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Specific Performance: Delay in Deposit of Payment

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In Habban Shah v. Sheruddin (Civil Appeal of 2026, arising out of SLP (C) No. 14479 of 2025, 2026 INSC 451), the Supreme Court of India addressed an intricate question of law regarding the executability of a specific performance decree. The court of first instance had directed the execution of a sale deed on the condition that the plaintiff-respondent deposit the balance sale consideration within three months. The balance consideration was not deposited within that period due to the pendency of a first appeal filed by the defendant-appellant, which included a temporary interim stay that subsequently lapsed.

The Supreme Court upheld the decisions of the Executing Court and the High Court, ruling that a decree of specific performance does not automatically become dead or inexecutable merely due to a delay in depositing the balance consideration. The Court emphasized that under Section 28 of the Specific Relief Act, 1963, a contract remains alive until it is formally rescinded by an order of the Court. Since the trial court retained control over the matter as a “superstitious control,” and subsequently allowed the plaintiff’s application to deposit the balance amount, the delay was effectively condoned. Consequently, the decree remained valid and executable.

Details

1. Key Parties and Bench

  • Appellant (Defendant): Habban Shah.
  • Respondent (Plaintiff): Sheruddin.
  • Bench: Hon’ble Justice Pankaj Mithal.

2. Factual Matrix of the Case

  • The Agreement: Habban Shah entered into an agreement to sell agricultural land admeasuring 12 kanals and 19 marlas in village Shikarpur, Haryana, to Sheruddin at Rs. 5,00,000/- per acre. He received an advance sum of Rs. 80,000/-, with the balance to be paid upon execution on or before March 15, 2006.
  • The Suit and Decree: Upon non-execution, Sheruddin filed a suit for specific performance. On October 31, 2012, the trial court decreed the suit, directing the defendant to execute the sale deed within three months after receiving the balance sale consideration.
  • Appellate History: * The defendant challenged the decree in a first appeal. An interim order restraining alienation was granted on December 17, 2012, which quickly lapsed on January 25, 2013. The first appeal was eventually dismissed on November 11, 2014.
    • A second appeal filed by the defendant before the High Court was also dismissed on January 12, 2017, without any interim orders having been granted.
  • Execution & Objections: Sheruddin first applied for execution on March 4, 2013, but it was dismissed for want of prosecution on August 1, 2014, while the first appeal was pending. He moved a second execution application on January 8, 2015. The defendant filed objections on July 14, 2015, claiming the execution was barred by time and inexecutable because the balance money had not been deposited within the stipulated three months.

3. Decisions of the Lower Courts

  • Executing Court: Dismissed the defendant’s objections on September 7, 2015, noting that the plaintiff was ready and willing but could not deposit the amount due to the pendency/interim orders of the first appeal. On October 9, 2015, it formally allowed the plaintiff to deposit the balance amount of Rs. 6,92,410/-, which was duly paid.
  • High Court (Revision): Dismissed the defendant’s revision petition on March 24, 2025, affirming that the plaintiff had repeatedly moved applications to deposit the amount and that the formal permission granted by the Executing Court finalized the compliance.

4. Primary Legal Issue

  • Whether a decree for specific performance becomes completely inexecutable if the plaintiff fails to deposit the balance sale consideration within the exact timeframe stipulated by the court of first instance.

5. Observations and Ruling of the Supreme Court

A. Nature of the Decree’s Direction

The Court analyzed the text of the October 31, 2012 decree. It observed that the primary directive was aimed at the defendant to execute the sale deed within three months upon receiving the balance consideration. While a reciprocal obligation on the plaintiff to pay within three months was implied by law (and mandated under Order XX Rule 12A of the CPC), the decree lacked an explicit penal clause stating that failure to deposit within three months would result in the dismissal or absolute forfeiture of the suit.

B. The Power to Extend Time under Section 28 of the Specific Relief Act

The Court highlighted the settled legal framework surrounding Section 28 of the Specific Relief Act, 1963.

  • A decree for specific performance does not automatically terminate the contract upon a payment default. The passing of a decree is in the nature of a preliminary decree, and the trial court retains “superstitious control” over the matter.
  • The contract remains vitalized until the vendor actively applies for, and the Court grants, a formal order rescinding the contract under Section 28.
  • Crucially, the court that passes the decree has the power to extend the time for payment of the balance consideration.

C. Implied Extension and Condonation of Delay

The Supreme Court ruled that when the Executing Court entertained the plaintiff’s second execution application and explicitly allowed his application to deposit Rs. 6,92,410/- on October 9, 2015, it effectively exercised its judicial discretion to extend the time for deposit. Once the court condoned the delay and accepted the money, it was no longer open to the defendant to assert non-compliance or inexecutability. Furthermore, the defendant had never moved an application to rescind the contract under Section 28.

6. Final Order

The Supreme Court found no legal infirmity or error in the orders passed by the Executing Court and the High Court. Finding the appeal devoid of merit, the Court dismissed the civil appeal, thereby validating the executability of the decree and allowing the registration of the sale deed to proceed in favor of the plaintiff-respondent.

2026 INSC 451

Habban Shah V. Sheruddin (D.O.J. 06.05.2026)

2026 INSC 451 click here to view full text of judgment

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2026 INSC 1002

Sunita Lahu Panchpande v. The District Collector & Ors. (D.O.J. 16.09.2026)

2026 INSC 1002 click here to view full text of judgment

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2026 INSC 1001

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2026 INSC 1001 click here to view full text of judgment

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2026 INSC 1000

Assistant Commissioner of Income Tax & Another v. M/s. Omaxe Limited (D.O.J. 16.09.2026)

2026 INSC 1000 click here to view full text of judgment

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