2026 INSC 463 Page 1 of 35

Civil Appeal @ SLP (C) No. 14206/2025

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. 7355 OF 2026

(@ SLP (C) No. 14206 of 2025)

ANAND NARAYAN SHUKLA …APPELLANTS(S)

VERSUS

JAGAT DHARI …RESPONDENT (S)

J U D G M E N T

MANOJ MISRA, J.

1. Leave granted.

2. This appeal impugns the judgment and order of the High

Court of Madhya Pradesh at Jabalpur

1, dated 05.03.2025, passed

in Misc. Petition No. 4682 of 2023, whereby appellant’s petition

against the order of 7

th Additional District Judge, Satna

2, dated

12.07.2023, passed in Execution Case No. 27A/2017 , was

dismissed.

1

The High Court

2

The Execution Court

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Facts

3. Appellant instituted a suit, inter alia, for specific performance

of an agreement for sale of immovable property dated 14.11.2011.

Under the agreement the respondent agreed to sell 3.75 acres of

land @ Rs.16,00,000 per acre, against which, Rs. 2,50,000 was

paid by way of advance. Trial Court decreed the suit on

03.03.2017 and thereby directed the appellant to pay balance of

the sale consideration to the first respondent (i.e., Defendant No.1)

within a month, or to deposit the same in Court. It was also

directed that on such payment/ deposit, the first respondent shall

execute and register the sale deed.

4. Pursuant to the decree, vide notice dated 01.04.2017, the

appellant called upon the judgment-debtor to execute the sale deed

by receiving Rs. 57,50,000 (i.e., the balance amount) or else face

execution of the decree of which costs would have to be borne by

him. However, neither the balance amount was paid to the

judgment debtor nor the same was deposited in Court within the

stipulated period.

5. In the meantime, first respondent filed an appeal (i.e., First

Appeal No. 311 of 2017) against the Trial Court decree.

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6. As there existed no stay on execution of the decree, on

18.07.2017 the appellant applied for execution of the decree which

gave rise to Execution Case No.27 of 2017. In paragraph 7 of the

execution application, it was stated:

“7. … The plaintiff-decree-holder personally wanted to give

the remaining amount of Rs. 57,50,000/- to the judgment

debtor, but he did not accept it, then on 01.04.2017, the

judgment debtor/defendant was informed by giving notice

through the Advocate that after receiving the remaining

amount of Rs. 57,50,000/- from the decree-holder, he

should execute and register the sale deed in compliance

with the sale agreement regarding the contracted land, but

the judgment debtor did not even comply with the notice,

due to which this application is being presented in the

Court. The decree-holder is ready to deposit the amount of

Rs. 57,50,000/- payable to the judgment debtor in the

Court which should be deposited by the decree-holder and

by giving the amount to the judgment-debtor, the sale deed

should be executed and registered by the judgment debtor

and in case this is not done, the amount should be

deposited in the Court and the contracted land should be

registered in favour of the decree-holder.”

7. On 19.07.2017, the Execution Court passed the following

order:

“Execution obtained from the office.

On behalf of the decree-holder/plaintiff, Shri R.L. Shukla,

Advocate. Judgment debtor absent.

The execution is known to be within the jurisdiction of this

Court. Therefore, it should be registered.

Amount should be duly paid by decree-holder and notice

should be issued to judgment debtor. The next date for

hearing fixed on 06.12.2017.”

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8. Thereafter, multiple dates were fixed (i.e., 06.12.2017,

06.04.2018, 10.01.2019, 23.04.2019, 08.05.2019, 13.08.2019 and

28.11.2019). On 6.12.2017, 06.04.2018 and 10.01.2019 though

the Court noticed that the judgment debtor is not served, yet it

observed that the decree-holder should pay the due amount to the

judgment debtor. Interestingly, no order was passed on those dates

to deposit the due amount. On 23.04.2019, the Execution Court,

while fixing 08.05.2019 as the next date, for the first time directed

the decree holder to deposit the amount in Court. However, on the

next date i.e., 08.05.2019, upon noticing that the judgment debtor

is not served, the Court while fixing the next date i.e., 13.08.2019,

surprisingly did not take notice of its earlier order dated

23.04.2019 and again ordered payment to the judgment debtor. On

13.08.2019, the Court noticed that service of summons was not

effected and, therefore, directed taking of fresh steps to serve

summons on the judgment debtor, while fixing 28.11.2019 for his

as well as decree-holder’s appearance to enable deposit of the

balance amount. On 28.11.2019, again the Court noticed that

steps to serve the judgment-debtor were not taken, therefore, while

fixing 27.04.2020 as the next date, it directed the decree-holder to

take steps within three days. Simultaneously, it ordered that if

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steps are taken, notice shall be issued to the judgment-debtor to

ensure his presence so that the decree holder could make deposit

of the amount payable under the decree in the presence of

judgment debtor. In between, lockdown was ordered due to Covid-

19 pandemic, as a result the matter could be taken not before

26.11.2020. On 26.11.2020, after perusing the records, it was

ordered thus:

“The judgment and decree passed earlier are conditional

and as per the condition, the said amount was to be

deposited within one month, hence first of all it has to be

decided whether the said judgment and decree can

actually be implemented in the present circumstances and

it will take time to take the above decision. Therefore, in

such a situation, first of all the decree-holder/plaintiff is

directed to deposit the amount of Rs. 57,50,000 (Fifty

Seven Lakh Fifty Thousand Rupees) today itself and

submit the receipt to the court by 05.00 PM of the day so

that it can be ascertained whether the decree-holder

actually wants to deposit the said amount even today.

An application was also submitted on behalf of the decree-

holder to the effect that the passed judgment and the

decree be implemented and along with the application, a

photocopy of the order passed in the First Appeal No.

311/17 made before the Honorable High Court, Jabalpur,

along with the documents as per the list, was submitted.

Please appear at 04:45 pm for proceeding in compliance

with the order of the case.”

9. After the above order was passed, the decree-holder deposited

Rs.57,50,000 in the concerned Section of the Court vide Cheque

Nos. 840602 to 840607. In consequence, when the matter was

taken up later in the day of 26.11.2020, it was ordered thus:

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“In compliance with the order, a total of 06 cheques of Rs.

57,50,000/- i.e., cheque Nos. 840602 to 840607 have been

deposited in the Nazarat Section/ Registry Section, Satna

on behalf of the decree-holder and in this regard, the

District Nazir, appearing in the court, has expressed his

consent and stated that the above cheques will be

presented by him in the Bank for payment and thereafter

the said amount will come in the CCD account. Therefore,

the District Nazir is directed to immediately report the said

amount to this Court after it is deposited in the CCD

account.

The case should be presented on 04.12.2020 for

presentation of information regarding deposit of amount

and for taking action as per the judgment and decree.”

10. After the deposit was made, the Execution Court proceeded

to consider whether the decree could be executed despite the delay

in deposit of the balance amount. To consider the said issue, the

matter was adjourned from one date to the other. Ultimately, on

10.12.2022, the following order was passed:

“Mr. R.L. Shukla Advocate for decree-holder is present.

Mr. I.S. Singh Advocate for the judgment debtor is present.

The judgment debtor is directed to comply with the

judgment and decree and submit the necessary

representation on the next date.

The case should be presented on 10.01.2023 for further

action in compliance with the judgment and decree.”

11. Thereafter, on 10.01.2023, the Court ordered thus:

“Mr. R.L. Shukla Advocate for decree-holder is present.

Mr. I.S. Singh Advocate for the judgment debtor is present.

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Time was sought on behalf of the judgment debtor to take

necessary advance action in compliance of the judgment

and decree, which is given after consideration of the case

with the direction to submit a report on the next date after

necessarily complying with the judgment and decree.

The judgment debtor is given a last opportunity to comply

with the judgment and decree.

The case should be presented on 30.01.2023 for further

action in compliance with the judgment and decree.”

12. On 30.01.2023, the judgment-debtor filed an application

claiming, inter alia, that no information was given to him in the

matter. Though the advocate representing him in the original suit

had appeared, he gave no information to him. In response to the

said application, on behalf of the decree-holder / appellant, it was

submitted that the advocate concerned had been representing the

judgment debtor since 2020, and therefore, such objection is

unwarranted. However, the Court, after perusing the record,

passed the following order:

“Since in this case no notice letter is found to have been

issued to the judgment debtor and no Vakalatnama has

been presented by their Advocate. Therefore, notice letter

should be issued to the judgment debtor on presenting the

amount along with a copy of the execution application.

The case should be presented for the presence of the

judgment debtor on 10.02.2023.”

13. Pursuant to the above order, on 14.03.2023, the judgment

debtor formally put in his appearance in the proceeding and

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applied for rescinding the contract and dismissing the execution

application for non-deposit of the balance amount within the

period specified by the decree. In response, the decree-holder

submitted an application that the deposit of Rs. 57,50,000 made

by him be accepted, and the sale deed be executed in his favour.

14. On 12.07.2023 the Court passed a detailed order. The

relevant portion thereof is extracted below:

“From the perusal of the execution case it is seen that an

application was filed by the decree holder on 03.04.2017

that the judgment debtor is not accepting the amount in

compliance of the decree and is not getting the sale deed

executed / registered. Therefore, the decree holder is ready

to deposit the said amount in the court but after the said

date no amount has been deposited by the decree holder

and the order book dated 26.11.2020 also shows that Rs.

57,50,000 has been deposited by the decree holder on the

said date. But it has also been mentioned in the order book

that the earlier judgment and decree was conditional and

as per the condition the amount was to be deposited within

one month and it will take time to decide whether the

judgment and decree can be implemented in the

circumstances of the case or not. In such a situation, to

ascertain whether the decree holder wants to deposit the

amount or not, order dated 26.11.2020 was passed on

which the amount was deposited by the decree holder on

the said date.

Therefore, it is clear that the judgment and decree passed

was conditional and the entire consideration amount was

to be paid to respondent no. 1 or deposited in the court

within one month, but after submitting the application on

03.04.2017 by the decree-holder, no amount was

deposited before 26.11.2020. Therefore, as the amount

has not been deposited within the stipulated time as per

the condition of the decree, the decree cannot be executed

and the execution case is dismissed.

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The decree-holder shall be entitled to receive back the

amount deposited by him.”

15. Aggrieved by the judgment and order of the Execution Court,

the appellant filed a Revision Petition before the High Court under

Article 227 of the Constitution which was dismissed by the

impugned order.

16. We have heard Mr. Saurabh Mishra, learned Senior Counsel,

for the appellant, Mr. Ajay Marwah, learned counsel, for the

respondent, and have perused the record.

Submissions on behalf of the Appellant

17. The learned counsel for the appellant submitted:

(i) The appellant (i.e., the decree-holder) had

issued notice well within time calling upon the

judgment-debtor to execute the sale deed in terms

of the decree. Not only that, the appellant deposited

the entire amount under order of the Execution

Court dated 26.11.2020 and had thereby complied

with the terms and conditions of the decree.

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(ii) The judgment debtor had filed an appeal

against the decree which came to be dismissed on

06.11.2023. On dismissal of the first appeal, the

decree of the Trial Court merged with that of the

Appellate Court and therefore, the deposit of the

balance amount cannot be said to be delayed.

(iii) Assuming there was delay, in the facts of the

case, it was liable to be condoned. Moreover, the

application to rescind the contract and dismiss the

execution application was not made till the deposit

was made. Once, under orders of the Court, the

amount was deposited, the contract could not have

been rescinded. Therefore, the application to rescind

the contract was not maintainable.

(iv) The High Court as well as the Execution Court

adopted a hyper-technical approach inasmuch as

they failed to consider that the facts and

circumstances of the case warranted extension of

time to make the deposit.

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(v) Section 28 of the Specific Relief Act, 1963

3 not

only empowers the Court which passed the decree

of specific performance of the contract to rescind the

contract for non-deposit of the purchase money

within the period allowed by the Court, but also

empowers the Court to extend the said period.

(vi) The power of rescission including extension of

time period for deposit is not to be exercised

mechanically. Rather, a justice oriented approach is

required upon consideration of entire facts and

circumstances including the conduct of the parties.

Here, the judgment-debtor was not interested in

complying with its part under the contract/ decree

and had filed a first appeal impugning the decree

which came to be dismissed on 06.11.2023. What is

relevant is that even before dismissal of the appeal,

the decree holder had deposited the balance amount

on 26.11.2020. In such circumstances, there was

3

1963 Act

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no justification to rescind the contract and dismiss

the execution application.

(vii) Even otherwise, if the judgment-debtor is to

suffer some loss on ground of delay, the Court has

power to direct the decree holder to deposit an

additional amount to compensate the judgment -

debtor, for which the appellant is ready.

Submissions on behalf of the respondent

18. Per contra, learned counsel for the respondent submitted:

(i) Order sheet of the Execution Court reveals that

at the time of registration of the execution case, in

2017 itself, the Court directed the appellant to make

payment of the balance amount yet, despite

repeated directions, such deposit was not made

until 26.11.2020.

(ii) Permission to make such deposit was without

prejudice to the right of the judgment debtor,

therefore there is no question of waiver of right to

seek recission of the contract . Besides, the

judgment debtor was not served with notice of the

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execution proceedings. As soon as the judgment-

debtor came to know about the execution

proceedings, application under Section 28 was filed.

(iii) Mere filing of appeal against the decree does not

operate as a stay on the operation of the decree,

therefore the appellant cannot take advantage of

pendency of the appeal in delaying payment/

deposit.

(iv) The question of merger of trial court decree in

the order of appellate court does not arise as the first

appeal was dismissed for want of prosecution on

06.11.2023.

(v) The appellant had paid a meagre amount by way

of advance, and had failed to comply with the

direction in the decree therefore, equitable relief of

extension of time is not available to him.

(vi) The Execution Court was justified in dismissing

the execution application and the High Court

justifiably upheld the order of the Execution Court.

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Issues

19. Upon consideration of the rival contentions, the following

issues arise for our consideration in this appeal:

(A) Whether the decree of specific performance

passed by the trial court merged in the order of the

appellate court even though the appellate court

dismissed the appeal for non-prosecution?

(B) Whether respondent’s application under Section

28 of the 1963 Act was maintainable after the Court

had granted permission to make deposit of the

balance amount and, pursuant thereto, the amount

was also deposited?

(C) Whether the rescission of the contract and

consequential dismissal of the execution application

vitiated by a pedantic approach of the court(s) below

as they failed to consider the facts and

circumstances of the case as also whether the

decree could be saved by compensating the

judgment-debtor for the delay in deposit of the

balance sale consideration?

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Issue (A)

20. The argument on behalf of the appellant is that the trial court

decree merged with the appellate court decree and therefore, in

absence of any direction in the appellate court decree to make

deposit, the contract could not have been rescinded by invoking

Section 28 of the 1963 Act. Per contra, on behalf of the respondent,

it is submitted that there is no decree of the appellate court as the

appeal was dismissed for non-prosecution. Hence, there is no

question of merger.

21. On the issue of merger of the trial court decree in the appellate

court decree, the law is settled. The doctrine of merger is based on

the principle of propriety in the hierarchy of the justice-delivery

system. The said doctrine postulates that there cannot be more

than one operative decree governing the same subject matter at a

given point of time. Once the superior Court has disposed of the lis

before it either way - whether the decree or order under appeal is

set aside or modified or simply confirmed, it is the decree or order

of the superior Court, tribunal or authority which is the final,

binding and operative decree or order wherein merges the decree

or order passed by the Court, tribunal or the authority below. The

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doctrine of merger does not make a distinction between an order of

reversal, modification or an order of confirmation passed by the

appellate authority/ court

4. However, the doctrine of merger would

only apply in a case when a higher forum entertains an appeal or

revision and passes an order on merit and not when the appeal or

revision is dismissed on the ground of delay in filing the same

5.

22. Section 2 (2)

6 of the Code of Civil Procedure, 1908

7, which

defines a decree, specifically excludes an order of dismissal in

default from the ambit of a decree. As a sequitur, for there to be a

merger of the trial court decree in the appellate court decree, there

must be an adjudication on merits, though it is immaterial whether

the decree or order under appeal is set aside or modified or simply

confirmed. In our view, dismissal of the appeal for non-prosecution

would not merge the trial court decree in the order of the appellate

court. In the present case, there is no dispute that the appeal of

4

Kunhayammed and others v. State of Kerala and another, (2000) 6 SCC 359; Chandi Prasad & Ors. v. Jagdish

Prasad & Ors., (2004) 8 SCC 724.

5

State of Kerala & Anr. v. Kondottyparambanmoosa & Ors, (2008) 8 SCC 65

6

Section 2 (2). – “Decree” means the formal expression of an adjudication which, so far as regards the Court

expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in

controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a

plaint and the determination of any question within section 144, but shall not include -

(a) any adjudication from which an appeal lies as an appeal from an order, or

(b) any order of dismissal for default.

Explanation. - A decree is preliminary when further proceedings have to be undertaken before the suit can be

completely disposed of. It is final when such adjudication completely disposes of the suit. It may be partly

preliminary and partly final.

7

CPC

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judgment-debtor was dismissed for non-prosecution; therefore, in

our view, there would be no merger of the trial court decree in the

appellate court order. Issue (A) is answered accordingly.

Issue (B)

23. The next argument on behalf of the appellant is that once the

Execution Court permitted the appellant to deposit the balance

consideration even after expiry of the period fixed by the trial court

decree, it would be deemed that the Court had extended the time

to deposit. Therefore, the application to rescind the contract for

non-deposit was not maintainable and ought to have been

dismissed. On this aspect, we notice that the order of the Execution

Court, dated 26.11.2020, permitting deposit did not determine the

rights of the parties qua rescission of the contract. Rather, the

deposit was permitted just to test the bona fides of the decree

holder in pursuing the execution. Though such deposit becomes a

relevant factor for determining whether the decree holder had been

throughout ready and willing to perform his obligation under the

contract/ decree, it would not extinguish the right of the judgment-

debtor to seek rescission of the contract. We, therefore, hold that

by permitting the decree holder to make deposit to show his bona

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fides, the Court did not foreclose the right of the judgment debtor

to seek rescission of the contract under Section 28 of the 1963 Act.

Issue (B) is decided accordingly.

Issue (C)

24. Before we address Issue (C), it would be apposite to notice the

provisions of Section 28

8 of the 1963 Act. A plain reading of sub-

section (1) of Section 28 would indicate that it enables the vendor

or lessor to apply in the same suit in which the decree is made to

8

28. Rescission in certain circumstances of contracts for the sale or lease of immovable property, the

specific performance of which has been decreed.—(1) Where in any suit a decree for specific performance of a

contract for the sale or lease of immovable property has been made and purchaser or lessee does not, within

the period allowed by the decree or such further period as the court may allow, pay the purchase money or

other sum which the court has ordered him to pay, the vendor or lessor may apply in the same suit in which the

decree is made, to have the contract rescinded and on such application the court may, by order, rescind the

contract either so far as regards the party in default or altogether, as the justice of the case may require.

(2) Where a contract is rescinded under sub-section (1), the court—

(a) shall direct the purchaser or lessee, if he has obtained possession of the property under the contract,

to restore such possession to the vendor or lessor, and

(b) may direct payment to the vendor or lessor of all the rents and profits which have accrued in respect

of the property from the date on which possession was so obtained by the purchaser or lessee until

restoration of possession to the vendor or lessor, and, if the justice of the case so requires, the

refund of any sum paid by the vendee or lessee as earnest money or deposit in connection with

the contract.

(3) If the purchaser or lessee pays the purchase money or other sum which he is ordered to pay under the

decree within the period referred to in sub-section (1), the court may, on application made in the same suit,

award the purchaser or lessee such further relief as he may be entitled to, including in appropriate cases all or

any of the following reliefs, namely—

(a) the execution of a proper conveyance or lease by the vendor or lessor;

(b) the delivery of possession, or partition and separate possession, of the property on the execution

of such conveyance or lease.

(4) No separate suit in respect of any relief which may be claimed under this section shall lie at the instance

of a vendor, purchaser, lessor or lessee, as the case may be.

(5) The costs of any proceedings under this section shall be in the discretion of the court.

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have the contract rescinded on failure of the purchaser or lessee,

as the case may be, to pay or deposit the purchase money or other

sum within the period allowed by the decree or such further period

as the court may allow. Upon receipt of such application the court

may, by order, rescind the contract. Use of phrases “may, by order,

rescind” and “such further period as the court may allow” make it

clear that the provision leaves discretion in the court either to

rescind the contract and, consequently, the decree, or to extend

the time for making payment/ deposit. Sub-section (4) makes it

clear that no separate suit in respect of any relief which may be

claimed under this section shall lie at the instance of a vendor,

purchaser, lessor or lessee, as the case may be. Therefore, what is

clear is that the court that passed the decree does not become

functus officio on passing the decree. It retains control over the

decree even after it is passed. By use of the expression “may, by

order, rescind” in sub-section (1), the legislative intent is clear that

it is a discretionary power and, therefore, there is no automatic

rescission in the event of default. As a sequitur, the Court that

passed the decree is vested with the power to extend the period

stipulated in the decree for deposit. Further, the language of sub-

section (4) makes it clear that not only the vendor or lessor, but

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also the purchaser or lessee, can apply to the Court that passed

the decree either to rescind the contract or to extend the time

period for payment/ deposit. Now, we shall notice few decisions

where this Court has construed Section 28 of the 1963 Act and laid

down principles guiding the exercise of power thereunder.

25. In Sardar Mohar Singh v. Mangilal

9, a three-Judge Bench

of this Court held:

“4. From the language of sub-section (1) of Section 28, it

could be seen that the Court does not lose its jurisdiction

after the grant of the decree for specific performance nor it

becomes functus officio. The very fact that Section 28 itself

gives power to grant order of rescission of the decree 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. It would

also be clear that the court has power to enlarge the time

in favor of the judgment debtor to pay the amount or to

perform the conditions mentioned in the decree for specific

performance, in spite of an application for rescission of the

decree having been filed by the judgment -debtor and

rejected. In other words, the court has the discretion to

extend time for compliance of the conditional decree as

mentioned in the decree for specific performance. It is true

that the respondent has not given satisfactory explanation

of every day's delay. It is not, unlike Section 5 of the

Limitation Act, an application for condonation of delay. It

is one for extension of time. Under these circumstances,

the executing court as well as the High Court had

exercised discretion and extended the time to comply the

conditional decree. Accordingly, we do not find any valid

and justifiable reason to interfere with the order passed by

the High Court confirming the order of the executing court

when in particular, the High Court has further enhanced

a sum of rupees 16,000 to compensate the petitioner for

loss of enjoyment of the money…”

9

(1997) 9 SCC 217

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(Emphasis supplied)

26. In K. Kalpana Saraswathi v. P.S.S. Somasundaram

Chettiar

10, while holding that the Court has power to extend time

for making deposit, this Court, in the words of Krishna Iyer, J.,

observed:

“4. It is perfectly open to the court in control of a suit for

specific performance to extend the time for deposit, and

this court may do so even now to enable the plaintiff to get

the advantage of the agreement to sell in her favor. The

disentitling circumstances relied upon by the defendant

respondent are offset by the false pleas raised in the course

of the suit by him and rightly negatived. Nor are we

convinced that the application for consideration and

extension of time cannot be read, as in substance it is, a

petition for more time to deposit. Even so, specific

performance is an equitable relief and he who seeks equity

can be put on terms to ensure that equity is done to the

opposite party even while granting the relief. The final end

of law is justice, and so the means to it too should be

informed by equity. That is why he who seeks equity shall

do equity. …”

27. In Bhupinder Kumar v. Angrej Singh

11, after considering

earlier decisions, this Court observed that when the Court passes

the decree for specific performance, the contract between the

parties is not extinguished. The decree for specific performance is

in the nature of a preliminary decree and the suit is deemed to be

pending even after the decree. The Court proceeded to observe:

10

(1980) 1 SCC 630

11

(2009) 8 SCC 766

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“22. Sub-section (1) of Section 28 makes it clear that the

Court does not lose its jurisdiction after the grant of decree

for specific performance nor it becomes functus officio. On

the other hand, Section 28 gives power to the court to

grant an order of rescission of the agreement and it has

the power to extend the time to pay the amount or perform

the conditions of decree for specific performance despite

the application for rescission of the agreement/decree. In

deciding an application under Section 28 (1) of the Act, the

court has to see all the attending circumstances including

the conduct of the parties.”

(Emphasis supplied)

28. In Ramankutty Guptan v. Avara

12, this Court answered two

questions. One, whether an application under Section 28 of the

1963 Act is maintainable in the court of first instance when the

decree has been passed by the appellate court. Second, whether

the execution court can entertain an application under Section 28

if it happens to be the court in which the suit was instituted. After

taking note of the provisions of Section 37 of CPC, it was held:

“8 … Therefore, it is clear that the decree of the appellate

court would be construed to be the decree passed by the

court of first instance. It is settled law that an appeal is a

continuation of the suit. Therefore, when a decree for

specific performance has been dismissed by the trial court,

but decreed by the Appellate Court, it should be construed

to be in the same suit. When the decree specifies the time

for performance of the conditions of the decree, on its

failure to deposit the money, Section 28(1) itself gives

power to the Court to extend the time on such terms as

the Court may allow to pay the purchase money or other

sum which the Court has ordered him to pay. In K.

Kalpana Saraswathi v. P.S.S. Somasundaram Chettiar, this

Court held that on an oral prayer made by the counsel for

the plaintiff for permission to deposit the entire amount as

12

(1994) 2 SCC 642

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directed by the trial court this Court directed the appellant

to deposit the amount within six months from that date

together with interest and other conditions mentioned

therein. An application for extension of time for payment

of balance consideration may be filed even in the court of

first instance or in the appellate court in the same suit as

the decree of the trial court stands merged with that of the

appellate court which decree is under execution. It is to be

seen that the procedure is the handmaid for justice and

unless the procedure touches upon jurisdictional issue, it

should be moulded to subserve substantial justice.

Therefore, technicalities would not stand in the way to

subserve substantive justice. Take a case where the decree

is transferred for execution to a transferee executing court,

then certainly the transferee court is not the original court

and execution court is not the “same court” within the

meaning of Section 28 of the Act. But when an application

has been made in the court in which the original suit was

filed and the execution is being proceeded with, then

certainly an application under Section 28 is maintainable

in the same court.”

(Emphasis supplied)

29. Following the view taken in Ramankutty Guptan (supra), in

V.S. Palanichamy Chettiar Firm v. C. Alagappan & Anr.

13, this

Court held:

“16. In view of the decision of this Court in Ramankutty

Guptan case when the trial court and the executing court

are the same, the executing court can entertain the

application for extension of time though the application is

to be treated as one filed in the main suit. On the same

analogy, the vendor judgment -debtor can also seek

rescission of the contract of sale or take up this plea in

defence to bar the execution of the decree.”

(Emphasis supplied)

30. In Ramankutty Guptan (supra), though it was clarified that

the phrase “in the same suit” as used in Section 28 would mean in

13

(1999) 4 SCC 702

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the suit itself and not in the execution proceedings, it was held that

if the execution application has been filed in the same court in

which the original suit was instituted i.e., the court of first

instance, the application can be entertained though it should be

numbered as an interlocutory application on the original side.

31. Following the aforesaid decisions, in Ishwar (Since

Deceased) thr. Lrs and Others v. Bhim Singh and Another

14,

this Court held:

“22. The law is, therefore, settled that an application

seeking rescission of contract, or extension of time, under

Section 28 (1) of the 1963 Act, must be decided as an

application in the original suit wherein the decree was

passed even though the suit has been disposed of. As a

sequitur, even if the Execution Court is the Court of first

instance with reference to the suit wherein the decree

under execution was passed, it must transfer the

application filed under Section 28 to the file of the suit

before dealing with it.”

32. In Ram Lal v. Jarnail Singh

15, this Court held that it should

be borne in mind that appeal is a continuation of the original

proceedings and the power of the Court to extend the time for

depositing the amount can be exercised even at the appellate stage

by the Court. It was further held that Order XX Rule 12A of CPC

14

2024 SCC OnLine SC 2338

15

2025 SCC OnLine SC 584

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requires the Court which passes the decree for specific

performance of a contract for the sale or lease of immovable

property to specify the period within which the purchase money or

the other sum is to be paid by the purchaser or the lessee. It was

held that where an appeal is filed against the decree passed by the

trial court and the appeal is disposed of, the appellate court should

specify the time for deposit of balance sale consideration. In that

light, this Court held that if the appellate court fails to specify any

time period, then it is expected of the decree-holder to make the

deposit within a reasonable period of time. This Court thereafter

proceeded to summarise the law qua execution of decree of specific

performance in the following terms:

“44. The decree for specific performance is in the nature of

a preliminary decree. Both the parties have reciprocal

rights and obligations flowing out of the decree. The decree

may fix the time limit for performance and in some cases

may also provide for the co nsequences for non-

performance within the time limit or the decree may even

be silent on this aspect.

45. The decree enforces specific performance of the

contract. The contract between the parties is thus not

extinguished by passing of a decree for specific

performance and it subsists despite the decree. Section 28

(1) of the Act makes it clear that the court does not become

functus officio after the grant of the decree for specific

performance and it retains its power and jurisdiction to

deal with the decree till the sale deed is executed.

46. The court has been conferred with the power to extend

the time to pay the amount and while taking into

consideration the delay that is sought to be condoned by

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the plaintiff, the court does not adjudge the same like an

application under section 5 of the Limitation Act, where

each day’s delay must be explained. The Court is given the

discretion to extend the time, and the provision therefore

seeks to provide complete relief to both the parties in terms

of the decree for specific performance.

47. The power and jurisdiction granted under Section 28

(1) of the Act, enables the court to extend the period for

payment of the purchase money if it has not been paid

within the period allowed by the decree. It also enables the

judgment debtor to seek for rescinding the contract for

non-compliance of the directions given in the decree and

while considering this application, the court is given the

discretion to rescind the contract or in an appropriate case

to even extend the time for paying the purchase money.

48. It should also be borne in mind that appeal is a

continuation of the original proceedings and the power of

the Court to extend the time for depositing the amount can

be exercised even in the appellate stage by the Court.

49. In the considered view of this court, the Appellate

Court, after deciding the appeal on merits, could have

called upon the plaintiff to deposit the balance sale

consideration by fixing a time limit. This would have at

least given an opportunity to the plaintiff to fulfill his

obligation. The non-payment of the balance 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. There must be an

element of willful negligence on the part of the plaintiff

before a court proceeds to invoke Section 28 of the Act and

rescind the contract.

50. This litigation is an eye-opener for the appellate courts

reminding that they owe a duty to comply with the

provisions of Order XX Rule 12A of the CPC. Where an

appeal is filed against the decree passed by the trial court

and the appeal is disposed of, the appellate court should

specify time to deposit the balance sale consideration. It is

too much to say that since the Trial Court had granted 2

months’ time to the decree holder to deposit the balance

sale consideration the same time period would apply even

to the decree that may be drawn by the appellate court.

What is executable is the decree passed by the appellate

court. The appellate court owes a duty to specify the time

period. If during the specified time period the decree holder

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is not in a position to deposit the balance sale

consideration or, in other words, fails to deposit the

balance sale consideration and later upon expiry of the

specified time period seeks permission to deposit, then it

would be within the discretion of the trial court to grant

further time to deposit the balance sale consideration or

decline. This discretion has to be exercised judiciously

keeping in mind various factors like bona fide of the decree

holder, the cause for failure to deposit the balance sale

consideration in time, the length of delay and also the

equities that might have been created during the

interregnum period in favor of the judgment debtor. It is

the cumulative effect and considerations of such factors

that should weigh with the court concerned while

permitting the decree holder to deposit the sale

consideration beyond the time period that might have been

prescribed by the trial court in its final decree.”

(Emphasis supplied)

33. Upon consideration of the provisions of Section 28 of the 1963

Act as also the decisions noticed above, in our view, the legal

principles, inter alia, guiding the exercise of power under Section

28 of the 1963 Act could be summarized as under:

(i) A decree for specific performance of a contract

is in the nature of a preliminary decree and

therefore, till the deed is executed pursuant to the

decree, the Court that passed the decree is vested

with the jurisdiction to either rescind the contract /

the decree for non-payment/non-deposit within the

stipulated period or extend the period for making

such payment/ deposit.

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(ii) Neither there is an automatic rescission of the

contract/ decree for non-payment/ non-deposit

within the period stipulated by the decree, nor there

is an automatic extension of time by making such

deposit, if the stipulated period for payment/

deposit has expired. However, where the decree

stipulates that on failure to pay / deposit within the

specified period, the decree shall stand rescinded or

the suit shall stand dismissed, the decree is

rendered inexecutable on failure to pay/ deposit

16.

(iii) Prayer to extend the time for making deposit in

compliance of the conditions stipulated in the

decree may be made prior to, or even after, expiry of

the period stipulated therefor

17.

(iv) There is no form prescribed for making the

prayer to extend the time to make such payment or

deposit. Therefore, the prayer seeking permission to

deposit the defaulted amount may be treated as one

for extension of time to deposit. Such prayer may

16

P.R. Yelumalai v. N.H. Ravi, (2015) 9 SCC 52

17

Johri Singh v. Sukhpal Singh and others, (1989) 4 SCC 403

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Civil Appeal @ SLP (C) No. 14206/2025

be made even orally wh ile the Court seeks to

address an application for rescission of the

contract/ decree or when the decree is put for

execution, provided the execution court is the one

which passed the decree. However, if the decree is

passed by the appellate court, such prayer/

application may be made before the court of first

instance having regard to the provisions of Section

37 of CPC. Further, what is important is that such

an application must be treated as an application in

the suit and numbered accordingly.

(v) As specific performance of a contract is an

equitable relief, while considering the prayer for

rescission of the contract/ decree, or for extension

of time to make deposit in compliance of the decree,

the Court must be guided by principles of equity.

Therefore, while considering the prayer for

extension of time to make deposit, to balance the

equities, the Court would have to consider the

attending facts and circumstances of the case, the

conduct of the parties and whether, by putting the

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Civil Appeal @ SLP (C) No. 14206/2025

decree holder to such additional terms and

conditions, the judgment debtor could be

adequately compensated for the delay.

(vi) Though each day’s delay in deposit need not be

explained as in an application under Section 5 of the

Limitation Act, the test is whether from the conduct

of the decree holder it could be logically inferred that

he had no intention to complete his part of the

contract. If it appears so, and there appears an

element of willful negligence on the part of the

decree holder in complying with the terms of the

decree, the Court may invoke its power under

Section 28 and rescind the contract.

(vii) Under Order XX Rule 12 A of CPC , when a

decree for specific performance of a contract for the

sale, or lease of immovable property, orders that the

purchase-money or other sum is to be paid by the

purchaser or lessee, the Court must specify the

period within which the payment shall be made.

Therefore, where the suit for specific performance is

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dismissed by the trial court but decreed by the

appellate court, or where the appeal against the

decree for specific performance is dismissed on

merits, the Court must fix the time within which

such payment is to be made. If no time limit is fixed,

the compliance thereof would have to be within a

reasonable period. As to what would be the

reasonable period would depend on facts of the case.

34. In light of the aforesaid legal principles, we shall now consider

whether the Execution Court (i.e., the Court which passed the

decree) or the High Court (i.e., the Revisional Court) took into

consideration all the relevant facts which were essential for

determining whether the contract/ decree was liable to be

rescinded or the decree holder was entitled to the discretionary

relief of extension of time to make deposit, and if so, on what terms.

35. The decree of specific performance passed in favour of the

appellant dated 03.03.2017 directed that the plaintiff shall pay to

the defendant no.1 entire consideration amount @ Rs.16,00,000

per acre for the land bearing Khasra No. 1463/ 12 dh/2, area 3.75

acres, situated at Mauza Rampur Chaurasi, Circle Raigon, Tehsil

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Raghuraj Nagar, District Satna within one month or deposit the

same in the Court. It was provided that upon payment by the

plaintiff of the said amount to defendant No.1 or depositing it in

the Court, defendant No.1 shall register the sale of the said land in

favor of the plaintiff within two months, and if defendant No.1 does

not do so, then after fulfilling all the legal formalities for registration

of the disputed land by the plaintiff and paying the stamp duty as

per rules, the contract of sale shall be executed by the Court on

behalf of defendant No.1 in favor of the plaintiff.

36. On 3.4.2017, the decree holder (i.e., the appellant) filed an

application before the Court praying for execution/ registration of

the sale deed on payment of the due amount of Rs.57,00,000. In

the application, it was stated that the applicant had sent legal

notice to the judgment debtor, but the judgment debtor neither

accepted the sum nor executed or registered the sale deed. On

18.7.2017 the decree holder filed a formal application for

execution. Though the application was registered, no order was

passed to deposit the amount in Court till 23.04.2019. Prior to

23.04.2019, the direction was to pay to the judgment-debtor,

which was not possible because he was not willing to accept having

already preferred an appeal against the trial court’s decree.

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37. On 23.04.2019, for the first time direction to deposit the

amount in Court was made while simultaneously issuing notice to

the judgment-debtor, fixing 08.05.2019. Thereafter, on the

following date i.e., 08.05.2019, even though the judgment debtor

was not served by that date, the Court directed that the decree

holder should pay the due amount. Simultaneously, while issuing

notice to the judgment-debtor, the Court fixed 13.08.2019. On

13.08.2019, the Court directed that if the decree holder submits

the amount along with the process fee, notice shall be issued to the

judgment-debtor to be present on 28.11.2019. Simultaneously, it

ordered that the decree holder shall deposit the amount on

28.11.2019. On 28.11.2019, the Court fixed 27.04.2020 requiring

the presence of judgment debtor on that date, and directed the

decree holder to deposit the amount on 27.04.20 20.

Unfortunately, on 27.04.2020 there was a lockdown due to Covid-

19 pandemic, and therefore, the matter was taken up on

26.11.2020 when, under orders of the Court, the balance amount

was deposited. In between, First Appeal No.311 of 2017 filed by

the defendant(s)/ judgment-debtor(s) against the trial court’s

decree was pending, which came to be dismissed for non -

prosecution on 06.11.2023.

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38. The Execution Court dismissed the execution application by

simply observing that the decree was conditional, the amount was

to be paid within one month, but no amount was deposited till

26.11.2020, even though the application was submitted on

03.04.2017, therefore the decree cannot be executed.

39. The High Court dismissed the revision petition by a short

order affirming the view of the Court below.

40. Neither the Execution Court nor the High Court took into

consideration that though the decree fixed a time frame for deposit

of the balance consideration, it did not provide for the

consequences of failing to adhere to the time schedule. In such

circumstances, in our view, there could be no automatic rescission

of the decree for specific performance. Thus, the Court while

exercising its power under Section 28 of the 1963 Act was required

to consider whether the decree was liable to be rescinded or the

decree holder was entitled to get extension of time up to the date of

deposit in Court. Though, while granting the relief of extension, it

was open for the Court to balance the equities by putting the decree

holder to such terms as may adequately compensate the judgment

debtor for the delay.

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41. As we find that neither the Execution Court nor the High

Court has considered the matter in proper perspective and in

accord with the settled principles governing the exercise of power

under Section 28 of the 1963 Act, we deem it appropriate to set

aside both the impugned orders, namely, the order of the High

Court and of the Execution Court, and restore the Execution

Application and all other applications filed therein qua rescission

of contract/ extension of time to deposit to their original number

on the file of the Execution Court/ the Court of first instance for a

fresh consideration in accordance with the law and in light of the

observations made in this judgment. Further, the Court shall deal

with those application(s) as application(s) in the suit and shall be

numbered as such. Issue C is decided accordingly.

42. The appeal is allowed in the aforesaid terms. Pending

applications, if any, shall stand disposed of.

.…….…………………….J.

(Manoj Misra)

…….…………………….J.

(Manmohan)

New Delhi;

May 8, 2026