LexANAND NARAYAN SHUKLA versus JAGAT DHARI
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[2026] 5 S.C.R. 453 : 2026 INSC 463 Anand Narayan Shukla v. Jagat Dhari (Civil Appeal No. 7355 of 2026) 08 May 2026 [Manoj Misra* and Manmohan JJ.] Issue for Consideration Issue arose whether the decree of specific performance passed by the trial court merged in the order of the appellate court even though the appellate court dismissed the appeal for non-prosecution; whether respondent’s application u/s.28 of the Specific Relief Act, 1963 was maintainable after the Court had granted permission to make deposit of the balance amount and, pursuant thereto, the amount was also deposited; and whether the rescission of the contract and consequential dismissal of the execution application vitiated by a pedantic approach of the courts below as they failed to consider the facts and circumstances of the case as also whether the decree could be saved by compensating the judgment-debtor for the delay in deposit of the balance sale consideration. Headnotes† Specific Relief Act, 1963 – s.28 – Rescission of a contract – Suit for specific performance of an agreement for sale of immovable property – Trial court directed the appellant to pay balance of the sale consideration to the respondent within a month and on payment, the respondent to execute and register the sale deed – However, the balance amount not paid to the judgment debtor nor the same was deposited in Court – First respondent filed appeal – Appellant applied for execution of the decree which gave rise to execution case – Execution court while fixing the date directed decree holder to deposit the amount in Court – Amount deposited – Judgment debtor applied for rescinding the contract and dismissing the execution application for non-deposit of the balance amount within the specified period – Execution court held that as the * Author 454 [2026] 5 S.C.R. Supreme Court Reports amount was not deposited within the stipulated time as per the condition of the decree, the decree cannot be executed and dismissed the execution case – Thereagainst, revision petition filed which was dismissed – Correctness: Held: For there to be a merger of the trial court decree in the appellate court decree, there must be an adjudication on merits, though it is immaterial whether the decree or order under appeal is set aside or modified or simply confirmed – Dismissal of the appeal for non-prosecution would not merge the trial court decree in the order of the appellate court – No dispute that the appeal of judgment-debtor was dismissed for non-prosecution, thus, there would be no merger of the trial court decree in the appellate court order – Order of the Execution Court, permitting deposit did not determine the rights of the parties qua rescission of the contract – Rather, the deposit was permitted just to test the bona fides of the decree holder in pursuing the execution – Though such deposit becomes a relevant factor for determining whether the decree holder had been throughout ready and willing to perform his obligation under the contract/decree, it would not extinguish the right of the judgment debtor to seek rescission of the contract – By permitting the decree holder to make deposit to show his bona fides, the Court did not foreclose the right of the judgment debtor to seek rescission of the contract u/s.28 – Neither the Execution Court nor the High Court took into consideration that though the decree fixed a time frame for deposit of the balance consideration, it did not provide for the consequences of failing to adhere to the time schedule – In such circumstances, there could be no automatic rescission of the decree for specific performance – Thus, the Court while exercising its power u/s.28 was required to consider whether the decree was liable to be rescinded or the decree holder was entitled to get extension of time up to the date of deposit in Court – Though, while granting the relief of extension, it was open for the Court to balance the equities by putting the decree holder to such terms as may adequately compensate the judgment debtor for the delay – Neither the Execution Court nor the High Court has considered the matter in proper perspective and in accord with the settled principles governing the exercise of power u/s.28 of the 1963 Act, thus both the impugned orders set aside. [Paras 22, 23, 40, 41] [2026] 5 S.C.R. 455 Anand Narayan Shukla v. Jagat Dhari Doctrines – Doctrine of merger – Meaning – Application of
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