Delay In Depositing Balance Sale Consideration Doesn’t Render Specific Performance Decree Inexecutable; Supreme Court
Kiran Raj
The Supreme Court of India Division Bench of Justice Sanjay Karol and Justice Manoj Misra set aside the High Court order that had treated a specific performance decree as incapable of execution due to the buyer’s delayed filing of execution and delayed deposit of the balance sale consideration. The Court restored the executing court’s order rejecting the seller’s objections and directed the executing court to proceed to execute the decree for sale of the immovable property under the agreement to sell. It held that a delay in depositing the balance amount beyond the time fixed in the decree would not, by itself, make the decree inexecutable where the buyer’s conduct continued to show readiness and willingness to complete the transaction.
The dispute arose from an agreement to sell immovable property situated in District Panchkula, under which the purchaser paid earnest money at the time of execution. The seller did not execute the sale deed, leading the purchaser to institute a suit seeking specific performance of the agreement, along with permanent injunction, and in the alternative, recovery of money with interest.
The trial court decreed the suit for specific performance and directed execution of the sale deed on receipt of the balance sale consideration within two months. The decree was reversed by the first appellate court, which granted only the alternative relief of refund of earnest money. In second appeal, the High Court restored the trial court decree after recording a finding that the purchaser was ready and willing to perform contractual obligations.
Following this, the decree-holder filed an execution petition beyond the two-month period stipulated in the decree and deposited the balance sale consideration in instalments thereafter. The judgment-debtor raised objections contending that the delay rendered the decree inexecutable. While the executing court dismissed the objections, the High Court allowed them and dismissed the execution petition, holding that the time granted in the decree had expired and had not been validly extended. This order was challenged before the Supreme Court.
The Supreme Court examined the effect of delay in depositing the balance sale consideration and the scope of powers under Section 28 of the Specific Relief Act, 1963. The Court noted that “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.”
Referring to precedent, the Court recorded that “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.”
On the High Court’s approach, the Supreme Court observed that “taking such a view would be a classic example of a hyper-technical approach which ought to be eschewed.” It further noted 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.”
Referring to Ram Lal v. Jarnail Singh, the Court recorded “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.”
On the issue of merger, the Court reiterated that “there cannot be more than one operative decree at a given point of time,” and that once the appellate court decides the matter on merits, “it is the decree or order of the superior court which is the final, binding and operative decree.”
The Court held that treating the decree as inexecutable merely because the execution petition was filed beyond sixty days was “clearly contrary to law.”
The Supreme Court directed that “the judgment of the High Court is set aside.” and “that of the executing Court dismissing the objections filed by the respondent is restored to its original number and status. A copy of this judgment be sent to the Executing Court,” and clarified that the executing court “shall then proceed in accordance with law to execute the decree of specific performance passed by the Trial Court.”
“The appeal is allowed,” and that “pending application(s), if any, shall stand disposed of.”
Advocates Representing the Parties
For the Petitioners: Mr. P.S. Patwalia, Sr. Adv. (not present) Ms. Natasha Dalmia, AOR Ms. Anisha Jain, Adv. Ms. Shambhavi Singh, Adv.
For the Respondents: Mr. Vivek Suri, Adv. Ms. Anukriti Pareek, AOR
Case Title: Dr. Amit Arya v. Kamlesh Kumari
Neutral Citation: 2025 INSC 1486
Case Number: C.A. arising out of SLP (C) No. 20091 of 2022
Bench: Justice Sanjay Karol, Justice Manoj Misra
