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SUPREME COURT OF INDIA
DHANANJAYA Y. CHANDRACHUD, INDIRA BANERJEE, JJ.
Surinder Pal Soni – Appellant
Versus
Sohan Lal (D) Thru LR & Ors – Respondents
Civil Appeal No 5360 of 2019 @Special Leave Petition (C) No 26508 of 2018
Decided On : 23-07-2019
(A) Specific Relief Act, 1963 – Section 28 – Agreement to sell – Suit for specific performance – Refund of earnest money in substitution of decree for specific performance – Partial decree of Trial Court in suit for specific performance was placed in issue before Appellate Court – Appellant acted bona fide – Equities in a matter arising out of a decree in a suit for specific performance must weigh in his favour – Executing court was justified in rejecting specious objections of respondents – High Court acted in excess of its revisional jurisdiction – High Court impermissibly substituted decree for specific performance with an order for refund of sale consideration, beyond earnest money of Rs. 2,00,000/- to decree holder – Reasons which weighed with High Court in doing so as well as its ultimate directions are unsustainable – In a Civil Revision arising out of an execution proceeding, High Court has modified decree – Such a course was not open in law – Impugned judgment and decree set aside and execution petition restored. (Paras 21 and 22)
(B) Doctrine – Doctrine of Merger – Upon decision of Appellate Court, there was a merger of judgment of Trial Court with decision which was rendered in appeal – Consequent upon passing of decree of an Appellate Court, decree of Trial Court merges with that of Appellate Court – Doctrine of merger is founded on rationale that there cannot be more than one operative decree at a given point in time – Doctrine of merger applies irrespective of whether Appellate Court has affirmed, modified or reversed decree of Trial Court – Doctrine of merger operates as a principle upon a judgment being rendered by Appellate Court – Once Appellate Court confirmed judgment and decree of Trial Court, there was evidently merger of judgment of Trial Court with decision of Appellate Court – Once Appellate Court renders its judgment, it is decree of Appellate Court which becomes executable – Entitlement of decree holder to execute decree of Appellate Court cannot be defeated. (Paras 13 and 17)
Facts of the Case:
Single Judge of the High Court of Punjab and Haryana allowed a Civil Revision instituted by respondents and in the process dismissed application of the appellant for execution of a decree in a suit for specific performance. Accepting objections of judgment debtor, High Court directed a refund of earnest money in substitution of decree for specific performance.
Findings of Court:
Appellant acted bona fide. Equities in a matter arising out of a decree in a suit for specific performance must weigh in his favour. Executing court was justified in rejecting the specious objections of respondents. High Court acted in excess of its revisional jurisdiction. High Court impermissibly substituted decree for specific performance with an order for refund of sale consideration, beyond earnest money of Rs. 2,00,000/- to decree holder.
Result : Appeal allowed.
JUDGMENT
Dr. Dhananjaya Y. Chandrachud, J
A learned Single Judge of the High Court of Punjab and Haryana allowed a Civil Revision instituted by the respondents and in the process dismissed the application of the appellant for the execution of a decree in a suit for specific performance. Accepting the objections of the judgment debtor, the High Court directed a refund of earnest money in substitution of the decree for specific performance.
2 In 2006, the appellant instituted a suit for specific performance of an agreement to sell dated 8 December 2003. The appellant sought to enforce an agreement for the sale of land bearing 12 kanals and 9 marlas, representing a half share out of the land bearing Khewat Khatauni No. 565/525, Khasra No. 94/18 (7-8), 19(8-0), 20/1 (6-3), 21/1 (1-7) and 94/21/3 (2-0) situated in village Billa, Tehsil and District Panchkula. On 20 March 2012, the Civil Judge (Senior Division), Panchkula decreed the suit except for land bearing 2 kanals mentioned in the sale deed in exhibit-D3. Insofar as is material, the decree provided thus :
"Resultantly, a decree for possession by way of specific performance of the agreement to sell Ex. P1 dated 08.12.2003 is passed in favour of the plaintiff in respect of remaining suit land, i.e., except the land of 2 kanals mentioned in sale deed Ex. D3, on making balance sale consideration amount to the L.Rs. of defendant No.1, after deducting the consideration of aforesaid 2 kanals land. The L.Rs of the defendant No.1 are directed to execute the sale deed in respect of the remaining suit land within a period of two months from today in receipt of remaining balance sale consideration after deduction of consideration of 2 kanals land and in case of failure of the L.Rs. of defendant No.1 to do so, the plaintiff is entitled to get the sale deed executed and registered quo the aforesaid land through the Court agency."
3 Both the appellant and the respondent filed appeals against the judgment of the Trial Court. On 23 April 2012, the Additional District Judge, Panchkula issued notice in the appeal and on the application for stay filed by the respondent.
4 On 15 June 2012, the appellant filed proceedings before the Civil Judge (Senior Division), Panchkula for seeking the execution of the decree passed in his favour, pending the first appeal.
5 On 19 May 2014, the respondent filed objections to the execution petition.
6 On 17 January 2015, the Additional District Judge upheld the judgment and order of the Trial Court while dismissing both sets of appeals filed respectively by the appellant and the respondent.
7 On 23 February 2015, the executing court rejected the objections of the respondents to the execution of the decree and allowed the appellant’s execution petition. The respondent then filed a civil revision before the High Court which resulted in the judgment of the learned Single Judge dated 1 June 2018 by which the order of the executing court was set aside. The High Court held that there was a failure on the part of the appellant to deposit the balance of the sale consideration within a period of two months from the date of the decree and as a consequence the decree had been rendered inexecutable by virtue of the provisions of Section 28 [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 the 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 m
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