Supreme Court upholds executing court’s permission to deposit decretal amount and rejects rescission claims under S.28

A Bench of Justices J.B. Pardiwala and R. Mahadevan heard appeals against a common judgment of the High Court of Punjab & Haryana challenging orders that permitted decree-holders to deposit the balance sale consideration and refused rescission of contract under Section 28 of the Specific Relief Act, 1963. The appeals arose from four connected execution proceedings following restoration of conditional decrees for specific performance.

The Court held that the High Court committed no error in dismissing the revision petitions and in upholding the executing court's orders allowing deposit of the decretal amount and rejecting rescission applications. The Court emphasised the doctrine of merger and the discretionary nature of Section 28, noting that a decree for specific performance remained a preliminary decree and that the court retained power to extend time for compliance. The Court, in its reasoning, observed: “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.” The appeals were dismissed.

Background The dispute arose from four identical suits in which trial courts granted conditional decrees for specific performance on 16.08.1994 directing that “The plaintiff is directed to deposit the balance sale consideration in the court within the period of twenty days” and directing the defendants to execute sale deeds. The first appellate court reversed those decrees, prompting regular second appeals to the High Court. The High Court allowed the second appeals on 03.05.2018 and 24.05.2018, restoring the trial decrees; decree sheets were prepared on 31.05.2018 and execution petitions followed on 04.09.2018. On 07.09.2018 the decree-holders sought and obtained permission to deposit the decretal amount, and the executing court allowed deposit the same day. While SLPs by the defendants were pending, this Court later dismissed those SLPs on 18.01.2019, affirming the High Court.

The defendants filed applications under Section 28 alleging failure to deposit within the trial court’s 20-day period and seeking rescission; the executing court dismissed those rescission applications on 16.08.2019. The High Court rejected four connected revision petitions by the defendants by a common order dated 09.09.2022, reasoning that the High Court in second appeals had not fixed any time for deposit, the executing court had acted promptly, and there was no willful or unreasonable delay by the decree-holders. The Supreme Court examined two legal questions: the effect of merger of the trial decree with the appellate decree, and whether the defendants could invoke rescission on account of non-deposit within the original 20 days. The Court applied established precedents on merger and Section 28 (including Sardar Mohar Singh v. Mangilal and related authorities), distinguished Prem Jeevan v. K.S. Venkata Raman as factually different, and observed that the High Court had not imposed a specific time for deposit in the appellate decree. The Court noted that sale deeds were executed in 2019, warrants of possession issued later, and possession was ultimately handed over to the plaintiffs before certain interlocutory steps; on 15.12.2022 a stay had been granted by this Court without noting that execution had already been completed. Ultimately the Supreme Court found no error of law and dismissed the appeals.

Case Details: Case No.: 2025 INSC 81; Civil Appeal Nos. 563-566 of 2025 (SLPs Nos. 22802-22805 of 2022) Case Title: Balbir Singh & Anr. etc. v. Baldev Singh (D) through his LRs & Ors. etc. Appearances: For the Petitioner(s): Not indicated in the judgment For the Respondent(s): Not indicated in the judgment