A civil appeal regarding the specific performance of a contract for the sale of immovable property. The case, Ram Lal v. Jarnail Singh (Now Deceased)Through Its Lrs&Ors.,centers on the appellant’s (original plaintiff’s) attempt to execute a decree for specific performance despite a delay in depositing the balance sale consideration. The Supreme Court analyzes previous rulings and the doctrine of merger, ultimately finding that the High Court erred in setting aside the executing court’s order that allowed the deposit, emphasizing that the appellate court had a duty to specify a new time limit for the deposit upon affirming the trial court’s decree. The Court concludes that the delay, while present, did not render the decree unexecutable given the circumstances and that the judgment debtors are entitled to interest on the delayed payment.
(A) Specific Relief Act, 1963, Sections 10, 11(2), 14 , 16 and 28 – Civil Procedure Code, 1908, Order 20 Rule 12-A, Order 21, Rule 34 – Limitation Act, 1963, Article 54 –Specific performance – Execution of decree – Deposit of balance sale consideration – Stipulation of time period – Extension of time – In accordance with the provisions of Order 20 Rule 12A the trial court while allowing the suit and granting the relief of specific performance specifically stipulated two months’ time period for the plaintiff to deposit the balance sale consideration and get the sale deed executed in his favour – However, the judgment and decree passed by the trial court came to be challenged before the appellate court – 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 – In the case on hand the appeal stood dismissed – 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 – Appellate Court did not specify in time limit to make payment of balance sale consideration – 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 – 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 – High Court should not have interfered with the order passed by the executing court – Impugned order passed by the High Court liable to be set aside and that of the executing court affirmed – Balance sale consideration of Rs. 4,87,000/- came to be deposited by the decree holder way back in 2019 and it shall now be disbursed in favour of the defendants with interest accumulated thereon within a period of four weeks from today – 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 – The executing court shall calculate the interest amount at the rate of 9 per cent simple interest and direct the appellant-herein to deposit the said amount within a period of two weeks.
(Para 35, 36, 53, 55 and 56)
(B) Specific Relief Act, 1963, Sections 10, 11(2), 14 , 16 and 28 – Civil Procedure Code, 1908, Order 20 Rule 12-A, Order 21, Rule 34 – Limitation Act, 1963, Article 54 –Specific performance – Execution of decree – Deposit of balance sale consideration – Stipulation of time period – Extension of time – The Decree for specific performance is in the nature of a preliminary decree – Both the parties have reciprocal rights and obligations flowing out of the decree – The decree may fix the time limit for performance and in some cases may also provide for the consequence for non-performance within the time limit or the decree may even be silent on this aspect – The decree enforces specific performance of the contract – The contract between the parties is thus not extinguished by passing of a decree for specific performance and it subsists despite the decree. Section 28 (1) of the Act, makes it clear that the Court does not become a functus officio after the grant of the decree for specific performance and it retains its power and jurisdiction to deal with the decree till the sale deed is executed – 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 – 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 – 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 44 to 49)
Ram Lal V. Jarnail Singh (Now Deceased) Through
Supreme Court: 2025 INSC 301: (DoJ 25-02-2025)
