Supreme Court of India
BALBIR SINGH & ANR. ETC.versusBALDEV SINGH (D) THROUGH HIS LRS. & ORS. ETC.
- Citation
- 2025 INSC 81
- Decided
- 17 January 2025
- Disposal
- Dismissed
- Bench
- B PARDIWALA
Holding
The High Court's decree merges the trial court decree, and the original 20‑day deposit condition does not survive the merger, so the defendants cannot rescind the contract under Section 28.
Summary
The plaintiffs obtained decrees for specific performance of a sale agreement, directing them to deposit the balance consideration within 20 days and the defendants to execute sale deeds. The trial court decrees were set aside by a first appellate court, but the High Court later restored them in regular second appeals, merging the trial court decree with its own. The plaintiffs deposited the balance consideration after obtaining permission from the executing court, and the sale deeds were executed. The defendants sought rescission of the contract under Section 28 of the Specific Relief Act, alleging the plaintiffs failed to deposit the amount within the original 20‑day period. The Supreme Court held that the High Court's decree merged the trial court decree, and the original time‑limit did not survive the merger; consequently, the defendants could not rescind the contract. The Court dismissed the appeals, affirming the High Court's order.
Issues considered
- The effect of merger of the trial court decree with the decree passed by the High Court in the second appeals.
- Whether the defendants could invoke Section 28 of the Specific Relief Act, 1963 to rescind the contract on the ground that the plaintiffs failed to deposit the balance sale consideration within the 20‑day period prescribed in the original decree.
Legislation cited
Headnote
Issue for Consideration The two questions of law fall for consideration in the instant appeal; First, the effect of merger of the trial court’s decree with that of the decree passed by High Court in second appeals; Secondly, whether the defendants/judgment debtors could have of contract on the ground that the plaintiffs/decree holders had failed to deposit the balance sale consideration within the stipulated time period of 20 days as prescribed in the original decree. Headnotes† Specific Relief Act, 1963 – s.28 – Specific Performance of the
Subjects
Doctrine of mergerRescission of contractSection 28 of Specific Relief Act, 1963Specific PerformanceAgreementOriginal decreeDecree of Second Appellate CourtDecree-holderJudgment-debtorPower of trial CourtSection 148 of Code of Civil Procedure, 1908Extension of time for payment of moneyModification of decree
Judgment
[2025] 1 S.C.R. 781 : 2025 INSC 81
Balbir Singh & Anr. Etc.
v.
Baldev Singh (D) Through His LRs. & Ors. Etc.
(Civil Appeal No(s). 563-566 of 2025)
17 January 2025
[J.B. Pardiwala* and R. Mahadevan, JJ.]
Issue for Consideration
The two questions of law fall for consideration in the instant appeal;
First, the effect of merger of the trial court’s decree with that of the
decree passed by High Court in second appeals; Secondly, whether
the defendants/judgment debtors could have prayed for rescission
of contract on the ground that the plaintiffs/decree holders had failed
to deposit the balance sale consideration within the stipulated time
period of 20 days as prescribed in the original decree.
Headnotes†
Specific Relief Act, 1963 – s.28 – Specific Performance of
the agreement – The suit of plaintiff was decreed in his
favour for possession by way of specific performance of the
agreement – The plaintiff was directed to deposit the balance
sale consideration in the Court within the period of twenty
days and defendants were directed to execute the sale deeds
in favour of plaintiff – The First Appellate Court set aside the
judgment of the trial Court – However, in the second appeal
before the High Court, the original decree passed by the trial
Court was restored – SLPs were filed – Meanwhile, original
Plaintiff preferred execution petition – Plaintiff prayed for
permission to deposit the balance sale consideration and
same was granted – Plaintiff deposited the balance sale
consideration – SLPs were dismissed and the judgment of
the High Court in second appeal was affirmed – Thereafter,
defendant/judgment debtors filed an application u/s.28 of
the Act to rescind the contract – Application was rejected –
Sale deeds were executed – Execution petition came to be
dismissed as withdrawn as possession was handed over to
plaintiff:
* Author
782 [2025] 1 S.C.R.
Supreme Court Reports
Held: The decision of the High Court in the second appeals
filed by the plaintiffs (decree holders) there was a merger of the
judgment of the trial court with the decision which was rendered
by the High Court in the second appeals – Consequent upon the
passing of the decree of the second appellate court, the decree
of the trial court merges with that of the same – Once the High
Court allowed the second appeals in favour of the plaintiffs, there
was evidently a merger of the judgment of the trial court with the
decision of the High Court – Once the High Court as an appellate
court in second appeal renders its judgment it is a decree of the
second appellate court which becomes executable hence, the
entitlement of the decree holder to execute the decree of the
second appellate court cannot be defeated – As far as failure on
the part of the decree-holder (plaintiff) to deposit the balance sale
consideration within 20 days from the date of the judgment passed
by the High Court in second appeal is concerned, the High Court
while allowing the second appeal filed by the original plaintiff had
not issued any specific direction as regards the deposit of the
balance sale consideration within a particular period of time – It is
incorrect on the part of the appellant herein to say that since the
trial court had directed that the balance sale consideration shall be
deposited within 20 days, the same direction would be applicable
even after the judgment of the High Court in second appeal – The
High Court committed no error in passing the impugned judgment.
[Paras 27, 28, 34, 52]
Code of Civil Procedure, 1908 – s.148 – Specific Relief Act,
1963 – s.28 – Power of trial Court – Extension of time for
payment of money:
Held: It is well settled position of law that when time for payment
of money is extended, it does not mean a modification of the
decree – The trial court has power to extend the time, and the
expression “such further period as the court may allow” would mean
the court which had passed the decree, or, where the application
under Section 28 of the Act of 1963, is filed. [Para 44]
Case Law Cited
Kunhayammed v. State of Kerala [2000] Supp. 1 SCR 538 : (2000)
6 SCC 359; Chandi Prasad v. Jagdish Prasad [2004] Supp. 4 SCR
942 : (2004) 8 SCC 724; Shanthi v. T.D. Vishwanathan (2019) 11
SCC 419 : (2019) 4 SCC (Civ) 787; Sardar Mohar Singh v. Mangilal
[2025] 1 S.C.R. 783
Balbir Singh & Anr. Etc. v.
Baldev Singh (D) Through His LRs. & Ors. Etc.
[1997] 1 SCR 297 : (1997) 9 SCC 217; Bhupinder Kumar v. Angrej
Singh [2009] 13 SCR 978 : (2009) 8 SCC 766 : (2009) 3 SCC
(Civ) 556; V. S. Palanichamy Chettiar Firm v. C. Alagappan [1999]
1 SCR 349 : (1999) 4 SCC 702; Mahanth Ram Das v. Ganga Das
[1961] 3 SCR 763 : AIR 1961 SC 882 – relied on.
Prem Jeevan v. K.S. Venkata Raman and Another (2017) 11 SCC
57 – held inapplicable.
Chanda (dead) through Lrs. v. Rattni and Anr. [2007] 4 SCR 402 :
(2007) 14 SCC 26; Surinder Pal Soni v. Sohan Lal (Dead) through
Legal Representatives [2019] 9 SCR 1036 : (2020) 15 SCC 771;
Khoday Distilleries Ltd. v. Sri Mahadeshwara Sahakara Sakkare
Karkhane Ltd. [2019] 3 SCR 411 : (2019) 4 SCC 376; Ramankutty
Guptan v. Avara [1994] 1 SCR 542 : (1994) 2 SCC 642; Gojer
Bros. (Pvt.) Ltd. v. Ratan Lal Singh [1975] 1 SCR 394 : (1974) 2
SCC 453 – referred to.
Commissioner of Income Tax, Bombay v. Tejaji Farasram, AIR
1954 BOM 93; Commissioner of Income Tax, Bombay v. Amritlal
Bhogilal & Co. (1958) 34 ITR 130 – referred to.
List of Acts
Specific Relief Act, 1963; Specific Relief Act, 1877; Limitation Act,
1963; Code of Civil Procedure.
List of Keywords
Doctrine of merger; Rescission of contract; Section 28 of Specific
Relief Act, 1963; Specific Performance; Agreement; Original decree;
Decree of Second Appellate Court; Decree-holder; Judgment-
debtor; Power of trial Court; Section 148 of Code of Civil Procedure,
1908; Extension of time for payment of money; Modification of
decree.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No(s). 563-566
of 2025
From the Judgment and Order dated 23.09.2022 of the High Court
of Punjab & Haryana at Chandigarh in CR Nos. 6706, 6952, 6980
and 7053 of 2019
784 [2025] 1 S.C.R.
Supreme Court Reports
Appearances for Parties
Gurinder Singh Gill, Sr. Adv., P. P. Nayak, Kuldeep Singh Kuchaliya,
Ms. Aashna Gill, Pratap Singh Gill, Ms. Eknoor Kaur, Ms. Bhupinder,
Ajay Pal, Advs. for the Appellants.
Chritarth Palli, Raj Kumar Yadav, Chandan Kumar Mandal,
Dhirendra Kumar Verma, Vijay Kumar, Chand Qureshi, Advs. for
the Respondents.
Judgment / Order of the Supreme Court
Judgment
J.B. Pardiwala, J.
1. Leave granted.
2. Since the issues raised in all the captioned appeals are same, the
parties are also same and the challenge is also to the self-same
judgment and order passed by the High Court those were taken up
for hearing analogously and are being disposed of by this common
judgment and order.
3. These appeals arise from the judgment and order passed by the
High Court of Punjab & Haryana at Chandigarh dated 09.09.2022
in Civil Revision No. 6706 of 2019, Civil Revision No. 6952 of 2019,
Civil Revision No. 6980 of 2019 and Civil Revision No. 7053 of 2019
respectively by which the High Court rejected all the four revision
applications filed by the original defendants by a common order and
thereby affirmed the order passed by the executing court permitting
the original plaintiff to deposit the balance sale consideration and
rejecting the application filed by the defendants (judgment debtors)
under Section 28 of the Specific Relief Act, 1963 (For short, “the
Act”) for rescission of contract.
4. The facts of this litigation giving rise to these appeals as recorded
by the High Court in its impugned judgment read thus:
“2. Four connected revision petitions have come up for final
disposal. The learned counsel representing the parties are
ad idem that these four revision petitions can, conveniently,
be disposed of by a common order.
[2025] 1 S.C.R. 785
Balbir Singh & Anr. Etc. v.
Baldev Singh (D) Through His LRs. & Ors. Etc.
3. Some peculiar facts are required to be noticed. As many
as four different suits for grant of specific performance of
the agreement to sell were decreed by the trial Court on
16.08.1994. Four identical conditional decrees for specific
performance of the agreement to sell were passed while
permitting the decree holder to deposit the balance sale
consideration in the Court within a period of 20 days and
the defendant was directed to get the sale deed executed in
favour of the plaintiffs. However, the judgments and decrees
passed by the trial Court were reversed on 24.11.1994 by
the First Appellate Court, which led to filing of four regular
second appeals. The High Court allowed three regular
second appeals on 03.05.2018, whereas, the fourth one
was allowed 24.05.2018. Resultantly, the decrees passed
by the trial Court were restored. The decree sheets were
prepared on 31. 05 .2018 and a copy thereof was supplied
to the plaintiffs. They filed four execution petitions on
04.09.2018. On 07.09.2018, applications to deposit the
amount were also filed. The judgment debtors also filed an
application under Section 28 of the Specific Relief Act, 1963
{hereinafter referred to as “the 1963 Act’’) for rescission of
the contract on account of non-payment of the remaining
sale consideration. The decree holder as permitted by the
Court, deposited the decreetal amount in the Court on
07.09.2018. Consequently, on 16.08.2019, the Executing
Court has dismissed the application for rescission of the
contract. These four revision petitions have been filed for
setting aside the orders dated 07.09.2018 and 16.08.2019.”
5. The High Court proceeded to record the submissions canvassed by
the parties as under:
“5. On one hand, the learned counsel representing the
judgment debtors contends that as per the trial Court’s
judgment dated 16.08.1994, the amount was required
to be deposited within a period of 20 days. Since the
decree holders have failed to deposit the amount within
the stipulated time, the contract was required to be
rescinded. He further contends that the High Court, while
allowing the regular second appeals, on 03.05.2018 and
786 [2025] 1 S.C.R.
Supreme Court Reports
24.05.2018, respectively, restored the judgment and
decree passed by the trial Court. He submits that at the
most, the amount could be deposited within a period of
20 days from 03.05.2018 and 24.05.2018, respectively.
Since the decree holders failed to deposit the amount,
therefore, the contract should have been ordered to be
rescinded. He, in support of his submission~, relies upon
the judgment passed by the Supreme Court in Prem
Jeevan v. K.S. Venkata Raman and Another 2017 (2)
Civil Court Cases 1.
6. On the other hand, the learned counsel representing the
decree holders submits that the trial Court has correctly
extended the period and permitted the decree holders to
deposit the amount as ordered in the conditional decree.
He submits that a decree passed in favour of the decree
holder cannot be permitted to be defeated, unless the
Court comes to a conclusion that the decree holder has
intentionally failed to honour the conditional decree.”
6. The High Court ultimately while rejecting all the four revision petitions
held as under:
“12. From a careful examination of the aforesaid judgments,
it is apparent that Section 28 of the 1963 Act enables the
Executing Court to extend the period keeping in view the
conduct of the parties. The Courts have also recognized
that the decree passed by the trial Court stands merged
with the decree passed by the Appellate Court. In this case,
the High Court did not fix any time period for deposit of the
amount. The application for execution was filed within a
period of four months. Immediately, on filing the execution
petition, the decree holders have filed an application
seeking permission to deposit the remaining amount, which
has been allowed. Undoubtedly, the judgment debtors
have filed the various applications for rescission of the
contract before the amount was deposited, however, in
the facts of the case, this Court does not find that there
was any unreasonable delay particularly when the High
Court did not fix any period for deposit of the amount. The
argument of learned counsel representing the petitioner
that 20 days’ period, as directed by the trial Court, shall
[2025] 1 S.C.R. 787
Balbir Singh & Anr. Etc. v.
Baldev Singh (D) Through His LRs. & Ors. Etc.
revive, is to be examined in the facts of the present case.
The decree passed by the trial Court stands merged with
the judgment and decree passed by the High Court in
the regular second appeal The question is “whether the
decree holder willfully failed to deposit the amount under
the decree particularly when the High Court did not fix the
time for such payment or there was, in fact, unreasonable
delay on part of the decree holder to deposit the amount?
13. In view of the detailed discussion here-in-before the
aforesaid question is answered in the negative.
14. Keeping in view the facts of the case, it is not considered
appropriate to conclude that the decree holders failed to
honour the conditional decree. The trial Court has exercised
its discretion prudently while extending the time and this
Court does not find any reasonable ground to interfere with
the order in the exercise of its revisional jurisdiction, which
has been passed in accordance with law. Consequently,
all the four revision petitions are dismissed.”
7. Having heard the learned counsel appearing for the parties and
having gone through the materials on record, the only question that
falls for our consideration whether the High Court committed any
error in passing the impugned judgment and order?
8. The original decree in one of the suits reads thus:
“In view of the foregoing findings on the aforesaid issues,
the suit of the plaintiff succeeds and it is hereby decree
with costs in his favour for possession by way of specific
performance of the agreement dated 5.4.1989 in respect
of the suit land mentioned in para no.1 of the plaint and
against the defendant.
The plaintiff is directed to deposit the balance sale
consideration in the court within the period of twenty days
and all the defendant are directed to get the sale-deed
executed in favour of the plaintiff in terms of the agreement
on or before 15.9.1994. In default, the plaintiff shall be
entitled to get the sale-deed executed and attested through
the court. Decree sheet be prepared accordingly. File be
consigned to the record room.”
788 [2025] 1 S.C.R.
Supreme Court Reports
9. Identical decrees as above were filed in the other connected suits too.
10. Thus, the plain reading of the decree referred to above indicates that
the plaintiff was directed to deposit the balance sale consideration in
the court within a period of 20 days and the defendants, at the same
time, were directed to execute the sale deeds in favour of the plaintiff.
11. Before the plaintiff could deposit the balance sale consideration as
directed by the trial court within the stipulated time period of 20 days
the defendants went in appeal before the district court. The appeals
were preferred on 26th August 1994. The first appellate court allowed
the appeals vide judgment and order dated 16th August 1994. Thus,
the judgment and decree passed by the trial court granting specific
performance came to be set aside.
12. In such circumstances referred to above the plaintiff went to the
High Court and filed regular second appeals. All the second appeals
came to be allowed vide judgment and order dated 03.05.2018 and
the judgment and order passed by the appellate court came to be
set aside and the original decree passed by the trial court granting
specific performance came to be restored.
13. Against the judgment and order passed by the High Court in second
appeals the defendants came to this court seeking leave to appeal.
While the SLPs filed by the defendants were pending before this
Court, the original plaintiff (decree holder) preferred execution petition
on 04.09.2018.
14. The plaintiffs prayed for permission before the executing court to
deposit the balance sale consideration and the same was granted by
the executing court vide order dated 07.09.2018 on the very same
day the plaintiff deposited the balance sale consideration.
15. On 18.01.2019 this Court dismissed all the SLPs filed by the
defendants herein thereby affirming the judgment and order passed
by the High Court in second appeals filed by the plaintiff.
16. On 04.04.2019 the defendants/judgment debtors filed an application
under Section 28 of the Act to rescind the contract.
17. The executing court vide order dated 16th August 2019 rejected
the application filed by the defendants under Section 28 of the Act
referred to above.
[2025] 1 S.C.R. 789
Balbir Singh & Anr. Etc. v.
Baldev Singh (D) Through His LRs. & Ors. Etc.
18. What is important to note is that in 2019 the sale deeds were executed
by the defendants in favour of the plaintiffs.
19. Vide the impugned judgment and order dated 23.09.2022 the
challenge to the orders passed by the executing court dated
07.09.2018 and 16.08.2019 respectively also failed.
20. On 29.11.2022 the warrants of possession were issued for the
purpose of execution of the decree.
21. On 07.12.2022 the execution petitions came to be dismissed as
withdrawn as possession of the suit lands was handed over to the
plaintiffs.
22. On 15.12.2022 this Court while issuing notice in the present SLPs
stayed the further proceedings of the execution petitions. It appears
that it was not brought to the notice of this Court that the execution
petition had already been disposed of and the possession of the suit
lands had also been handed over to the plaintiffs.
ANALYSIS:-
23. In view of the aforesaid, two questions of law fall for our consideration.
First, the effect of merger of the trial court’s decree with that of the
decree passed by High Court in second appeals. Secondly, whether
the defendants/ judgment debtors could have prayed for rescission of
contract on the ground that the plaintiffs/ decree holders had failed
to deposit the balance sale consideration within the stipulated time
period of 20 days as prescribed in the original decree.
24. Section 28 of the Act reads as follows:
“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 the 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
790 [2025] 1 S.C.R.
Supreme Court Reports
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.”
25. The present section corresponds to Section 35(c) of the Specific
Relief Act, 1877 (hereinafter referred to as “the repealed Act”) under
which it was open to the vendor or lessor in the circumstances
mentioned in that section to bring a separate suit for rescission; but
[2025] 1 S.C.R. 791
Balbir Singh & Anr. Etc. v.
Baldev Singh (D) Through His LRs. & Ors. Etc.
this section goes further and gives to the vendor or lessor the right
to seek rescission in the same suit, when after the suit for specific
performance is decreed the plaintiff fails to pay the purchase money
within the period fixed. The present section, therefore, seeks to
provide complete relief to both the parties in terms of a decree
for specific performance in the same suit without requiring one of
the parties to initiate separate proceedings. The object is to avoid
multiplicity of suits. Likewise, under the present provision where the
purchaser or lessee has paid the money, he is entitled in the suit
for specific performance to the reliefs as indicated in sub-section (3)
like, partition, possession, etc. A suit for specific performance does
not come to an end on passing of a decree and the court which has
passed the decree for specific performance retains the control over
the decree even after the decree has been passed.
26. The decree for specific performance has been described as a
preliminary decree. The power under Section 28 of the Act is
discretionary and the court cannot ordinarily annul the decree once
passed by it. Although the power to annul the decree exists yet
Section 28 of the Act provides for complete relief to both the parties
in terms of the decree. The court does not cease to have the power
to extend the time even though the trial court had earlier directed in
the decree that payment of balance price to be made by certain date
and on failure the suit to stand dismissed. The power exercisable
under this section is discretionary. [See : Chanda (dead) through
Lrs. v. Rattni and Anr. reported in (2007) 14 SCC 26]
27. As stated above upon the decision of the High Court in the second
appeals filed by the plaintiffs (decree holders) there was a merger of
the judgment of the trial court with the decision which was rendered
by the High Court in the second appeals. Consequent upon the
passing of the decree of the second appellate court, the decree of
the trial court merges with that of the same.
28. The doctrine of merger is founded on the rationale that there cannot
be more than one operative decree at a given point of time. The
doctrine of merger applies irrespective of whether the appellate
court has affirmed, modified or reversed the decree of the trial court.
The doctrine has been discussed and explained succinctly by this
Court in Surinder Pal Soni v. Sohan Lal (Dead) through Legal
Representatives, (2020) 15 SCC 771.
792 [2025] 1 S.C.R.
Supreme Court Reports
29. In Kunhayammed v. State of Kerala, (2000) 6 SCC 359, while
explaining the doctrine of merger, this Court held thus:
“12. The logic underlying the doctrine of merger is that
there cannot be more than one decree or operative orders
governing the same subject-matter at a given point of
time. When a decree or order passed by an inferior court,
tribunal or authority was subjected to a remedy available
under the law before a superior forum then, though the
decree or order under challenge continues to be effective
and binding, nevertheless its finality is put in jeopardy.
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. However, the doctrine is
not of universal or unlimited application. The nature of
jurisdiction exercised by the superior forum and the content
or subject-matter of challenge laid or which could have
been laid shall have to be kept in view.”
30. Further, while explaining the position that emerges on the grant of
special leave to appeal by this Court, it was observed:
“41. Once a special leave petition has been granted,
the doors for the exercise of appellate jurisdiction of this
Court have been let open. The order impugned before
the Supreme Court becomes an order appealed against.
Any order passed thereafter would be an appellate order
and would attract the applicability of doctrine of merger.
It would not make a difference whether the order is one
of reversal or of modification or of dismissal affirming
the order appealed against. It would also not make any
difference if the order is a speaking or non-speaking one.”
31. This position of law has been affirmed and reiterated by a three-
Judge Bench decision of this Court in Khoday Distilleries Ltd. v.
Sri Mahadeshwara Sahakara Sakkare Karkhane Ltd., (2019) 4
SCC 376.
[2025] 1 S.C.R. 793
Balbir Singh & Anr. Etc. v.
Baldev Singh (D) Through His LRs. & Ors. Etc.
32. The decision in Kunhayammed (supra) was followed by a three-
Judge Bench decision of this Court in Chandi Prasad v. Jagdish
Prasad, (2004) 8 SCC 724, which held thus:
“23. The doctrine of merger is based on the principles of
propriety in the hierarchy of the justice delivery system.
The doctrine of merger does not make a distinction
between an order of reversal, modification or an order of
confirmation passed by the appellate authority. The said
doctrine postulates that there cannot be more than one
operative decree governing the same subject-matter at a
given point of time.
24. It is trite that when an appellate court passes a decree,
the decree of the trial court merges with the decree of the
appellate court and even if and subject to any modification
that may be made in the appellate decree, the decree of the
appellate court supersedes the decree of the trial court. In
other words, merger of a decree takes place irrespective of
the fact as to whether the appellate court affirms, modifies
or reverses the decree passed by the trial court.”
33. The decision in Chandi Prasad (Supra) was followed by a two-Judge
Bench of this Court in Shanthi v. T.D. Vishwanathan, (2019) 11
SCC 419 : (2019) 4 SCC (Civ) 787, rendered on 24-10-2018 in the
following terms:
“7. … When an appeal is prescribed under a statute and
the appellate forum is invoked and entertained, for all
intents and purposes, the suit continues. When a higher
forum entertains an appeal and passes an order on merit,
the doctrine of merger would apply. The doctrine of merger
is based on the principles of the propriety in the hierarchy
of the justice delivery system. The doctrine of merger
does not make a distinction between an order of reversal,
modification or an order of confirmation passed by the
appellate authority. The said doctrine postulates that there
cannot be more than one operative decree governing the
same subject-matter at a given point of time.”
34. Thus, once the High Court allowed the second appeals in favour of
the plaintiffs, there was evidently a merger of the judgment of the
trial court with the decision of the High Court. Once the High Court
794 [2025] 1 S.C.R.
Supreme Court Reports
as an appellate court in second appeal renders its judgment it is
a decree of the second appellate court which becomes executable
hence, the entitlement of the decree holder to execute the decree
of the second appellate court cannot be defeated.
35. The issue may be looked at from another perspective in terms of
the provisions of Section 28 of the Act referred to earlier.
36. Interpreting the provisions of Section 28 of the Act, a three-Judge
Bench of this Court held in Sardar Mohar Singh v. Mangilal, (1997)
9 SCC 217:
“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 favour 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 with the conditional decree as
mentioned in the decree for specific performance.”
37. In Bhupinder Kumar v. Angrej Singh, (2009) 8 SCC 766 : (2009)
3 SCC (Civ) 556, this Court held thus :
“21. It is clear that Section 28 gives power to the court
either to extend the time for compliance with the decree
or grant an order of rescission of the agreement. These
powers are available to the trial court which passes the
decree of specific performance. In other words, when
the court passes the decree for specific performance,
the contract between the parties is not extinguished. To
put it clearly 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.
[2025] 1 S.C.R. 795
Balbir Singh & Anr. Etc. v.
Baldev Singh (D) Through His LRs. & Ors. Etc.
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.”
38. The learned counsel appearing on behalf of the respondents placed
reliance on the decision in V.S. Palanichamy Chettiar Firm v. C.
Alagappan, (1999) 4 SCC 702. While adverting to the decision of
this Court in Ramankutty Guptan v. Avara, (1994) 2 SCC 642, the
two-Judge Bench held:
“15. … This Court observed that 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.
The Court held, after noticing the conflict of decisions by
the Bombay [Maruti Vishnu Kshirsagar v. Bapu Keshav
Jadhav, 1969 SCC OnLine Bom 39 : AIR 1970 Bom 398]
High Court and the Andhra Pradesh [Ibrahim Shariff v.
Masthan Shariff, 1966 SCC OnLine AP 251 : (1967) 2 An
WR 60] High Court, that when the court which passed the
decree and the executing court is the same, application
under Section 28 can be filed in the executing court.
However, where a decree is transferred for execution to
a transferee executing court then certainly the transferee
court is not the original court and the executing 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.”
796 [2025] 1 S.C.R.
Supreme Court Reports
39. In the above case, the facts before this Court were that an agreement
to sell had been executed nineteen years earlier on 16-2-1980 and
no explanation was forthcoming as to why the balance of the sale
consideration was not deposited within the time granted by the court.
No application for extension was made under Section 28 of the Act.
This Court observed that merely because a suit was filed within a
period of three years prescribed by Article 54 of the Limitation Act,
1963, that did not absolve the vendee-plaintiff from demonstrating
that he was ready and willing to perform the agreement and whether
the non-performance was on account of obstacles placed by the
vendor or otherwise. In that context, this Court held:
“17. … The court has to see all the attendant circumstances
including if the vendee has conducted himself in a
reasonable manner under the contract of sale. That
being the position of law for filing the suit for specific
performance, can the court, as a matter of course, allow
extension of time for making payment of balance amount
of consideration in terms of a decree after 5 years of
passing of the decree by the trial court and 3 years of its
confirmation by the appellate court? It is not the case of
the respondent decree-holders that on account of any fault
on the part of the vendor judgment-debtor, the amount
could not be deposited as per the decree. That being
the position, if now time is granted, that would be going
beyond the period of limitation prescribed for filing of the
suit for specific performance of the agreement though this
provision may not be strictly applicable. It is nevertheless
an important circumstance to be considered by the Court.
That apart, no explanation whatsoever is coming from the
respondent decree-holders as to why they did not pay
the balance amount of consideration as per the decree
except what the High Court itself thought fit to comment
which is certainly not borne out from the record. Equity
demands that discretion be not exercised in favour of the
respondent decree-holders and no extension of time be
granted to them to comply with the decree.”
40. The facts noted in the above extract from the judgment indicate a
situation which is factually distinct. In that case, the balance of the
sale consideration was sought to be deposited three years after the
[2025] 1 S.C.R. 797
Balbir Singh & Anr. Etc. v.
Baldev Singh (D) Through His LRs. & Ors. Etc.
confirmation of the decree by the appellate court. In the present case
the balance sale consideration came to be deposited immediately
after the second appeals came to be allowed by the High Court in
2018 by seeking permission of the executing court.
41. In a given case the trial court while passing a conditional decree in
a suit for specific performance may say so in so many words that
if the plaintiff fails to deposit the balance sale consideration within
a particular period of time stipulated by the court while allowing the
suit, the failure to make such deposit within the time prescribed would
have the effect of dismissal of suit. In other words, there could be a
decree which may say that if the plaintiff fails to deposit the balance
sale consideration within the stipulated time period, the suit shall
automatically stand dismissed. If such is the nature of the decree
then will the court concerned become “functus officio” and would have
no jurisdiction to grant extension of time fixed by the decree for the
purpose of deposit? This is one issue that the Supreme Court one
day in an appropriate case may have to consider and decide. We
say so because there are conflicting views of different High Courts,
including to some extent of this Court. In the present case, it is not
necessary for us to look into and decide this issue because the
decree is not of such a nature.
42. In the case of Mahanth Ram Das v. Ganga Das, AIR 1961 SC 882,
this Court has taken the view that Section 148 of the Code of Civil
Procedure (C.P.C.) empowers the Court to deal with events that
might arise subsequent to an order, for the purpose of enlarging
time for payment even though it had been peremptorily fixed, but in
that connection the Court observed as follows:
“…Such procedural orders, though peremptory (conditional
decrees apart) are, in essence, in terrorem, so that dilatory
litigants might put themselves in order and avoid delay.
They do not, however, completely estop a Court from
taking note of events and circumstances which happen
within the time fixed.”
43. The aforesaid gives an impression whilst laying down, in effect, that
s. 148 must be liberally construed, the Court has excluded from its
ambit conditional decrees.
44. It is well settled position of law that when time for payment of money
is extended, it does not mean a modification of the decree. The
798 [2025] 1 S.C.R.
Supreme Court Reports
trial court has power to extend the time, and the expression “such
further period as the court may allow” would mean the court which
had passed the decree, or, where the application under Section 28
of the Act of 1963, is filed.
45. In the case of Sardar Mohar Singh (supra), this Court had held
that the Court does not lose its jurisdiction after the grant of decree
for specific performance nor it becomes functus officio. This Court
had further held that the very fact that Section 28 of the Act itself
gives power to grant order of rescission of the decree, the same
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. The Court has the discretion to
extend time for compliance of the conditional decree as mentioned
in the decree for specific performance.
46. One very unusual contention was raised by the learned counsel
appearing for the appellant as regards the failure on the part of the
decree-holder(plaintiff) to deposit the balance sale consideration
within 20 days from the date of the judgment passed by the High
Court in second appeal. The argument is that the trial court while
allowing the suit filed by the plaintiff for specific performance had
specifically directed that the plaintiff shall deposit the balance sale
consideration with the court within 20 days from the date of the
judgment passed by the trial court. According to the learned counsel
this very decree passed by the trial court came be affirmed by the
High Court in second appeal and, therefore, the plaintiff was obliged
to deposit the balance sale consideration within 20 days from the
date the High Court delivered its judgment in second appeal. This
argument proceeds applying the doctrine of Merger.
47. We do not find any merit in the aforenoted submission canvased on
behalf of the appellant herein.
48. In the aforesaid context, we may refer to the observations made
by the Chief Justice M.C. Chagla (as His Lordship then was) in the
case of Commissioner of Income Tax, Bombay v. Tejaji Farasram
reported in AIR 1954 BOM 93. We quote the relevant observations
as under:
“It is a well established principle of law that when an appeal
is provided from a decision of a tribunal and the appeal
Court after hearing the appeal passes an order, the order
[2025] 1 S.C.R. 799
Balbir Singh & Anr. Etc. v.
Baldev Singh (D) Through His LRs. & Ors. Etc.
of the original Court ceases to exist and is merged in the
order of the appeal Court, & although the appeal Court
may merely confirm the order of the trial Court, the order
that stands and is operative is not the order of the trial
Court but the order of the appeal Court.”
49. The doctrine of Merger or the Merger doctrine in civil proceedings is
a common law doctrine that stems from the idea of maintenance of
the decorum of the hierarchy of courts and tribunals. The Court in
the case of Gojer Bros. (Pvt.) Ltd. v. Ratan Lal Singh reported in
(1974) 2 SCC 453 correctly summed up the meaning of the doctrine
as “the doctrine is based on the simple reasoning that there cannot
be, at the same time, more than one operative order governing the
same subject matter”. To put it simply, if there are two orders passed
on the same subject matter, that is, one passed by a subordinate
court like a tribunal and another passed by a superior court like the
High Court, the operative part of the order by the subordinate court
(tribunal in this instance) may be merged with the order of the High
Court.
50. In the case of Commissioner of Income Tax, Bombay v. Amritlal
Bhogilal & Co. reported in (1958) 34 ITR 130, this Court in para
10 observed as under:
“10. There can be no doubt that, if an appeal is provided
against an order passed by a tribunal, the decision of the
appellate authority is the operative decision in law. If the
appellate authority modifies or reverses the decision of
the Tribunal, it is obvious that it is the appellate decision
that is effective and can be enforced. In law, the position
would be just the same even if the appellate decision
merely confirms the decision of the Tribunal. As a result
of the confirmation or affirmance of the decision of the
tribunal by the appellate authority, the original decision
merges in the appellate decision and it is the appellate
decision alone that subsists and is operative and capable
of enforcement.”
51. Thus, the Supreme Court merely reiterated the observation of Bombay
High Court in the case of Tejaji Farasram (supra) and stated that
the hierarchy of courts and tribunals is to be maintained when the
decision is reversed by the superior court and even when the superior
court merely affirms the decision of the subordinate court.
800 [2025] 1 S.C.R.
Supreme Court Reports
52. Thus, the High Court while allowing the second appeal filed by the
original plaintiff had not issued any specific direction as regards the
deposit of the balance sale consideration within a particular period of
time. It is incorrect on the part of the appellant herein to say that since
the trial court had directed that the balance sale consideration shall
be deposited within 20 days, the same direction would be applicable
even after the judgment of the High Court in second appeal.
53. Before we close this matter, we must deal with the judgment of this
Court in the case of Prem Jeevan vs. K.S. Venkata Raman and
Another reported in (2017) 11 SCC 57 on which strong reliance has
been placed by the learned counsel appearing for the appellants
herein. In the said case a decree for specific performance was
granted in favour of the plaintiff as follows:
“In the result, the suit of the plaintiff is decreed with costs
directing Defendant 1 to execute and register sale deed
in favour of the plaintiff in respect of the suit schedule
property within two months from the date of this order
after receipt of balance sale consideration of Rs 10,50,000
(sic with interest) at 6% per annum from 27-9-2002 i.e.
from the date of agreement of sale. It is further decreed
that in case Defendant 1 refuses to receive the balance
sale consideration with interest the plaintiff is at liberty
to deposit the said amount into the Court and to obtain
regular sale deed through Court.”
54. The plaintiffs therein claimed to have issued a cheque on 04.12.2008
for the amount in question but the same was returned as not accepted
by the judgment debtor, who was the appellant before this Court.
Thereafter the decree holders applied for execution sometime in
the year 2010, after making the deposit of the decretal amount on
07.10.2010. The judgment debtor filed an application before the
executing court objecting to the execution of the decree as the
amount in question was not deposited by the decree holders within
the stipulated time, rendering the decree inexecutable in the absence
of extension of time.
55. The executing court upheld the objection holding as under:
“There is no documentary proof to show that he sought
enlargement of time for paying the purchase money under
Section 28(1) of the 1963 Act. Without seeking extension of
time the respondent herein filed this EP on 7-10-2010 i.e.
[2025] 1 S.C.R. 801
Balbir Singh & Anr. Etc. v.
Baldev Singh (D) Through His LRs. & Ors. Etc.
after a period two years two months. As per the decision in
Suggula Venkata Subrahmanyam v. Desu Venkata Rama
Rao [Suggula Venkata Subrahmanyam v. Desu Venkata
Rama Rao, (2010) 5 ALD 807 : 2010 SCC OnLine AP 670]
the execution petition for obtaining specific performance
is not maintainable.”
56. On a revision having been filed by the decree holders the High Court
reversed the order of the executing court and held as under:
“17. The executing court was not clear, both as regards the
facts and as to law. On facts, it did not take into account,
the real purport of the decree. The relevant portion has
already been extracted. The stipulation of two months
was for the first respondent to execute the decree. That
stipulation, no doubt, is coupled with the right to receive
the balance of consideration. There was nothing on record
to indicate that he ever made any effort to collect or
demand the balance of consideration from the petitioner,
within that time. The plea of the petitioner that when he
offered the amount, the respondents refused to receive;
remained unrebutted. The first respondent did not file
any rejoinder to the counter-affidavit. As observed in the
preceding paragraphs, the executing court did not record
any evidence of the parties. Therefore, the finding recorded
by the trial court, in this behalf, cannot be sustained. When
valuable rights accrued to a party, on account of the suit
for specific performance being decreed, they cannot be
taken away, on the basis of such an untenable finding.
18. On the aspect of law, the executing court proceeded
as though Section 28 of the Act gets attracted, though
it did not mention in so many words. Firstly, the first
respondent himself did not invoke that provision. Secondly,
the provision gets attracted only where, (a) the court,
which passed the decree, directs the decree-holder to pay
the purchaser money (balance of consideration) within a
period, stipulated by it, and (b) the decree-holder failed
to comply with the direction. It is then, and only then, that
the court can consider the feasibility of directing rescission
of contract. In the instant case, the time stipulated by the
trial court in its decree was for the first respondent to
802 [2025] 1 S.C.R.
Supreme Court Reports
execute the decree, and not directly for the petitioner to
deposit the amount.
19. There is nothing on record to disclose that the first
respondent has ever made any effort to receive the amount,
stipulated in the decree. On the other hand, the plea of
the petitioner that, when he offered to pay the amount,
the first respondent did not receive the same; remained
unrebutted. The court must ensure strict compliance with
the conditions stipulated in a provision, which has the
effect of nullifying a decree. Even where two views are
possible on the facts of the case, the one, which would
sustain the decree, must be adopted.”
57. This Court looked into Order XX Rule 12-A C.P.C. which provides
that in every decree of specific performance of a contract, the
court has to specify the period within which the payment has to be
made. In the said case the period was two months from the date
of the decree. The Court took notice of the fact that in the absence
of the said time being extended, the decree holder could execute
the decree only by making the payment of the decretal amount to
the judgment debtor or making the deposit in the court in terms of
the said decree. This Court also took notice of the fact that neither
the said deposit was made within the stipulated time nor extension
of time was sought or granted and also no explanation had been
furnished for the delay in making of the deposit.
58. In such circumstances referred to above, this Court rejected the
contention advanced on behalf of the decree holders that unless the
judgment debtor seeks rescission of the contract in terms of Section
28 of the Act, the decree would remain executable in spite of expiry
of the period for deposit.
59. This Court while allowing the appeals filed by the judgment debtor
held that although Section 28 of the Act permits the judgment debtor
to seek rescission of a contract and also permits extension of time by
the court yet merely because rescission of contract was not sought
by the judgment debtor would not automatically result in extension of
time. Thus, the decision of this Court in Prem Jeevan (supra) was
altogether in a different factual scenario. The same is of no avail to
the appellants herein.
[2025] 1 S.C.R. 803
Balbir Singh & Anr. Etc. v.
Baldev Singh (D) Through His LRs. & Ors. Etc.
60. In the overall view of the matter, we are convinced that the High
Court committed no error much less any error of law in passing the
impugned judgment.
61. In the result, the appeals fail and are hereby dismissed.
Result of the case: Appeals dismissed.
†
Headnotes prepared by: Ankit Gyan,
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