Anand Narayan Shukla v. Jagat Dhari

Advs. for the Respondent(s): Ajay Marwah, Swaroopanada Mishra, Mrigank Bhardwaj, Ms. Dhriti Sharma, Rahul Kumar. Judgment / Order of the Supreme Court Judgment Manoj Misra, J.

1. Leave granted.

2. This appeal impugns the judgment and order of the High Court of Madhya Pradesh at Jabalpur1, dated 05.03.2025, passed in Misc. Petition No. 4682 of 2023, whereby appellant’s petition against the order of 7th Additional District Judge, Satna2, dated 12.07.2023, passed in Execution Case No. 27A/2017, was dismissed. Facts

3. Appellant instituted a suit, inter alia, for specific performance of an agreement for sale of immovable property dated 14.11.2011. Under the agreement the respondent agreed to sell 3.75 acres of land @ Rs.16,00,000 per acre, against which, Rs. 2,50,000 was paid by way of advance. Trial Court decreed the suit on 03.03.2017 and thereby directed the appellant to pay balance of the sale consideration to the 1 2 The High Court The Execution Court Supreme Court Reports [2026] 5 S.C.R. 457 first respondent (i.e., Defendant No.1) within a month, or to deposit the same in Court. It was also directed that on such payment/ deposit, the first respondent shall execute and register the sale deed.

4. Pursuant to the decree, vide notice dated 01.04.2017, the appellant called upon the judgment-debtor to execute the sale deed by receiving Rs. 57,50,000 (i.e., the balance amount) or else face execution of the decree of which costs would have to be borne by him. However, neither the balance amount was paid to the judgment debtor nor the same was deposited in Court within the stipulated period.

5. In the meantime, first respondent filed an appeal (i.e., First Appeal No. 311 of 2017) against the Trial Court decree.

6. As there existed no stay on execution of the decree, on 18.07.2017 the appellant applied for execution of the decree which gave rise to Execution Case No.27 of 2017. In paragraph 7 of the execution application, it was stated: “7. … The plaintiff-decree-holder personally wanted to give the remaining amount of Rs. 57,50,000/- to the judgment debtor, but he did not accept it, then on 01.04.2017, the judgment debtor/defendant was informed by giving notice through the Advocate that after receiving the remaining amount of Rs. 57,50,000/- from the decree-holder, he should execute and register the sale deed in compliance with the sale agreement regarding the contracted land, but the judgment debtor did not even comply with the notice, due to which this application is being presented in the Court. The decree-holder is ready to deposit the amount of Rs. 57,50,000/- payable to the judgment debtor in the Court which should be deposited by the decree-holder and by giving the amount to the judgment-debtor, the sale deed should be executed and registered by the judgment debtor and in case this is not done, the amount should be deposited in the Court and the contracted land should be registered in favour of the decree-holder.”

7. On 19.07.2017, the Execution Court passed the following order: “Execution obtained from the office. On behalf of the decree-holder/plaintiff, Shri R.L. Shukla, Advocate. Judgment debtor absent. Anand Narayan Shukla v. Jagat Dhari 458 [2026] 5 S.C.R. The execution is known to be within the jurisdiction of this Court. Therefore, it should be registered. Amount should be duly paid by decree-holder and notice should be issued to judgment debtor. The next date for hearing fixed on 06.12.2017.”

8. Thereafter, multiple dates were fixed (i.e., 06.12.2017, 06.04.2018, 10.01.2019, 23.04.2019, 08.05.2019, 13.08.2019 and 28.11.2019). On 6.12.2017, 06.04.2018 and 10.01.2019 though the Court noticed that the judgment debtor is not served, yet it observed that the decree-holder should pay the due amount to the judgment debtor. Interestingly, no order was passed on those dates to deposit the due amount. On 23.04.2019, the Execution Court, while fixing 08.05.2019 as the next date, for the first time directed the decree holder to deposit the amount in Court. However, on the next date i.e., 08.05.2019, upon noticing that the judgment debtor is not served, the Court while fixing the next date i.e., 13.08.2019, surprisingly did not take notice of its earlier order dated 23.04.2019 and again ordered payment to the judgment debtor. On 13.08.2019, the Court noticed that service of summons was not effected and, therefore, directed taking of fresh steps to serve summons on the judgment debtor, while fixing 28.11.2019 for his as well as decree-holder’s appearance to enable deposit of the balance amount. On 28.11.2019, again the Court noticed that steps to serve the judgment-debtor were not taken, therefore, while fixing 27.04.2020 as the next date, it directed the decree-holder to take steps within three days. Simultaneously, it ordered that if steps are taken, notice shall be issued to the judgment-debtor to ensure his presence so that the decree holder could make deposit of the amount payable under the decree in the presence of judgment debtor. In between, lockdown was ordered due to Covid-19 pandemic, as a result the matter could be taken not before 26.11.2020. On 26.11.2020, after perusing the records, it was ordered thus: “The judgment and decree passed earlier are conditional and as per the condition, the said amount was to be deposited within one month, hence first of all it has to be decided whether the said judgment and decree can actually be implemented in the present circumstances and it will take time to take the above decision. Therefore, in such Supreme Court Reports [2026] 5 S.C.R. 459 a situation, first of all the decree-holder/plaintiff is directed to deposit the amount of Rs. 57,50,000 (Fifty Seven Lakh Fifty Thousand Rupees) today itself and submit the receipt to the court by 05.00 PM of the day so that it can be ascertained whether the decree-holder actually wants to deposit the said amount even today. An application was also submitted on behalf of the decree- holder to the effect that the passed judgment and the decree be implemented and along with the application, a photocopy of the order passed in the First Appeal No. 311/17 made before the Honorable High Court, Jabalpur, along with the documents as per the list, was submitted. Please appear at 04:45 pm for proceeding in compliance with the order of the case.”

9. After the above order was passed, the decree-holder deposited Rs.57,50,000 in the concerned Section of the Court vide Cheque Nos. 840602 to 840607. In consequence, when the matter was taken up later in the day of 26.11.2020, it was ordered thus: “In compliance with the order, a total of 06 cheques of Rs. 57,50,000/- i.e., cheque Nos. 840602 to 840607 have been deposited in the Nazarat Section/ Registry Section, Satna on behalf of the decree-holder and in this regard, the District Nazir, appearing in the court, has expressed his consent and stated that the above cheques will be presented by him in the Bank for payment and thereafter the said amount will come in the CCD account. Therefore, the District Nazir is directed to immediately report the said amount to this Court after it is deposited in the CCD account. The case should be presented on 04.12.2020 for presentation of information regarding deposit of amount and for taking action as per the judgment and decree.”

10. After the deposit was made, the Execution Court proceeded to consider whether the decree could be executed despite the delay in deposit of the balance amount. To consider the said issue, the matter was adjourned from one date to the other. Ultimately, on 10.12.2022, the following order was passed: Anand Narayan Shukla v. Jagat Dhari 460 [2026] 5 S.C.R. “Mr. R.L. Shukla Advocate for decree-holder is present. Mr. I.S. Singh Advocate for the judgment debtor is present. The judgment debtor is directed to comply with the judgment and decree and submit the necessary representation on the next date. The case should be presented on 10.01.2023 for further action in compliance with the judgment and decree.”

11. Thereafter, on 10.01.2023, the Court ordered thus: “Mr. R.L. Shukla Advocate for decree-holder is present. Mr. I.S. Singh Advocate for the judgment debtor is present. Time was sought on behalf of the judgment debtor to take necessary advance action in compliance of the judgment and decree, which is given after consideration of the case with the direction to submit a report on the next date after necessarily complying with the judgment and decree. The judgment debtor is given a last opportunity to comply with the judgment and decree. The case should be presented on 30.01.2023 for further action in compliance with the judgment and decree.”

12. On 30.01.2023, the judgment-debtor filed an application claiming, inter alia, that no information was given to him in the matter. Though the advocate representing him in the original suit had appeared, he gave no information to him. In response to the said application, on behalf of the decree-holder / appellant, it was submitted that the advocate concerned had been representing the judgment debtor since 2020, and therefore, such objection is unwarranted. However, the Court, after perusing the record, passed the following order: “Since in this case no notice letter is found to have been issued to the judgment debtor and no Vakalatnama has been presented by their Advocate. Therefore, notice letter should be issued to the judgment debtor on presenting the amount along with a copy of the execution application. The case should be presented for the presence of the judgment debtor on 10.02.2023.” Supreme Court Reports [2026] 5 S.C.R. 461

13. Pursuant to the above order, on 14.03.2023, the judgment debtor formally put in his appearance in the proceeding and applied for rescinding the contract and dismissing the execution application for non-deposit of the balance amount within the period specified by the decree. In response, the decree-holder submitted an application that the deposit of Rs. 57,50,000 made by him be accepted, and the sale deed be executed in his favour.

14. On 12.07.2023 the Court passed a detailed order. The relevant portion thereof is extracted below: “From the perusal of the execution case it is seen that an application was filed by the decree holder on 03.04.2017 that the judgment debtor is not accepting the amount in compliance of the decree and is not getting the sale deed executed / registered. Therefore, the decree holder is ready to deposit the said amount in the court but after the said date no amount has been deposited by the decree holder and the order book dated 26.11.2020 also shows that Rs. 57,50,000 has been deposited by the decree holder on the said date. But it has also been mentioned in the order book that the earlier judgment and decree was conditional and as per the condition the amount was to be deposited within one month and it will take time to decide whether the judgment and decree can be implemented in the circumstances of the case or not. In such a situation, to ascertain whether the decree holder wants to deposit the amount or not, order dated 26.11.2020 was passed on which the amount was deposited by the decree holder on the said date. Therefore, it is clear that the judgment and decree passed was conditional and the entire consideration amount was to be paid to respondent no. 1 or deposited in the court within one month, but after submitting the application on 03.04.2017 by the decree-holder, no amount was deposited before 26.11.2020. Therefore, as the amount has not been deposited within the stipulated time as per the condition of the decree, the decree cannot be executed and the execution case is dismissed. The decree-holder shall be entitled to receive back the amount deposited by him.” Anand Narayan Shukla v. Jagat Dhari 462 [2026] 5 S.C.R.

15. Aggrieved by the judgment and order of the Execution Court, the appellant filed a Revision Petition before the High Court under Article 227 of the Constitution which was dismissed by the impugned order.

16. We have heard Mr. Saurabh Mishra, learned Senior Counsel, for the appellant, Mr. Ajay Marwah, learned counsel, for the respondent, and have perused the record. Submissions on behalf of the Appellant

17. The learned counsel for the appellant submitted: (i) The appellant (i.e., the decree-holder) had issued notice well within time calling upon the judgment-debtor to execute the sale deed in terms of the decree. Not only that, the appellant deposited the entire amount under order of the Execution Court dated 26.11.2020 and had thereby complied with the terms and conditions of the decree. (ii) The judgment debtor had filed an appeal against the decree which came to be dismissed on 06.11.2023. On dismissal of the first appeal, the decree of the Trial Court merged with that of the Appellate Court and therefore, the deposit of the balance amount cannot be said to be delayed. (iii) Assuming there was delay, in the facts of the case, it was liable to be condoned. Moreover, the application to rescind the contract and dismiss the execution application was not made till the deposit was made. Once, under orders of the Court, the amount was deposited, the contract could not have been rescinded. Therefore, the application to rescind the contract was not maintainable. (iv) The High Court as well as the Execution Court adopted a hyper- technical approach inasmuch as they failed to consider that the facts and circumstances of the case warranted extension of time to make the deposit. (v) Section 28 of the Specific Relief Act, 19633 not only empowers the Court which passed the decree of specific performance of the contract to rescind the contract for non-deposit of the purchase money within the period allowed by the Court, but also empowers the Court to extend the said period. 3 1963 Act Supreme Court Reports [2026] 5 S.C.R. 463 (vi) The power of rescission including extension of time period for deposit is not to be exercised mechanically. Rather, a justice oriented approach is required upon consideration of entire facts and circumstances including the conduct of the parties. Here, the judgment-debtor was not interested in complying with its part under the contract/ decree and had filed a first appeal impugning the decree which came to be dismissed on 06.11.2023. What is relevant is that even before dismissal of the appeal, the decree holder had deposited the balance amount on 26.11.2020. In such circumstances, there was no justification to rescind the contract and dismiss the execution application. (vii) Even otherwise, if the judgment-debtor is to suffer some loss on ground of delay, the Court has power to direct the decree holder to deposit an additional amount to compensate the judgment-debtor, for which the appellant is ready. Submissions on behalf of the respondent

18. Per contra, learned counsel for the respondent submitted: (i) Order sheet of the Execution Court reveals that at the time of registration of the execution case, in 2017 itself, the Court directed the appellant to make payment of the balance amount yet, despite repeated directions, such deposit was not made until 26.11.2020. (ii) Permission to make such deposit was without prejudice to the right of the judgment debtor, therefore there is no question of waiver of right to seek recission of the contract. Besides, the judgment debtor was not served with notice of the execution proceedings. As soon as the judgment-debtor came to know about the execution proceedings, application under Section 28 was filed. (iii) Mere filing of appeal against the decree does not operate as a stay on the operation of the decree, therefore the appellant cannot take advantage of pendency of the appeal in delaying payment/ deposit. (iv) The question of merger of trial court decree in the order of appellate court does not arise as the first appeal was dismissed for want of prosecution on 06.11.2023. Anand Narayan Shukla v. Jagat Dhari 464 [2026] 5 S.C.R. (v) The appellant had paid a meagre amount by way of advance, and had failed to comply with the direction in the decree therefore, equitable relief of extension of time is not available to him. (vi) The Execution Court was justified in dismissing the execution application and the High Court justifiably upheld the order of the Execution Court. Issues

19. Upon consideration of the rival contentions, the following issues arise for our consideration in this appeal: (A) 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? (B) Whether respondent’s application under Section 28 of the 1963 Act was maintainable after the Court had granted permission to make deposit of the balance amount and, pursuant thereto, the amount was also deposited? (C) Whether the rescission of the contract and consequential dismissal of the execution application vitiated by a pedantic approach of the court(s) 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? Issue (A)

20. The argument on behalf of the appellant is that the trial court decree merged with the appellate court decree and therefore, in absence of any direction in the appellate court decree to make deposit, the contract could not have been rescinded by invoking Section 28 of the 1963 Act. Per contra, on behalf of the respondent, it is submitted that there is no decree of the appellate court as the appeal was dismissed for non-prosecution. Hence, there is no question of merger.

21. On the issue of merger of the trial court decree in the appellate court decree, the law is settled. The doctrine of merger is based on the principle of propriety in the hierarchy of the justice-delivery system. The said doctrine postulates that there cannot be more than one operative decree governing the same subject matter at a given point Supreme Court Reports [2026] 5 S.C.R. 465 of time. Once the superior Court has disposed of the lis before it either way - whether the decree or order under appeal is set aside or modified or simply confirmed, it is the decree or order of the superior Court, tribunal or authority which is the final, binding and operative decree or order wherein merges the decree or order passed by the Court, tribunal or the authority below. The doctrine of merger does not make a distinction between an order of reversal, modification or an order of confirmation passed by the appellate authority/ court4. However, the doctrine of merger would only apply in a case when a higher forum entertains an appeal or revision and passes an order on merit and not when the appeal or revision is dismissed on the ground of delay in filing the same5.

22. Section 2 (2)6 of the Code of Civil Procedure, 19087, which defines a decree, specifically excludes an order of dismissal in default from the ambit of a decree. As a sequitur, 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. In our view, dismissal of the appeal for non-prosecution would not merge the trial court decree in the order of the appellate court. In the present case, there is no dispute that the appeal of judgment- debtor was dismissed for non-prosecution; therefore, in our view, there would be no merger of the trial court decree in the appellate court order. Issue (A) is answered accordingly. Issue (B)

23. The next argument on behalf of the appellant is that once the Execution Court permitted the appellant to deposit the balance 4 5 6