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Supreme Court of India

ANAND NARAYAN SHUKLAversusJAGAT DHARI

Citation
2026 INSC 463
Decided
8 May 2026
Disposal
Appeal(s) allowed

Holding

Dismissal of an appeal for non‑prosecution does not merge the trial‑court decree, the right to seek rescission under Section 28 remains, and the lower courts erred by not exercising the discretionary power to extend time or balance equities, warranting setting aside their orders.

Summary

The appellant sought specific performance of a sale deed for 3.75 acres of land, and the trial court decreed payment of the balance consideration within a month or deposit in court. The appellant failed to pay or deposit until November 2020, while the respondent filed an appeal that was dismissed for non‑prosecution in 2023. The execution court dismissed the execution application, holding that the conditional decree could not be executed due to the delayed deposit, and the High Court affirmed this dismissal. The Supreme Court examined whether the trial‑court decree merged into the appellate order, whether the respondent could invoke Section 28 of the Specific Relief Act after the deposit permission, and whether the lower courts erred in not considering equitable extension of time. It held that dismissal for non‑prosecution does not cause merger, that the right to seek rescission under Section 28 remains, and that the courts below failed to apply the discretionary principles governing extension of time and rescission. Consequently, the Supreme Court set aside the orders of the execution and High Courts and restored the applications for fresh consideration, allowing the appeal.

Issues considered

  • Whether the decree of specific performance passed by the trial court merged into the order of the appellate court when the appeal was dismissed for non‑prosecution.
  • Whether the respondent’s application under Section 28 of the Specific Relief Act, 1963 was maintainable after the court permitted the appellant to deposit the balance amount and the deposit was made.
  • Whether the rescission of the contract and dismissal of the execution application were vitiated by a pedantic approach, and whether the decree could be saved by granting an extension of time or compensation for delay.

Legislation cited

Headnote

453 : 2026 INSC 463 Anand Narayan Shukla v. Jagat Dhari (Civil Appeal No. 7355 of 2026) 08 May 2026 [Manoj Misra* and Manmohan JJ.] Issue for Consideration Issue arose whether the decree of specific performance passed by the trial court merged in the order of the appellate court even though the to make deposit of the balance amount and, pursuant thereto, the amount was also deposited; and whether the rescission of the contract and consequential dismissal of the execution application vitiated by a pedantic approach of the courts below as they failed to consider the facts and

Subjects

Rescission of contractDoctrine of mergerSpecific performanceExecution of decreeSection 28Delay in depositExtension of timeEquity

Judgment

                 [2026] 5 S.C.R. 453 : 2026 INSC 463

                         Anand Narayan Shukla
                                  v.
                             Jagat Dhari
                      (Civil Appeal No. 7355 of 2026)
                                 08 May 2026
                  [Manoj Misra* and Manmohan JJ.]


                           Issue for Consideration
       Issue arose whether the decree of specific performance passed
       by the trial court merged in the order of the appellate court
       even though the appellate court dismissed the appeal for
       non-prosecution; whether respondent’s application u/s.28 of the
       Specific Relief Act, 1963 was maintainable after the Court had
       granted permission to make deposit of the balance amount and,
       pursuant thereto, the amount was also deposited; and whether
       the rescission of the contract and consequential dismissal of the
       execution application vitiated by a pedantic approach of the courts
       below as they failed to consider the facts and circumstances of the
       case as also whether the decree could be saved by compensating
       the judgment-debtor for the delay in deposit of the balance sale
       consideration.

                                  Headnotes†
       Specific Relief Act, 1963 – s.28 – Rescission of a contract –
       Suit for specific performance of an agreement for sale of
       immovable property – Trial court directed the appellant to pay
       balance of the sale consideration to the respondent within
       a month and on payment, the respondent to execute and
       register the sale deed – However, the balance amount not
       paid to the judgment debtor nor the same was deposited in
       Court – First respondent filed appeal – Appellant applied for
       execution of the decree which gave rise to execution case –
       Execution court while fixing the date directed decree holder to
       deposit the amount in Court – Amount deposited – Judgment
       debtor applied for rescinding the contract and dismissing the
       execution application for non-deposit of the balance amount
       within the specified period – Execution court held that as the

* Author
454                                                            [2026] 5 S.C.R.

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       amount was not deposited within the stipulated time as per
       the condition of the decree, the decree cannot be executed
       and dismissed the execution case – Thereagainst, revision
       petition filed which was dismissed – Correctness:
       Held: For there to be a merger of the trial court decree in the
       appellate court decree, there must be an adjudication on merits,
       though it is immaterial whether the decree or order under appeal
       is set aside or modified or simply confirmed – Dismissal of the
       appeal for non-prosecution would not merge the trial court decree
       in the order of the appellate court – No dispute that the appeal of
       judgment-debtor was dismissed for non-prosecution, thus, there
       would be no merger of the trial court decree in the appellate court
       order – Order of the Execution Court, permitting deposit did not
       determine the rights of the parties qua rescission of the contract –
       Rather, the deposit was permitted just to test the bona fides of the
       decree holder in pursuing the execution – Though such deposit
       becomes a relevant factor for determining whether the decree holder
       had been throughout ready and willing to perform his obligation
       under the contract/decree, it would not extinguish the right of the
       judgment debtor to seek rescission of the contract – By permitting
       the decree holder to make deposit to show his bona fides, the
       Court did not foreclose the right of the judgment debtor to seek
       rescission of the contract u/s.28 – Neither the Execution Court
       nor the High Court took into consideration that though the decree
       fixed a time frame for deposit of the balance consideration, it did
       not provide for the consequences of failing to adhere to the time
       schedule – In such circumstances, there could be no automatic
       rescission of the decree for specific performance – Thus, the
       Court while exercising its power u/s.28 was required to consider
       whether the decree was liable to be rescinded or the decree holder
       was entitled to get extension of time up to the date of deposit
       in Court – Though, while granting the relief of extension, it was
       open for the Court to balance the equities by putting the decree
       holder to such terms as may adequately compensate the judgment
       debtor for the delay – Neither the Execution Court nor the High
       Court has considered the matter in proper perspective and in
       accord with the settled principles governing the exercise of power
       u/s.28 of the 1963 Act, thus both the impugned orders set aside.
       [Paras 22, 23, 40, 41]
[2026] 5 S.C.R.                                                            455

                    Anand Narayan Shukla v. Jagat Dhari


     Doctrines – Doctrine of merger – Meaning – Application of –
     Discussed. [Para 21]
     Specific Relief Act; 1963 – s.28 – Rescission in certain
     circumstances of contracts for the sale or lease of immovable
     property, the specific performance of which has been
     decreed – Legal principles guiding the exercise of power
     u/s.28 – Stated. [Para 33]

                              Case Law Cited
     Kunhayammed and Others v. State of Kerala and Another [2000]
     Supp. 1 SCR 538 : (2000) 6 SCC 359; Chandi Prasad & Ors. v.
     Jagdish Prasad & Ors. [2004] Supp. 4 SCR 942 : (2004) 8 SCC
     724; State of Kerala & Anr. v. Kondottyparambanmoosa & Ors.
     [2008] 11 SCR 957 : (2008) 8 SCC 65; Sardar Mohar Singh v.
     Mangilal [1997] 1 SCR 297 : (1997) 9 SCC 217; K. Kalpana
     Saraswathi v. P.S.S. Somasundaram Chettiar [1980] 2 SCR 293 :
     (1980) 1 SCC 630; Bhupinder Kumar v. Angrej Singh [2009]
     13 SCR 978 : (2009) 8 SCC 766; Ramankutty Guptan v. Avara
     [1994] 1 SCR 542 : (1994) 2 SCC 642; V.S. Palanichamy Chettiar
     Firm v. C. Alagappan & Anr. [1999] 1 SCR 349 : (1999) 4 SCC
     702; Ishwar (Since Deceased) Thr. Lrs and Others v. Bhim Singh
     and Another [2024] 9 SCR 1 : 2024 SCC OnLine SC 2338; Ram
     Lal v. Jarnail Singh [2025] 2 SCR 1745 : 2025 SCC OnLine SC
     584; P.R. Yelumalai v. N.H. Ravi [2015] 4 SCR 163 : (2015) 9
     SCC 52; Johri Singh v. Sukhpal Singh and others [1989] Supp.
     1 SCR 17 : (1989) 4 SCC 403 – referred to.

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

                             List of Keywords
     Rescission of the contract; Doctrine of merger; Delay in deposit
     of the balance sale consideration; Suit for specific performance
     of an agreement for sale; Execution and registration of sale deed;
     Dismissal of the appeal for non-prosecution; Readiness and
     willingness to perform obligation under the contract; Foreclosure
     of right to rescission of the contract; Rescission of the decree for
     specific performance; Relief of extension.
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                                  Case Arising From
       C I V I L A P P E L L AT E J U R I S D I C T I O N : C i v i l A p p e a l N o .
       7355 of 2026
       From the Judgment and Order dated 05.03.2025 of the High
       Court of Madhya Pradesh Principal Seat at Jabalpur in MP No.
       4682 of 2023.

                              Appearances for Parties
       Advs. for the Appellant(s):
       Saurabh Mishra, Sr. Adv., Sanchit Garga, Sankalp Mishra, Shashwat
       Jaiswal.
       Advs. for the Respondent(s):
       Ajay Marwah, Swaroopanada Mishra, Mrigank Bhardwaj, Ms. Dhriti
       Sharma, Rahul Kumar.

                      Judgment / Order of the Supreme Court

                                        Judgment
       Manoj Misra, J.

1.     Leave granted.
2.     This appeal impugns the judgment and order of the High Court of
       Madhya Pradesh at Jabalpur1, dated 05.03.2025, passed in Misc.
       Petition No. 4682 of 2023, whereby appellant’s petition against the
       order of 7th Additional District Judge, Satna2, dated 12.07.2023,
       passed in Execution Case No. 27A/2017, was dismissed.

       Facts
3.     Appellant instituted a suit, inter alia, for specific performance of an
       agreement for sale of immovable property dated 14.11.2011. Under
       the agreement the respondent agreed to sell 3.75 acres of land @
       Rs.16,00,000 per acre, against which, Rs. 2,50,000 was paid by way
       of advance. Trial Court decreed the suit on 03.03.2017 and thereby
       directed the appellant to pay balance of the sale consideration to the


1    The High Court
2    The Execution Court
[2026] 5 S.C.R.                                                         457

                    Anand Narayan Shukla v. Jagat Dhari


     first respondent (i.e., Defendant No.1) within a month, or to deposit
     the same in Court. It was also directed that on such payment/ deposit,
     the first respondent shall execute and register the sale deed.
4.   Pursuant to the decree, vide notice dated 01.04.2017, the appellant
     called upon the judgment-debtor to execute the sale deed by receiving
     Rs. 57,50,000 (i.e., the balance amount) or else face execution of
     the decree of which costs would have to be borne by him. However,
     neither the balance amount was paid to the judgment debtor nor the
     same was deposited in Court within the stipulated period.
5.   In the meantime, first respondent filed an appeal (i.e., First Appeal
     No. 311 of 2017) against the Trial Court decree.
6.   As there existed no stay on execution of the decree, on 18.07.2017
     the appellant applied for execution of the decree which gave rise
     to Execution Case No.27 of 2017. In paragraph 7 of the execution
     application, it was stated:
           “7. … The plaintiff-decree-holder personally wanted to give
           the remaining amount of Rs. 57,50,000/- to the judgment
           debtor, but he did not accept it, then on 01.04.2017, the
           judgment debtor/defendant was informed by giving notice
           through the Advocate that after receiving the remaining
           amount of Rs. 57,50,000/- from the decree-holder, he
           should execute and register the sale deed in compliance
           with the sale agreement regarding the contracted land, but
           the judgment debtor did not even comply with the notice,
           due to which this application is being presented in the
           Court. The decree-holder is ready to deposit the amount
           of Rs. 57,50,000/- payable to the judgment debtor in the
           Court which should be deposited by the decree-holder
           and by giving the amount to the judgment-debtor, the sale
           deed should be executed and registered by the judgment
           debtor and in case this is not done, the amount should be
           deposited in the Court and the contracted land should be
           registered in favour of the decree-holder.”
7.   On 19.07.2017, the Execution Court passed the following order:
           “Execution obtained from the office.
           On behalf of the decree-holder/plaintiff, Shri R.L. Shukla,
           Advocate. Judgment debtor absent.
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            The execution is known to be within the jurisdiction of this
            Court. Therefore, it should be registered.
            Amount should be duly paid by decree-holder and notice
            should be issued to judgment debtor. The next date for
            hearing fixed on 06.12.2017.”
8.     Thereafter, multiple dates were fixed (i.e., 06.12.2017, 06.04.2018,
       10.01.2019, 23.04.2019, 08.05.2019, 13.08.2019 and 28.11.2019).
       On 6.12.2017, 06.04.2018 and 10.01.2019 though the Court noticed
       that the judgment debtor is not served, yet it observed that the
       decree-holder should pay the due amount to the judgment debtor.
       Interestingly, no order was passed on those dates to deposit the
       due amount. On 23.04.2019, the Execution Court, while fixing
       08.05.2019 as the next date, for the first time directed the decree
       holder to deposit the amount in Court. However, on the next date i.e.,
       08.05.2019, upon noticing that the judgment debtor is not served, the
       Court while fixing the next date i.e., 13.08.2019, surprisingly did not
       take notice of its earlier order dated 23.04.2019 and again ordered
       payment to the judgment debtor. On 13.08.2019, the Court noticed
       that service of summons was not effected and, therefore, directed
       taking of fresh steps to serve summons on the judgment debtor,
       while fixing 28.11.2019 for his as well as decree-holder’s appearance
       to enable deposit of the balance amount. On 28.11.2019, again
       the Court noticed that steps to serve the judgment-debtor were not
       taken, therefore, while fixing 27.04.2020 as the next date, it directed
       the decree-holder to take steps within three days. Simultaneously,
       it ordered that if steps are taken, notice shall be issued to the
       judgment-debtor to ensure his presence so that the decree holder
       could make deposit of the amount payable under the decree in the
       presence of judgment debtor. In between, lockdown was ordered
       due to Covid-19 pandemic, as a result the matter could be taken
       not before 26.11.2020. On 26.11.2020, after perusing the records,
       it was ordered thus:
            “The judgment and decree passed earlier are conditional
            and as per the condition, the said amount was to be
            deposited within one month, hence first of all it has to be
            decided whether the said judgment and decree can actually
            be implemented in the present circumstances and it will
            take time to take the above decision. Therefore, in such
[2026] 5 S.C.R.                                                               459

                    Anand Narayan Shukla v. Jagat Dhari


           a situation, first of all the decree-holder/plaintiff is directed
           to deposit the amount of Rs. 57,50,000 (Fifty Seven Lakh
           Fifty Thousand Rupees) today itself and submit the receipt
           to the court by 05.00 PM of the day so that it can be
           ascertained whether the decree-holder actually wants to
           deposit the said amount even today.
           An application was also submitted on behalf of the decree-
           holder to the effect that the passed judgment and the
           decree be implemented and along with the application,
           a photocopy of the order passed in the First Appeal No.
           311/17 made before the Honorable High Court, Jabalpur,
           along with the documents as per the list, was submitted.
           Please appear at 04:45 pm for proceeding in compliance
           with the order of the case.”
9.   After the above order was passed, the decree-holder deposited
     Rs.57,50,000 in the concerned Section of the Court vide Cheque
     Nos. 840602 to 840607. In consequence, when the matter was taken
     up later in the day of 26.11.2020, it was ordered thus:
           “In compliance with the order, a total of 06 cheques of
           Rs. 57,50,000/- i.e., cheque Nos. 840602 to 840607 have
           been deposited in the Nazarat Section/ Registry Section,
           Satna on behalf of the decree-holder and in this regard,
           the District Nazir, appearing in the court, has expressed
           his consent and stated that the above cheques will be
           presented by him in the Bank for payment and thereafter
           the said amount will come in the CCD account. Therefore,
           the District Nazir is directed to immediately report the
           said amount to this Court after it is deposited in the CCD
           account.
           The case should be presented on 04.12.2020 for
           presentation of information regarding deposit of amount
           and for taking action as per the judgment and decree.”
10. After the deposit was made, the Execution Court proceeded to
    consider whether the decree could be executed despite the delay
    in deposit of the balance amount. To consider the said issue, the
    matter was adjourned from one date to the other. Ultimately, on
    10.12.2022, the following order was passed:
460                                                       [2026] 5 S.C.R.

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          “Mr. R.L. Shukla Advocate for decree-holder is present.
          Mr. I.S. Singh Advocate for the judgment debtor is present.
          The judgment debtor is directed to comply with the judgment
          and decree and submit the necessary representation on
          the next date.
          The case should be presented on 10.01.2023 for further
          action in compliance with the judgment and decree.”
11. Thereafter, on 10.01.2023, the Court ordered thus:
          “Mr. R.L. Shukla Advocate for decree-holder is present.
          Mr. I.S. Singh Advocate for the judgment debtor is present.
          Time was sought on behalf of the judgment debtor to take
          necessary advance action in compliance of the judgment
          and decree, which is given after consideration of the case
          with the direction to submit a report on the next date after
          necessarily complying with the judgment and decree.
          The judgment debtor is given a last opportunity to comply
          with the judgment and decree.
          The case should be presented on 30.01.2023 for further
          action in compliance with the judgment and decree.”
12. On 30.01.2023, the judgment-debtor filed an application claiming, inter
    alia, that no information was given to him in the matter. Though the
    advocate representing him in the original suit had appeared, he gave
    no information to him. In response to the said application, on behalf
    of the decree-holder / appellant, it was submitted that the advocate
    concerned had been representing the judgment debtor since 2020,
    and therefore, such objection is unwarranted. However, the Court,
    after perusing the record, passed the following order:
          “Since in this case no notice letter is found to have been
          issued to the judgment debtor and no Vakalatnama has
          been presented by their Advocate. Therefore, notice letter
          should be issued to the judgment debtor on presenting
          the amount along with a copy of the execution application.
          The case should be presented for the presence of the
          judgment debtor on 10.02.2023.”
[2026] 5 S.C.R.                                                          461

                    Anand Narayan Shukla v. Jagat Dhari


13. Pursuant to the above order, on 14.03.2023, the judgment debtor
    formally put in his appearance in the proceeding and applied for
    rescinding the contract and dismissing the execution application for
    non-deposit of the balance amount within the period specified by
    the decree. In response, the decree-holder submitted an application
    that the deposit of Rs. 57,50,000 made by him be accepted, and the
    sale deed be executed in his favour.
14. On 12.07.2023 the Court passed a detailed order. The relevant
    portion thereof is extracted below:
           “From the perusal of the execution case it is seen that an
           application was filed by the decree holder on 03.04.2017
           that the judgment debtor is not accepting the amount in
           compliance of the decree and is not getting the sale deed
           executed / registered. Therefore, the decree holder is ready
           to deposit the said amount in the court but after the said
           date no amount has been deposited by the decree holder
           and the order book dated 26.11.2020 also shows that Rs.
           57,50,000 has been deposited by the decree holder on the
           said date. But it has also been mentioned in the order book
           that the earlier judgment and decree was conditional and as
           per the condition the amount was to be deposited within one
           month and it will take time to decide whether the judgment
           and decree can be implemented in the circumstances of
           the case or not. In such a situation, to ascertain whether
           the decree holder wants to deposit the amount or not, order
           dated 26.11.2020 was passed on which the amount was
           deposited by the decree holder on the said date.
           Therefore, it is clear that the judgment and decree passed
           was conditional and the entire consideration amount was
           to be paid to respondent no. 1 or deposited in the court
           within one month, but after submitting the application on
           03.04.2017 by the decree-holder, no amount was deposited
           before 26.11.2020. Therefore, as the amount has not been
           deposited within the stipulated time as per the condition
           of the decree, the decree cannot be executed and the
           execution case is dismissed.
           The decree-holder shall be entitled to receive back the
           amount deposited by him.”
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15. Aggrieved by the judgment and order of the Execution Court, the
    appellant filed a Revision Petition before the High Court under Article
    227 of the Constitution which was dismissed by the impugned order.
16. We have heard Mr. Saurabh Mishra, learned Senior Counsel, for the
    appellant, Mr. Ajay Marwah, learned counsel, for the respondent,
    and have perused the record.

       Submissions on behalf of the Appellant
17. The learned counsel for the appellant submitted:
       (i)     The appellant (i.e., the decree-holder) had issued notice well
               within time calling upon the judgment-debtor to execute the
               sale deed in terms of the decree. Not only that, the appellant
               deposited the entire amount under order of the Execution Court
               dated 26.11.2020 and had thereby complied with the terms and
               conditions of the decree.
       (ii)    The judgment debtor had filed an appeal against the decree
               which came to be dismissed on 06.11.2023. On dismissal of
               the first appeal, the decree of the Trial Court merged with that
               of the Appellate Court and therefore, the deposit of the balance
               amount cannot be said to be delayed.
       (iii) Assuming there was delay, in the facts of the case, it was liable
             to be condoned. Moreover, the application to rescind the contract
             and dismiss the execution application was not made till the deposit
             was made. Once, under orders of the Court, the amount was
             deposited, the contract could not have been rescinded. Therefore,
             the application to rescind the contract was not maintainable.
       (iv) The High Court as well as the Execution Court adopted a hyper-
            technical approach inasmuch as they failed to consider that
            the facts and circumstances of the case warranted extension
            of time to make the deposit.
       (v)     Section 28 of the Specific Relief Act, 19633 not only empowers
               the Court which passed the decree of specific performance
               of the contract to rescind the contract for non-deposit of the
               purchase money within the period allowed by the Court, but
               also empowers the Court to extend the said period.


3   1963 Act
[2026] 5 S.C.R.                                                        463

                    Anand Narayan Shukla v. Jagat Dhari


     (vi) The power of rescission including extension of time period for
          deposit is not to be exercised mechanically. Rather, a justice
          oriented approach is required upon consideration of entire facts
          and circumstances including the conduct of the parties. Here,
          the judgment-debtor was not interested in complying with its part
          under the contract/ decree and had filed a first appeal impugning
          the decree which came to be dismissed on 06.11.2023. What is
          relevant is that even before dismissal of the appeal, the decree
          holder had deposited the balance amount on 26.11.2020. In
          such circumstances, there was no justification to rescind the
          contract and dismiss the execution application.
     (vii) Even otherwise, if the judgment-debtor is to suffer some loss
           on ground of delay, the Court has power to direct the decree
           holder to deposit an additional amount to compensate the
           judgment-debtor, for which the appellant is ready.

     Submissions on behalf of the respondent
18. Per contra, learned counsel for the respondent submitted:
     (i)    Order sheet of the Execution Court reveals that at the time
            of registration of the execution case, in 2017 itself, the Court
            directed the appellant to make payment of the balance amount
            yet, despite repeated directions, such deposit was not made
            until 26.11.2020.
     (ii)   Permission to make such deposit was without prejudice to the
            right of the judgment debtor, therefore there is no question of
            waiver of right to seek recission of the contract. Besides, the
            judgment debtor was not served with notice of the execution
            proceedings. As soon as the judgment-debtor came to know
            about the execution proceedings, application under Section
            28 was filed.
     (iii) Mere filing of appeal against the decree does not operate as
           a stay on the operation of the decree, therefore the appellant
           cannot take advantage of pendency of the appeal in delaying
           payment/ deposit.
     (iv) The question of merger of trial court decree in the order of
          appellate court does not arise as the first appeal was dismissed
          for want of prosecution on 06.11.2023.
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       (v)   The appellant had paid a meagre amount by way of advance, and
             had failed to comply with the direction in the decree therefore,
             equitable relief of extension of time is not available to him.
       (vi) The Execution Court was justified in dismissing the execution
            application and the High Court justifiably upheld the order of
            the Execution Court.

       Issues
19. Upon consideration of the rival contentions, the following issues arise
    for our consideration in this appeal:
       (A) Whether the decree of specific performance passed by the trial
           court merged in the order of the appellate court even though
           the appellate court dismissed the appeal for non-prosecution?
       (B) Whether respondent’s application under Section 28 of the 1963
           Act was maintainable after the Court had granted permission
           to make deposit of the balance amount and, pursuant thereto,
           the amount was also deposited?
       (C) Whether the rescission of the contract and consequential
           dismissal of the execution application vitiated by a pedantic
           approach of the court(s) below as they failed to consider the
           facts and circumstances of the case as also whether the decree
           could be saved by compensating the judgment-debtor for the
           delay in deposit of the balance sale consideration?

       Issue (A)
20. The argument on behalf of the appellant is that the trial court decree
    merged with the appellate court decree and therefore, in absence
    of any direction in the appellate court decree to make deposit, the
    contract could not have been rescinded by invoking Section 28 of
    the 1963 Act. Per contra, on behalf of the respondent, it is submitted
    that there is no decree of the appellate court as the appeal was
    dismissed for non-prosecution. Hence, there is no question of merger.
21. On the issue of merger of the trial court decree in the appellate court
    decree, the law is settled. The doctrine of merger is based on the
    principle of propriety in the hierarchy of the justice-delivery system.
    The said doctrine postulates that there cannot be more than one
    operative decree governing the same subject matter at a given point
[2026] 5 S.C.R.                                                                                          465

                         Anand Narayan Shukla v. Jagat Dhari


      of time. 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. 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/ court4.
      However, the doctrine of merger would only apply in a case when a
      higher forum entertains an appeal or revision and passes an order
      on merit and not when the appeal or revision is dismissed on the
      ground of delay in filing the same5.
22. Section 2 (2)6 of the Code of Civil Procedure, 19087, which defines
    a decree, specifically excludes an order of dismissal in default from
    the ambit of a decree. As a sequitur, for there to be a merger of the
    trial court decree in the appellate court decree, there must be an
    adjudication on merits, though it is immaterial whether the decree
    or order under appeal is set aside or modified or simply confirmed.
    In our view, dismissal of the appeal for non-prosecution would not
    merge the trial court decree in the order of the appellate court. In
    the present case, there is no dispute that the appeal of judgment-
    debtor was dismissed for non-prosecution; therefore, in our view,
    there would be no merger of the trial court decree in the appellate
    court order. Issue (A) is answered accordingly.

      Issue (B)
23. The next argument on behalf of the appellant is that once the
    Execution Court permitted the appellant to deposit the balance


4   Kunhayammed and others v. State of Kerala and Another (2000) 6 SCC 359; Chandi Prasad & Ors. v.
    Jagdish Prasad & Ors. (2004) 8 SCC 724.
5   State of Kerala & Anr. v. Kondottyparambanmoosa & Ors. (2008) 8 SCC 65
6   Section 2 (2). – “Decree” means the formal expression of an adjudication which, so far as regards the
    Court expressing it, conclusively determines the rights of the parties with regard to all or any of the
    matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the
    rejection of a plaint and the determination of any question within section 144, but shall not include -
           (a) any adjudication from which an appeal lies as an appeal from an order, or
           (b) any order of dismissal for default.
    Explanation. - A decree is preliminary when further proceedings have to be undertaken before the suit
    can be completely disposed of. It is final when such adjudication completely disposes of the suit. It may
    be partly preliminary and partly final.
7   CPC
466                                                                                    [2026] 5 S.C.R.

                                   Supreme Court Reports


       consideration even after expiry of the period fixed by the trial court
       decree, it would be deemed that the Court had extended the time
       to deposit. Therefore, the application to rescind the contract for non-
       deposit was not maintainable and ought to have been dismissed.
       On this aspect, we notice that the order of the Execution Court,
       dated 26.11.2020, permitting deposit did not determine the rights of
       the parties qua rescission of the contract. Rather, the deposit was
       permitted just to test the bona fides of the decree holder in pursuing
       the execution. Though such deposit becomes a relevant factor for
       determining whether the decree holder had been throughout ready and
       willing to perform his obligation under the contract/ decree, it would
       not extinguish the right of the judgment-debtor to seek rescission of
       the contract. We, therefore, hold that by permitting the decree holder
       to make deposit to show his bona fides, the Court did not foreclose
       the right of the judgment debtor to seek rescission of the contract
       under Section 28 of the 1963 Act. Issue (B) is decided accordingly.

       Issue (C)
24. Before we address Issue (C), it would be apposite to notice the
    provisions of Section 288 of the 1963 Act. A plain reading of sub-


8   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 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 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.
[2026] 5 S.C.R.                                                             467

                       Anand Narayan Shukla v. Jagat Dhari


     section (1) of Section 28 would indicate that it enables the vendor
     or lessor to apply in the same suit in which the decree is made to
     have the contract rescinded on failure of the purchaser or lessee,
     as the case may be, to pay or deposit the purchase money or other
     sum within the period allowed by the decree or such further period
     as the court may allow. Upon receipt of such application the court
     may, by order, rescind the contract. Use of phrases “may, by order,
     rescind” and “such further period as the court may allow” make it
     clear that the provision leaves discretion in the court either to rescind
     the contract and, consequently, the decree, or to extend the time
     for making payment/ deposit. Sub-section (4) makes it clear that 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. Therefore, what is clear is that the
     court that passed the decree does not become functus officio on
     passing the decree. It retains control over the decree even after
     it is passed. By use of the expression “may, by order, rescind” in
     sub-section (1), the legislative intent is clear that it is a discretionary
     power and, therefore, there is no automatic rescission in the event of
     default. As a sequitur, the Court that passed the decree is vested with
     the power to extend the period stipulated in the decree for deposit.
     Further, the language of sub-section (4) makes it clear that not only
     the vendor or lessor, but also the purchaser or lessee, can apply to
     the Court that passed the decree either to rescind the contract or to
     extend the time period for payment/ deposit. Now, we shall notice few
     decisions where this Court has construed Section 28 of the 1963 Act
     and laid down principles guiding the exercise of power thereunder.
25. In Sardar Mohar Singh v. Mangilal 9, a three-Judge Bench of this
    Court held:
            “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


9   (1997) 9 SCC 217
468                                                             [2026] 5 S.C.R.

                            Supreme Court Reports


             to deal with the decree of specific performance. It would
             also be clear that the court has power to enlarge the time
             in favor 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 of the conditional decree as
             mentioned in the decree for specific performance. It is true
             that the respondent has not given satisfactory explanation
             of every day’s delay. It is not, unlike Section 5 of the
             Limitation Act, an application for condonation of delay. It is
             one for extension of time. Under these circumstances, the
             executing court as well as the High Court had exercised
             discretion and extended the time to comply the conditional
             decree. Accordingly, we do not find any valid and justifiable
             reason to interfere with the order passed by the High
             Court confirming the order of the executing court when
             in particular, the High Court has further enhanced a sum
             of rupees 16,000 to compensate the petitioner for loss of
             enjoyment of the money…”
                                                     (Emphasis supplied)

26. In K. Kalpana Saraswathi v. P.S.S. Somasundaram Chettiar10,
    while holding that the Court has power to extend time for making
    deposit, this Court, in the words of Krishna Iyer, J., observed:
             “4. It is perfectly open to the court in control of a suit for
             specific performance to extend the time for deposit, and
             this court may do so even now to enable the plaintiff to get
             the advantage of the agreement to sell in her favor. The
             disentitling circumstances relied upon by the defendant
             respondent are offset by the false pleas raised in the course
             of the suit by him and rightly negatived. Nor are we convinced
             that the application for consideration and extension of time
             cannot be read, as in substance it is, a petition for more time
             to deposit. Even so, specific performance is an equitable


10   (1980) 1 SCC 630
[2026] 5 S.C.R.                                                              469

                        Anand Narayan Shukla v. Jagat Dhari


             relief and he who seeks equity can be put on terms to
             ensure that equity is done to the opposite party even while
             granting the relief. The final end of law is justice, and so
             the means to it too should be informed by equity. That is
             why he who seeks equity shall do equity. …”
27. In Bhupinder Kumar v. Angrej Singh11, after considering earlier
    decisions, this Court observed that when the Court passes the decree
    for specific performance, the contract between the parties is not
    extinguished. 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. The Court proceeded to observe:
             “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.”
                                                    (Emphasis supplied)

28. In Ramankutty Guptan v. Avara 12, this Court answered two
    questions. One, whether an application under Section 28 of the 1963
    Act is maintainable in the court of first instance when the decree has
    been passed by the appellate court. Second, whether the execution
    court can entertain an application under Section 28 if it happens to
    be the court in which the suit was instituted. After taking note of the
    provisions of Section 37 of CPC, it was held:
             “8 … Therefore, it is clear that the decree of the appellate
             court would be construed to be the decree passed by
             the court of first instance. It is settled law that an appeal



11   (2009) 8 SCC 766
12   (1994) 2 SCC 642
470                                                           [2026] 5 S.C.R.

                           Supreme Court Reports


             is a continuation of the suit. Therefore, when a decree
             for specific performance has been dismissed by the
             trial court, but decreed by the Appellate Court, it should
             be construed to be in the same suit. 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. In K. Kalpana Saraswathi v. P.S.S. Somasundaram
             Chettiar, this Court held that on an oral prayer made by
             the counsel for the plaintiff for permission to deposit the
             entire amount as directed by the trial court this Court
             directed the appellant to deposit the amount within six
             months from that date together with interest and other
             conditions mentioned therein. An application for extension
             of time for payment of balance consideration may be filed
             even in the court of first instance or in the appellate court
             in the same suit as the decree of the trial court stands
             merged with that of the appellate court which decree is
             under execution. It is to be seen that the procedure is the
             handmaid for justice and unless the procedure touches
             upon jurisdictional issue, it should be moulded to subserve
             substantial justice. Therefore, technicalities would not
             stand in the way to subserve substantive justice. Take a
             case where the decree is transferred for execution to a
             transferee executing court, then certainly the transferee
             court is not the original court and execution 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.”
                                                   (Emphasis supplied)

29. Following the view taken in Ramankutty Guptan (supra), in V.S.
    Palanichamy Chettiar Firm v. C. Alagappan & Anr.13, this Court held:


13   (1999) 4 SCC 702
[2026] 5 S.C.R.                                                               471

                     Anand Narayan Shukla v. Jagat Dhari


             “16. In view of the decision of this Court in Ramankutty
             Guptan case when the trial court and the executing court
             are the same, the executing court can entertain the
             application for extension of time though the application
             is to be treated as one filed in the main suit. On the
             same analogy, the vendor judgment-debtor can also seek
             rescission of the contract of sale or take up this plea in
             defence to bar the execution of the decree.”
                                                     (Emphasis supplied)

30. In Ramankutty Guptan (supra), though it was clarified that the
    phrase “in the same suit” as used in Section 28 would mean in the
    suit itself and not in the execution proceedings, it was held that if
    the execution application has been filed in the same court in which
    the original suit was instituted i.e., the court of first instance, the
    application can be entertained though it should be numbered as an
    interlocutory application on the original side.
31. Following the aforesaid decisions, in Ishwar (Since Deceased) thr.
    Lrs and Others v. Bhim Singh and Another14, this Court held:
             “22. The law is, therefore, settled that an application seeking
             rescission of contract, or extension of time, under Section
             28 (1) of the 1963 Act, must be decided as an application
             in the original suit wherein the decree was passed even
             though the suit has been disposed of. As a sequitur, even
             if the Execution Court is the Court of first instance with
             reference to the suit wherein the decree under execution
             was passed, it must transfer the application filed under
             Section 28 to the file of the suit before dealing with it.”
32. In Ram Lal v. Jarnail Singh15, this Court held that it should be borne
    in mind that appeal is a continuation of the original proceedings and
    the power of the Court to extend the time for depositing the amount
    can be exercised even at the appellate stage by the Court. It was
    further held that Order XX Rule 12A of CPC requires the Court which
    passes the decree for specific performance of a contract for the sale



14   2024 SCC OnLine SC 2338
15   2025 SCC OnLine SC 584
472                                                            [2026] 5 S.C.R.

                           Supreme Court Reports


       or lease of immovable property to specify the period within which
       the purchase money or the other sum is to be paid by the purchaser
       or the lessee. It was held that where an appeal is filed against the
       decree passed by the trial court and the appeal is disposed of, the
       appellate court should specify the time for deposit of balance sale
       consideration. In that light, this Court held that if the appellate court
       fails to specify any time period, then it is expected of the decree-
       holder to make the deposit within a reasonable period of time. This
       Court thereafter proceeded to summarise the law qua execution of
       decree of specific performance in the following terms:
            “44. The decree for specific performance is in the nature of
            a preliminary decree. Both the parties have reciprocal rights
            and obligations flowing out of the decree. The decree may
            fix the time limit for performance and in some cases may
            also provide for the consequences for non-performance
            within the time limit or the decree may even be silent on
            this aspect.
            45. The decree enforces specific performance of the
            contract. The contract between the parties is thus
            not extinguished by passing of a decree for specific
            performance and it subsists despite the decree. Section
            28 (1) of the Act makes it clear that the court does not
            become functus officio after the grant of the decree for
            specific performance and it retains its power and jurisdiction
            to deal with the decree till the sale deed is executed.
            46. The court has been conferred with the power to
            extend the time to pay the amount and while taking into
            consideration the delay that is sought to be condoned by
            the plaintiff, the court does not adjudge the same like an
            application under section 5 of the Limitation Act, where
            each day’s delay must be explained. The Court is given the
            discretion to extend the time, and the provision therefore
            seeks to provide complete relief to both the parties in
            terms of the decree for specific performance.
            47. The power and jurisdiction granted under Section 28
            (1) of the Act, enables the court to extend the period for
            payment of the purchase money if it has not been paid
            within the period allowed by the decree. It also enables
[2026] 5 S.C.R.                                                            473

                    Anand Narayan Shukla v. Jagat Dhari


           the judgment debtor to seek for rescinding the contract for
           non-compliance of the directions given in the decree and
           while considering this application, the court is given the
           discretion to rescind the contract or in an appropriate case
           to even extend the time for paying the purchase money.
           48. It should also be borne in mind that appeal is a
           continuation of the original proceedings and the power
           of the Court to extend the time for depositing the amount
           can be exercised even in the appellate stage by the Court.
           49. In the considered view of this court, the Appellate
           Court, after deciding the appeal on merits, could have
           called upon the plaintiff to deposit the balance sale
           consideration by fixing a time limit. This would have
           at least given an opportunity to the plaintiff to fulfill his
           obligation. The non-payment of the balance consideration
           within the time period fixed by the Trial Court does not
           amount to abandonment of the contract and consequent
           rescinding of the same. The real test must be to see if
           the conduct of the plaintiff will amount to a positive refusal
           to complete his part of the contract. There must be an
           element of willful negligence on the part of the plaintiff
           before a court proceeds to invoke Section 28 of the Act
           and rescind the contract.
           50. This litigation is an eye-opener for the appellate
           courts reminding that they owe a duty to comply with the
           provisions of Order XX Rule 12A of the CPC. Where an
           appeal is filed against the decree passed by the trial court
           and the appeal is disposed of, the appellate court should
           specify time to deposit the balance sale consideration. It
           is too much to say that since the Trial Court had granted
           2 months’ time to the decree holder to deposit the balance
           sale consideration the same time period would apply even
           to the decree that may be drawn by the appellate court.
           What is executable is the decree passed by the appellate
           court. The appellate court owes a duty to specify the time
           period. If during the specified time period the decree
           holder is not in a position to deposit the balance sale
           consideration or, in other words, fails to deposit the balance
474                                                             [2026] 5 S.C.R.

                                  Supreme Court Reports


              sale consideration and later upon expiry of the specified
              time period seeks permission to deposit, then it would be
              within the discretion of the trial court to grant further time
              to deposit the balance sale consideration or decline. This
              discretion has to be exercised judiciously keeping in mind
              various factors like bona fide of the decree holder, the
              cause for failure to deposit the balance sale consideration
              in time, the length of delay and also the equities that
              might have been created during the interregnum period
              in favor of the judgment debtor. It is the cumulative effect
              and considerations of such factors that should weigh with
              the court concerned while permitting the decree holder
              to deposit the sale consideration beyond the time period
              that might have been prescribed by the trial court in its
              final decree.”
                                                     (Emphasis supplied)

33. Upon consideration of the provisions of Section 28 of the 1963 Act
    as also the decisions noticed above, in our view, the legal principles,
    inter alia, guiding the exercise of power under Section 28 of the 1963
    Act could be summarized as under:
       (i)    A decree for specific performance of a contract is in the nature
              of a preliminary decree and therefore, till the deed is executed
              pursuant to the decree, the Court that passed the decree is
              vested with the jurisdiction to either rescind the contract / the
              decree for non-payment/non-deposit within the stipulated period
              or extend the period for making such payment/ deposit.
       (ii)   Neither there is an automatic rescission of the contract/ decree
              for non-payment/ non-deposit within the period stipulated by the
              decree, nor there is an automatic extension of time by making
              such deposit, if the stipulated period for payment/ deposit has
              expired. However, where the decree stipulates that on failure
              to pay / deposit within the specified period, the decree shall
              stand rescinded or the suit shall stand dismissed, the decree
              is rendered inexecutable on failure to pay/ deposit16.



16   P.R. Yelumalai v. N.H. Ravi (2015) 9 SCC 52
[2026] 5 S.C.R.                                                          475

                        Anand Narayan Shukla v. Jagat Dhari


      (iii) Prayer to extend the time for making deposit in compliance of
            the conditions stipulated in the decree may be made prior to,
            or even after, expiry of the period stipulated therefor17.
      (iv) There is no form prescribed for making the prayer to extend the
           time to make such payment or deposit. Therefore, the prayer
           seeking permission to deposit the defaulted amount may be
           treated as one for extension of time to deposit. Such prayer
           may be made even orally while the Court seeks to address
           an application for rescission of the contract/ decree or when
           the decree is put for execution, provided the execution court
           is the one which passed the decree. However, if the decree
           is passed by the appellate court, such prayer/ application may
           be made before the court of first instance having regard to the
           provisions of Section 37 of CPC. Further, what is important is
           that such an application must be treated as an application in
           the suit and numbered accordingly.
      (v)     As specific performance of a contract is an equitable relief,
              while considering the prayer for rescission of the contract/
              decree, or for extension of time to make deposit in compliance
              of the decree, the Court must be guided by principles of equity.
              Therefore, while considering the prayer for extension of time to
              make deposit, to balance the equities, the Court would have
              to consider the attending facts and circumstances of the case,
              the conduct of the parties and whether, by putting the decree
              holder to such additional terms and conditions, the judgment
              debtor could be adequately compensated for the delay.
      (vi) Though each day’s delay in deposit need not be explained as
           in an application under Section 5 of the Limitation Act, the test
           is whether from the conduct of the decree holder it could be
           logically inferred that he had no intention to complete his part of
           the contract. If it appears so, and there appears an element of
           willful negligence on the part of the decree holder in complying
           with the terms of the decree, the Court may invoke its power
           under Section 28 and rescind the contract.



17   Johri Singh v. Sukhpal Singh and Others (1989) 4 SCC 403
476                                                          [2026] 5 S.C.R.

                          Supreme Court Reports


       (vii) Under Order XX Rule 12 A of CPC, when a decree for specific
             performance of a contract for the sale, or lease of immovable
             property, orders that the purchase-money or other sum is to
             be paid by the purchaser or lessee, the Court must specify
             the period within which the payment shall be made. Therefore,
             where the suit for specific performance is dismissed by the trial
             court but decreed by the appellate court, or where the appeal
             against the decree for specific performance is dismissed on
             merits, the Court must fix the time within which such payment
             is to be made. If no time limit is fixed, the compliance thereof
             would have to be within a reasonable period. As to what would
             be the reasonable period would depend on facts of the case.
34. In light of the aforesaid legal principles, we shall now consider whether
    the Execution Court (i.e., the Court which passed the decree) or
    the High Court (i.e., the Revisional Court) took into consideration
    all the relevant facts which were essential for determining whether
    the contract/ decree was liable to be rescinded or the decree holder
    was entitled to the discretionary relief of extension of time to make
    deposit, and if so, on what terms.
35. The decree of specific performance passed in favour of the appellant
    dated 03.03.2017 directed that the plaintiff shall pay to the defendant
    no.1 entire consideration amount @ Rs.16,00,000 per acre for the
    land bearing Khasra No. 1463/ 12 dh/2, area 3.75 acres, situated
    at Mauza Rampur Chaurasi, Circle Raigon, Tehsil Raghuraj Nagar,
    District Satna within one month or deposit the same in the Court. It
    was provided that upon payment by the plaintiff of the said amount
    to defendant No.1 or depositing it in the Court, defendant No.1 shall
    register the sale of the said land in favor of the plaintiff within two
    months, and if defendant No.1 does not do so, then after fulfilling
    all the legal formalities for registration of the disputed land by the
    plaintiff and paying the stamp duty as per rules, the contract of sale
    shall be executed by the Court on behalf of defendant No.1 in favor
    of the plaintiff.
36. On 3.4.2017, the decree holder (i.e., the appellant) filed an
    application before the Court praying for execution/ registration of
    the sale deed on payment of the due amount of Rs.57,00,000. In
    the application, it was stated that the applicant had sent legal notice
    to the judgment debtor, but the judgment debtor neither accepted
[2026] 5 S.C.R.                                                      477

                    Anand Narayan Shukla v. Jagat Dhari


     the sum nor executed or registered the sale deed. On 18.7.2017
     the decree holder filed a formal application for execution. Though
     the application was registered, no order was passed to deposit the
     amount in Court till 23.04.2019. Prior to 23.04.2019, the direction
     was to pay to the judgment-debtor, which was not possible because
     he was not willing to accept having already preferred an appeal
     against the trial court’s decree.
37. On 23.04.2019, for the first time direction to deposit the amount in
    Court was made while simultaneously issuing notice to the judgment-
    debtor, fixing 08.05.2019. Thereafter, on the following date i.e.,
    08.05.2019, even though the judgment debtor was not served by
    that date, the Court directed that the decree holder should pay the
    due amount. Simultaneously, while issuing notice to the judgment-
    debtor, the Court fixed 13.08.2019. On 13.08.2019, the Court directed
    that if the decree holder submits the amount along with the process
    fee, notice shall be issued to the judgment-debtor to be present on
    28.11.2019. Simultaneously, it ordered that the decree holder shall
    deposit the amount on 28.11.2019. On 28.11.2019, the Court fixed
    27.04.2020 requiring the presence of judgment debtor on that date,
    and directed the decree holder to deposit the amount on 27.04.2020.
    Unfortunately, on 27.04.2020 there was a lockdown due to Covid-19
    pandemic, and therefore, the matter was taken up on 26.11.2020
    when, under orders of the Court, the balance amount was deposited.
    In between, First Appeal No.311 of 2017 filed by the defendant(s)/
    judgment-debtor(s) against the trial court’s decree was pending,
    which came to be dismissed for non-prosecution on 06.11.2023.
38. The Execution Court dismissed the execution application by simply
    observing that the decree was conditional, the amount was to be
    paid within one month, but no amount was deposited till 26.11.2020,
    even though the application was submitted on 03.04.2017, therefore
    the decree cannot be executed.
39. The High Court dismissed the revision petition by a short order
    affirming the view of the Court below.
40. Neither the Execution Court nor the High Court took into consideration
    that though the decree fixed a time frame for deposit of the balance
    consideration, it did not provide for the consequences of failing to
    adhere to the time schedule. In such circumstances, in our view,
    there could be no automatic rescission of the decree for specific
478                                                        [2026] 5 S.C.R.

                               Supreme Court Reports


       performance. Thus, the Court while exercising its power under
       Section 28 of the 1963 Act was required to consider whether the
       decree was liable to be rescinded or the decree holder was entitled
       to get extension of time up to the date of deposit in Court. Though,
       while granting the relief of extension, it was open for the Court to
       balance the equities by putting the decree holder to such terms as
       may adequately compensate the judgment debtor for the delay.
41. As we find that neither the Execution Court nor the High Court has
    considered the matter in proper perspective and in accord with the
    settled principles governing the exercise of power under Section 28 of
    the 1963 Act, we deem it appropriate to set aside both the impugned
    orders, namely, the order of the High Court and of the Execution
    Court, and restore the Execution Application and all other applications
    filed therein qua rescission of contract/ extension of time to deposit
    to their original number on the file of the Execution Court/ the Court
    of first instance for a fresh consideration in accordance with the law
    and in light of the observations made in this judgment. Further, the
    Court shall deal with those application(s) as application(s) in the
    suit and shall be numbered as such. Issue C is decided accordingly.
42. The appeal is allowed in the aforesaid terms. Pending applications,
    if any, shall stand disposed of.

       Result of the case: Appeal allowed.




       †
           Headnotes prepared by: Nidhi Jain


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