The Supreme Court has restored a decree for specific performance in a property dispute, holding that mere delay in issuing a legal notice cannot by itself establish lack of “readiness and willingness” on the part of a purchaser.
The bench of Justices Sanjay Karol and Vipul M. Pancholi ruled that a High Court exercising jurisdiction under Section 100 of the Code of Civil Procedure (CPC) cannot reappreciate evidence and overturn concurrent findings of fact unless such findings suffer from perversity or material illegality.
The dispute arose from a sale agreement executed on 19 March 2010 for purchase of a property bearing Survey No. 75/12 for a total consideration of ₹9.30 lakh. Out of this amount, ₹9 lakh had already been paid as earnest money and only ₹30,000 remained payable at the time of execution of the sale deed. The agreement required completion of the transaction within four months.
According to the purchaser, he repeatedly approached the vendors within the stipulated period to complete the transaction. However, the vendors allegedly sought further time and later became evasive while demanding additional money. After these attempts failed, the purchaser issued a legal notice on 1 February 2011 calling upon the vendors to execute the sale deed and subsequently filed a suit seeking specific performance.
The vendors disputed the claim and argued that the agreement was never intended to operate as a genuine sale transaction. They contended that the document had merely been executed as a “security arrangement” linked to another land transaction involving purchasers from Bengaluru and was not meant to transfer ownership of the disputed property.
The Trial Court rejected this defence and decreed the suit in favour of the purchaser. It noted that the vendors had admitted execution of the agreement and their signatures thereon and had never alleged forgery. The court also relied upon testimony from the attesting witness and document scribe, who supported the purchaser’s case regarding payment of ₹9 lakh as consideration.
The First Appellate Court agreed that the agreement was genuine but denied specific performance on the ground that the purchaser had not sufficiently established readiness and willingness under Section 16(c) of the Specific Relief Act, 1963. Instead, it ordered refund of the advance amount with interest.
Subsequently, the Madras High Court, while deciding a second appeal under Section 100 CPC, altered the factual findings and concluded that the agreement was merely a security document and not intended as a genuine sale transaction. The High Court denied specific performance and directed return of ₹9.30 lakh with 12% interest.
The Supreme Court found this approach legally unsustainable. Referring to settled principles governing Section 100 CPC, the Bench reiterated that the High Court’s jurisdiction in second appeals is restricted to substantial questions of law and does not permit reassessment of evidence merely because another view may be possible.
The Court observed that both the Trial Court and First Appellate Court had concurrently held the sale agreement to be genuine after appreciating oral and documentary evidence. The vendors had admitted execution of the agreement and failed to prove their claim that the document was merely a security arrangement. They had also failed to produce the alleged Bengaluru purchasers as witnesses.
On the issue of readiness and willingness, the Supreme Court held that courts must examine the overall conduct of parties rather than rely upon isolated circumstances. The Bench observed that the purchaser had already paid approximately 93% of the total consideration, leaving only ₹30,000 payable at the time of execution of the sale deed. Such substantial payment strongly indicated a genuine intention to complete the transaction.
Rejecting the High Court’s reasoning, the Court emphasized that issuance of a legal notice after the expiry of the four-month period could not automatically imply unwillingness to perform the contract, particularly when the suit itself had been filed within the limitation period prescribed by law.
The Court also noted that despite receiving the legal notice, the vendors did not issue any reply disputing the transaction. Such silence, according to the Bench, justified drawing an adverse inference against them and strengthened the purchaser’s case.
Allowing the appeal, the Supreme Court set aside both the High Court judgment and the First Appellate Court’s decision denying specific performance and restored the Trial Court decree in favour of the purchaser.
Case Details
Case Title: A. Shahul Hameed Versus N. Malligarjuna And Ors.
Citation: JURISHOUR-1432-SC-2026
Case No.: Special Leave Petition (Civil) No.32390 of 2025
Date: 20/05/2026
