Dispute arising from four specific performance decrees for the sale of land. The core issue involves the timely deposit of the balance sale consideration by the plaintiffs (decree holders) following the restoration of the trial court’s conditional decrees by the High Court after intermediate appeals. The defendants (appellants) argued that the failure to deposit the amount within the 20-day period stipulated in the original trial court decree warranted rescission of the contract under Section 28 of the Specific Relief Act, 1963. The Court ultimately dismissed the appeals, finding no error in the High Court’s decision which allowed the deposit, applying the doctrine of merger, and emphasizing that the court retained discretion under Section 28 to extend time for compliance, especially since the High Court had not set a new timeframe.
(A) Specific Relief Act, 1963, Section 28 – Specific performance – Recession of contract – Application for – Whether the defendants/ judgment debtors could have prayed for rescission of contract on the ground that the plaintiffs/ decree holders had failed to deposit the balance sale consideration within the stipulated time period of 20 days as prescribed in the original decree – Section 28 of the 1963 act corresponds to Section 35(c) of the Specific Relief Act, 1877 (“the repealed Act”) it was open to the vendor or lessor in the circumstances mentioned in that section to bring a separate suit for rescission – This section goes further and gives to the vendor or lessor the right to seek rescission in the same suit, when after the suit for specific performance is decreed the plaintiff fails to pay the purchase money within the period fixed – Section 28 of the Act, 1963 seeks to provide complete relief to both the parties in terms of a decree for specific performance in the same suit without requiring one of the parties to initiate separate proceedings – The object is to avoid multiplicity of suits – Likewise, under the present provision where the purchaser or lessee has paid the money, he is entitled in the suit for specific performance to the reliefs as indicated in sub-section (3) like, partition, possession, etc. – A suit for specific performance does not come to an end on passing of a decree and the court which has passed the decree for specific performance retains the control over the decree even after the decree has been passed – The decree for specific performance has been described as a preliminary decree – The power under Section 28 of the Act is discretionary and the court cannot ordinarily annul the decree once passed by it – Although the power to annul the decree exists yet Section 28 of the Act provides for complete relief to both the parties in terms of the decree – 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 power exercisable under this section is discretionary.
(Para 25 and 26)
(B) Merger of decree – Effect of merger – of the trial court’s decree with that of the decree passed by High Court in second appeals – Held that once the High Court allowed the second appeals in favour of the plaintiffs, there was evidently a merger of the judgment of the trial court with the decision of the High Court – Once the High Court as an appellate court in second appeal renders its judgment it is a decree of the second appellate court which becomes executable hence, the entitlement of the decree holder to execute the decree of the second appellate court cannot be defeated – 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 27, 28 and 34)
(C) Doctrine of merger – Explained – Held that the doctrine of Merger or the Merger doctrine in civil proceedings is a common law doctrine that stems from the idea of maintenance of the decorum of the hierarchy of courts and tribunals – The doctrine is based on the simple reasoning that there cannot be, at the same time, more than one operative order governing the same subject matter – To put it simply, if there are two orders passed on the same subject matter, that is, one passed by a subordinate court like a tribunal and another passed by a superior court like the High Court, the operative part of the order by the subordinate court (tribunal in this instance) may be merged with the order of the High Court.
(Para 49)
(D) Civil Procedure Code, 1908, Section 148 – Specific Relief Act, 1963, Section 28 – Specific performance – Conditional decree – Enlargement of time – Recession of contract – Application for -Section 148 of the Code empowers the Court to deal with events that might arise subsequent to an order, for the purpose of enlarging time for payment even though it had been peremptorily fixed – When time for payment of money is extended, it does not mean a modification of the decree – The trial court has power to extend the time, and the expression “such further period as the court may allow” would mean the court which had passed the decree, or, where the application under Section 28 of the Act of 1963, is filed – Court does not lose its jurisdiction after the grant of decree for specific performance nor it becomes functus officio – The very fact that Section 28 of the Act itself gives power to grant order of rescission of the decree, the same 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 – The Court has the discretion to extend time for compliance of the conditional decree as mentioned in the decree for specific performance.
(Para 42 to 25)
Balbir Singh V. Baldev Singh (D) Through His Lrs.
Supreme Court: 2025 INSC 81: (DoJ 17-01-2025)
