Does a decree for specific performance become inexecutable for minor delays in deposit of the balance sale consideration, or can courts overlook hyper-technical defaults when readiness and willingness are evident?

Summary

Practical Impact

What’s New / What Lawyers Should Note

• Clarifies that non-payment of the balance sale consideration within the decree-fixed period does not ipso facto rescind the contract.
• Emphasises that courts must eschew a hyper-technical approach and assess a party’s overall conduct to determine readiness and willingness.
• Confirms that the executing court may only extend time under Section 28 upon a proper application; absence of such application does not invalidate the decree.
• Reaffirms that the doctrine of merger renders only the final appellate decree operative for execution.
• Provides binding guidance on minor-delay issues in specific-performance execution petitions.

Summary of Legal Reasoning

1. Section 28 Scope
   • Decree-granting court can extend the time for deposit of sale money on application.
   • No automatic extension by mere filing of execution petition.
2. Rejection of Hyper-Technical Forfeiture
   • Following Ramankutty Gupta, the Court rejects treating every delay as fatal.
   • Delay must be weighed against the decree-holder’s conduct.
3. Readiness and Willingness Test
   • Reliance on Ram Lal: substantive proof of genuine intent to perform overrides minor defaults.
4. Doctrine of Merger
   • Only the final appellate decree survives as the operative decree (Balbir Singh).
   • When the High Court set aside execution, no decree subsisted; SC’s restoration revives executability.
5. Application to Facts
   • A 27-day delay beyond 60 days was minor and did not demonstrate refusal to perform.
   • No Section 28 application needed to preserve the contract where conduct shows intent.

Arguments by the Parties

Petitioner

• Deposited nearly the full balance within a few months, showing readiness to perform.
• Minor delay beyond two months should not defeat a substantive decree.
• Section 28 allows extension—but even without a formal extension, conduct suffices.
• Doctrine of merger renders the Trial Court decree unsuspended; execution is maintainable.

Respondent

• Execution petition filed on Day 87—beyond the 60-day limit directed by the Trial Court.
• No application under Section 28 was made to extend the time.
• Failure to deposit balance sale consideration within two months bars execution.
• Hyper-technical interpretation should lead to rescission of the contract.

Factual Background

In December 2004, the parties executed an agreement to sell a 2-biswa plot in Panchkula (Rs.9.05 lakhs total; Rs.1 lakh earnest money). The purchaser sued for specific performance in 2006; the Trial Court (May 2011) decreed performance, directing sale deed within two months on payment of Rs.8.05 lakhs. The First Appellate Court (2013) reversed that decree; the Second Appeal (2016) restored it. The purchaser filed execution on Day 87; balance deposits followed on Days 138 and 245. The High Court dismissed execution for delay; the Supreme Court allowed the appeal.

Statutory Analysis

• Section 28, Specific Relief Act
  • Sub-sec (1): Allows vendor to apply for rescission if purchaser defaults within decree period or any extension.
  • Sub-sec (1) empowers the same court to extend time “on such terms as the court may allow.”
  • SC clarifies that extension power requires a formal application; yet non-grant does not auto-rescind a contract.
• Doctrine of Merger
  • Only the final decree of the higher court remains operative (Surinder Pal Soni; Kunhayammed).
  • When execution petition is quashed by the High Court, no trial-court decree subsists until revived by final order.

Procedural Innovations

• Endorses a purposive approach to execution defaults, focusing on substantive justice over technical compliance.
• Clarifies the interplay between execution petitions and Section 28 applications in the same court.
• Illustrates the application of the doctrine of merger to execution proceedings in successive appeals.

Alert Indicators

• ✔ Precedent Followed – Affirms Ramankutty Gupta, Ram Lal, Balbir Singh principles.
• 🔄 Conflicting Decisions – Resolves the High Court’s hyper-technical approach conflicting with prior Supreme Court rulings.