In a judgment dated 27th May 2026, the Supreme Court of India allowed the Civil Appeal arising out of Special Leave Petition (Civil) No. 32390 of 2025 and set aside the judgment and decree dated 25.06.2025 passed by the High Court of Judicature at Madras in Second Appeal No. 905 of 2017. The Supreme Court restored the decree of specific performance passed by the Trial Court dated 21.12.2012, thereby directing the defendants to execute the sale deed in favour of the plaintiff upon deposit of the balance sale consideration.
The dispute pertained to an Agreement to Sell dated 19.03.2010 executed between the parties for the sale of a property for a total consideration of Rs.9,30,000/-. Out of this amount, the plaintiff had paid Rs.9,00,000/- as advance/earnest money at the time of execution of the agreement, with the balance of Rs.30,000/- payable at the time of registration of the sale deed within four months. The plaintiff claimed that he was always ready and willing to perform his part of the contract. He approached the defendants in July 2010 and again in December 2010 for completion of the transaction, but the defendants allegedly became evasive, demanded more money, and threatened to sell the property to a third party. Consequently, the plaintiff issued a legal notice on 01.02.2011 calling upon the defendants to receive the balance consideration and execute the sale deed. Upon failure to receive any response, the plaintiff instituted a suit for specific performance.
The defendants contested the suit, denying the genuineness of the transaction and claiming that the agreement was merely a nominal or security document executed in relation to an earlier transaction involving certain buyers from Bangalore. They further alleged that a reconveyance deed had also been executed on the same date.
The Trial Court, after appreciating the evidence, decreed the suit for specific performance, holding the agreement to be genuine, valid, and enforceable. It noted that the defendants had admitted execution of the agreement and their signatures thereon, and had not raised any plea of forgery. The defence of the agreement being a security document was found to be improbable. The First Appellate Court, while concurring with the finding on the genuineness of the agreement, reversed the relief of specific performance on the ground that the plaintiff had failed to prove his readiness and willingness within the stipulated time, as the legal notice was issued after the expiry of four months. It directed refund of the advance amount with 6% interest.
In the Second Appeal, the High Court went further and held that the agreement itself was not intended for sale but was executed only as a security arrangement. It affirmed denial of specific performance and modified the refund direction to Rs.9,30,000/- with 12% interest from the date of the suit.
The Supreme Court, after carefully examining the concurrent findings of the Trial Court and First Appellate Court on the genuineness and validity of the agreement, held that the High Court, while exercising jurisdiction under Section 100 of the Code of Civil Procedure, 1908, had erred in interfering with those findings. Referring to established principles, the Court reiterated that re-appreciation of evidence and interference with concurrent findings of fact is impermissible in a Second Appeal unless the findings are perverse, based on no evidence, or suffer from material illegality. The High Court had essentially re-appreciated the evidence to arrive at a different conclusion, which was not permissible.
On the question of readiness and willingness under Section 16(c) of the Specific Relief Act, 1963, the Supreme Court held that the plaintiff had sufficiently established continuous readiness and willingness. The Court observed that the plaintiff had paid nearly 93% of the sale consideration upfront, which itself demonstrated his readiness. His conduct in approaching the defendants within the stipulated period and issuing a legal notice soon after they refused to perform their part of the contract further evidenced his willingness. The mere fact that the legal notice was issued after the expiry of four months from the date of the agreement could not, by itself, lead to an inference of lack of readiness and willingness, especially when the suit itself was filed within the prescribed period of limitation. The Court emphasised that readiness and willingness must be assessed in light of the overall conduct of the parties and the attending circumstances of the case.
The Supreme Court also noted that despite receiving the legal notice, the defendants failed to issue any reply denying the agreement or the assertions made therein, which gave rise to an adverse inference against them. The defence that the agreement was merely a security document was found to be an afterthought and not substantiated by any credible evidence.
Accordingly, the Supreme Court set aside the judgments of the High Court and the First Appellate Court insofar as they denied the relief of specific performance. The decree of the Trial Court granting specific performance was restored. The defendants were directed to execute the sale deed upon the plaintiff depositing the balance consideration.
Case Details: A. Shahul Hameed versus N. Malligarjuna and Ors.
Citation: 2026 INSC 573
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