Anand Narayan Shukla Vs Jagat Dhari (Supreme Court of India)
In a significant ruling on Specific Relief Act, 1963, the Supreme Court held that a decree for specific performance does not automatically become unenforceable merely because the purchaser failed to deposit the balance sale consideration within the time stipulated in the decree.
The case involved a decree-holder who had obtained a decree for specific performance of a land sale agreement. Although the decree required payment of the balance consideration within one month, the amount was actually deposited much later during execution proceedings. The execution court dismissed the execution petition and rescinded the contract solely on the ground of delay, and the High Court affirmed the same.
Reversing both orders, the Supreme Court clarified that a decree for specific performance is in the nature of a preliminary decree, and the court passing such decree retains control over it even after the decree is passed. The Court emphasized that Section 28 of the Specific Relief Act gives courts discretionary power either to rescind the contract or extend time for deposit depending on the facts and equities of the case.
The Court held that there is no automatic rescission merely because the stipulated period expired, unless the decree itself expressly provides such consequence. Courts must examine the conduct of parties, bona fides of the decree-holder, surrounding circumstances, and whether delay can be compensated monetarily instead of mechanically terminating valuable contractual rights.
Importantly, the Supreme Court observed that the decree-holder had consistently shown willingness to perform the contract, had issued notice to the judgment-debtor, initiated execution proceedings promptly, and eventually deposited the amount pursuant to court directions. The Court also noted that the execution proceedings were affected by repeated adjournments, non-service of notice, pendency of appeal, and even Covid lockdown disruptions.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. Leave granted.
