2026 Supreme(SC) 491

SUPREME COURT OF INDIA
PANKAJ MITHAL, S.V.N. BHATTI, JJ.
Habban Shah – Appellant
Versus
Sheruddin – Respondent
Civil Appeal No. 7062 of 2026 [Arising Out of Special Leave Petition (C) No. 14479 of 2025]
Decided On : 06-05-2026

IMPORTANT POINTS
(1) Recession of contract – Moving of application under Section 28 of S.R. Act for rescinding contract for non-compliance of condition is not mandatory rather optional and immaterial – Court is not powerless to treat contract as having rescinded for non-compliance of condition.
(2) Specific Performance of contract – Relief of specific performance is an equitable and a discretionary relief – He who seeks equity must ensure that equity is done to opposite party – Final end of law is nothing but justice – He who seeks equity must do equity.
(3) Mere dismissal of first execution application on the ground of default does not preclude decree holder from filing a fresh execution within limitation.

Headnote:

(A) Specific Relief Act, 1963 – Section 20 – Civil Procedure Code, 1908 – Order XX Rule 12A – Agreement to sell – Suit for Specific Performance – Non-deposit of balance sale consideration within time stipulated – Direction by Court was specifically to defendant-appellant to execute sale deed within three months on receipt of balance sale consideration, which by implication means that there is reciprocal obligation upon plaintiff-respondent to deposit amount within three months – It is only by necessary implication that plaintiff-respondent was required to deposit amount within three months – Decree of specific performance in case at hand provides for execution of sale deed after receiving balance sale consideration within a period of three months – Mere dismissal of first execution application on the ground of default does not preclude decree holder from filing a fresh execution within limitation – Objections to limitation and maintainability of execution are not tenable and stand overruled. (Paras 18, 19, 23 and 24)

(B) Specific Relief Act, 1963 – Section 28 – Civil Procedure Code, 1908 – Section 148/151 – Agreement to sell – Suit for Specific Performance – Non-deposit of balance sale consideration within time stipulated – Decree imposes reciprocal obligations upon both parties – Obligation of executing decree is upon receipt of balance sale consideration – Plaintiff-respondent had not deposited balance sale consideration within period of three months stipulated under decree – He had not even moved any application within said time for seeking extension of time, either under Section 148/151 of CPC or under Section 28 of Act – Moving of application under Section 28 of Act for rescinding contract for non-compliance of condition is not mandatory rather optional and immaterial and court in a given circumstance is not powerless to treat the contract as having rescinded for non-compliance of condition – Plaintiff-respondent having not only failed to deposit balance sale consideration within time stipulated under decree but also having failed to move any application for extension of time within time permitted disentitled himself from executing decree – There is neither automatic extension of time nor condonation of delay in making deposit – Decree ceases to exists due to non-compliance and becomes inexecutable. (Paras 25, 28 and 35)

(C) Specific Relief Act, 1963 – Section 28 – Recession of contract – Since decree of a specific performance is in nature of preliminary decree, Court passing the same does not become functus officio as soon as decree is passed but retains control over decree even after passing of decree till sale deed is executed or decree is rendered inexecutable – Power of Court under Section 28 of Act is discretionary and can be exercised on equitable consideration – Exercise of such discretion must be equitable to both sellers and purchasers – It is not mandatory upon court to grant relief of specific performance even if it legally appears to be correct – Court has to pass order as justice of case may require – Parties approaching Court must have feeling that justice has been done to either of them. (Paras 36, 39, 43 and 49)

(D) Specific Relief Act, 1963 – Section 20 – Specific Performance of contract – Relief of specific performance is an equitable and a discretionary relief – He who seeks equity must ensure that equity is done to opposite party – Final end of law is nothing but justice – He who seeks equity must do equity – Plaintiff respondent is obliged to establish his readiness and willingness to perform his obligation by depositing balance sale consideration strictly within time allowed – It is not at all equitable to condone delay on his part in depositing balance sale consideration or extending time for the same, more particularly when due to non-compliance, suit itself stands automatically dismissed and decree vanishes. (Paras 45 and 46)

Facts of the case:

A short but an intricate question of law which arises for consideration in this appeal is: whether decree of specific performance passed by court of first instance directing for execution of sale deed on deposit of balance sale consideration within three months would be inexecutable for reason that balance sale consideration was not deposited within time stipulated.

Findings of Court:

In the event defendant-appellant is unable to refund said amount, it would be open for him to sell his ½ acre of said land to plaintiff-respondent or to any other third party if he refuses to purchase and may make payment of amount by sale of said land within a period of three months.

Result : Appeal allowed.