Specific Relief Act | Power to Extend Time Under Section 28 Is Discretionary and Must Be Exercised Prudently: Supreme Court

"The trial court retains the discretion to extend time for compliance with a conditional decree for specific performance, provided there is no willful default or unreasonable delay. Equity demands that such decrees should not be frustrated due to procedural technicalities," the Supreme Court observed. Supreme Court dismissed appeals challenging the Punjab and Haryana High Court’s order that upheld the executing court’s decision allowing the deposit of balance sale consideration by the decree holders and denying rescission of the contract under Section 28 of the Specific Relief Act, 1963. The bench, comprising Hon’ble Justice J.B. Pardiwala and Hon’ble Justice R. Mahadevan, reaffirmed the equitable principles underlying specific performance decrees and emphasized the judiciary's power to ensure fair outcomes in execution proceedings.

“Doctrine of Merger Applies—Executing Court Retains Power to Extend Time”

The Supreme Court addressed the appellants’ argument that the decree holders were required to deposit the balance sale consideration within 20 days, as stipulated in the trial court’s decree of 1994. The appellants claimed that this timeline was revived after the High Court restored the trial court’s decree in second appeals decided in 2018. Rejecting this contention, the bench clarified:

"Once the High Court’s judgment in the second appeals supersedes the trial court’s decree, the latter merges with the appellate decree. In the absence of a specific timeline prescribed by the High Court, the plaintiffs were entitled to execute the appellate decree without being bound by the original 20-day timeline."

Citing the precedent in Kunhayammed v. State of Kerala (2000) 6 SCC 359, the Court reiterated that the doctrine of merger ensures only one operative decree at any given time.

“Section 28 Empowers Courts to Prevent Injustice in Specific Performance Cases”

The Court examined the scope of Section 28 of the Specific Relief Act, 1963, which allows the rescission of a contract or the extension of time for compliance with a specific performance decree. It reiterated the principles laid down in Sardar Mohar Singh v. Mangilal (1997) 9 SCC 217, where the Court held that trial courts retain jurisdiction over specific performance decrees even after their issuance.

The bench observed:

"The power to grant an order of rescission or to extend time under Section 28 is discretionary and must be exercised with prudence. In the present case, the decree holders promptly filed execution petitions and sought permission to deposit the balance sale consideration, demonstrating their bona fide intent to comply with the decree. The trial court correctly allowed the extension, and the High Court rightly upheld this decision."

The appellants’ reliance on Prem Jeevan v. K.S. Venkata Raman (2017) 11 SCC 57, where delay and non-compliance led to rescission, was found inapplicable. The Court distinguished the factual matrix, noting that the plaintiffs in Prem Jeevan failed to explain a prolonged delay in compliance, whereas in the present case, the plaintiffs acted swiftly after the High Court’s decree.

“Equity and Fairness Outweigh Procedural Objections”

The bench underscored that the overarching goal of equity in specific performance cases is to ensure that decrees are not frustrated by procedural technicalities. The Court remarked:

"The purpose of Section 28 is to provide complete relief to both parties in terms of the decree for specific performance while avoiding multiplicity of proceedings. The courts are empowered to extend time for compliance where no willful default or unreasonable delay exists, ensuring justice and fairness."

It was emphasized that the decree holders promptly deposited the amount upon obtaining the High Court decree and did not act in a manner detrimental to the defendants.

The litigation arose out of agreements to sell immovable property. In 1994, the trial court decreed specific performance in favor of the plaintiffs, conditional upon depositing the balance sale consideration within 20 days. The defendants appealed, and the appellate court reversed the decrees. However, the High Court restored the trial court’s decrees in second appeals in 2018.

Following the High Court’s decision, the decree holders sought permission from the executing court to deposit the balance consideration, which was granted. The defendants filed applications under Section 28 of the Specific Relief Act, seeking rescission of the contracts on the ground of non-compliance within the 20-day period stipulated by the trial court’s decree. Both the executing court and the High Court rejected these applications, leading to the present appeals before the Supreme Court.

The Supreme Court’s judgment reinforces the equitable principles underpinning specific performance decrees. By affirming the trial court’s discretion to extend time and dismissing the appellants’ reliance on procedural timelines, the Court ensured that substantive justice prevailed.

The appeals were dismissed, and the decree holders’ right to enforce specific performance was upheld.

Date of Decision: January 17, 2025