Listen to this post
Miss the Deadline, Lose the Decree? SC clarifies effect of non-compliance and applicability of Section 28 of the Specific Relief Act

Summary: In its recent judgement dated May 6, 2026 in Habban Shah v. Sheruddin, the Hon’ble Supreme Court clarified that decrees for specific performance of an agreement to sell immovable property are conditional and self-operative. The plaintiff’s failure to comply with timelines for deposit of balance sale consideration, without seeking extension, can render the decree inexecutable automatically. This consequence may follow even without a formal application under Section 28 of the Specific Relief Act, 1963, by the defendant. The rationale being, the relief of specific performance is equitable and the party that seeks equity, cannot act inequitably by not adhering to the terms of the decree.

Introduction

Specific performance is an equitable remedy, with particular emphasis on the conduct of the party seeking relief. Furthermore, grant of a decree for specific performance does not ipso facto conclude the matter. As the decree remains executable, and not absolute, compliance with the terms of the decree is equally critical, to ensure entitlement to its benefit.

Execution proceedings for a decree for specific performance (of an agreement to sell immovable property) often raise a recurring question. Does delay in depositing the balance sale consideration defeat the decree? Can such delay be condoned in equity, or does the decree continue to subsist unless formally rescinded under Section 28 of the Specific Relief Act, 1963 (“Act”)

The Hon’ble Supreme Court’s recent judgment dated May 6, 2026 in Habban Shah v. Sheruddin[1] (“Habban Shah”) provides a clear answer. The ruling underscores that compliance with the decree is a substantive requirement. Non-compliance may extinguish the decree itself, even without a formal application under Section 28 of the Act, seeking recission of the underlying agreement, whose specific performance has been decreed.

Factual background and issue before the Supreme Court

The dispute arose from an agreement to sell agricultural land. The plaintiff paid part consideration and sought specific performance upon failure of the defendant to execute the sale deed.

The trial court decreed the suit in favour of the plaintiff on October 31, 2012. It directed execution of the sale deed within three months, upon receipt of the balance consideration.

The decree was affirmed in appeal. There was no subsisting restraint preventing deposit of the balance amount after a brief interim order (restraining transfer of the land) lapsed early in the appellate stage.

However, the plaintiff:

  • Did not deposit the balance consideration within the stipulated three months;
  • Did not seek extension of time within that period;
  • Sought to deposit the amount much later during execution (in 2015), which was eventually permitted by the executing court.

The executing court and the High Court upheld the execution, largely relying on the plaintiff’s readiness and willingness, including moving an extension application (after six months). It treated the delayed deposit as sufficient compliance.

Before the Hon’ble Supreme Court, the Appellant (original defendant) contended that the decree was conditional and had become inexecutable on account of the Plaintiff’s non-compliance, i.e. failure to make the deposit within three months.

The plaintiff (Respondent before the Supreme Court) argued that the subsequent deposit cured the defect and that rescission could not be inferred without the defendant having preferred a formal application under Section 28 of the Act, seeking rescission.

The issue before the Hon’ble Supreme Court, thus, was whether non-compliance with the direction to deposit the sale consideration in three months and not seeking any extension of time within this period, renders the decree inexecutable, even without the defendant having moved an application under Section 28 of the Act?

Decision of the Court and precedents cited

The Hon’ble Supreme Court allowed the Appeal, holding

  • Non-compliance with the timeline for deposit without moving an application for extension within this time rendered the decree inexecutable;
  • The conduct of the plaintiff/ respondent, including non-compliance and the belated deposit, showed he was not ‘ready and willing’ and disentitled him from relief.
  • The decree was rendered inexecutable the moment the plaintiff/ respondent did not comply.
  • An application under Section 28 of the Act was not mandatory and the decree stood inexecutable. The underlying contract was rescinded even without such application, due to the plaintiff/ respondent’s non-compliance with the conditions of deposit provided in the decree.

In holding thus, the Hon’ble Supreme Court referred to the following precedents:

  • Balbir Singh v. Baldev Singh, [2] was relied on to reiterate that the court does not become functus officio on passing of decree for specific performance. Instead, Section 28 of the Act confers a discretion on the court to deal with the decree of specific performance till the sale deed is executed or the decree is rendered inexecutable. Failure to comply with conditions, without seeking extension, renders the decree inexecutable.
  • N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao,[3] was cited to emphasise that continuous conduct of the plaintiff is a key consideration for deciding his ‘readiness and willingness’, as specific performance, by nature, remains an equitable relief granted at the discretion of the court.
  • P.R. Yelumalai v. N.M. Ravi, [4] was also considered. In that matter, it was held that a belated deposit by the decree holder and the court accepting it, does not imply an automatic extension of time to make the deposit. It was clarified that a delayed deposit, without an extension application within the specified time, means non-compliance with the terms of the decree and an automatic dismissal of the suit. The court held that a decree holder is not entitled to seek ‘execution’ in such facts as there exists no decree to ‘execute’.
  • Relying on Prem Jeevan v. K.S. Venkata Raman, [5], the Court rejected the argument that the judgement debtor is not entitled to rescission of the contract, without filing an application under Section 28 of the Act, as such application is not mandatory. Non-compliance with decreed conditions is sufficient for the courts to recognise rescission of the underlying contract even without a formal application.

Conclusion

The decision in Habban Shah reinforces a balanced approach in dealing with a decree for specific performance of an agreement to sell immovable property. The Court clarified that a decree of specific performance is not an absolute, final and continuing entitlement. On the contrary, such a decree is executable and imposes reciprocal obligations on the parties. The decree holder is to deposit/ pay the balance sale consideration and the judgement debtor is to accept the same and execute a sale deed in favour of the decree holder. It is thus a conditional relief that survives only if its terms are honoured. Dishonour of the terms renders the decree moot and disentitles the decree holder from relief.

The Hon’ble Supreme Court made three aspects clearin Habban Shah. First, timelines in a decree for specific performance are crucial and must be strictly adhered to. Second, non-compliance, without timely recourse to extension, is fatal and can extinguish the decree itself. Third, Section 28 of the Act operates as an enabling mechanism and not as a mandatory procedural gateway, which excuses non-compliance of the decree holder.

Equally important is the Court’s reaffirmation of equity, as a consideration for granting or rejecting relief. The conduct of the decree holder assumes prime significance. The test of readiness and willingness is not limited to conduct prior to the decree. It must continue through execution. Since specific performance is an equitable relief, he who seeks equity, must do equity and cannot invoke equitable considerations, to overcome his own non-compliance.  

For practitioners, the takeaway is straightforward. Compliance with a specific performance decree must be prompt. Delay is not merely a procedural lapse. It may result in the loss of the decree itself, even without an application under Section 28 of the Act.

[1] SLP (C) No. 14479 of 2025

[2] (2025) 3 SCC 543

[3] (1995) 5 SCC 115

[4] (2015) 9 SCC 52

[5] (2017) 11 SCC 57