Suit For Specific Performance Doesn't End With Passing Of Decree; Court Retains Power To Annul Decree Or Extend Time : Supreme Court

The Supreme Court (on January 17), observed that a suit for specific performance does not conclude after the passing of a decree and that the court retains its control even after the decree is passed. The Bench of Justices JB Pardiwala and R Mahadevan also said that the court's power under Section 28 of the Specific Relief Act is discretionary. For reference, this provision provides that after a specific performance has been decreed in a suit and the plaintiff fails to pay the purchase money within the stipulated time, the court may rescind the contract after receiving an application for the same.“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 Court observed that the 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."It is well settled position of law that 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”"In the present case, the trial court had directed the specific performance of an agreement to sell and granted 20 days to the plaintiff to deposit the balance sale consideration. Subsequently, the High Court restored the Trial Court's order, which was initially interfered with by the first appellate court.However, at the time of execution, the defendants filed a Section 28 application on account of non-payment of the remaining amount. The same application came to be dismissed and the order was affirmed by the High Court. Thus, the present appeal.The Court referred to a plethora in regard to Section 28. One of these was the decision in Sardar Mohar Singh v. Mangilal, (1997) 9 SCC 217. Therein, it was observed that the Court does not lose its jurisdiction after the grant of decree for specific performance. Further, Section 28 indicates that till the execution of a decree, the Trial Court retains its power to deal with the decree of specific performance.It also rejected the appellant/ defendant's contention that the direction of the Trial Court pertaining to depositing the sale consideration within 20 days, is applicable even after the High Court's judgment. It pointed out that the High Court did not issue any specific direction regarding the deposit of the balance sale consideration.To support, reliance was placed on several judgments including Commissioner of Income Tax, Bombay v. Tejaji Farasram reported in AIR 1954 BOM 93:“It is a well established principle of law that when an appeal is provided from a decision of a tribunal and the appeal Court after hearing the appeal passes an order, the order of the original Court ceases to exist and is merged in the order of the appeal Court, & although the appeal Court may merely confirm the order of the trial Court, the order that stands and is operative is not the order of the trial Court but the order of the appeal Court.”Pertinently, this observation was reiterated by the Supreme Court in Commissioner of Income Tax, Bombay v. Amritlal Bhogilal & Co. reported in (1958) 34 ITR 130. Building on this, the Court observed:“It is incorrect on the part of the appellant herein to say that since the trial court had directed that the balance sale consideration shall be deposited within 20 days, the same direction would be applicable even after the judgment of the High Court in second appeal.”In view of this, while dismissing the present appeal, the Division Bench concluded that the High Court had committed no error while passing the impugned judgment.Also from the judgment: Higher Court's Order Becomes Final, Trial Court's Order Gets Merged With It : Supreme Court Explains Doctrine Of MergerCase Title: BALBIR SINGH & ANR ETC VERSUS BALDEV SINGH (D) THROUGH HIS LRS & ORS. ETCCitation: 2025 LiveLaw (SC) 82Click here to read/download the judgment

Suit For Specific Performance Doesn't End With Passing Of Decree; Court Retains Power To Annul Decree Or Extend Time : Supreme Court

Gyanvi Khanna

Tags