HABBAN SHAHversusSHERUDDIN

                 [2026] 5 S.C.R. 404 : 2026 INSC 451

                               Habban Shah
                                    v.
                                Sheruddin
                      (Civil Appeal No. 7062 of 2026)
                                06 May 2026
               [Pankaj Mithal* and S.V.N. Bhatti, JJ.]


                           Issue for Consideration
       Issue arose whether the decree of specific performance passed
       by the court of first instance directing for the execution of sale
       deed on deposit of the balance sale consideration within three
       months would be inexecutable for the reason that the balance
       sale consideration was not deposited within the time stipulated.

                                 Headnotes†
       Specific Relief Act,1963 – s.28 – Code of Civil Procedure,
       1908 – Ord. XX r.12A – Specific performance – Executability
       of conditional decree – Non-deposit of balance sale
       consideration within stipulated time – Defendant-appellant
       entered into agreement to sell the agricultural land to plaintiff-
       respondent for a sale consideration and received advance –
       Sale deed was to be executed by the stipulated date upon
       payment of the balance consideration – Non-execution of the
       sale deed within the time stipulated, the plaintiff-respondent
       filed suit for specific performance – Suit decreed by the
       court of first instance, directing the defendant-appellant to
       execute the sale in favour of plaintiff-respondent in terms of
       the agreement after receiving the balance sale consideration
       within three months and if the sale was not so executed,
       plaintiff-respondent would be entitled to get it executed
       through the process of the court – Decree challenged in
       first appeal which was dismissed – Second appeal also
       dismissed – Application for execution filed, and the defendant
       filed objections which were rejected – Defendant-appellant
       then filed Revision which was dismissed by the High Court –
       Correctness:


* Author
[2026] 5 S.C.R.                                                             405

                        Habban Shah v. Sheruddin


     Held: Decree of specific performance rendered inexecutable on
     account of non-compliance of the condition to deposit the balance
     sale consideration within the time of three months stipulated
     therein and the contract as a whole stand rescinded in terms of
     s.28 – Decree passed in a suit for specific performance is in the
     nature of a preliminary decree – Court passing the same does
     not become functus officio as soon as the decree is passed but
     retains control over the decree even after the passing of the
     decree till the sale deed is executed or the decree is rendered
     inexecutable – s.28(1) provides for depositing or paying the balance
     sale consideration within the time allowed or to seek recession
     of the contract in the event of default even though the decree of
     specific performance has been granted, whereas s.28(4) bars a
     separate suit for any relief which can be claimed in the same suit
     by moving an application u/s.28 – Power of the Court u/s.28 is
     discretionary and can be exercised on equitable consideration – It
     is not mandatory to move an application u/s.28 and that the Court
     in the given circumstances is not powerless to treat the contract as
     having rescind it for non-compliance of the condition – On facts,
     the direction was specifically to the defendant-appellant to execute
     the sale deed within three months on receipt of the balance sale
     consideration, which by implication means that there is reciprocal
     obligation upon the plaintiff-respondent to deposit the amount within
     three months – Objections to the limitation and maintainability of
     the execution not tenable – Plaintiff-respondent having failed to
     deposit the balance sale consideration within the time permitted
     indicates that he was not actually ready and willing to perform his
     obligation under the decree which obligation, in essence, took the
     shape of a condition under the agreement – Plaintiff-respondent
     disentitled himself from the benefit of the decree of specific
     performance – s.28 provides that the Court has to pass an order
     as the justice of the case may require – Parties approaching the
     Court must have the feeling that justice has been done to either of
     them in the facts and circumstances of the case particularly when
     the decree relates to specific performance of a contract based
     upon equity, equality and fairness – Thus, incumbent upon the
     Court to pass equitable order accordingly, balancing the equities
     between the parties – Impugned judgment passed by the High
     Court in the Revision and that of the Executing Court dismissing
     the objections, set aside. [Paras 18, 22-24, 46-53]
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                                Case Law Cited
       Balbir Singh and Another v. Baldev Singh (Dead) Through his legal
       representatives and Others [2025] 1 SCR 781 : (2025) 3 SCC
       543; Bhagyoday Cooperative Bank Limited v. Ravindra Balkrishna
       Patel [2022] 18 SCR 1 : (2022) 14 SCC 417; P.R. Yelumalai v.
       N.M. Ravi [2015] 4 SCR 163 : (2015) 9 SCC 52; Prem Jeevan v.
       K.S. Venkata Raman and Another (2017) 11 SCC 57; Dr. Amit
       Arya v. Kamlesh Kumari, 2025 INSC 1486 : 2025 SCC OnLine
       SC 2886; Ram Lal v. Jarnail Singh (now Deceased), Through Its
       Lrs. and Others [2025] 2 SCR 1745 : 2025 SCC OnLine SC 584;
       N.P. Thirugnanam (Dead), by Lrs v. Dr. R. Jagan Mohan Rao and
       Others [1995] Supp. 2 SCR 53 : (1995) 5 SCC 115; Surinder
       Pal Soni v. Sohan Lal (Dead) Through Lrs. [2019] 9 SCR 1036 :
       (2020) 15 SCC 771 – referred to.

                                    List of Acts
       Specific Relief Act, 1963; Code of Civil Procedure, 1908; Limitation
       Act, 1963.

                               List of Keywords
       Specific performance; Executability of decree; Conditional decree;
       Balance sale consideration; Non-compliance of decree condition;
       Readiness and willingness; Equitable relief; Discretionary relief;
       Time as essence of contract; Extension of time; Condonation of
       delay; Inexecutable decree; Rescission of contract; Reciprocal
       obligations; Equitable jurisdiction; Balancing of equities; Doctrine
       of merger; Execution proceedings; Equitable order.

                              Case Arising From
       CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7062 of 2026
       From the Judgment and Order dated 24.03.2025 of the High Court
       of Punjab & Haryana at Chandigarh in CR No. 7232 of 2015

                           Appearances for Parties
       Adv. for the Appellant(s):
       Ankit Swarup.
       Adv. for the Respondent(s):
       Divyesh Pratap Singh.
[2026] 5 S.C.R.                                                        407

                       Habban Shah v. Sheruddin


                Judgment / Order of the Supreme Court

                                Judgment

     Pankaj Mithal, J.

1.   Heard Shri Manoj Swarup, learned senior counsel for the defendant-
     appellant and Shri Divyesh Pratap Singh, learned counsel for the
     plaintiff-respondent.
2.   Leave granted.
3.   A short but an intricate question of law which arises for our
     consideration in this appeal is: whether the decree of specific
     performance passed by the court of first instance on 31.10.2012
     directing for the execution of sale deed on deposit of the balance
     sale consideration within three months would be inexecutable for
     the reason that the balance sale consideration was not deposited
     within the time stipulated.
4.   The suit property is an agricultural land admeasuring 12 kanals
     and 19 marlas situate in village Shikarpur, Tehsil Tauru, District
     Mewat in the state of Haryana. The said land belonged to Habban
     (defendant-appellant). He entered into an agreement to sell the said
     land to Sheruddin (plaintiff-respondent) for a sale consideration of
     Rs.5,00,000/- per acre and received a sum of Rs.80,000/- in advance.
     It was agreed that the sale deed shall be executed on or before
     15.03.2006 and that balance sale consideration would be payable
     at the time of execution and registration of sale deed.
5.   Upon non-execution of the sale deed within the time stipulated, the
     plaintiff-respondent instituted a suit for specific performance of the
     aforesaid agreement to sell dated 19.10.2005. The said suit after
     contest by the defendant-appellant was decreed on 31.10.2012 by
     the court of first instance. The said decree specifically provided that
     the defendant-appellant shall execute the sale in favour of plaintiff-
     respondent in respect of suit land in terms of the agreement after
     receiving the balance sale consideration within a period of three
     months from the date of the judgment and if the sale is not so
     executed, the plaintiff-respondent would be entitled to get it executed
     through the process of the court.
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6.     It is not in dispute that the aforesaid decree was challenged in a first
       appeal wherein on 17.12.2012 an interim order was passed restraining
       both the parties from alienating suit property till 25.01.2013. The said
       interim order was not extended and as such lapsed on 25.01.2013
       itself. Finally, the said appeal was dismissed on 11.11.2014 upholding
       the decree of the first court.
7.     The decree so passed by the court of first instance and confirmed
       by the first appellate court was taken to the High Court by means
       of a second appeal by the defendant-appellant. Ultimately the same
       was also dismissed on 12.01.2017. It may be worth noting that in
       the second appeal no interim order of any nature was ever passed.
8.     In the meantime, the plaintiff-respondent as a decree holder on
       04.03.2013 applied for the execution of the aforesaid decree dated
       31.10.2012. However, the said execution was dismissed for want of
       prosecution on 01.08.2014. It appears that the execution may not
       have been pressed for the reason that an appeal was preferred by
       the other side which continued to remain pending wherein though
       an interim order was passed for a short period which lapsed with
       the efflux of time.
9.     Subsequently, the plaintiff-respondent moved another application
       dt. 08.01.2015 for execution of the aforesaid decree of specific
       performance. In the said execution, the defendant-appellant filed
       objections dated 14.07.2015 to the effect that the execution is barred
       by time as the execution has been moved after a gap of three years
       and that the decree allowed only three months’ time for depositing
       the balance sale consideration.
10. The objections filed in the aforesaid Execution Petition were dismissed
    by the Executing Court vide order dated 07.09.2015 primarily on the
    ground that the plaintiff-respondent was always ready and willing to
    perform his obligation and that the balance sale consideration could
    not have been deposited due to the interim order passed in the first
    appeal or due to its pendency.
11. Not satisfied by the above order passed by the Executing Court, the
    defendant-appellant preferred Civil Revision No.7232 of 2015 before
    the High Court specifically contending that the decree of specific
    performance, in unequivocal terms directed for the execution of the
    sale deed upon receiving the balance sale consideration within a
[2026] 5 S.C.R.                                                       409

                                  Habban Shah v. Sheruddin


      period of three months. Therefore, the plaintiff-respondent was under
      an obligation to deposit the balance amount within three months and
      since neither the amount was deposited nor any extension of time
      to deposit the same was applied, he is not entitled to execute the
      decree. The decree as such has become inexecutable.
12. The aforesaid revision preferred by the defendant-appellant has been
    dismissed by the High Court by order impugned dated 24.03.2025,
    more or less on similar grounds as assigned by the Executing
    Court with a further reasoning that the plaintiff-respondent had in
    the meantime moved an application on 05.03.2013 and again on
    08.01.2015 for the deposit of the balance sale consideration and
    the second application seeking permission to deposit the balance
    amount was allowed on 09.10.2015 by the Executing Court and the
    amount of Rs.6,92,410/- was duly deposited.
13. The above orders passed by the Executing Court and the Revisional
    Court dismissing the objections of the defendant-appellant and
    affirming the same, have been assailed in this appeal.
14. The submission of Shri Manoj Swarup, learned senior counsel for
    the defendant-appellant is that the decree provided for the deposit of
    balance sale consideration within a period of three months and since
    it was not deposited within the time provided, the decree is no longer
    executable. The plaintiff-respondent never moved any application for
    the extension of time to deposit the balance sale consideration and
    has not even explained the reason for the delay in making the deposit.
    Therefore, the defendant-appellant is entitled to the revocation of the
    contract in accordance with provisions of Section 28 of the Specific
    Relief Act, 19631. In support of his contentions, he has relied upon
    a number of decisions, to be precise four in number, of this Court
    in which the latest is Balbir Singh and Another v. Baldev Singh
    (Dead) Through his legal representatives and Others2.
15. From the other side, it is contended that the decree of specific
    performance is clear enough and is an executable decree. The
    court of first instance had decreed the suit after recording clear
    finding of fact that the plaintiff-respondent was always ready and


1   Hereinafter referred to as ‘the Act’
2   (2025) 3 SCC 543
410                                                           [2026] 5 S.C.R.

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       willing to perform his obligations under the agreement. Therefore,
       the question of readiness and willingness does not arise at this
       stage of the execution. The plaintiff-respondent never denied to
       deposit the balance sale consideration rather it was on account
       of the defendant-appellant filing an appeal and obtaining interim
       order restraining parties from alienating the property that it was not
       possible for the plaintiff-respondent to deposit the amount. There
       was no need on his part to deposit the amount as directed, as under
       the order of the appellate court sale/alienation was not permissible.
       Moreover, once the application of the plaintiff-respondent to permit
       him to deposit the balance sale consideration was allowed, it was
       no longer open for the defendant-appellant to allege non-compliance
       of the decree. In such a scenario, the delay, if any, in depositing the
       amount stands condoned or in other words the time for making the
       deposit stands extended. It is also submitted that the defendant-
       appellant is not entitled to any benefit under Section 28 of the Act
       as he never moved any application for rescinding the contract as
       envisaged therein.
16. It is in the above factual position that we have to examine whether the
    decree of specific performance passed by the court of first instance
    is executable or has become inexecutable on account of default in
    depositing the balance sale consideration within the time stipulated
    under the decree.
17. The operative portion of the judgment and decree dated 31.10.2012
    reads as under:-
            “As a sequel to the findings on issue wise, the suit of the
            plaintiff is decreed with costs. The defendant is directed
            to execute the sale deed in favour of the plaintiff in reject
            to the suit land in view of the agreement to sell dated
            19.10.2005 after receiving the balance sale consideration
            within the period of three months from the date of this
            judgment failing which the plaintiff will be at liberty to get
            execute the sale deed by approaching this court. The
            defendant is also directed to hand over the possession over
            the possession of the suit land legally and the defendant
            is restrained from alienating the suit land. Decree-sheet
            be prepared accordingly. File be consigned to the record-
            room after due compliance.”
[2026] 5 S.C.R.                                                         411

                        Habban Shah v. Sheruddin


18. A simple reading of the aforesaid directions contained in the order
    would reveal that the court had directed the defendant-appellant to
    execute the sale deed in favour of the plaintiff-respondent in terms
    of the agreement after receiving the balance sale consideration
    within the period of three months from the date of the judgment.
    Therefore, the direction is to the defendant-appellant to execute the
    sale deed within a period of three months after receiving the balance
    sale consideration. There appears to be no specific direction to the
    plaintiff-respondent that the balance sale consideration has to be
    deposited by him within three months. The direction in this regard
    is specifically to the defendant-appellant to execute the sale deed
    within three months on receipt of the balance sale consideration,
    which by implication means that there is reciprocal obligation upon
    the plaintiff-respondent to deposit the amount within three months.
    It is only by necessary implication that the plaintiff-respondent was
    required to deposit the amount within three months.
19. It is trite to mention that in view of Order XX Rule 12A CPC it is
    mandatory that every decree of specific performance of a contract
    must specify the period within which the sale consideration/the
    balance sale consideration should be paid. It is in consonance with
    the aforesaid provision that the decree of specific performance in
    the case at hand provides for the execution of the sale deed after
    receiving the balance sale consideration within a period of three
    months.
20. Thus, we assume that there was a specific direction to the plaintiff-
    respondent to deposit the amount within three months of the judgment
    and therefore, the issue as stated earlier is; whether non-deposit of
    the balance sale consideration within the time stipulated above would
    be fatal and would make the decree inexecutable which otherwise
    is an executable decree.
21. Before we dwell on the merits of the above issue, we would like to
    mention that a feeble attempt was made to contend that the execution
    as filed by the plaintiff-respondent is barred by time and that the first
    execution having been dismissed, the second was not maintainable.
22. As regards limitation, the decree is dated 31.10.2012 whereas the
    second execution was filed on 08.01.2015 i.e., within three years of
    the decree and as such the same was clearly within time. Article 136
    of the Schedule to the Limitation Act, 1963, provides for a period of
412                                                          [2026] 5 S.C.R.

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       twelve years from the decree or the time when it becomes enforceable
       in law for filing an application for the execution of any decree. The
       execution in the case at hand was moved within the aforesaid period
       of twelve years and as such cannot be said to be barred by limitation.
23. The aforesaid execution is maintainable even otherwise for the simple
    reason that the first application was not decided on merits but was
    simply dismissed for want of prosecution. In this connection, reference
    may be made to paragraph 25 of Bhagyoday Cooperative Bank
    Limited v. Ravindra Balkrishna Patel3, wherein also a second
    Execution Petition was filed after the first was dismissed on the
    ground of default and the court held that mere dismissal of the first
    application on the ground of default does not preclude the decree
    holder from filing a fresh execution within limitation.
24. In view of the above, the objections to the limitation and maintainability
    of the execution are not tenable and stand overruled.
25. Now coming to the merits of the executability of the decree for
    specific performance dated 31.10.2012. It may be noted that the
    aforesaid decree is an executable decree but is a conditional decree.
    It provides for the execution of the sale deed by the defendant-
    appellant within three months, subject to the plaintiff-respondent
    depositing the balance sale consideration. Therefore, as stated
    earlier, the decree imposes reciprocal obligations upon both the
    parties. The obligation of executing the decree is upon receipt of
    the balance sale consideration. Therefore, by necessary implication
    for the purposes of executing the sale deed, the plaintiff-respondent
    had to deposit/pay the balance sale consideration within the time
    stipulated for depositing the aforesaid amount or for executing the
    sale deed, as the case may be.
26. Admittedly, in the present case, the plaintiff-respondent had not
    deposited the balance sale consideration within the period of three
    months stipulated under the decree. He had not even moved any
    application within the said time for seeking extension of time, either
    under Section 148/151 of the CPC or under Section 28 of the Act.
27. The interim order dated 17.12.2012 passed in first appeal preferred
    by the defendant-appellant, only restrained the parties from alienating


3   (2022) 14 SCC 417
[2026] 5 S.C.R.                                                         413

                        Habban Shah v. Sheruddin


     the suit property. It nowhere prohibited the plaintiff-respondent
     from depositing the balance sale consideration as a prelude to
     the execution of the sale deed. Moreover, the aforesaid stay order
     elapsed on 25.01.2013 and the first appeal itself was dismissed on
     11.11.2014. No doubt, the plaintiff-respondent had moved application
     on 05.03.2013 seeking extension of time for depositing the balance
     sale consideration but no orders were ever passed on the said
     application. The said application was filed after the stay in the first
     appeal had expired. Therefore, there was no application seeking
     extension of time within the period of three months stipulated under
     the decree.
28. Subsequently, plaintiff-respondent filed second application to deposit
    balance sale amount on which the court permitted the deposit of
    balance sale consideration vide order dated 09.10.2015, in pursuance
    whereof the balance amount was deposited. This was done much
    after the first appeal itself was dismissed. The question, therefore,
    is whether such permission to deposit or the deposit itself would
    ipso facto amount to condoning the delay in making the deposit and
    resultantly it amounts to deemed extension of time. The answer of
    the above proposition is an absolute ‘No’.
29. In this connection, it would be profitable to refer to a decision of this
    court in P.R. Yelumalai v. N.M. Ravi4. In the said case the court
    was dealing with a similar issue where the decree holder failed to
    make the deposit within the time stipulated under the decree. The
    court refused to accept the plea that once the deposit is made and
    accepted by the court, though beyond the period stipulated under
    the decree, it would amount to deemed extension of time. It was
    held that the conditional decree is self-operative, therefore, non-
    compliance of any condition leads to automatic dismissal of the suit.
    In a case, the deposit is not made within the time permitted and no
    application is moved for the extension of time within the said time,
    it would amount to failure to comply with the condition of the decree
    which leads to the automatic dismissal of the suit. In other words, it
    was held that the suit for specific performance of a contract stands
    automatically dismissed when the conditions under the decree are
    not complied with by the decree holder and he is not entitled to seek


4   (2015) 9 SCC 52
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       execution of the decree as it ceases to exist in the eyes of law due
       to deemed dismissal of the suit.
30. This being the position in law, the submission that the plaintiff-
    respondent had deposited the balance sale consideration with the
    permission of the court and the same was accepted and as such
    the condition stands complied with, cannot be accepted.
31. One of the other arguments is that the defendant-appellant had not
    even filed any application under Section 28 of the Act for rescinding
    the contract, therefore, no relief to the above effect could be granted
    to the defendant-appellant.
32. The aforesaid argument does not tie down our hands as this aspect
    of the matter stands covered by one another decision of this court
    rendered in Prem Jeevan v. K.S. Venkata Raman and Another5.
33. In the aforesaid case one of the contentions advanced on behalf of
    decree holder was that unless an application seeking recession of
    the contract in terms of Section 28 of the Act is filed, judgment debtor
    is not entitled to the relief of rescinding the contract. The court upon
    due consideration held that failure of the judgment debtor to seek
    recession of the contract in terms of Section 28 of the Act does not
    imply that the decree which has become inexecutable would revive
    and would be executable when the deposits were not made in time
    and no application for extension of time was moved.
34. In view of the above decision, it is settled that moving of an application
    under Section 28 of the Act for rescinding the contract for non-
    compliance of the condition is not mandatory rather optional and
    immaterial and that the court in a given circumstance is not powerless
    to treat the contract as having rescinded for non-compliance of the
    condition.
35. In view of the ratio laid down in P.R. Yelumalai (supra) that the suit
    for specific performance of contract stands automatically dismissed,
    no sooner than the condition contemplated under the decree is not
    complied with, coupled with the fact that there is no mandatory
    requirement of moving an application for rescinding a contract in
    terms of Section 28 of the Act in view of Prem Jeevan (supra), we



5   (2017) 11 SCC 57
[2026] 5 S.C.R.                                                        415

                        Habban Shah v. Sheruddin


     are of the opinion that the plaintiff-respondent having not only failed
     to deposit the balance sale consideration within the time stipulated
     under decree but also having failed to move any application for
     extension of time within the time permitted disentitled himself from
     executing the decree. There is neither automatic extension of time
     nor condonation of delay in making the deposit. The decree ceases
     to exists due to non-compliance and becomes inexecutable.
36. Shri Manoj Swarup, learned senior counsel for the defendant-appellant
    had placed strong reliance upon the recent decision of this court in
    Balbir Singh and Another v. Baldev Singh (Dead) through its
    legal representatives and others6. The aforesaid decision reiterating
    the earlier precedents holds that the language of Section 28(1) of
    the Act establishes that the court does not lose its jurisdiction after
    the grant of decree for specific performance and it does not become
    functus officio as the very said provision gives discretionary power
    to the court to grant extension of time to comply with the conditions
    under the decree and even for the recession of the contract. Thus,
    the court retains its power and jurisdiction to deal with the decree
    of specific performance till the sale deed is executed or the decree
    is rendered inexecutable.
37. The court therein took cognizance to the fact that neither the deposit
    was made within the stipulated time nor extension of time was sought
    or granted within the time permitted. Further, no explanation was
    furnished for the delay in making the deposit and as such held the
    view taken that the decree is inexecutable is correct.
38. The aforesaid decision though relied upon by both the sides does
    not render much assistance to the plaintiff-respondent rather helps
    the defendant-appellant.
39. The above discussion leads us to the following conclusions:
     i.     The decree passed in a suit for specific performance is in the
            nature of a preliminary decree.
     ii.    Since the decree of a specific performance is in the nature
            of preliminary decree, the Court passing the same does not
            become functus officio as soon as the decree is passed but



6   (2025) 3 SCC 543
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              retains control over the decree even after the passing of the
              decree till the sale deed is executed or the decree is rendered
              inexecutable.
       iii.   Section 28 (1) of the Act provides for depositing or paying the
              balance sale consideration within the time allowed or to seek
              recession of the contract in the event of default even though
              the decree of specific performance has been granted.
       iv.    Sub-Section (4) of Section 28 of the Act bars a separate suit
              for any relief which can be claimed in the same suit by moving
              an application under Section 28 of the Act.
       v.     The power of the Court under Section 28 of the Act is
              discretionary and can be exercised on equitable consideration.
              The exercise of such discretion must be equitable to both the
              sellers and purchasers.
       vi.    The default, if any, subsequent to decree for the specific
              performance resulting in the recession of contract has to be
              decided having regard to the broad terms of Section 28 (1) and
              Section 28 (4) in exercise of equity jurisdiction so as to give
              quietus to the dispute; and
       vii.   It is not mandatory to move an application under Section 28
              and that the Court in the given circumstances is not powerless
              to treat the contract as having rescind it for non-compliance
              of the condition.
40. The plaintiff-respondent has placed reliance upon Dr. Amit Arya v.
    Kamlesh Kumari7 which is also a very recent decision of this
    court. In the said case, the court observed that the power to extend
    time granted can be exercised by the court, however, non-grant of
    extension of time cannot be the end of the transaction. Such non-
    extension of time would be a classic example of a hyper technical
    approach which the court must eschew in view of Ram Lal v. Jarnail
    Singh (now Deceased), through its LRs and Others8, wherein it
    has been observed that “non-payment of balance sale consideration
    within the time period fixed by the trial court does not amount to



7   2025 SCC OnLine SC 2886
8   2025 SCC OnLine SC 584
[2026] 5 S.C.R.                                                            417

                        Habban Shah v. Sheruddin


     abandonment of the contract and consequent rescinding of the same.
     The real test must be to see if the conduct of the decree holder
     amounts to a positive refusal to complete his part of the contract”.
41. In view of the above decision, we have to examine whether there was
    any positive act on part of the plaintiff-respondent for non-compliance
    of his obligation of depositing the balance sale consideration as per
    the decree.
42. At the cost of repetition, we must remind that the decree for specific
    performance was passed on 31.10.2012 and the interim order granted
    in first appeal lapsed on 25.01.2013, but the plaintiff-respondent
    neither deposited the balance sale consideration, if he was ready
    and willing to perform his obligation, within the period of three months
    contemplated under the decree nor cared to move any application
    seeking extension of time for depositing the balance amount on any
    ground, much less for the reason that the decree had not attained
    finality and was subject matter of appeal. This shows that the plaintiff-
    respondent was shying away from performing his obligation.
43. It is pertinent to mention here that the relief of specific performance
    of an agreement is an equitable and a discretionary relief in terms of
    Section 16 (C) and Section 20 of the Act. It is not mandatory upon
    the court to grant the relief of specific performance even if it legally
    appears to be correct.
44. In N.P. Thirugnanam (Dead), by LRs v. Dr. R. Jagan Mohan Rao
    and Others9, the court observed that to adjudge whether the plaintiff
    is ready and willing to perform his part of the contract, it must take
    into consideration the conduct of the plaintiff, both prior to the filing
    of the suit and subsequent to the filing of the suit along with other
    attending circumstances. The court is not bound to grant the relief of
    specific performance merely because there was a valid agreement or
    at one point of time the plaintiff was ready and willing to perform his
    obligation. The relief of specific performance is an equitable remedy and
    it is on the discretion of the court to grant or not to grant such a relief.
45. Once it is accepted that the relief of specific performance is an
    equitable and a discretionary relief, therefore, he who seeks equity
    must ensure that equity is done to the opposite party. The final end


9   (1995) 5 SCC 115
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       of law is nothing but justice, therefore, the parties to the suit for
       specific performance should be informed by equity. In other words,
       he who seeks equity must do equity.
46. In view of the above legal position when the relief of specific
    performance is an equitable and a discretionary relief and the same
    having been granted, the plaintiff-respondent must perform his part
    of the obligation in time. The condition to deposit the balance sale
    consideration within three months under the decree partakes the
    condition under the agreement and makes the aforesaid time as
    an essence of the agreement. Therefore, the plaintiff-respondent
    is obliged to establish his readiness and willingness to perform his
    obligation by depositing the balance sale consideration strictly within
    the time allowed. It is not at all equitable to condone the delay on
    his part in depositing the balance sale consideration or extending the
    time for the same, more particularly when due to non-compliance, the
    suit itself stands automatically dismissed and the decree vanishes.
    The conduct of the plaintiff-respondent disentitles him the relief which
    was earlier granted in view of the long passage of time since 2005
    when the agreement was entered into till date as in between land
    prices might have increased manifold.
47. In the end, an attempt has been made from the side of the plaintiff-
    respondent to contend that when valuable rights have accrued in
    his favour on account of the decree of specific performance, such
    rights cannot be taken away and that the view which assist the
    decree must be adopted.
48. It is true that the rights accrued ought not to be disturbed unless there
    are strong reasons for the same. In the present case, the plaintiff-
    respondent got the decree by establishing his readiness and willingness
    to perform his part of the agreement but nonetheless he failed to
    establish his continuous readiness and willingness till the execution
    of the sale deed. If he was ready and willing to perform his part of the
    agreement till the stage of decreeing the suit, there would have been
    no problem on his part in immediately complying with his obligation
    under the decree by depositing the balance sale consideration within
    the time permitted. The plaintiff-respondent having failed to abide
    by such a condition indicates that he was not actually ready and
    willing to perform his obligation under the decree which obligation, in
    essence, took the shape of a condition under the agreement. In such
[2026] 5 S.C.R.                                                          419

                         Habban Shah v. Sheruddin


      circumstances, the plaintiff-respondent disentitled himself from the
      benefit of the decree of specific performance. Therefore, the submission
      that the view which assist the decree must be adopted is not tenable
      in the facts and circumstances of the present case.
49. It is trite to mention that Section 28 of the Act provides that the Court
    has to pass an order as the justice of the case may require. The
    parties approaching the Court must have the feeling that justice has
    been done to either of them in the facts and circumstances of the
    case particularly when the decree relates to specific performance of
    a contract based upon equity, equality and fairness. Therefore, it is
    incumbent upon the Court to pass an equitable order accordingly,
    balancing the equities between the parties.
50. In the above context, post-hearing, we interacted with the learned
    counsel for the parties. Shri Manoj Swarup, learned senior counsel
    for the defendant-appellant, submitted that the defendant-appellant
    is not in a position to offer any amount and that at best he can
    leave one-half acre out of the two and a half acres involved in the
    agreement, i.e., 4 kanals to make good the loss, if any, suffered by
    the plaintiff-respondent. It may be worth noting that the defendant-
    appellant had received part of the sale consideration amounting to Rs.
    80,000/- on 19.10.2005. Therefore, in the facts and circumstances,
    we consider it prudent to order refund of the earnest money with
    simple interest so as to adjust the equities.
51. We have deliberately not touched the submission of the parties on the
    doctrine of merger as facts in that regard were not clear on record.
    Moreover, the parties have proceeded to make their submissions
    on the basis of the judgment and decree passed by the court of first
    instance rather than that of the first appellate Court or the second
    appellate Court. The first appellate Court and the Court of second
    appeal have not granted any time either for the execution of the sale
    deed or for the deposit of balance sale consideration. Therefore,
    the time provided by the Court of first instance under the decree
    is the material time within which the parties were required to fulfil
    their reciprocal obligations. Accordingly, we have not dealt with the
    decision in the case of Surinder Pal Soni vs. Sohan Lal (Dead)
    through LRs.10 which is primarily on the doctrine of merger.


10   (2020) 15 SCC 771
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52. In view of the aforesaid facts and circumstances, the decree of
    specific performance dated 31.10.2012 is rendered inexecutable on
    account of non-compliance of the condition to deposit the balance
    sale consideration within the time of three months stipulated therein
    and the contract as a whole stand rescinded in terms of Section 28
    of the Act.
53. Accordingly, the impugned judgment and order dated 24.03.2025
    passed by the High Court of Punjab and Haryana at Chandigarh
    in Civil Revision No.7232 of 2015 and that of the Executing Court
    dated 07.09.2015 dismissing the objections, are hereby set aside.
    The objections are upheld and the execution proceedings are directed
    to be closed with the direction to the defendant-appellant to refund
    of the part sale consideration or the earnest money of Rs.80,000/-
    received by him with simple interest at the rate of 8 percent per
    annum from the date of its receipt i.e.,19.10.2005 till its refund.
    In the event, the defendant-appellant is unable to refund the said
    amount, it would be open for him to sell his ½ acre of the said land
    to the plaintiff-respondent or to any other third party if he refuses to
    purchase and may make the payment of the aforesaid amount by
    the sale of the said land within a period of three months.
54. The appeal is allowed accordingly.
55. Pending application(s), if any, stands disposed of.

       Result of the case: Appeal allowed.




       †
           Headnotes prepared by: Nidhi Jain