By Team @ Mahendra Bhavsar & Co.
Reviewed by: Mahendra Bhavsar & Co. Legal Team
Quick Answer
In A. Shahul Hameed v. N. Malligarjuna & Ors., decided on 27 May 2026, the Supreme Court restored a decree for specific performance of a property sale agreement. The Court held that the High Court exceeded its jurisdiction under Section 100 of the Code of Civil Procedure by disturbing concurrent findings of fact regarding the genuineness of the agreement. It also held that the purchaser had established continuous readiness and willingness to perform the contract and that delay alone could not defeat the claim when the suit was filed within the prescribed limitation period.
Why This Judgment Matters
Property sale disputes frequently involve allegations that an agreement was merely a security arrangement or that the purchaser was not genuinely interested in completing the transaction.
This judgment is important because it addresses two recurring issues in real estate litigation. First, it clarifies the limits of the High Court’s powers in second appeals under Section 100 CPC. Secondly, it explains how courts should assess a purchaser’s readiness and willingness when seeking specific performance of a sale agreement.
The decision is particularly relevant for purchasers who have paid a substantial portion of the sale consideration and later face resistance from vendors. It also provides guidance on how courts evaluate conduct, surrounding circumstances and communications between parties when determining whether the purchaser genuinely intended to complete the transaction.
Brief Facts
The plaintiff entered into a sale agreement for the purchase of property for a total consideration of ₹9.30 lakh. According to the agreement, ₹9 lakh was paid as advance consideration, and only ₹30,000 remained payable at the time of execution of the sale deed. The sale was to be completed within four months.
The plaintiff claimed that he repeatedly approached the defendants to complete the transaction. According to him, the defendants initially sought additional time and later became evasive while demanding more money. A legal notice was eventually issued calling upon them to execute the sale deed after receiving the balance consideration. When no satisfactory response followed, the plaintiff filed a suit seeking specific performance.
The defendants argued that the agreement was never intended to operate as a genuine sale agreement and was only a security arrangement connected to an earlier transaction involving third parties. The Trial Court rejected this defence and granted specific performance. The First Appellate Court accepted the genuineness of the agreement but denied specific performance on the ground that readiness and willingness had not been established. The High Court also denied specific performance and modified the relief. The matter then reached the Supreme Court.
Key Legal Issue
The Supreme Court considered two principal questions:
1. Could the High Court interfere with concurrent findings that the sale agreement was genuine while exercising jurisdiction under Section 100 CPC?
2. Had the purchaser established continuous readiness and willingness under Section 16(c) of the Specific Relief Act, 1963?
What the Court Held
High Court Could Not Re-Appreciate Evidence
The Supreme Court reiterated that interference in second appeals is limited to substantial questions of law. It observed that both the Trial Court and the First Appellate Court had concurrently found the sale agreement to be genuine after evaluating oral and documentary evidence. The High Court failed to demonstrate any perversity or material illegality in those findings and effectively re-appreciated evidence to reach a different conclusion. This was held to be impermissible under Section 100 CPC.
Security Arrangement Defence Was Unconvincing
The Court noted that the defendants had admitted execution of the agreement and their signatures. The evidence of the attesting witness and document scribe supported the plaintiff’s case regarding payment of advance consideration. The defence that the agreement was merely a security document was found to be unsupported by reliable evidence.
Readiness and Willingness Was Established
The Supreme Court disagreed with the finding that the plaintiff lacked readiness and willingness. It emphasised that the issue must be assessed from the overall conduct of the parties and surrounding circumstances rather than a single factor. The plaintiff had paid approximately 93% of the agreed consideration and consistently asserted his willingness to complete the transaction.
Delay Alone Is Not Determinative
The Court held that merely because the legal notice was issued after expiry of the contractual period, it could not automatically lead to the conclusion that the plaintiff was unwilling to perform the agreement. The suit had been filed within the limitation period, and the plaintiff’s conduct demonstrated continued interest in enforcement of the contract. The defendants’ failure to respond to the legal notice also supported an adverse inference against them.
Accordingly, the Supreme Court restored the Trial Court’s decree granting specific performance.
Practical Takeaways
- Purchasers should maintain records showing efforts to complete the transaction.
- Payment of substantial consideration may be relevant when assessing readiness and willingness.
- Delay alone may not defeat a specific performance claim if the suit is filed within limitation.
- Courts assess readiness and willingness from the overall facts and conduct of the parties.
- High Courts generally cannot re-appreciate evidence in second appeals merely because another view is possible.
- Failure to respond to a legal notice may have evidentiary consequences.
What the Judgment Does Not Decide
- Whether every delayed legal notice proves readiness and willingness.
- The outcome of specific performance claims based on different facts.
- The validity of all security arrangement defences in property disputes.
- Any issue beyond the evidence and pleadings in the present case.
- Whether specific performance must be granted in every sale agreement dispute.
Short Ratio
Where concurrent findings establish that a sale agreement is genuine, the High Court cannot re-appreciate evidence in a second appeal absent perversity or material illegality. Readiness and willingness under Section 16(c) must be assessed from the overall conduct of the parties, and delay alone does not defeat a claim filed within the limitation.
