The Saga of Specific Performance: A Clash of Timelines and Legal Doctrines


Court: Supreme Court of India.

Case Name: BALBIR SINGH vs. BALDEV SINGH (D) THROUGH HIS LRS.

Citation: 2025 INSC 81 (Reportable)

Background of the Dispute

The case of Balbir Singh & Anr. vs. Baldev Singh (D) Through His LRS & Ors., revolves around a protracted legal battle concerning the specific performance of agreements to sell land. The dispute originated from conditional decrees issued by the Trial Court on 16.08.1994, which directed the plaintiffs to deposit the balance sale consideration within 20 days, and the defendants to execute the sale deeds by 15.09.1994.

The First Appellate Court reversed these decrees on 24.11.1994. Subsequently, the High Court restored the Trial Court's decrees on 03.05.2018 and 24.05.2018. Following this, the plaintiffs filed execution petitions on 04.09.2018 and sought permission to deposit the balance sale consideration, which was granted, and the deposit was made on 07.09.2018. The defendants then applied for rescission of the contract under Section 28 of the Specific Relief Act, 1963, contending that the plaintiffs had failed to deposit the amount within 20 days of the trial court decree. The defendants were unsuccessful in their application and the sale deeds were executed in 2019. This decision was challenged, ultimately reaching the Supreme Court.

Key Legal Issues

  • Merger of Decrees: The core legal issue was whether the trial court’s decree merged with the High Court's decree. The defendants argued that the original condition of depositing the balance within 20 days from the trial court decree should still apply. The Supreme Court had to determine which decree was the operative one.
  • Rescission under Section 28: The defendants sought to rescind the contract under Section 28 of the Specific Relief Act, 1963, due to the plaintiffs’ delay in depositing the sale consideration. The court had to consider whether the executing court had the authority to extend the time for payment and if that authority was exercised appropriately.
  • Time for Deposit: A significant point of contention was whether the 20-day timeline from the trial court’s decree remained applicable after the High Court restored the decree. The plaintiffs argued that the court retained the power to extend the timeline considering the conduct of all the parties involved. The Supreme Court had to clarify when the 20-day limit began.

Analysis of the Judgement

Doctrine of Merger

The Supreme Court affirmed the doctrine of merger, holding that the trial court’s decree merged with the High Court’s decision in the second appeals. This meant the High Court’s order, which restored the trial court decree, became the operative decree, and not the decree of the trial court. The condition in the trial court's decree for depositing the money within 20 days from the date of that decree did not survive. The Supreme Court highlighted that there can be only one operative decree at a given point of time. The Supreme Court stated that the direction to deposit the balance amount within 20 days had to be interpreted to mean 20 days from the date of the decree of the trial court and not from the date of the decree of the High Court.

Interpretation of Section 28

The Court interpreted Section 28 of the Specific Relief Act, 1963, as empowering the executing court to extend the time for depositing the amount. The court emphasized its power to extend the time to pay or perform the conditions of a decree for specific performance, despite an application for rescission. The Court recognized that the trial court retains its jurisdiction to deal with the decree of specific performance until the sale deed is executed.

Discretionary Powers of the Court

The Supreme Court emphasized that the court’s power to extend time is discretionary, based on the specific circumstances, conduct of parties, and ensuring that no party is deprived of the fruits of the decree for a technicality or without reasonable cause.

No Undue Delay

The Supreme Court noted that the plaintiffs had sought permission to deposit the amount immediately after the High Court restored the trial court decree. There was no undue delay on the part of the decree holders, as they sought permission to deposit the amount as soon as the High Court restored the trial court’s decree in 2018.

Rejection of the Defendants’ Arguments

The Supreme Court rejected the defendants' argument that the 20-day deadline from the trial court's decree should be revived. The High Court had not issued any specific direction regarding a timeline for the deposit of the sale consideration. The court held that the direction of the trial court would not apply after the High Court had passed its decree.

Distinguishing from Prem Jeevan v. K.S. Venkata Raman

The Supreme Court distinguished this case from its earlier decision in Prem Jeevan v. K.S. Venkata Raman, noting that in Prem Jeevan there was a delay of over two years in depositing the decretal amount with no justification, whereas, in the present case the deposit was made promptly after the High Court's order.

Issue of Functus Officio

The Supreme Court raised, but did not decide, the question of whether a conditional decree that explicitly states that the suit will be dismissed if payment is not made within a specific timeline renders the court functus officio on the expiry of that timeline. The court noted conflicting views on this point, and observed that it would have to be considered in an appropriate case.

Rationale, Reasoning given by the Judges

The Supreme Court’s reasoning was based on several principles:

  • The Doctrine of Merger: The core rationale was that the High Court’s decision superseded the Trial Court's decree. The High Court’s order is the operative decree and the timeline in the trial court's order no longer applied.
  • Discretionary Power of the Court: The Court emphasized that Section 28 grants discretionary power to extend time for compliance with a decree for specific performance. This power is to be used to prevent injustice.
  • Conduct of the Parties: The Court focused on whether the decree-holders (plaintiffs) had acted diligently. It found that they had sought to deposit the money shortly after the High Court order, showing no lack of willingness to honor the decree.
  • Equity and Justice: The Supreme Court ensured that decrees passed by the courts should not be nullified on technical grounds. It balanced equity with law, ensuring a fair outcome for the plaintiffs.
  • No automatic Rescission: The court stated that a mere delay in the deposit of the balance sale amount would not automatically lead to rescission of the contract. An application for rescission of the contract under section 28, would be allowed only where the plaintiff fails to make the deposit as per decree or the extended time granted by the court.
  • No Modification of Decree: The court stated that extension of time for payment does not modify the decree, as the trial court always retains the power to extend the time for payment under the decree.

Excerpt, important quotes from the decision

  • "The doctrine of merger is founded on the rationale that there cannot be more than one operative decree at a given point of time."
  • "The court does not cease to have the power to extend the time even though the trial court had earlier directed in the decree that payment of balance price to be made by certain date and on failure the suit to stand dismissed."
  • "The very fact that Section 28 of the Act itself gives power to grant order of rescission of the decree would indicate that till the sale deed is executed in execution of the decree, the Trial Court retains its power and jurisdiction to deal with the decree of specific performance."
  • "It is incorrect on the part of the appellant herein to say that since the trial court had directed that the balance sale consideration shall be deposited within 20 days, the same direction would be applicable even after the judgment of the High Court in second appeal.”

Points to Remember

  • The doctrine of merger is crucial in appellate decrees. When an appellate court reviews a lower court’s decision, the lower court’s order merges with the higher court’s order.
  • Executing courts have discretionary powers to extend time for payment under Section 28 of the Specific Relief Act.
  • Courts consider the conduct of the parties when deciding whether to grant an extension of time, including whether there was any willful delay or negligence on their part.
  • The power to extend time can prevent injustice and technicalities from defeating the purpose of a decree.
  • The court has the jurisdiction and power to extend time, even if the trial court originally specified the time in the conditional decree.
  • The decree for specific performance is in the nature of preliminary decree, and the court retains control over the decree even after it has been passed.
  • A mere delay in depositing the balance sale consideration does not automatically lead to rescission of contract.
  • When an appeal is provided against the order passed by a tribunal, the decision of the appellate authority is the operative decision in law, even if the appellate court affirms the decision of the tribunal

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