Summary
Once the High Court in second appeal restored the trial court's conditional decree for specific performance, the trial decree merged in the appellate decree. Because the appellate decree fixed no time for deposit, the trial court's 20-day deposit period did not revive from the date of the second-appeal judgment. Since the decree holders deposited promptly with the executing court's permission, the judgment debtors' application under Section 28 of the Specific Relief Act, 1963 for rescission was rightly rejected.
Issues
- What effect the merger of the trial court's decree with the decree of the High Court in second appeal had on the 20-day period for deposit of the balance sale consideration fixed by the trial court.
- Whether the judgment debtors could seek rescission of the contract under Section 28 of the Specific Relief Act, 1963 because the decree holders did not deposit within 20 days.
- Whether the executing court could permit the deposit and extend time under Section 28.
Provisions considered
- Section 28, Specific Relief Act, 1963Read as giving the court that passed the decree continuing control over it. A decree for specific performance is in the nature of a preliminary decree, and until the sale deed is executed the court may either rescind the contract or extend time for payment, a discretion exercised on the conduct of the parties. Extending time does not modify the decree. Rescission was refused because the deposit was made promptly after the second appeals succeeded. (¶¶ 24, 25, 26, 36, 37, 40, 44, 45)
- Section 35(c), Specific Relief Act, 1877Noted as the predecessor provision, under which the vendor had to file a separate suit for rescission; Section 28 allows relief in the same suit to avoid multiple suits. (¶ 25)
- Section 148, Code of Civil Procedure, 1908Referring to Mahanth Ram Das, the Court noted that Section 148 lets courts enlarge peremptorily fixed time but has been read as excluding conditional decrees. (¶¶ 42, 43)
- Order XX Rule 12A, Code of Civil Procedure, 1908Discussed in distinguishing Prem Jeevan, where the decree specified the period for payment under this Rule and the deposit was made late with no extension sought or explanation given. (¶¶ 57, 58, 59)
Held
- Under the doctrine of merger there can be only one operative decree on a subject at a time. When an appellate court affirms, modifies or reverses the trial decree, the trial decree merges in the appellate decree, and the decree of the second appellate court becomes the executable decree. The decree holder's right to execute it cannot be defeated. (¶¶ 27, 28, 29, 32, 33, 34, 48, 49, 50, 51)
- The High Court, in allowing the second appeals, gave no direction fixing a time for deposit. The argument that the trial court's 20-day period applied afresh from the date of the second-appeal judgment was rejected. (¶¶ 46, 47, 52)
- Under Section 28 the court that passed a decree for specific performance does not become functus officio. Until the sale deed is executed it retains power to extend time for payment, even after an application for rescission, having regard to all the circumstances and the parties' conduct. (¶¶ 25, 26, 36, 37, 44, 45)
- V.S. Palanichamy Chettiar Firm, where the deposit was sought three years after appellate confirmation without explanation, was distinguishable. Here the balance was deposited, with leave of the executing court, immediately after the second appeals were allowed. (¶¶ 38, 39, 40)
- Prem Jeevan was distinguished on its facts: there the decree specified the payment period, the deposit was made late, and no extension was sought or explanation given. (¶¶ 53, 57, 58, 59)
- The Court left open whether a court becomes functus officio and loses the power to extend time where the decree itself says the suit stands dismissed on failure to deposit within the stipulated period, as the decree here was not of that kind. (¶ 41)
Result
Appeals dismissed; High Court's order upholding the executing court's permission to deposit and its rejection of the Section 28 rescission applications affirmed.