Source: Supreme Court 

Why in News? 

A bench of Justice JB Pardiwala and Justice R Mahadevan held that the Appellate Court owes a duty to specify the time period within which balance sale consideration is to be paid. 

• The Supreme Court held this in the case of Ram Lal v. Jarnail Singh (Now Deceased) through it’s Lr’s & Ors.(NCT of Delhi) (2025). 

What was the Background of Ram Lal v. Jarnail Singh (Now Deceased) through it’s Lr’s & Ors (NCT of Delhi) (2025) Case?   

• Case Origin 
  • The case is an appeal against the Punjab and Haryana High Court’s decision dated 30th August 2022, which allowed a Civil Revision Application filed by the defendants. 
  • This decision set aside the order of the Executing Court, which had directed the defendants to execute the sale deed in favor of the plaintiff upon deposit of the remaining sale amount of ₹5,00,000 within 15 days. 
• Background of the Dispute 
  • The plaintiff (appellant) filed a suit for specific performance of a sale agreement dated 16th November 2006 with the defendants (respondents) regarding agricultural land. 
  • The Trial Court decreed the suit in favor of the plaintiff on 20th January 2012, directing the defendant to execute and register the sale deed within 3 months, provided the plaintiff deposited the balance sale consideration within 2 months. 
• First Appeal 
  • The defendants challenged the Trial Court’s decision in the District Court, but their appeal was dismissed on 21st April 2015. 
  • The defendants did not file a Second Appeal, making the decree final. 
• Execution Petition 
  • The plaintiff filed an execution petition in January 2017, requesting permission to deposit the balance sale consideration. 
  • The Executing Court allowed the petition on 06th May 2019, directing the plaintiff to deposit the amount within 15 days and the defendants to execute the sale deed before 06th July 2019. 
• Defendants’ Challenge in High Court 
  • The defendants filed a Civil Revision before the High Court, arguing that:  
    • The plaintiff delayed depositing the balance amount without any valid reason. 
    • The decree had become unexecutable due to this delay. 
  • The High Court agreed, holding that:  
    • The plaintiff should have deposited the amount immediately after dismissal of the First Appeal in 2015. 
    • Since no compelling reasons were given for the delay, the decree had become unexecutable. 
  • The High Court set aside the Executing Court’s order, effectively dismissing the plaintiff’s claim. 
• Current Appeal 
  • The plaintiff has now appealed against the High Court’s decision, seeking enforcement of the decree despite the delay. 

What were the Court’s Observations? 

• The Court observed that the relevant provision in this case is Order XX Rule 12 A of Civil Procedure Code, 1908 (CPC) which provides for decree for specific performance of contract for sale or lease of immovable property. 
• Rule 12A of Order XX makes it obligatory for the Court to specify in the decree for specific performance of contract for sale or lease of immovable property the date  by which the purchase money or other sum should be paid by the vendee or lessee. 
• The Court in this case invoked the doctrine of merger which is based on the rationale that at a given point there cannot be more than one operative decree. 
• Thus, once a judgment passed by the Trial Court came to be challenged in the Appellate Court the judgment passed by the Trial Court merges with that of the Appellate Court irrespective of the fact whether the appeal is allowed or disallowed. 
• The Court held that the decree of specific performance is in the nature of a preliminary decree and both the parties have reciprocal rights and obligations flowing out of the decree. 
• Further, Section 28 (1) of Specific Relief Act, 1963 (SRA) makes it clear that the Court does not become a functus officio after the grant of the decree of specific performance and it retains its power and jurisdiction to deal with the decree till the sale deed is executed. 
• The non-payment of the balance sale consideration within the time period fixed by the Trial Court does not amount to abandonment of the contract and consequent rescinding of the same. The real test must be to see if the conduct of the plaintiff will amount to a positive refusal to complete his part of the contract. 
• There must be an element of willful negligence on the part of the plaintiff before a Court proceeds to invoke Section 28 of SRA and rescind the contract. 
• The Court in this case held that the appellate Court must specify the time to deposit the balance sale consideration. 
• What is executable is the decree passed by the appellate court. The Appellate Court owes a duty to specify the time period.  
• If during the specified time period the decree holder is not in a position to deposit the balance sale consideration or, in other words, fails to deposit the balance sale consideration and later upon expiry of the specified time period seeks permission to deposit, then it would be within the discretion of the trial court to grant further time to deposit the balance sale consideration or decline. 
• This discretion has to be exercised judiciously keeping in mind various factors like bona fide of the decree holder, the cause for failure to deposit the balance sale consideration in time, the length of delay and also the equities that might have been created during the interregnum period in favour of the judgment debtor. 
• The Court finally held that if the appellate Court fails to specify the time the decree holder is expected to deposit the amount within reasonable time. 
• Thus, the Appeal succeeded in the facts of the present case.

What is Order XX Rule 12A of CPC?

• This provision was inserted in 1976 by way of an amendment. 
• This provision provides for a decree for specific performance of contract for sale or lease of immovable property. 
  • The provision provides for the following: 
  • If the decree of specific performance requires the buyer or lessee to pay an amount (purchase money or any other sum), it must mention this clearly. 
• The decree of specific performance must specify a deadline for making the payment. 
• Rule 12A makes it obligatory for the court to specify in the decree for specific performance of contract for sale or lease of immovable property the date by which purchase money or other sum should be paid by the vendee or lessee.