Specific Performance & Possession in Execution

This article provides a detailed analysis of a recent judicial pronouncement that clarifies a crucial aspect of specific performance decrees: the power of an executing court to grant possession of the suit property, even when such relief was not explicitly prayed for in the original suit. The ruling underscores the comprehensive nature of specific performance and the executing court’s role in ensuring complete relief to the decree-holder.

1. Factual Background and Procedural History

The case originated from a suit for specific performance of a contract based on an agreement of sale. The original plaintiffs (respondents herein) successfully obtained a decree for specific performance from the Trial Court. It appears that the original defendant, who had executed the agreement, subsequently sold the suit property to the petitioners herein (subsequent purchasers). Consequently, the original defendant did not challenge the Trial Court’s decree, allowing it to become final.

In the execution proceedings, a critical issue arose: despite the decree for specific performance, the executing court took the view that the decree did not explicitly mention putting the plaintiffs in possession of the suit property. On this basis, the executing court declined to hand over possession to the respondents (decree-holders).

Aggrieved by the executing court’s order, the respondents (decree-holders) challenged it before the High Court of Judicature for Rajasthan, Bench at Jaipur, by way of a Civil Writ Petition. The High Court, through its order dated July 11, 2023, allowed the petition. The High Court held that even if a decree for specific performance does not explicitly seek or grant possession, the executing court is obligated to ensure that possession is handed over to the decree-holder. It reasoned that a decree of specific performance, and the subsequent execution and registration of the sale deed, entails an implied right for the decree-holder to be in possession of the conveyed property. The High Court, therefore, set aside the executing court’s order and directed it to issue a warrant of possession in favour of the plaintiff decree-holder.

The petitioners herein, who claimed to be subsequent purchasers of the suit property, challenged this High Court order before the Supreme Court of India by way of a Special Leave Petition.

2. Identification of Legal Issues

The short but significant legal question that fell for the Supreme Court’s consideration was:

• Grant of Possession by Executing Court: Whether the relief of possession can be granted by the executing court in a case where the suit has been decreed for specific performance simpliciter, and no express relief for the transfer of possession of the suit property was specifically sought or granted in the original decree.

3. Arguments of the Parties

Arguments on Behalf of the Petitioner(s) (Subsequent Purchasers):

While the judgment does not explicitly detail the arguments of the petitioners’ counsel, it can be inferred that they contended the following:

• The executing court’s power is limited to what is explicitly stated in the decree. Since the original decree for specific performance did not grant possession, the executing court correctly refused to grant it.
• Granting possession without it being specifically prayed for in the suit and decreed by the trial court would amount to the executing court going beyond its jurisdiction.
• They likely argued that if possession was intended, the plaintiff should have sought it at the initial stage of the suit or, at the very least, by amending the plaint at a later stage as provided by law.

Arguments on Behalf of the Respondent(s) (Original Plaintiffs/Decree-Holders):

The respondents’ arguments, which the High Court had accepted and the Supreme Court ultimately endorsed, would have been:

• A decree for specific performance inherently includes the right to possession, as the primary objective of such a decree is to put the plaintiff in the same position as if the contract had been performed.
• They would have relied on Section 22 of the Specific Relief Act, 1963, which allows for the seeking of possession or partition along with specific performance, and critically, permits such relief to be sought at any stage of the proceeding, including execution.
• They would have emphasized that Section 55(1) of the Transfer of Property Act, 1882, imposes a duty on the seller to deliver possession to the buyer upon execution of the sale deed.

4. Court’s Analysis and Reasoning

The Supreme Court confirmed that the legal position on this issue had already been settled by its own previous judgments. The Court specifically relied on the landmark case of Babu Lal v. Hazari Lal Kishori Lal (1982) 1 SCC 525, which meticulously elaborated on Section 22 of the Specific Relief Act, 1963.

The Court, following Babu Lal (supra), distinguished between two situations:

1. Exclusive Possession with Contracting Party:
   • If the exclusive possession of the suit property is with the contracting party (the original defendant/seller), a decree for specific performance simpliciter (without explicitly providing for delivery of possession) may give complete relief to the decree-holder.
   • This is because, in such cases, the seller is bound not only to execute the sale deed but also to put the property in possession of the decree-holder. This aligns with Section 55(1) of the Transfer of Property Act, 1882, which obligates the seller to transfer such possession of the property as its nature admits, upon being required.
2. Possession with Third Parties or Joint Holdings:
   • In cases where the relief of possession cannot be effectively granted to the decree-holder without specifically claiming it, for instance, where the property is jointly held by the defendant with other persons, or where, after the contract, the property has passed into the possession of a third person.
   • In such scenarios, to obtain complete and effective relief, the plaintiff must claim the relief of transfer of possession over the property, potentially along with partition, if required.
   • The Court highlighted that Section 22 of the Specific Relief Act was introduced to avoid multiplicity of proceedings by allowing the plaintiff to amend the plaint to include a claim for possession, partition, etc., at any stage of the proceeding.
   • Crucially, the Court in Babu Lal (supra) explicitly held that the expression “any stage of the proceeding” includes the stage of execution of the decree by the executing court. It clarified that “proceeding” is a comprehensive term, indicating a prescribed course of action for enforcing a legal right, and that execution is indeed a stage in legal proceedings.