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Supreme Court Clocks Out Buyer's Dream: Three Months Too Late
In a ruling that underscores the sanctity of timelines in equitable remedies, the has held that a decree-holder's failure to deposit the balance sale consideration within the stipulated three months renders a decree , automatically leading to contract rescission under . Justices Pankaj Mithal and S.V.N. Bhatti delivered the verdict in Habban Shah v. Sheruddin (2026 INSC 451), overturning the 's leniency on delay.
The bench allowed the seller's appeal, directing refund of the ₹80,000 with 8% simple interest from , or alternatively, sale of half an acre to settle accounts—balancing equities after two decades of litigation.
A Haryana Farmland Deal Gone Sour
The saga began in when Habban Shah, owner of 12 kanals 19 marlas of agricultural land in Shikarpur village, Mewat district, Haryana, agreed to sell it to Sheruddin for ₹5 lakhs per acre. Shah received ₹80,000 as advance, with the sale deed due by .
When Shah failed to execute, Sheruddin sued for . The trial court decreed on : Shah to execute the deed after receiving balance consideration within three months , or Sheruddin could approach court for it. Appeals by Shah failed—first appellate court in 2014, High Court in 2017—with no extensions granted.
Sheruddin filed execution in (dismissed for want of prosecution) and again in . Shah objected: time-barred and non-deposit. Executing court and High Court () dismissed objections, allowing late deposit in , citing interim stay in appeal and ongoing readiness.
Seller's Stand: , Decree Dead on Arrival
Habban Shah's counsel, , hammered that the decree's plain language tied execution to deposit within three months. No timely deposit or extension sought under or Specific Relief Act—decree self-operative, suit auto-dismissed per precedents like P.R. Yelumalai v. N.M. Ravi () 9 SCC 52 and Balbir Singh v. Baldev Singh (2025) 3 SCC 543.
No bar by limitation (), but non-compliance fatal. Section 28 doesn't require his application to rescind—court can deem it so ( Prem Jeevan v. K.S. Venkata Raman , 2017 11 SCC 57).
Buyer's Defense: Stay Stalled Me, Later Deposit Cures All
Sheruddin countered: Trial court found him always ready/willing (). Interim order (, lapsed ) restrained alienation, not deposit. Applications in / for deposit were allowed—delay condoned, time extended. No positive refusal to perform ( Ram Lal v. Jarnail Singh , 2025 SCC OnLine SC 584). Rights from decree can't vanish without rescission application.
Court's Scalpel: Equity Demands Timely Action, Not Excuses
The bench dissected the decree as conditional and reciprocal—preliminary in nature, court retains control till execution or inexecutability (). No explicit deposit directive to buyer, but implied within three months.
Interim order didn't bar deposit; post-lapse, no extension sought timely. Later permission () ≠ condonation or extension ( P.R. Yelumalai ). No mandatory Section 28 application needed—court exercises equity jurisdiction.
is discretionary/equitable (;
N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao
, 1995 5 SCC 115). Buyer must prove
continuous
readiness post-decree:
"
."
Delay disentitled him, especially with land value surge since
.
Distinguishing Dr. Amit Arya v. Kamlesh Kumari (2025 SCC OnLine SC 2886), no hyper-technical bar if no abandonment—but here, inaction post-stay lapse showed reluctance.
Seven key conclusions crystallized the law:
i. The decree passed in a suit for is in the nature of a ... Court retains control...
iii. provides for depositing... or to seek recession...
vii. It is not mandatory to move an application under Section 28...
Landmark Lines from the Bench
On :
"the suit for of a contract stands automatically dismissed when the conditions under the decree are not complied with by the decree holder and he is not entitled to seek execution of the decree as it ceases to exist in the eyes of law due to deemed dismissal of the suit."
Conduct trumps decree:
"the plaintiff-respondent... failed to establish his till the execution of the sale deed... indicates that he was not actually ready and willing to perform his obligation under the decree."
Equity's balance:
"the final end of law is nothing but justice... ."
No separate plea needed:
"moving of an application under Section 28... is not mandatory rather optional and immaterial."
Gavel Falls: Refund, Not Real Estate
Appeal allowed; High Court/Executing Court orders set aside. Decree inexecutable, contract rescinded. Shah to refund ₹80,000 + 8% interest from , or sell ½ acre (4 kanals) within three months.
This binds lower courts to enforce timelines strictly in , curbing endless executions while safeguarding sellers from stale claims. Buyers: deposit promptly or risk equity's axe. As LiveLaw noted (2026 LiveLaw (SC) 466), no separate rescission app needed—court's discretionary power reigns.
