Bench comprising of Justices JB Pardiwala and R Mahadevan
The Supreme Court, in a landmark judgment, clarified the nature of a suit for specific performance under the Specific Relief Act, 1963, particularly focusing on the power of the trial court after the decree for specific performance has been passed. The Court ruled on the question of whether the trial court retains jurisdiction and control over the decree even after the passing of the decree for specific performance.
Facts:
In the present case, the trial court had directed the specific performance of an agreement to sell and ordered the plaintiff to deposit the remaining sale consideration within 20 days. The defendants later filed an application under Section 28 of the Specific Relief Act, arguing that the plaintiff failed to make the payment within the stipulated time, and thus, the decree for specific performance should be rescinded. The trial court dismissed the application, and its order was upheld by the High Court. The defendants appealed, claiming that the 20-day deadline for depositing the balance sale consideration was binding even after the High Court’s judgment.
Issues:
- Whether the trial court retains control over the decree for specific performance even after it has been passed and after the time for payment has lapsed.
- Whether the trial court has the discretion to extend the time for compliance with the decree, despite the expiration of the original deadline.
- Whether the High Court’s judgment supersedes the trial court’s order regarding the payment deadline.
- The applicability of Section 28 of the Specific Relief Act concerning rescission and extension of time.
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Contention of the Petitioner
The petitioners, representing the defendants, contended that the direction of the trial court requiring the plaintiff to deposit the remaining sale consideration within 20 days should remain applicable even after the judgment of the High Court in the second appeal. They argued that the trial court’s order was final, and the failure to comply with the payment deadline should result in the rescission of the specific performance decree under Section 28.
Contention of the Respondent
The respondents, representing the plaintiff, argued that the trial court retains its power to extend the time for compliance with the decree, even if the original deadline has passed. They emphasized that the trial court retains jurisdiction over the decree until its execution and that the power to extend time is discretionary under Section 28. The respondents also pointed out that the High Court did not issue any specific direction regarding the 20-day payment deadline, and thus, the original trial court order should prevail.
Court’s Analysis
The Supreme Court in its analysis referred to the provisions of Section 28 of the Specific Relief Act, which grants the court the discretion to rescind a decree for specific performance if the plaintiff fails to comply with the payment conditions. The Court clarified that a decree for specific performance does not come to an end with the passing of the decree; rather, it is described as a "preliminary decree." The court retains control over the decree even after its passing, as long as the sale deed has not been executed.
The Court rejected the argument put forth by the petitioners that the trial court's direction regarding the payment deadline was automatically applicable after the High Court’s decision. It emphasized that once the appeal court (in this case, the High Court) has rendered its judgment, the order of the trial court merges with the higher court's order, and the original trial court’s directions are no longer operative unless specifically reinstated by the higher court.
The Court also highlighted that extending the time for payment does not constitute a modification of the decree but rather a discretionary decision by the court based on the circumstances of the case.
Conclusion:
The Supreme Court, in dismissing the appeal, upheld the High Court’s decision and clarified that the trial court retains jurisdiction over a decree for specific performance even after its passage. The Court emphasized that Section 28 of the Specific Relief Act provides the trial court with the discretion to extend the time for compliance with the decree and that the failure to comply with the payment deadline does not automatically result in the rescission of the decree. Furthermore, the Court reiterated the doctrine of merger, stating that the order of the appellate court supersedes the trial court’s order, unless specifically reinstated.
The decision reinforced the notion that a suit for specific performance is an ongoing process that involves judicial oversight even after the decree is passed, and that courts have the flexibility to ensure fairness by extending time or modifying conditions where necessary
