The Supreme Court has held that a decree for specific performance does not become inexecutable merely because the decree-holder failed to deposit the balance sale consideration within the time stipulated in the decree, so long as the conduct of the decree-holder does not amount to abandonment of the contract.
Case Details
- Case Title: Dr. Amit Arya v. Kamlesh Kumari
- Court: Supreme Court of India
- Bench: Justice Sanjay Karol and Justice Manoj Misra
- Date of Judgment: December 19, 2025
- Citation: 2025 INSC 1486
- Arising out of: SLP (C) No. 20991 of 2022
- Impugned Judgment: August 8, 2022 of the Punjab & Haryana High Court
The appeal arose from execution proceedings relating to a decree for specific performance of an agreement to sell immovable property situated in Panchkula, Haryana.
Background of the Dispute
The parties entered into an agreement to sell on December 11, 2004 for a plot of land measuring 2 biswas and 10 biswasi in Kalka, District Panchkula, for a total consideration of ₹9,05,000.
An amount of ₹1,00,000 was paid as earnest money at the time of execution of the agreement.
When the transaction did not culminate in execution of a sale deed, the purchaser instituted a civil suit seeking specific performance of the agreement, along with a permanent injunction restraining alienation of the property.
In the alternative, recovery of ₹2,46,000 with interest was sought.
Trial Court Decree
By judgment dated May 14, 2011, the Trial Court decreed the suit for specific performance. It directed the defendant to execute the sale deed in favour of the plaintiff upon receipt of the balance consideration of ₹8,05,000 within two months.
The decree further stipulated that in default, the plaintiff would be entitled to have the sale deed executed through court on deposit of necessary expenses.
The operative portion of the decree stated that the defendant was restrained from alienating the property in favour of any person other than the plaintiff and that the plaintiff was entitled to possession of the suit land upon execution of the sale deed.
Proceedings in Appeal
In first appeal, the Additional District Judge reversed the decree for specific performance, holding that the agreement contained a clause for refund of double the earnest money if the sale deed was not executed by the stipulated date, and that the plaintiff had not established entitlement to specific performance.
However, in second appeal, the High Court restored the Trial Court decree. It held that the presence of a clause stipulating a date for execution did not bar a suit for specific performance and that the plaintiff had proved readiness and willingness to perform his part of the contract.
The decree for specific performance was thus reinstated.
Execution Proceedings and Objections
The decree-holder filed an execution application on July 4, 2016.
The judgment-debtor objected, contending that the execution was filed 87 days after expiry of the two-month period fixed in the decree and that the balance sale consideration had not been deposited within that period.
It was argued that the decree had become inexecutable and that the delay demonstrated lack of readiness and willingness.
The Executing Court dismissed the objections on January 20, 2018. However, the High Court, in revision, accepted the objections.
It held that the Executing Court had no power to extend time for deposit of consideration, that no application for extension had been filed before the appellate court, and that mere filing of the execution petition did not automatically extend time. On this reasoning, the execution petition was dismissed.
Issues Before the Supreme Court
The principal question before the Supreme Court was whether the decree for specific performance became inexecutable solely because the execution petition was filed after the expiry of the time fixed in the decree and because the balance sale consideration was deposited belatedly.
A connected issue was whether, after the merger of the Trial Court decree with the appellate judgment, the High Court was justified in treating the two-month time limit as fatal to execution in the absence of any express extension.
Interpretation of Section 28 of the Specific Relief Act
The Court examined Section 28 of the Specific Relief Act, 1963, which empowers the court to extend time for payment of purchase money and to rescind the contract upon default.
Referring to earlier precedents, the Court reiterated that the provision enables extension of time even after a decree for specific performance, and that failure to pay within the stipulated time does not automatically rescind the contract.
Relying on V.S. Palanichamy Chettiar Firm v. C. Alagappan, the Court noted that an application under Section 28 can be entertained by the court which passed the decree when execution is being proceeded with before it.
Readiness, Willingness, and Delay
The Supreme Court disapproved the hyper-technical approach adopted by the High Court. It emphasized that non-payment of balance consideration within the time fixed by the decree does not by itself amount to abandonment of the contract.
The decisive test, the Court observed, is whether the conduct of the decree-holder shows a positive refusal to perform his obligations.
Quoting its earlier decision, the Court reiterated that
“the non-payment of 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.”
On facts, the Court noted that the High Court, while restoring the Trial Court decree in second appeal, had already recorded a finding that the plaintiff was ready and willing to perform his part of the contract.
In this context, a delay of 27 days beyond the stipulated period could not be said to strike at the root of the agreement.
Doctrine of Merger
The Court also addressed the doctrine of merger. It reiterated that once a higher court entertains an appeal on merits, the decree of the lower court merges with that of the appellate court, and only one operative decree subsists at any given time.
Applying this principle, the Court held that after the High Court restored the Trial Court decree in second appeal, that decree merged with the High Court’s judgment.
Consequently, the execution could not be defeated by treating the original two-month period in isolation, particularly when no finding of abandonment or refusal to perform had been recorded against the decree-holder.
Final Decision
Setting aside the High Court’s order that had dismissed the execution petition, the Supreme Court restored the order of the Executing Court rejecting the objections.
It directed that the execution proceedings be revived and proceeded with in accordance with law to give effect to the decree for specific performance.
Allowing the appeal, the Court held that denial of execution on the sole ground of delay in deposit of consideration, in the absence of rescission or abandonment, was contrary to settled law.
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