The Doctrine of Merger and Extended Judicial Control under Section 28 of the Specific Relief Act

Introduction

This commentary examines the Supreme Court of India’s decision in the matter of Balbir Singh & Anr. Etc. v. Baldev Singh (D) Through His LRs & Ors. Etc. (2025 INSC 81). The dispute arose from multiple decrees of specific performance regarding sales of immovable property. After the trial court decreed specific performance directing the plaintiffs (decree holders) to deposit the balance sale consideration within 20 days, the defendants (judgment debtors) appealed to the first appellate court, which reversed the trial court’s decision. Ultimately, the High Court allowed the regular second appeals, reinstating the original decrees. In the ensuing execution proceedings, the principal question was whether the period fixed by the trial court to deposit the sale consideration still bound the plaintiffs after their appeals succeeded at higher forums. This decision clarifies how the doctrine of merger operates, how the time to deposit sale consideration can be extended, and under what circumstances the contract for sale can be rescinded based on non-deposit of consideration.

Summary of the Judgment

The Supreme Court upheld the High Court’s dismissal of the defendants’ applications to rescind the contract under Section 28 of the Specific Relief Act, 1963 (“the Act”). The apex court found that the time limit stipulated by the trial court merged and effectively ceased to apply once the High Court allowed the second appeals in favor of the plaintiffs. Though the trial court’s decree initially directed deposit of the balance sale consideration within 20 days, the High Court’s decree superseded the trial court’s instructions since, under the doctrine of merger, the final appellate court’s decree is the operative one.

Therefore, once the High Court restored the decrees, the trial court’s original timelines no longer strictly bound the decree holders. The Supreme Court further clarified that the court retains wide discretion under Section 28 of the Act to extend time for depositing the balance consideration and that a decree for specific performance does not automatically become open to rescission if the purchase money is not deposited purely because of the initial 20-day deadline in the trial court’s decree.

Analysis

Precedents Cited

The Court engaged with several key precedents explaining the doctrine of merger, the continuing nature of suits for specific performance, and the courts’ discretion to extend time under Section 28 of the Act:

Surinder Pal Soni v. Sohan Lal: Clarified the doctrine of merger, confirming that only one operative decree remains after a superior court’s decision.
Kunhayammed v. State Of Kerala: Explained that once an appellate court grants special leave and hears a matter, the operative portion of the original order merges with the appellate decree. Therefore, there cannot be multiple operative decrees on the same subject matter.
Chandi Prasad v. Jagdish Prasad: Reiterated that when an appellate court passes judgment, the trial court’s decree merges into the appellate court’s decree, which alone becomes enforceable.
Sardar Mohar Singh v. Mangilal and Bhupinder Kumar v. Angrej Singh: Emphasized that the trial court does not become functus officio after granting a decree of specific performance, retaining jurisdiction under Section 28 to address rescission or extension of time.
V.S. Palanichamy Chettiar Firm v. C. Alagappan and Ramankutty Guptan v. Avara: Discussed how application under Section 28(1) of the Act can be made in the same court that passed the decree, provided that the decree has not been transferred to another court.
Prem Jeevan v. K.S. Venkata Raman: The Supreme Court distinguished this case from the present matter because it involved a plaintiff who failed to deposit the purchase money for an extended period with no valid explanation and without seeking an extension of time, effectively rendering the decree unenforceable.

Legal Reasoning

The Court’s legal reasoning turned primarily on two aspects: the doctrine of merger and Section 28 of the Specific Relief Act. On the doctrine of merger, the Court explained that once the High Court reversed the judgment of the first appellate court and reinstated the trial court’s decision, it effectively replaced the trial court’s earlier decree with the High Court’s decree. Thus, specific conditions (such as the 20-day time limit originally imposed at trial) did not automatically continue to apply unless re-imposed by the High Court.

On Section 28, the Court clarified that even where a decree of specific performance stipulates a deadline for depositing the balance sale consideration, that court—and by extension, the executing court— maintains discretion to extend deadlines. The Court stressed that a conditional decree for specific performance is not necessarily rendered unenforceable if the decree holder does not strictly adhere to the original timeframe, so long as he or she promptly seeks permission to deposit the consideration and demonstrates no willful or unreasonable delay.

Impact

This decision significantly affects the enforcement of decrees in suits for specific performance. Practitioners must now be mindful that:

The final appellate decree overrides any intermediate orders or conditions, preventing parties from invoking missed deadlines from lower-court orders as an automatic defense in execution proceedings.
Section 28 of the Act continues to grant broad discretion to courts to either extend the time for deposit or rescind the contract, depending on equities of the case and the conduct of the parties.
The aim is to prevent injustice by ensuring that a formalistic interpretation of timetables does not undermine the substantive merits of a decree unless the decree holder’s lack of promptness is clearly deliberate or egregious.

Complex Concepts Simplified

Doctrine of Merger: When a higher court hears an appeal and delivers its own decision—whether affirming, modifying, or reversing—its decision becomes the sole operative decree. The lower court’s decree effectively merges into the higher court’s decree. As a result, it is the final appellate decree that is legally binding.
Functus Officio: This Latin term means “having performed his or her office.” When a court becomes functus officio, it means it can no longer alter or revisit its decisions. However, the Supreme Court clarified that in specific performance suits, the court retains control over the decree, meaning it does not become functus officio until complete execution of the decree.
Rescission of Contract (Section 28 of the Act): After a decree for specific performance is granted, the defendant can apply to request rescission if the plaintiff fails to pay the decretal amount or otherwise comply with the decree. At the same time, a decree holder can seek an extension of the timeline to make the required deposit. This prevents automatic nullification of the decree in genuine circumstances of delay.

Conclusion

The Supreme Court’s judgment fortifies the principle that appellate decrees supersede lower-court decrees, underscoring that specific deadlines from the trial court do not automatically revive if the appellate court’s decree is silent on these time limits. It also reinforces the broad discretion courts enjoy under Section 28 of the Specific Relief Act to monitor compliance and grant equitable relief in execution proceedings, including extending time for deposit.

Practitioners and parties should be aware that successful appellants in such suits must be diligent in complying with deposit requirements after appellate rulings, but failure to meet the exact timeline prescribed by the trial court does not necessarily render a decree unenforceable. Courts will examine conduct, fairness, and the overall equities of the situation to ensure that justice is served and unwarranted rescission of contracts is avoided.