Case: Surinder Pal Soni Vs. Sohan Lal (D) Thru LR &amp; Ors

2. In 2006, the appellant instituted a suit for specific performance of an agreement to sell dated 8 December 2003. The appellant sought to enforce an agreement for the sale of land bearing 12 kanals and 9 marlas, representing a half share out of the land bearing Khewat Khatauni No. 565/525, Khasra No. 94/18 (7-8), 19(8-0), 20/1 (6-3), 21/1 (1-7) and 94/21/3 (2-0) situated in village Billa, Tehsil and District Panchkula. On 20 March 2012, the Civil Judge (Senior Division), Panchkula decreed the suit except for land bearing 2 kanals mentioned in the sale deed in exhibit-D3. Insofar as is material, the decree provided thus :Resultantly, a decree for possession by way of specific performance of the agreement to sell Ex. P1 dated 08.12.2003 is passed in favour of the plaintiff in respect of remaining suit land, i.e., except the land of 2 kanals mentioned in sale deed Ex. D3, on making balance sale consideration amount to the L.Rs. of defendant No.1, after deducting the consideration of aforesaid 2 kanals land. The L.Rs of the defendant No.1 are directed to execute the sale deed in respect of the remaining suit land within a period of two months from today in receipt of remaining balance sale consideration after deduction of consideration of 2 kanals land and in case of failure of the L.Rs. of defendant No.1 to do so, the plaintiff is entitled to get the sale deed executed and registered quo the aforesaid land through the Court agency3. Both the appellant and the respondent filed appeals against the judgment of the Trial Court. On 23 April 2012, the Additional District Judge, Panchkula issued notice in the appeal and on the application for stay filed by the respondent4. On 15 June 2012, the appellant filed proceedings before the Civil Judge (Senior Division), Panchkula for seeking the execution of the decree passed in his favour, pending the first appeal5. On 19 May 2014, the respondent filed objections to the execution petition6. On 17 January 2015, the Additional District Judge upheld the judgment and order of the Trial Court while dismissing both sets of appeals filed respectively by the appellant and the respondent7. On 23 February 2015, the executing court rejected the objections of the respondents to the execution of the decree and allowed the appellants execution petition. The respondent then filed a civil revision before the High Court which resulted in the judgment of the learned Single Judge dated 1 June 2018 by which the order of the executing court was set aside. The High Court held that there was a failure on the part of the appellant to deposit the balance of the sale consideration within a period of two months fromthe date of the decree and as a consequence the decree had been rendered inexecutable by virtue of the provisions of Section 28 of the Specific Relief Act 1963 . The High Court noted that of the total sale consideration of Rs. 8,35,000/- under the terms of the agreement to sell, the appellant in 2004 had paid an amount of Rs. 5,85,000/- while the balance of Rs. 1,15,864/-, consequent upon the partial decree in the suit had been deposited on 19 February 2015 after the dismissal of the first appeals on 17 January 2015. The High Court opined thus:A perusal of the operative portion of the decree under execution shows that though the lower court has not specifically fixed any time for deposit of the amount of balance sale consideration but it has been provided in unambiguous terms that the sale deed is to be executed within two months from the date of judgment upon deposit of balance sale consideration8. According to the High Court, the time frame for the deposit of the balance sale consideration was implicit in the decision of the Trial Court which had ordered the execution of the sale deed within two months from the date of the judgment upon deposit of the remaining sale consideration. The High Court held that the judgment and decree had not been stayed during the pendency of the first appeals and the mere filing of an appeal did not amount to a stay under Order 41 Rule 5 of the Code of Civil Procedure 1908 . Hence, it was not open to the appellant to seek the execution of the decree on account of the lapse of the period stipulated in the decree for its execution. The High Court has relied upon the provisions of Section 28 of the Specific Relief Act. It also observed that no application for the enlargement of time had been filed by the appellant. The correctness of this view falls for determination in the present appeal12. By its judgment dated 20 March 2012, the Trial Court decreed the suit for specific performance filed by the appellant save and except for the land admeasuring 2 kanals. The decree of the Trial Court envisaged performance of the agreement to sell dated 8 December 2003 in respect of the land which formed the subject matter of the suit, except for 2 kanals. The judgment debtor was directed to execute the sale deed in respect of the remaining portion of the suit land(i) within a period of 2 months;(ii) on receipt of the balance sale consideration; and(iii) upon deducting the consideration for 2 kanals of landThe decision of the Trial Court was carried in appeal both by the decree holder and by the judgment debtor. The Appellate Court issued notice on the appeal and the application for stay filed by the judgment debtor, while the decree holder moved for execution of the decree. The judgment debtor had filed objections to the execution of the decree. The Appellate Court dismissed both sets of appeals by confirming the judgment and decree of the Trial Court.

Court's reasoning:
13. Upon the decision of the Appellate Court, there was a merger of the judgment of the Trial Court with the decision which was rendered in appeal. Consequent upon the passing of the decree of an Appellate Court, the decree of the Trial Court merges with that of the Appellate Court. The doctrine of merger is founded on the rationale that there cannot be more than one operative decree at a given point in time. The doctrine of merger applies irrespective of whether the Appellate Court has affirmed, modified or reversed the decree of the Trial Court17. We are unable to accept the submission. The doctrine of merger operates as a principle upon a judgment being rendered by the Appellate Court. In the present case, once the Appellate Court confirmed the judgment and decree of the Trial Court, there was evidently a merger of the judgment of the Trial Court with the decision of the Appellate Court. Once the Appellate Court renders its judgment, it is the decree of the Appellate Court which becomes executable. Hence, the entitlement of the decree holder to execute the decree of the Appellate Court cannot be defeated21. In the above case, the facts before this Court were that an agreement to sell had been executed nineteen years earlier on 16 February 1980 and no explanation was forthcoming as to why the balance of the sale consideration was not deposited within the time granted by the court. No application for extension was made under Section 28 of the Specific Relief Act. This Court observed that merely because a suit was filed within a period of three years prescribed by Article 54 of the Limitation Act 1963, that did not absolve the vendee-plaintiff from demonstrating that he was ready and willing to perform the agreement and whether the non-performance was on account of obstacles placed by the vendor or otherwise. In that context, this Court held:17. …The court has to see all the attendant circumstances including if the vendee has conducted himself in a reasonable manner under the contract of sale. That being the position of law for filing the suit for specific performance, can the court, as a matter of course, allow extension of time for making payment of balance amount of consideration in terms of a decree after 5 years of passing of the decree by the trial court and 3 years of its confirmation by the appellate court? It is not the case of the respondent decree-holders that on account of any fault on the part of the vendor judgment-debtor, the amount could not be deposited as per the decree. That being the position, if now time is granted, that would be going beyond the period of limitation prescribed for filing of the suit for specific performance of the agreement though this provision may not be strictly applicable. It is nevertheless an important circumstance to be considered by the Court. That apart, no explanation whatsoever is coming from the respondent decree-holders as to why they did not pay the balance amount of consideration as per the decree except what the High Court itself thought fit to comment which is certainly not borne out from the record. Equity demands that discretion be not exercised in favour of the respondent decree-holders and no extension of time be granted to them to comply with the decreeThe facts noted in the above extract from the judgment indicate a situation which is factually distinct. In that case, the balance of the sale consideration was sought to be deposited three years after the confirmation of the decree by the Appellate Court. In the present case, the facts clearly are to the contrary. The appellant had deposited an amount of Rs. 5,85,000/- The partial decree of the Trial Court in the suit for specific performance was placed in issue before the Appellate Court. After the Appellate Court affirmed the decree on 17 January 2015, the decree of the Trial Court merged with that of the Appellate Court. Barely a month thereafter, on 19 February 2015 the appellant deposited the balance of the sale consideration. The appellant acted bona fide. The equities in a matter arising out of a decree in a suit for specific performance must weigh in his favour. The executing court was justified in rejecting the specious objections of the respondents. The High Court acted in excess of its revisional jurisdiction. The High Court impermissibly substituted the decree for specific performance with an order for refund of the sale consideration, beyond the earnest money of Rs. 2,00,000/- to the decree holder. The reasons which weighed with the High Court in doing so as well as its ultimate directions are unsustainable. In a Civil Revision arising out of an execution proceeding, the High Court has modified the decree. Such a course was not open in law.