SC: Specific Performance Suits Stay Alive Post-Decree, Courts Retain Powers

The Supreme Court ruled that specific performance suits don't end with a decree; courts retain power under Section 28 to modify, extend deadlines, or annul decrees post-judgment.

SC: Specific Performance Suits Stay Alive Post-Decree, Courts Retain Powers

The Supreme Court, in a recent judgment delivered on January 17, has held that a suit for specific performance does not conclude merely upon the passing of a decree. The Court retains control and jurisdiction over the decree, allowing it to exercise discretion under Section 28 of the Specific Relief Act. The Bench comprising Justices JB Pardiwala and R Mahadevan underscored that courts retain the power to extend the time for compliance or annul the decree, emphasizing the discretionary nature of the relief provided under the Act.

Key Observations by the Supreme Court

  • The Court noted that:
    • "A suit for specific performance does not come to an end on passing of a decree, and the court which has passed the decree retains control over it even thereafter."
    • A decree for specific performance is preliminary in nature, and Section 28 of the Act provides complete relief to both parties.
    • The court retains the power to extend the timeline for compliance, even if the decree had earlier directed payment within a fixed period.
  • The Court emphasized that granting or rescinding specific performance remains at the discretion of the courts, and once decreed, they do not automatically lose jurisdiction.

Case Background

  • The trial court had decreed specific performance of an agreement to sell, granting the plaintiff 20 days to deposit the balance sale consideration.
  • The first appellate court interfered with this order; however, the High Court reinstated the trial court’s decision, upholding the decree.
  • The defendants subsequently filed an application under Section 28, citing non-payment within the stipulated period.
  • The application was dismissed by the trial court, and the High Court upheld this dismissal, leading to the present appeal before the Supreme Court.

Court's Legal Reasoning

  • The Court referred to Sardar Mohar Singh v. Mangilal, (1997) 9 SCC 217, which affirmed that courts retain jurisdiction until the execution of a decree.
  • It was observed that until the sale deed is executed in compliance with the decree, the trial court retains power to modify or extend the timeline.
  • The Court cited Commissioner of Income Tax, Bombay v. Tejaji Farasram (AIR 1954 BOM 93) and reiterated:
    • "When an appeal is provided from a decision and the appellate court passes an order, the order of the original court ceases to exist and merges with the appellate court's order."
  • The Supreme Court rejected the appellant's argument that the trial court's directive of 20 days applied even after the High Court's judgment, clarifying:
    • "The direction to deposit the balance consideration within 20 days does not survive after the High Court's judgment in second appeal."

Doctrine of Merger

The Supreme Court reiterated the principle that once an appellate court issues a decision, it supersedes the trial court's decree, as reaffirmed in Commissioner of Income Tax, Bombay v. Amritlal Bhogilal & Co. (1958) 34 ITR 130.

Case Title: BALBIR SINGH & ANR ETC VERSUS BALDEV SINGH (D) THROUGH HIS LRS & ORS. ETC

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