Mere Delay By Plaintiff In Depositing Balance Sale Consideration Won't Render Specific Performance Decree Inexecutable: Supreme Court

The Supreme Court held that some delay in depositing the balance sale consideration by the buyer, beyond the timeline prescribed in the decree, would not render the decree for specific performance inexecutable if the buyer remained ready and willing to perform his part of the agreement.

A bench of Justices Sanjay Karol and Manoj Misra referred to the recent case of Ram Lal v. Jarnail Singh, 2025 LiveLaw (SC) 283, where it was held:

“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.”

The dispute stemmed from a 2004 agreement under which the appellant agreed to purchase a plot for ₹9.05 lakh. A suit for specific performance was decreed by the Trial Court in 2011, directing execution of the sale deed on deposit of the balance amount within two months. Although the decree was reversed in first appeal, the High Court in second appeal in 2016 restored it without prescribing any fresh time limit.

Following the decision in second appeal, the decree holder filed an execution application on July 4, 2016, about 87 days after expiry of the two month period mentioned in the decree. Substantial portions of the balance consideration were deposited subsequently in August and December 2016.

The judgment debtor raised objections, contending that the execution petition was filed beyond the stipulated time and that the failure to deposit the entire balance consideration within two months showed lack of readiness and willingness. These objections were dismissed by the executing court in January 2018.

However, the High Court in revision held the decree to be inexecutable due to non-deposit within the stipulated time and absence of any extension. Challenging this view, the buyer approached the Supreme Court.

Setting aside the impugned order, the judgment authored by Justice Karol emphasised that a decree for specific performance cannot be treated as dead merely because of a short delay in compliance, unless the conduct of the decree-holder demonstrates a clear abandonment or refusal to perform his obligations.

“In the present facts, it has been held by the Court below that the appellant was ready and willing to perform his part of the contract.”, the cCurt noted, pointing out that the buyer had filed execution proceedings and deposited the consideration, evidencing continued readiness and willingness to perform.

Another aspect discussed by the Court was regarding the application of a doctrine of merger. It stated that by operation of law, where an appellate court affirms a decree for specific performance without prescribing any time limit for depositing the balance sale consideration, the decree cannot be rendered inexecutable merely because the decree-holder deposits the amount beyond the period fixed in the original trial court decree. Recent judgment in Balbir Singh & Anr. v. Baldev Singh was cited.

“The doctrine of merger, as we have already discussed, means that at one point in time, only one decree can subsist. If the order dismissing the objections has been set aside and the execution petition dismissed, there is no decree that could be executed, and as such, the question of extension of time would not arise. Even otherwise, given the finding of readiness and willingness, alluded to above, it would be justified to accept that the delay of 27 days would not strike at the heart of the agreement. The decree of the Trial Court would merge with the final decision of the High Court.”, the court observed.

Accordingly, the appeal was allowed, and the Executing Court, was directed to proceed in accordance with law to execute the decree of specific performance passed by the Trial Court.

Cause Title: DR. AMIT ARYA Versus KAMLESH KUMARI

Citation : 2025 LiveLaw (SC) 1240

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Appearance:

For Petitioner(s) :Mr. P.S. Patwalia, Sr. Adv. (not present) Ms. Natasha Dalmia, AOR Ms. Anisha Jain, Adv. Ms. Shambhavi Singh, Adv.

For Respondent(s) :Mr. Vivek Suri, Adv. Ms. Anukriti Pareek, AOR