Addressing the scope of extending time for depositing balance sale consideration in specific performance decrees, Justice Rohit Ranjan Agarwal of the High Court of Judicature at Allahabad set aside orders of lower courts that permitted a buyer to deposit the balance amount after a delay of more than two decades. The High Court held that specific performance is an equitable relief requiring courts to balance equities, and an unexplained long delay coupled with willful negligence disentitles the decree-holder from obtaining an extension under Section 28 of the Specific Relief Act, 1963.
Background of the Case
The dispute originated from an agreement to sell dated July 3, 1991, entered into between the seller (defendant-petitioner Duliram Maurya) and the buyer (plaintiff-respondent Nandram) for a piece of land. The total sale consideration was fixed at Rs. 25,000, out of which Rs. 13,000 was paid as advance on the date of agreement, while the remaining Rs. 12,000 was to be paid at the time of execution of the sale deed.
In 1993, the buyer instituted Original Suit No. 109 of 1993 seeking specific performance of the contract. The trial court dismissed the suit on August 18, 1998, observing that there was no agreement for executing a sale deed and that the contract was executed under the garb of a loan transaction.
Against the trial court decision, the buyer filed Civil Appeal No. 101 of 1998. On November 22, 2003, the appellate court allowed the appeal, decreed the suit, and directed the seller to execute the sale deed within two months, while directing the buyer to deposit the balance sale consideration within one month.
The seller preferred Second Appeal No. 235 of 2004 before the High Court. No interim stay order was granted in the second appeal. On August 6, 2012—nearly nine years after the decree—the buyer initiated execution proceedings (Execution Case No. 1 of 2012) and moved an application seeking extension of time, which was not granted by the court and remained pending.
The seller’s second appeal was ultimately dismissed on September 23, 2019. Following this, the seller moved Application 26-C under Section 28 of the Specific Relief Act, 1963, seeking rescission of the contract/decree due to the buyer’s failure to deposit the balance amount within the stipulated time. In response, on November 17, 2025, the buyer filed Applications 31-C and 55-C seeking extension of time to deposit the balance consideration along with a delay condonation application.
By an order dated December 23, 2025, the executing court rejected the seller’s rescission application (26-C) and allowed the buyer’s extension applications (31-C and 55-C) subject to payment of Rs. 1,000 as costs. The seller’s revision petition (Civil Revision No. 3 of 2026) was subsequently dismissed by the Additional District Judge/Special Judge (POCSO Act), Court No. 3, Budaun, on April 6, 2026. Aggrieved by these orders, the seller approached the High Court under Article 227.
Arguments of the Parties
Appearing for the petitioner-seller, Advocate Rahul Sahai submitted that the first appellate court decreed the suit in 2003 with a direction to deposit the balance within one month, but no deposit was made nor execution filed for nine years. He contended that even after the second appeal was dismissed in 2019, the buyer waited until November 17, 2025, to move an application for extension of time. He argued that allowing a deposit after more than 20 years leads to a travesty of justice and fails to balance equity. Reliance was placed on the Supreme Court ruling in Habban Shah v. Sheruddin.
Conversely, Advocate Lalit Kumar, representing the respondent-buyer, argued that Section 28 of the Specific Relief Act empowers courts to extend time. He contended that the decree of 2003 merged into the judgment of the High Court in second appeal passed on September 23, 2019, under the Doctrine of Merger. He contended that because the second appeal was pending, execution proceedings were not pressed, and therefore the time limit should not be computed from the year 2003. Reliance was placed on the Supreme Court decisions in Anand Narayan Shukla v. Jagat Dhari and Balbir Singh & Another v. Baldev Singh (Dead).
Court’s Analysis and Relevant Precedents
The High Court examined the provisions of Section 28 of the Specific Relief Act, 1963, which governs the rescission of contracts for the sale or lease of immovable property after a decree of specific performance has been passed.
Analyzing statutory principles and landmark precedents, the Court noted:
- Nature of Specific Performance Decree: Citing Chanda v. Rattni and Balbir Singh & Another v. Baldev Singh (Dead), the Court observed that a decree for specific performance is in the nature of a preliminary decree. Section 28 provides discretionary powers, and the court does not automatically become functus officio or lose jurisdiction to extend time or rescind the contract till the sale deed is executed, as also settled in Sardar Mohar Singh v. Mangilal and Bhupinder Kumar v. Angrej Singh.
- Rescission Application Not Mandatory: Referencing Habban Shah v. Sheruddin, the Court noted that moving an application under Section 28 for rescinding the contract is optional and not mandatory, and courts are not powerless to treat a contract as rescinded if conditions are not met.
- Strict Compliance and Conditional Decrees: Referring to P.R. Yelumalai v. N.M. Ravi, the Court noted that acceptance of deposit beyond the prescribed period without valid justification does not amount to deemed extension.
- Appellate Stage and Forum: Citing Ramankutty Guptan v. Avara, the Court highlighted that an application under Section 28 is maintainable in the court of first instance when the decree has been passed by an appellate court, as the decree of the trial court merges into that of the appellate court.
- Willful Negligence and Equity Test: Relying on the principles in Ram Lal v. Jarnail Singh and Anand Narayan Shukla v. Jagat Dhari, the High Court emphasized that while each day’s delay need not be explained, the true test is whether the buyer’s conduct shows willful negligence or a lack of intention to perform their part of the contract.
Rejecting the buyer’s plea regarding pendency of the second appeal, the High Court observed:
“The said argument is totally misconceived as it is a case of specific performance where the suit was decreed by the first appellate court on 22.11.2003 granting one month time to plaintiff respondent to deposit the balance sale consideration.”
The Court noted that the second appeal had no stay order operating, and the buyer never appeared or contested the proceedings in second appeal. Pointing out the conduct of the buyer, the Court observed:
“The action of plaintiff respondent clearly reveals that he was not interested in getting the decree executed for specific performance of contract nor was ready to complete his part by making deposit of balance sale consideration.”
“In the instant case, there is an unexplained delay on the part of the plaintiff respondent in completing his part of performance for depositing the balance sale consideration.”
Distinguishing Anand Narayan Shukla v. Jagat Dhari on facts, the Court emphasized that in that precedent, proceedings and deposits were pursued promptly within short intervals, unlike the present case where the buyer waited for decades.
Holding that equities heavily favored the seller due to the long lapse of time, the Court observed:
“Length of delay and also the equities that have been created during the interregnum period is in favour of judgment debtor. In a suit for specific performance the court has to balance equity between the parties.”
Critiquing the lower courts’ rulings, the High Court stated:
“Both the courts below were not correct to allow the application seeking extension of time on a cost of Rs. 1000/- to be paid to the judgment debtor and his application under Section 28 of the Act of 1963 for recession of decree being rejected.”
“Both the courts below failed to balance the equity in the instant case and had wrongly recorded that the plaintiff respondent was not at fault in getting the decree executed due to pendency of second appeal.”
Decision of the Court
The High Court held that the orders passed by both lower courts were patently illegal. Consequently, the High Court set aside the order dated April 6, 2026, passed in Civil Revision No. 3 of 2026 by the Additional District Judge/Special Judge (POCSO Act), Budaun, and the order dated December 23, 2025, passed by the Additional Civil Judge (Junior Division), Budaun in Execution Case No. 1 of 2012.
Allowing the writ petition, the High Court directed the seller (defendant-petitioner) to refund the advance amount of Rs. 13,000 received under the agreement to sell dated July 3, 1991, to the buyer (plaintiff-respondent) within one month along with 6% interest per annum calculated from the date of receipt of the advance.
Case Details:
Case Title: Duliram Maurya v. Nandram
Case No.: Matters Under Article 227 No. 6695 of 2026
Bench: Justice Rohit Ranjan Agarwal
Date: August 06, 2026
