The Supreme Court has asked an Executing Court to proceed in accordance with the law to execute the decree of specific performance pertaining to an agreement to sell. The Apex Court also reiterated that non-payment of balance sale 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 appeal before the Apex Court was filed against a judgment of the Punjab & Haryana High Court. The dispute pertained to the execution of an agreement to sell between the parties regarding a property located in the District of Panchkula.

The Division Bench of Justice Sanjay Karol and Justice Manoj Misra held,"Unquestionably, the power to extend the time granted within the decree for performance of its conditions can be extended on such terms as the Court may deem fit. However, it is a matter of record that in this case no such extension was granted. However, such non-grant of extension of time cannot, in our view, be the end of the transaction. Taking such a view would be a classic example of a hyper-technical approach which, this Court has observed, ought to be eschewed [see Ramankutty Gupta v. Avara]. We are supported in such a view by a recent order of this Court in Ram Lal v. Jarnail Singh, whereby it has been observed that, “the non-payment of balance sale 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.”

Senior Advocate P.S. Patwalia represented the Appellant, while AOR Anukriti Pareek represented the Respondent.

Factual Background

The parties entered into an agreement to sell a plot of land situated in Kalka, District Panchkula and Rs 1 lakh was paid as ‘earnest money’. The appellant filed a suit for specific performance and permanent injunction against the Respondent, restraining her from alienating the suit land by way of sale, mortgage, gift, or otherwise in favour of any third party. In the alternative, it was prayed that the appellant be paid Rs 2,46,000 with interest. The Trial Court held the plaintiff entitled for possessions of the suit land and the defendant was directed to execute the sale deed in favour of the plaintiff on receiving the balance sale consideration of Rs.8,05,000 from the plaintiff, in terms of the agreement to sell.

On First Appeal before the Addl. District Judge, Panchkula, it was held that the finding of the Trial Court with regard to specific performance could not be sustained. The appellant preferred a second appeal, and the judgment of the First Appellate Court was set aside, and that of the Trial Court was restored. The appellant filed an Execution Application. Objections were filed thereagainst on the primary ground that the application was filed with a delay of 87 days, which is after the two-month period provided by the judgment. The Civil Judge dismissed the objections. The High Court held that the Executing Court has no power to extend the time, even if an application is filed. Aggrieved thereby, the appellant approached the Apex Court.

Reasoning

The Bench, at the outset, explained that the Specific Relief Act, 1963, provides for specific performance of a contract, and the power to extend the time granted within the decree for performance of its conditions can be extended on such terms as the Court may deem fit. Considering that in the instant case, no such extension was granted, the Bench stated that the non-grant of extension of time cannot be the end of the transaction.

Referring to Ram Lal v.Jarnail Singh (2025), the Bench stated, “In view of the above, the position that since the execution has been filed beyond the 60-day period on the 87th day and, therefore, the decree cannot be acted upon – is clearly contrary to law”, the Bench mentioned.

“In the present facts, it has been held by the Court below that the appellant was ready and willing to perform his part of the contract. The doctrine of merger, as we have already discussed, means that at one point in time, only one decree can subsist. If the order dismissing the objections has been set aside and the execution petition dismissed, there is no decree that could be executed, and as such, the question of extension of time would not arise. Even otherwise, given the finding of readiness and willingness, alluded to above, it would be justified to accept that the delay of 27 days would not strike at the heart of the agreement. The decree of the Trial Court would merge with the final decision of the High Court", the order read.

Thus, setting aside the judgment of the High Court, the Bench restored the judgment of the executing Court, dismissing the objections filed by the respondent to its original number and status. “Let a copy of this judgment be sent to the Executing Court, which shall then proceed in accordance with law to execute the decree of specific performance passed by the Trial Court”, it concluded.

Cause Title: Dr. Amit Arya v. Kamlesh Kumari (Neutral Citation: 2025 INSC 1486)

Appearance

Appellant: Senior Advocate P.S. Patwalia, AOR Natasha Dalmia, Advocates Anisha Jain, Shambhavi Singh, Deveshi Chand

Respondent:AOR Anukriti Pareek

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Justice Sanjay KarolJustice Manoj Misra

Tulip Kanth

Assistant Editor

Tulip Kanth is an Assistant Editor at Verdictum having over 5 years of experience in the field of legal journalism and editing. She extensively covers judgments of the Supreme Court, High Courts as well as Tribunals. She has previously worked with a legal publishing website where she oversaw the work of other editors and has also created updates on notifications of different Government Ministries. She holds an English Honours Degree from SGTB Khalsa College, Delhi University and has completed her LLB course with specialisation in Corporate Law from Amity University.