Source: Supreme Court 

Why in News? 

A bench of Justice JB Pardiwala and Justice R Mahadevan held that in case of a suit for specific performance the Court retains control over the decree even after the decree is passed.               

• The Supreme Court held this in the case of Balbir Singh & Anr v. Baldev Singh (D) Through LR’s and Ors. (2025). 

What was the Background of Balbir Singh & Anr v. Baldev Singh (D) Through LR’s and Ors. Case?  

• The case involves a dispute over a decree for specific performance of a contract. 
• The trial court directed the plaintiff to deposit the balance sale consideration within 20 days and the defendants to execute the sale deeds. 
• The defendants filed appeals, and the appellate court set aside the trial court's decree. However, the High Court restored the trial court's decree in second appeals. 
• The defendants then filed SLPs, which were dismissed by the Supreme Court, affirming the High Court's judgment. 
• During the pendency of the SLPs, the plaintiff deposited the balance sale consideration, and eventually, the sale deeds were executed. 
• The defendants later sought to rescind the contract, but their application was rejected. The possession of the suit lands was handed over to the plaintiffs, and the execution petitions were dismissed as withdrawn. 

What were the Court’s Observations?  

• The issue that the Court considered in the present facts was: 
  • Whether the defendants/ judgment debtors could have prayed for rescission of contract on the ground that the plaintiffs/ decree holders had failed to deposit the balance sale consideration within the stipulated time period of 20 days as prescribed in the original decree? 
• Answering the issue, the Court held that when time for payment of money is extended, it does not mean a modification of the decree. 
• Further, the Court held that the trial court has power to extend the time, and the expression “such further period as the court may allow” would mean the court which had passed the decree, or, where the application under Section 28 of the Specific Relief Act, 1963 (SRA) , is filed.  
• The Court further held that the very fact that Section 28 of SRA itself gives power to grant order of rescission of the decree, the same would indicate that till the sale deed is executed in execution of the decree, the Trial Court retains its power and jurisdiction to deal with the decree of specific performance.  
• The Court has the discretion to extend time for compliance of the conditional decree as mentioned in the decree for specific performance. 
• The High Court, while allowing the second appeal filed by the original plaintiff had not issued any specific direction as regards the deposit of the balance sale consideration within a particular period of time. 
• Thus, it was concluded that it is incorrect on the part of the appellant herein to say that since the trial court had directed that the balance sale consideration shall be deposited within 20 days, the same direction would be applicable even after the judgment of the High Court in second appeal.

What is Rescission under Section 28 of SRA? 

• Section 28 of SRA provides for rescission in certain circumstances of the contract for sale or lease of immovable property, the specific performance of which has been decreed. 
• Application for rescission under Section 28 (1) can be made: 
  • If a decree for specific performance of a sale/lease contract has been made, and the purchaser or lessee fails to pay the amount ordered within the specified time (or any extension allowed by the court), the vendor or lessor can apply in the same suit to rescind the contract. 
  • In the above scenario the Court may rescind the contract either partially (for the defaulting party) or entirely, based on what justice requires. 
• Section 28 (2) lays down the consequences of rescission. It says that if the contract is rescinded the Court can make the following orders: 
  • Restores Possession: Orders the purchaser or lessee to return possession of the property to the vendor or lessor if possession was taken under the contract. 
  • Compensation: May require the purchaser or lessee to pay the vendor or lessor any rents and profits accrued during possession, and if just, refund earnest money or deposits paid. 
• Section 28 (3) lays down the relief that the purchaser can ask for. If the purchaser or lessee pays the required amount within the specified time, they may apply for further relief, which can include: 
  • Proper conveyance or lease execution. 
  • Delivery of possession or partition of the property. 
• Section 28 (4) further provides that no separate suit can be filed for reliefs under this section. All such applications must be made in the original suit.  
• Section 28 (5) provides that the Court has the discretion to decide who bears the costs of proceedings under this section.

What are the Landmark Cases on Section 28 of SRA? 

• Chanda (dead) through Lrs. v. Rattni and Anr. (2007): 
  • The decree for specific performance has been described as a preliminary decree.  
  • The power under Section 28 of the Act is discretionary and the court cannot ordinarily annul the decree once passed by it. 
  • Although the power to annul the decree exists yet Section 28 of the Act provides for complete relief to both the parties in terms of the decree.  
  • The court does not cease to have the power to extend the time even though the trial court had earlier directed in the decree that payment of balance price to be made by certain date and on failure the suit to stand dismissed.
• Bhupinder Kumar v. Angrej Singh (2009): 
  • Section 28 gives power to the court either to extend the time for compliance with the decree or grant an order of rescission of the agreement. 
  • The decree for specific performance is in the nature of a preliminary decree and the suit is deemed to be pending even after the decree. 
  • Sub-section (1) of Section 28 makes it clear that the court does not lose its jurisdiction after the grant of decree for specific performance nor it becomes functus officio. 
• Ramankutty Guptan v. Avara (1994): 
  • This Court observed that when the decree specifies the time for performance of the conditions of the decree, on its failure to deposit the money, Section 28(1) itself gives power to the court to extend the time on such terms as the court may allow to pay the purchase money or other sum which the court has ordered him to pay. 
  • When the court which passed the decree and the executing court is the same, application under Section 28 can be filed in the executing court. 
  • However, where a decree is transferred for execution to a transferee executing court then certainly the transferee court is not the original court and the executing court is not the “same court” within the meaning of Section 28 of the Act.