In A. Shahul Hameed v. N. Malligarjuna and Ors. (Civil Appeal No. [To Be Allocated] of 2026, arising out of SLP (Civil) No. 32390 of 2025, decided on May 27, 2026), the Supreme Court of India addressed a property dispute involving a suit for the specific performance of an Agreement to Sell. The plaintiff (purchaser) had paid approximately 97% (Rs. 9,00,000/- out of Rs. 9,30,000/-) of the total sale consideration as earnest money, leaving a nominal balance of Rs. 30,000/-. The High Court of Judicature at Madras had partly allowed a second appeal, dismissing the specific performance claim upon finding that the agreement was a mere nominal security document, and that a delay in sending the initial legal notice disproved the purchaser’s readiness and willingness under Section 16(c) of the Specific Relief Act, 1963.
The Supreme Court allowed the appeal and completely restored the Trial Court’s decree for specific performance. The Court ruled that the High Court exceeded its limited jurisdictional boundaries under Section 100 of the Code of Civil Procedure, 1908 (CPC), by re-appreciating evidence to overturn concurrent findings of fact without establishing any perversity. Furthermore, the Apex Court held that paying a massive chunk of the consideration (nearly 97%) strongly indicates readiness, and a minor delay in issuing a legal notice cannot be weaponized against a plaintiff to deny equity, provided the lawsuit is instituted well within the prescribed period of statutory limitation.
1. Factual Background & Path of Litigation
- The Sale Agreement: On March 19, 2010, the plaintiff entered into a written agreement to purchase a property (Survey No. 75/1) from the defendants for Rs. 9,30,000/-, executing a massive advance payment of Rs. 9,00,000/- as earnest money. The remaining Rs. 30,000/- was due at registration within four months.
- The Refusal: The purchaser asserted that he approached the vendors within the designated timelines, but they sought extensions and eventually became evasive in December 2010, demanding more money. The plaintiff issued a formal legal notice on February 1, 2011, and subsequently filed O.S. No. 35 of 2011 before the Subordinate Judge, Hosur, when the defendants failed to reply.
- The Sham Defence: The defendants argued that the transaction was a nominal, non-binding arrangement meant to serve as a “security document” for an independent, incomplete transaction involving separate buyers from Bangalore.
- The Lower Court Rulings:
- The Trial Court decreed specific performance on December 21, 2012, holding the agreement to be completely genuine and valid since execution was admitted and the “security document” theory was highly unconvincing.
- The First Appellate Court concurred that the document was genuine and rejected the security defense, but it modified the decree to a simple monetary refund of Rs. 9,00,000/- with 6% interest. It concluded that because the plaintiff’s legal notice was sent after the initial four-month contractual window lapsed, continuous “readiness and willingness” under Section 16(c) of the Specific Relief Act was not proved.
- The High Court of Madras modified the first appeal’s decree. It inexplicably resurrected the discarded defense, declaring the text was purely a security arrangement, but increased the monetary refund to Rs. 9,30,000/- with a 12% commercial interest rate. The plaintiff appealed to the Supreme Court.
2. Key Legal Issues & Court’s Observations
A. Impermissible Reversal of Concurrent Findings Under Section 100 CPC
The Supreme Court evaluated whether the High Court was legally justified in altering the concurrent findings regarding the validity and nature of the contract.
- Limited Scope of Second Appeals: Under Section 100 CPC, the High Court’s jurisdiction is strictly confined to substantial questions of law. Re-appreciating evidence or disturbing findings of fact simply because an alternative narrative is plausible is textually barred.
- Binding First Inference: Reviewing historical jurisprudence—including Kondiba Dagadu Kadam (1999), Doddanarayana Reddy (2020), and Ramachandra Reddy (2025)—the Court emphasized that concurrent findings of fact can only be upended if they are shown to be perverse, based on entirely inadmissible evidence, or suffering from material illegality.
- Lack of Supporting Proof: Both lower courts properly analyzed the evidence, noting that the document’s scribe and attesting witnesses fully supported the advance payment of Rs. 9,00,000/-. The vendors never examined the “Bangalore Buyers,” never revoked the sale contract, and failed to introduce any proof to back their security plea. Thus, the High Court committed a gross error by stepping into the realm of evidence re-appreciation.
B. Fulfillment of Readiness and Willingness Under Section 16(c)
The Apex Court set aside the High Court and First Appellate Court’s findings concerning the statutory bar of Section 16(c):
- Evaluating the 97% Consideration: The Court observed that readiness and willingness must be gathered from the overall conduct of a party and the entirety of surrounding circumstances. If a purchaser is truly unwilling to follow through with a contract, he would not part with 97% of the total transaction amount up front.
- The Rule of Limitation vs. Short Delays: Citing Madhukar Nivrutti Jagtap (2020), Justice Sanjay Karol reiterated that the equitable English rule of laches does not rigidly apply in India. So long as a specific performance suit is filed within the three-year statutory period of limitation, a brief delay in issuing a pre-suit legal notice cannot be held against the plaintiff to declare him unready.
- Adverse Inference against Silent Vendors: The plaintiff issued his notice shortly after the vendors became evasive and demanded illicit premiums. Despite receiving the notice, the vendors maintained total silence and failed to issue any written reply denying the contentions. This raised a heavy adverse inference against the vendors, exposing their security defense as an engineered afterthought.
3. Final Order of the Court
- Appeal Allowed: The Supreme Court allowed the Civil Appeal and set aside the judgments of both the High Court of Madras and the First Appellate Court.
- Decree Restored: The original judgment and decree of the Trial Court dated December 21, 2012, directing the specific performance of the Agreement to Sell, is fully restored in favor of the plaintiff.
- Disposal: All connected pending miscellaneous applications were ordered closed with no order as to costs.
2026 INSC 573
A. Shahul Hameed V. N. Malligarjuna And Ors. (D.O.J. 27.05.2026)
