Introduction
In an important ruling reaffirming the equitable nature of remedies under contract law, the Supreme Court of India has held that mere delay in depositing the balance sale consideration does not render a decree for specific performance inexecutable, so long as the plaintiff continues to demonstrate readiness and willingness to perform their contractual obligations.
The judgment, delivered by a Bench comprising Justice Sanjay Karol and Justice Manoj Misra, clarifies that procedural timelines in decrees for specific performance cannot be interpreted mechanically to defeat substantive rights. The Court emphasised that delay, by itself, does not amount to abandonment or rescission of the contract.
The ruling was delivered in Dr. Amit Arya v. Kamlesh Kumari, reported as 2025 LiveLaw (SC) 1240, and builds upon earlier precedents including Ram Lal v. Jarnail Singh (2025) and Balbir Singh v. Baldev Singh.
Factual Background of the Case
The dispute arose from an agreement to sell executed in 2004, under which the appellant agreed to purchase a plot of land for a total sale consideration of ₹9.05 lakh.
When the vendor failed to execute the sale deed, the buyer instituted a suit for specific performance. In 2011, the Trial Court decreed the suit, directing execution of the sale deed upon deposit of the balance sale consideration within two months.
Subsequently:
- The decree was reversed in first appeal.
- In 2016, the High Court, in second appeal, restored the trial court’s decree without prescribing any fresh time limit for depositing the balance consideration.
After the decree was restored, the decree-holder filed an execution petition on 4 July 2016, approximately 87 days after the two-month period mentioned in the original trial court decree. The balance consideration was deposited in parts during August and December 2016.
Objections Before the Executing Court
The judgment debtor opposed the execution proceedings on the following grounds:
- The execution petition was filed beyond the time stipulated in the decree.
- Failure to deposit the entire balance sale consideration within two months showed lack of readiness and willingness on the part of the buyer.
- No application for extension of time had been filed.
The Executing Court rejected these objections in January 2018, holding that the decree-holder had not abandoned the contract.
However, the High Court, in revision, reversed this finding and held the decree to be inexecutable, reasoning that:
- The balance consideration was not deposited within the stipulated time.
- No formal extension of time was granted.
Aggrieved by this approach, the buyer approached the Supreme Court.
Issues Before the Supreme Court
The primary questions before the Supreme Court were:
- Whether delay in depositing the balance sale consideration, beyond the timeline fixed in the decree, renders a decree for specific performance inexecutable.
- Whether such delay amounts to abandonment of the contract.
- What is the effect of the doctrine of merger when an appellate court restores a decree without prescribing a fresh timeline.
Supreme Court’s Reasoning
Delay Does Not Automatically Defeat Specific Performance
Allowing the appeal, the Supreme Court held that delay alone cannot extinguish a decree for specific performance. The Court relied on its recent judgment in Ram Lal v. Jarnail Singh (2025 LiveLaw (SC) 283), where it was held that:
“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 Court clarified that the decisive test is whether the conduct of the plaintiff indicates a positive refusal to perform the contract. Unless such refusal or abandonment is clearly established, courts should not deny enforcement of a decree merely on account of delay.
Readiness and Willingness Remain Central
Justice Sanjay Karol, authoring the judgment, underscored that readiness and willingness is the cornerstone of decrees for specific performance.
In the present case:
- The decree-holder initiated execution proceedings soon after the High Court restored the decree.
- Substantial portions of the balance consideration were deposited.
- Courts below had already recorded findings affirming the plaintiff’s readiness and willingness.
The Court observed that such conduct negated any inference of abandonment, and therefore, the decree could not be treated as inexecutable.
Doctrine of Merger Applies
Another significant aspect addressed by the Court was the doctrine of merger.
The Supreme Court held that when an appellate court affirms or restores a decree for specific performance without fixing a fresh timeline, the original trial court decree merges into the appellate decree. Consequently:
- Only one operative decree subsists in law.
- The decree cannot be rendered inexecutable solely because the timeline fixed in the original decree was exceeded.
Relying on Balbir Singh & Anr. v. Baldev Singh, the Court noted that procedural timelines cannot override the substantive equity underlying specific performance decrees.
Short Delay Does Not Strike at the Heart of the Contract
The Supreme Court further observed that the delay involved in the present case was not inordinate and did not strike at the root of the agreement.
The Court noted:
“A decree for specific performance cannot be treated as dead merely because of a short delay in compliance, unless the conduct of the decree-holder demonstrates a clear abandonment or refusal to perform his obligations.”
Accordingly, the High Court’s approach of treating the decree as inexecutable was held to be legally unsustainable.
Final Decision
The Supreme Court set aside the impugned revision order passed by the High Court and restored the order of the Executing Court.
The Executing Court was directed to proceed with the execution of the decree for specific performance in accordance with law.
Legal Significance of the Judgment
This ruling has far-reaching implications for specific performance litigation in India:
- It prevents technical objections from defeating substantive rights.
- It reinforces that equity and conduct, not rigid timelines, govern enforcement.
- It strengthens the protection available to decree-holders who remain bona fide and diligent.
- It clarifies the limited role of delay in execution proceedings.
The judgment is particularly relevant in property disputes, where litigation often spans several years and procedural delays are common.
Conclusion
The Supreme Court’s decision in Dr. Amit Arya v. Kamlesh Kumari serves as a crucial reminder that specific performance is an equitable remedy, and courts must adopt a substantive justice-oriented approach while dealing with execution proceedings.
By holding that delay in depositing the balance sale consideration does not automatically render a decree inexecutable, the Court has once again prioritised readiness, willingness, and intent over procedural rigidity, ensuring that justice is not sacrificed at the altar of technicalities.
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