Supreme Court: Specific Performance Decrees Don't Vanish on Delayed Deposits—Equity Calls the Shots

In a landmark ruling that breathes new life into delayed specific performance executions, the Supreme Court of India has held that courts aren't handcuffed by time limits in decrees. A bench of Justice Manoj Misra and Justice Manmohan overturned lower court orders dismissing an execution petition, emphasizing that Section 28 of the Specific Relief Act, 1963 (SRA), grants judges flexible powers to extend deposit timelines rather than automatically scrapping contracts. The case, Anand Narayan Shukla v. Jagat Dhari (2026 INSC 463), remands the matter for fresh scrutiny, spotlighting equity over rigid deadlines.

From 2011 Deal to 2026 Showdown: The Land That Sparked a Legal Marathon

The saga began with a November 14, 2011, agreement where respondent Jagat Dhari promised to sell 3.75 acres of land in Satna, Madhya Pradesh, to appellant Anand Narayan Shukla at Rs 16 lakh per acre. Shukla paid a Rs 2.5 lakh advance, but the deal stalled.

Fast-forward to March 3, 2017: The trial court (7th Additional District Judge, Satna) decreed specific performance, ordering Shukla to pay the Rs 57.5 lakh balance within one month—or deposit it in court—after which Dhari must execute the sale deed. Shukla promptly issued a notice on April 1, 2017, offering payment, but Dhari refused and appealed (First Appeal No. 311/2017).

No stay on execution meant Shukla filed Execution Case No. 27A/2017 on July 18, 2017, affirming readiness to deposit. Proceedings dragged amid service issues, adjournments, and COVID-19 lockdowns. The execution court flip-flopped: early orders urged direct payment to Dhari; later ones (from April 23, 2019) mandated court deposit. Finally, on November 26, 2020, Shukla deposited the full amount via cheques, as directed to prove bona fides .

Dhari then sought rescission under Section 28 SRA, claiming default voided the decree. The execution court agreed on July 12, 2023, dismissing proceedings; the Madhya Pradesh High Court at Jabalpur upheld it on March 5, 2025, under Article 227.

Appellant's Equity Cry vs. Respondent's Clock-Watching Defense

Shukla's counsel, Senior Advocate Saurabh Mishra , argued the deposit fulfilled the decree, especially post-Dhari's dismissed appeal (November 6, 2023, for non-prosecution). He invoked Section 28's extension power, decrying "hyper-technical" rulings ignoring Dhari's non-cooperation, procedural delays, and Shukla's readiness—even offering compensation for delay.

Dhari's side, via Ajay Marwah , countered: Repeated court directions since 2017 went unheeded till 2020; no merger from a default-dismissed appeal; no waiver despite deposit permission; meager advance showed poor equity for Shukla.

Three key issues emerged: (A) Merger of trial decree in appellate order? (B) Maintainability of rescission post-deposit? (C) Equitable extension or pedantic dismissal?

Decoding Section 28: No Auto-Pilot Rescissions, Just Judicial Balancing

The bench dissected Section 28 SRA, affirming decrees for specific performance as "preliminary" till sale deeds materialize—courts retain control, per precedents like Sardar Mohar Singh v. Mangilal (1997) 9 SCC 217 (extension despite delay) and K. Kalpana Saraswathi v. P.S.S. Somasundaram Chettiar (1980) 1 SCC 630 (equity trumps technicalities).

Rejecting merger (Issue A), the Court cited Kunhayammed v. State of Kerala (2000) 6 SCC 359: Non-prosecution dismissals aren't merits-based decrees (CPC Section 2(2)). On maintainability (Issue B), deposit permission tested intent, not barring rescission ( Bhupinder Kumar v. Angrej Singh (2009) 8 SCC 766).

The core (Issue C): Summarizing seven principles from cases like Ramankutty Guptan v. Avara (1994) 2 SCC 642 and recent Ram Lal v. Jarnail Singh (2025 SCC OnLine SC 584), no automatic rescission sans explicit decree clause ( P.R. Yelumalai v. N.H. Ravi (2015) 9 SCC 52). Courts weigh conduct: Was delay willful? Can Dhari be compensated? Oral deposit prayers suffice if execution court = decree court; treat as suit applications.

Here, lower courts ignored no auto-rescission clause, Shukla's notices/applications, Dhari's appeal/lockdowns, and deposit per order—pure "pedantry," not equity.

As LiveLaw noted, this "eye-opener" reminds appellate courts (per Order XX Rule 12A CPC) to fix deposit timelines post-merits appeals.

Key Observations Straight from the Bench

"Neither there is an automatic rescission of the contract/decree for non-payment/non-deposit within the period stipulated by the decree, nor there is an automatic extension of time by making such deposit, if the stipulated period for payment/deposit has expired."

"Though each day’s delay in deposit need not be explained as in an application under Section 5 of the Limitation Act, the test is whether from the conduct of the decree holder it could be logically inferred that he had no intention to complete his part of the contract."

"As specific performance of a contract is an equitable relief, while considering the prayer for rescission of the contract/decree, or for extension of time to make deposit in compliance of the decree, the Court must be guided by principles of equity."

Verdict Remands for Justice 2.0: Broader Ripples Ahead

The appeal succeeds: High Court and execution orders set aside; execution revived for "fresh consideration" per Section 28 principles, treating applications as suit filings.

Practically, buyers get breathing room if bona fide—courts can impose interest/damages on sellers. Future cases demand holistic reviews: delays from appeals, pandemics, service lapses? All factor in. No more mechanical dismissals; equity reigns, potentially easing execution backlogs while safeguarding sellers via compensation.

This nuanced framework, as echoed in Bar & Bench reports, fortifies specific performance as viable relief, not a ticking time bomb.