in substitution of the decree of specific performance holding that there was failure on part of appellant to deposit the balance of the sale consideration within a period of two months from the date of decree and as a consequence the decree was rendered inexecutable by virtue of provisions of s.28 of 1963 Act – On appeal, held: The doctrine of merger is founded on the rationale that there cannot be more than one operative decree at a given point in time – The said doctrine applies irrespective of whether the Appellate Court has affirmed, modified or reversed the decree of the trial court – Upon the decision of Appellate Court, there is a merger of the judgment of trial court with the decision which is rendered in appeal – In the instant case, once the Appellate Court confirmed 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 – Hence, the entitlement of the decree holder to execute the decree of the Appellate Court cannot be defeated – Appellant-decreeholder had paid the balance of the sale consideration after the judgment of the Appellate Court – Appellant having acted bona fide, the equities must weigh in his favour – Executing court was justified in rejecting the specious objections of the respondents – In revision arising out of an execution proceeding, High Court modified the decree – Such a course was not open in law – High Court acted in excess of its revisional jurisdiction in substituting decree for specific performance with an order for refund of the sale consideration, beyond the earnest money of Rs. 2,00,000/- to the decree holder – In consequence, the order passed by Executing Court dismissing objections of respondents is restored.

Allowing the appeal, the Court

HELD: 1. The doctrine of merger operates as a principle upon a judgment being rendered by the Appellate Court. In the present case, once the Appellate Court confirmed 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. [Para 17] [1047-B]

2.1 The High Court held that there was a failure on the part of the appellant to deposit the balance of the sale consideration within a period of two months from the date of the decree and as a consequence the decree had been rendered inexecutable by virtue of the provisions of Section 28 of the Specific Relief Act 1963. The High Court noted that of the total sale consideration of Rs. 8,35,000/- under the terms of the agreement to sell, the appellant in 2004 had paid an amount of Rs. 5,85,000/- while the balance of Rs. 1,15,864/-, consequent upon the partial decree in the suit had been deposited on 19 February 2015 after the dismissal of the first appeals on 17 January 2015. According to the High Court, the time frame for the deposit of the balance sale consideration was implicit in the decision of the Trial Court which had ordered the execution of the sale deed within two months from the date of the judgment upon deposit of the remaining sale consideration. The High Court held that the judgment and decree had not been stayed during the pendency of the first appeals and the mere filing of an appeal did not amount to a stay under Order 41 Rule 5 of the Code of Civil Procedure 1908. Hence, it was not open to the appellant to seek the execution of the decree on account of the lapse of the period stipulated in the decree for its execution. [Paras 7, 8] [1040-F-G; 1041-A-B; 1042-A-C]

2.2 The appellant had deposited an amount of

Rs. 5,85,000/-. The partial decree of the Trial Court in the suit for specific performance was placed in issue before the Appellate Court. After the Appellate Court affirmed the decree, the decree of the Trial Court merged with that of the Appellate Court. Barely a month thereafter, on 19 February 2015 the appellant deposited the balance of the sale consideration. The appellant acted bona fide. The equities in a matter arising out of a decree in a suit for specific performance must weigh in his favour. The High Court impermissibly substituted the decree for specific performance with an order for refund of the sale consideration, beyond the earnest money of Rs. 2,00,000/- to the decree holder. The reasons which weighed with the High Court in doing so as well as its ultimate directions are unsustainable. [Para 21] [1050-D-F] Chandi Prasad v. Jagdish Prasad (2004) 8 SCC

724 : [2004] 4 Suppl. SCR 942; Sardar Mohar Singh v. Mangilal (1997) 9 SCC 217 : [1997] 1 SCR 297; Bhupinder Kumar v. Angrej Singh (2009) 8 SCC 766; Kunhayammed v. State of Kerala (2000) 6 SCC 359: [2000] 1 Suppl. SCR 538 ; Khoday Distilleries Ltd v. Sri Mahadeshwara Sahakara Sakkare Karkhane Ltd . (2019) 4 SCC 376 – relied on.

Shanthi v. T D Vishwanathan Civil Appeal No. 10442 of 2011, 2018 SCC OnLine SC 2196 ; S Palanichamy Chettiar Firm v. C Alagappan (1999) 4 SCC 702 : [1999] 1 SCR 349; Ramankutty Guptan

v. Avara [1994] 2 SCC 642 : [1994] 1 SCR 542 – referred to.