Ram Lal vs Jarnail Singh (D) 2025 INSC 301 - S. 28 Specific Relief Act - Order XX Rule 12A CPC

Specific Relief Act 1963 - Section 28 - The non-payment of the balance sale consideration within the time period fixed by the Trial Court does not amount to abandonment of the contract and consequent rescinding of the same. The 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 Section 28 of the Act and rescind the contract. (Para 49) Merely because rescission of contract was not sought by the judgment debtor the same would not automatically result in extension of time. (Para 26) 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.- 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. 52. 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. (Para 50-52)

Code of Civil Procedure 1908 - Order XX Rule 12A - Rule 12A makes it obligatory for the court to specify in the decree for specific performance of contract for sale or lease of immovable property the date by which purchase money or other sum should be paid by the vendee or lessee. The trial court has jurisdiction to fix time-limit for depositing the money by the decree- holder under Section 28 of the Specific Relief Act, 1963. The decree is preliminary in nature and the court retains control over it. (Para 34) Appellate Courts owe a duty to comply with the provisions of Order XX Rule 12A -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- 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.(Para 50)

Doctrine of merger - Once the judgment passed by the trial court is challenged before the appellate court the judgment and order passed by the trial court would get merged with the judgment of the appellate court irrespective of the fact whether the appeal is allowed or dismissed- settled. 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 doctrine of merger applies irrespective of whether the appellate court has affirmed, modified or reversed the decree of the trial court. (Para 36-37)

Summary: The appellant filed a suit for specific performance based on a sale agreement - The Trial Court decreed the suit directing the plaintiff to deposit the balance sale consideration (Rs. 6,86,875 minus Rs. 2,50,000 already paid) within two months - The defendants appealed to the District Court, which dismissed the appeal on April 21, 2015, affirming the Trial Court's decree without specifying a new time limit for depositing the balance amount- In January 2017, the appellant filed an execution petition, seeking permission to deposit the balance sale consideration (Rs. 4,87,000). The Executing Court allowed this on May 6, 2019, and the amount was deposited on May 20, 2019- The Punjab and Haryana High Court, on August 30, 2022, overturned the Executing Court’s order, ruling the decree unexecutable due to the appellant’s delay (nearly three years after the appeal dismissal) in depositing the balance amount, absent compelling reasons- The Supreme Court allowed the appeal, set aside the High Court’s order, and upheld the Executing Court’s order.