Supreme Court Clarifies Doctrine of Merger: Higher Court's Order Prevails, Overriding Trial Court's Decision

Supreme Court Clarifies Doctrine of Merger: Higher Court's Order Prevails, Overriding Trial Court's Decision

The Supreme Court observed that only one decree or operative order can govern the same subject matter at any given time. It clarified that under the doctrine of merger, when a superior court disposes of a case—whether by modifying, setting aside, or affirming the lower court’s decree—the superior court’s order becomes the final, binding, and operative decree, effectively subsuming the lower court’s decision.The bench of Justice JB Pardiwala and Justice R Mahadevan heard the case in which the trial court laid down performance and called the plaintiff to deposit the balance amount of sale consideration for 20 days. After the trial court dismissed the plaintiff’s application for a change of possession he relied on the First Appellate Court to order him to deposit the outstanding sales consideration in accordance with legal dictates; but when the First Appellate Court interfered with this order the plaintiff took it to the Punjab & Haryana High Court for the second appeal.The High Court, while establishing the plaintiff’s allegiance in favor in his second appeal, did not enforce any precise course to deposit the residual balance of sale consideration within any sure period of time. The question before the Supreme Court was to decide whether directing the trial court to deposit the balance sale consideration, beyond a timeframe of 20 days, would still be possible once the High Court allowed the second appeal. As mentioned above, through correlation of pending trial, Justice Pardiwala also pointed out that the doctrine of merger means that the trial court judgment becomes part and parcel of the High Court order. As the High Court has not set any time limit for the deposit of the balance sale consideration, its direction overrides and no new period is started over again notwithstanding the affirmation of the order of the trial court by the High Court.The judgment affirmed that equitable relief refers to specific performance and the plaintiff is subject to the ruling of the High Court. Besides, the plaintiff is entitled to claim an extension for the time limit of twenty days minimum within which the remaining sale consideration for the property must be deposited as deposition of the agreed price under the contract of sale is as much a condition of specific performance of that contract as the actual delivery of the averred property.

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