A Shahul Hameedv.N Malligarjuna and Others

Legal Analysis: A. Shahul Hameed vs. N. Malligarjuna and Others

Citation: 2026 INSC 573
Court: Supreme Court of India
Bench: Division Bench comprising Justice Sanjay Karol (and another)
Judgment Author: Justice Sanjay Karol
Date of Decision: May 27, 2026
Nature of Judgment: Civil Appeal arising out of SLP (C) No. 32390 of 2025 against the judgment of the Madras High Court in a second appeal under Section 100 CPC, concerning specific performance of an agreement to sell.

Synopsis of the Judgment
The plaintiff (purchaser) entered into a sale agreement dated 19.03.2010 for purchase of property for Rs.9,30,000/-, paying Rs.9,00,000/- as earnest money. The defendants (vendors) failed to execute the sale deed within the stipulated four months. The plaintiff filed a suit for specific performance. The Trial Court decreed the suit. The First Appellate Court concurred that the agreement was genuine but denied specific performance on the ground that the plaintiff failed to prove readiness and willingness under Section 16(c) of the Specific Relief Act, 1963, instead directing refund of the advance with 6% interest. The High Court, in second appeal, went further and held that the agreement was never intended for sale but was only a security document, and affirmed denial of specific performance but enhanced interest to 12% on the refund amount. The Supreme Court allowed the plaintiff's appeal, holding that the High Court exceeded its jurisdiction under Section 100 CPC by interfering with concurrent findings of fact on the genuineness of the agreement without showing perversity. The Court further held that the plaintiff had sufficiently established continuous readiness and willingness, as he had paid 93% of the consideration and approached the defendants within the stipulated period. The Supreme Court restored the Trial Court's decree for specific performance.

1. Basic Information of the Judgment

• Case Title: A. Shahul Hameed vs. N. Malligarjuna and Others

• Civil Appeal No.: Arising out of SLP (C) No. 32390 of 2025 (Leave granted)

• Bench: Justice Sanjay Karol (Division Bench)

• Date of Decision: May 27, 2026

• Citation: 2026 INSC 573

• Appeal From: Judgment and decree dated 25.06.2025 passed by the High Court of Judicature at Madras in S.A. No. 905 of 2017.

2. Legal Framework

Laws and Provisions Involved:

• Specific Relief Act, 1963 (SPA 1963): Section 16(c) (plaintiff must aver and prove readiness and willingness to perform his part of the contract).

• Code of Civil Procedure, 1908 (CPC): Section 100 (second appeal only on substantial question of law; limitation on interference with concurrent findings of fact).

• Indian Evidence Act, 1872: Section 114 (adverse inference from failure to reply to legal notice).

• Transfer of Property Act, 1882: Sections 54 (sale), 55 (rights and liabilities of buyer and seller).

Key Precedents Cited and Applied:

• Kondiba Dagadu Kadam v. Savitribai Sopan Gujar (1999) – If from given set of circumstances two inferences are possible, the one drawn by the lower appellate court is binding on the High Court in second appeal.

• Karnataka Board of Wakf v. Anjuman-E-Ismail Madris-Un-Niswan (1999) – High Court cannot interfere with pure findings of fact unless perverse or based on no evidence.

• C. Doddanarayana Reddy v. C. Jayarama Reddy (2020) – Reappreciation of evidence to replace findings of lower courts is impermissible in second appeal.

• State of Rajasthan v. Shiv Dayal (2019) – Concurrent findings can be interfered with only if recorded dehors the pleadings, based on no evidence, or based on misreading of material evidence.

• Ramachandra Reddy v. Ramulu Ammal (2023) – Jurisdiction under Section 100 CPC is limited; interference with concurrent findings requires demonstration of perversity or material illegality.

• Syed Dastagir v. T.R. Gopalakrishna Setty (1999) – Readiness and willingness must be gathered from entirety of facts and circumstances.

• Madhukar Nivrutti Jagtap v. Pramilabai Chandulal Parandekar (2020) – Readiness and willingness is a question of fact; plaintiff need not continuously approach defendant; delay within limitation is not fatal.

• R. Lakshmikantham v. Devaraji (2019) – In India, mere delay cannot be ground for refusing specific performance if suit is within limitation.

What the Judgment is About: The judgment clarifies the limited scope of the High Court's jurisdiction under Section 100 CPC to interfere with concurrent findings of fact by the Trial Court and First Appellate Court. It reaffirms that such interference is permissible only if the findings are perverse, based on no evidence, or suffer from material illegality. It also clarifies the requirement of "readiness and willingness" under Section 16(c) of the Specific Relief Act, holding that payment of substantial consideration (93% of the total) and the plaintiff's conduct in approaching the vendors within the stipulated period sufficiently establishes continuous readiness and willingness.

3. Relevant Facts

• The plaintiff (A. Shahul Hameed) entered into a sale agreement dated 19.03.2010 with the defendants (N. Malligarjuna and others) for the purchase of property bearing Survey No. 75/1 for a total sale consideration of Rs.9,30,000/-.

• The plaintiff paid Rs.9,00,000/- as earnest money/advance. The balance amount of Rs.30,000/- was agreed to be paid at the time of execution of the sale deed, which was to be completed within four months (i.e., by 19.07.2010).

• According to the plaintiff, he approached the defendants in July 2010 to complete the transaction, but they sought further time. In December 2010, when he again insisted, the defendants became evasive and demanded more money. When he refused, they threatened to alienate the property to a third party.

• The plaintiff issued a legal notice dated 01.02.2011 calling upon the defendants to receive the balance consideration and execute the sale deed. No reply was received.

• The plaintiff filed O.S. No. 35 of 2011 before the Subordinate Judge, Hosur, seeking specific performance.

• The defendants filed a written statement denying the averments. They contended that the agreement was only a nominal/security document executed in relation to an earlier sale transaction with "Bangalore Buyers" (relatives of the plaintiff). They claimed that an alleged reconveyance deed was executed on the same date. They also disputed the receipt of Rs.9,00,000/- and denied the plaintiff's readiness and willingness.

• The Trial Court (Subordinate Judge, Hosur) decreed the suit for specific performance on 21.12.2012, holding that the agreement was genuine and valid, the defendants had admitted execution and signatures, and the defence of security document was improbable.

• The First Appellate Court (District Judge, Krishnagiri) vide judgment dated 28.08.2014 partly modified the Trial Court's order. It concurred with the Trial Court that the agreement was genuine and valid and that the defence of security document was not established. However, it denied the relief of specific performance on the ground that the plaintiff had failed to prove his readiness and willingness under Section 16(c) SPA 1963, because the legal notice was issued after the expiry of four months. It directed the defendants to refund the advance of Rs.9,00,000/- with 6% interest.

• The plaintiff filed a second appeal (S.A. No. 905 of 2017) before the Madras High Court. The High Court formulated two substantial questions of law concerning the denial of specific performance despite concurrence on genuineness, and the sufficiency of evidence of readiness and willingness.

• The High Court, by impugned judgment dated 25.06.2025, partly allowed the second appeal. It held that the agreement was never intended for sale and was executed only as a security for the earlier transaction with Bangalore Buyers. It affirmed the denial of specific performance but directed the defendants to pay Rs.9,30,000/- (the full consideration) with 12% interest per annum from the date of suit (10.03.2011) till realization, and created a charge on the suit property.

• The plaintiff appealed to the Supreme Court.

4. Issues

1. Whether the High Court, while exercising jurisdiction under Section 100 of the CPC, was justified in reversing the concurrent findings of fact of the Trial Court and the First Appellate Court that the sale agreement dated 19.03.2010 was genuine and valid, and in holding that it was merely a security document.

2. Whether the plaintiff had established continuous readiness and willingness in terms of Section 16(c) of the Specific Relief Act, 1963, so as to entitle him to the relief of specific performance.

3. Whether the First Appellate Court and the High Court were correct in denying specific performance on the ground of delay in issuing the legal notice, despite the plaintiff having paid 93% of the consideration and filing the suit within limitation.

5. Ratio Decidendi

A. The High Court exceeded its jurisdiction under Section 100 CPC by interfering with concurrent findings of fact on the genuineness of the agreement (Paras 12-16).

The Court held that both the Trial Court and the First Appellate Court had concurrently held that the sale agreement dated 19.03.2010 was genuine, valid, and duly executed. The defendants had admitted their signatures and did not raise any plea of forgery. The plaintiff's testimony was corroborated by an attesting witness (PW2) and the scribe (PW3), who consistently deposed that Rs.9,00,000/- was paid as advance. The Courts below rejected the defence that the agreement was merely a security document, finding it improbable and unsupported by evidence. The alleged reconveyance deed was disbelieved because the scribe had not signed it and the attesting witness (DW2) admitted ignorance of its contents and the survey number.

The Court reiterated the well-settled principles governing second appeals under Section 100 CPC (citing Kondiba Dagadu Kadam, Karnataka Board of Wakf, C. Doddanarayana Reddy, State of Rajasthan v. Shiv Dayal, and Ramachandra Reddy v. Ramulu Ammal):

• The High Court can interfere with concurrent findings of fact only if they are perverse, based on no evidence, based on misreading of evidence, or suffering from material illegality.

• If two inferences are possible from a given set of circumstances, the inference drawn by the lower appellate court is binding on the High Court.

• Reappreciation of evidence to substitute a different finding is impermissible.

The Court found that the High Court had reappreciated the evidence and come to a different conclusion (that the agreement was a security document) without demonstrating any perversity in the findings of the Courts below. Therefore, the High Court's interference was illegal and the concurrent findings on genuineness were restored.

B. The plaintiff had sufficiently established continuous readiness and willingness under Section 16(c) of the Specific Relief Act (Paras 17-21).

The Court held that the First Appellate Court and the High Court erred in denying specific performance on the ground of lack of readiness and willingness. The following factors were decisive:

• The plaintiff had paid Rs.9,00,000/- out of the total consideration of Rs.9,30,000/- (nearly 93%). Such substantial payment is strong evidence of readiness.

• Only a nominal balance of Rs.30,000/- was payable at the time of registration. A person unwilling to perform the contract would not pay such a large advance.

• The plaintiff pleaded and deposed that he approached the defendants within the stipulated four months (July 2010), but they sought further time. When he approached again in December 2010, they became evasive and demanded more money. The legal notice dated 01.02.2011 was issued soon after the defendants' refusal.

• The suit was filed on 10.03.2011, well within the three-year limitation period for specific performance (Article 54 of the Limitation Act).

• The defendants, despite receiving the legal notice, did not reply. An adverse inference arises against them under Section 114 of the Evidence Act.

The Court relied on Madhukar Nivrutti Jagtap to hold that "readiness and willingness" is a question of fact to be examined with reference to all the circumstances; the plaintiff need not continuously approach the defendant or make incessant requests. The Court also relied on R. Lakshmikantham and Mademsetty Satyanarayana to hold that in India, mere delay in filing the suit cannot be ground for refusing specific performance if the suit is within limitation, unlike in England where equity may refuse relief for delay.

The Court noted that the principal defence of the defendants throughout was that the agreement was a security document, not that the plaintiff lacked readiness and willingness. Once that defence was concurrently rejected, there was no logical basis to hold that the plaintiff was unwilling to perform.

C. The impugned judgment of the High Court and the First Appellate Court (insofar as it denied specific performance) were set aside, and the Trial Court's decree for specific performance was restored (Para 22).

The Court allowed the appeal, set aside the High Court's judgment and the First Appellate Court's judgment denying specific performance, and restored the Trial Court's decree dated 21.12.2012 granting specific performance.

6. New Legal Principles Established / Reiterated

• Scope of Section 100 CPC on concurrent findings: The judgment reiterates the long-settled principle that the High Court cannot interfere with concurrent findings of fact in a second appeal unless the findings are shown to be perverse, based on no evidence, or suffer from material illegality. It emphasises that reappreciation of evidence to reach a different conclusion is not permissible, even if another view is possible.

• Readiness and willingness under Section 16(c) – substantial advance payment as strong evidence: Payment of a very large percentage of the consideration (93% in this case) is itself strong evidence of the plaintiff's readiness and willingness. The burden then shifts to the defendant to show that the plaintiff was unwilling.

• Delay in issuing legal notice within limitation is not fatal: The plaintiff is not required to issue a legal notice immediately upon expiry of the stipulated period. If the defendant sought time or became evasive, the plaintiff can wait for a reasonable period. As long as the suit is filed within limitation, delay (especially when explained by the defendant's conduct) cannot be used to deny specific performance.

• Adverse inference from failure to reply to legal notice: If a defendant receives a legal notice calling upon him to perform the contract and does not reply, an adverse inference can be drawn against the defendant under Section 114 of the Evidence Act, particularly when the defence raised later appears to be an afterthought.

7. Court’s Examination and Analysis of Concepts

• Analysis of the concurrent findings on genuineness (Paras 12-16): The Court examined the reasoning of the Trial Court and the First Appellate Court. The Trial Court had noted that the defendants admitted execution and signatures, did not plead forgery, and failed to produce any credible evidence for the security document defence. The First Appellate Court had independently concurred with this finding. The High Court, without pointing to any perversity or misreading of evidence, simply reappreciated the evidence and reached a contrary conclusion. The Supreme Court held that this was a clear violation of the limits of Section 100 CPC. The Court quoted extensively from Kondiba Dagadu Kadam and Ramachandra Reddy to reinforce that the High Court cannot substitute its opinion for that of the first appellate court unless the conclusions are contrary to mandatory provisions of law or based on inadmissible evidence.

• Analysis of the reconveyance deed (Para 14): The Court noted that the alleged reconveyance deed was disbelieved by the Courts below because the scribe had not signed it, and the attesting witness (DW2) admitted during cross-examination that he was unaware of the contents of the document, the survey number mentioned therein, and even the year of its execution. DW2 also did not use the term "security" for the executed sale agreement. This analysis demonstrates that the lower courts had thoroughly examined the evidence and given cogent reasons for disbelieving the defence.

• Analysis of readiness and willingness (Paras 17-21): The Court emphasised that "readiness and willingness" is not a theoretical concept but a question of fact to be determined from the entire conduct of the parties. The plaintiff had paid Rs.9,00,000/- out of Rs.9,30,000/-. The balance was only Rs.30,000/-, which was payable at the time of registration. A person who pays such a large advance cannot be said to be unwilling to complete the transaction. The Court also noted that the defendants' conduct in seeking more time and then demanding additional money indicates that they were the ones not ready to perform. The legal notice was issued only after the defendants became evasive. The Court quoted Madhukar Nivrutti Jagtap for the proposition that the plaintiff need not show overt acts throughout the entire period; rather, the overall conduct must be examined.

• Adverse inference (Para 21): The Court held that the defendants' failure to reply to the legal notice (Ex. A-2) despite admitting receipt is a significant circumstance. A reply denying the transaction would have been the natural response of a genuine vendor. Their silence, followed by a defence raised only in the written statement, indicates that the defence was an afterthought. An adverse inference under Section 114 of the Evidence Act was therefore drawn against the defendants.

8. Critical Analysis

Strengths: The judgment is a strong reaffirmation of the limited scope of second appeals under Section 100 CPC. It correctly restrains High Courts from reappreciating evidence and interfering with concurrent findings of fact without showing perversity. The judgment also provides a practical and realistic approach to Section 16(c) of the Specific Relief Act. By holding that payment of 93% of the consideration is itself compelling evidence of readiness and willingness, the Court prevents vendors from taking advantage of technical arguments to defeat genuine purchasers who have already parted with almost the entire sale price. The adverse inference drawn from the failure to reply to the legal notice is a sound evidentiary principle.

Potential concerns: The judgment does not explicitly address the First Appellate Court's observation that the legal notice was issued after the expiry of four months. The Supreme Court held that since the plaintiff approached the defendants within the stipulated period and they sought further time, the legal notice issued later (after the defendants became evasive) cannot be held against the plaintiff. This is a fact-specific finding, but it may lead to future disputes about what constitutes "seeking further time" – mere oral requests may be difficult to prove. However, given that the Trial Court and First Appellate Court both accepted the plaintiff's version on this point, the Supreme Court was bound by those concurrent findings.

Practical impact: This judgment will be cited in all specific performance suits where the plaintiff has paid substantial advance consideration. It makes it clear that a plaintiff who has paid a large percentage of the sale price cannot be easily defeated on the ground of lack of readiness and willingness merely because the legal notice was issued a few months after the stipulated period. It also reinforces that High Courts must exercise great restraint in second appeals, especially where the Trial Court and First Appellate Court have concurred on findings of fact. The judgment will discourage vendors from raising frivolous defences of "security document" or "nominal agreement" after admitting execution of the sale agreement.

9. Final Outcome

• Civil Appeal: Allowed.

• The impugned judgment and decree dated 25.06.2025 passed by the High Court of Judicature at Madras in S.A. No. 905 of 2017 was set aside.

• The judgment and decree dated 28.08.2014 passed by the First Appellate Court (District Judge, Krishnagiri) insofar as it denied the relief of specific performance was also set aside.

• The judgment and decree dated 21.12.2012 passed by the Trial Court (Subordinate Judge, Hosur) in O.S. No. 35 of 2011 decreeing the suit for specific performance was restored.

• The defendants were directed to execute the sale deed in favour of the plaintiff upon the plaintiff depositing the balance consideration of Rs.30,000/- (if not already deposited) within a period to be fixed by the Trial Court.

• Pending application(s), if any, were disposed of.

• No order as to costs.

10. Practical Application

• For a plaintiff (purchaser) in a specific performance suit: To prove readiness and willingness, lead evidence of substantial payment of consideration (bank statements, receipts, witnesses to the transaction). If you have paid a very high percentage of the price (e.g., over 90%), argue that this itself establishes readiness. Also, document all attempts to contact the vendor within the stipulated period – keep records of phone calls, messages, or witnesses who accompanied you. If the vendor seeks further time, note that down. If you issue a legal notice after the stipulated period, explain the delay by showing the vendor's conduct (seeking time, becoming evasive). Cite this judgment for the proposition that delay within limitation is not fatal and that the failure of the vendor to reply to the legal notice gives rise to an adverse inference.

• For a defendant (vendor) in a specific performance suit: To defeat the claim, you must raise a credible defence at the earliest opportunity (in the written statement itself). If you admit execution of the agreement, you cannot later claim it was a "security document" or "nominal" without strong evidence. Lead evidence of the alleged contemporaneous documents (e.g., reconveyance deed) with proper execution and attestation. Ensure that your witnesses are credible and can speak to the contents of the documents. If you receive a legal notice, always send a reply denying the transaction or disputing the plaintiff's readiness, otherwise the court may draw an adverse inference against you.

• For a High Court hearing a second appeal under Section 100 CPC: Before interfering with concurrent findings of fact, ask yourself: Are the findings of the courts below perverse? Is there a complete absence of evidence on a material point? Has the lower court misread a crucial document? If the answer is no, do not reappreciate the evidence. If the lower appellate court has given satisfactory reasons for its findings (even if you disagree), you are bound by them. Quote Kondiba Dagadu Kadam and this judgment to remind yourself of the limited jurisdiction.

• For a lawyer drafting a second appeal: Frame substantial questions of law that go to the jurisdiction of the courts below or to the interpretation of a statute, not to the appreciation of evidence. For example, a question such as "Whether the lower appellate court erred in law in holding that the plaintiff failed to prove readiness and willingness under Section 16(c) despite payment of 93% of the consideration?" may be arguable. However, be prepared that the High Court may still decline to interfere if the lower court's finding is based on some evidence. Do not attempt to re-argue facts.

11. Court Lines

• "It is a well settled legal position that Section 100 confers jurisdiction on High Court to entertain a second appeal, only when it is satisfied that the case involves a substantial question of law. Re-appreciation of evidence and interference with concurrent findings of fact is impermissible unless such findings are shown to be perverse, based on no evidence, or suffering from material illegality or misreading of evidence." (Para 11)

• "In a case where from a given set of circumstances two inferences are possible, one drawn by the lower appellate court is binding on the High Court in second appeal." (Para 11.1, quoting Kondiba Dagadu Kadam)

• "The High Court would not have been justified in interfering with the concurrent findings of fact in this case even prior to the amendment of Section 100 CPC. The judgment of the High Court is clearly against the provisions of Section 100 and in no uncertain terms clearly violates the legislative intention." (Para 11.4, quoting Ramachandra Reddy)

• "The question as to whether the plaintiff seeking specific performance has been ready and willing to perform his part of the contract is required to be examined with reference to all the facts and the surrounding factors of the given case. The requirement is not that the plaintiff should continuously approach the defendant with payment or make incessant requests for performance." (Para 17.2, quoting Madhukar Nivrutti Jagtap)

• "In India, it is well settled that the rule of equity that exists in England, does not apply, and so long as a suit for specific performance is filed within the period of limitation, delay cannot be put against the plaintiff." (Para 17.2, quoting R. Lakshmikantham)

• "If the plaintiff was unwilling to perform the contract, he would not have paid nearly 93% of the sale consideration." (Para 18)

• "Despite admittedly receiving the legal notice, the defendant(s) failed to issue any reply denying the agreement or disputing the assertions made by the plaintiff therein. An adverse inference, therefore, arises against the defendant(s), particularly when the defence sought to be raised appears to be an afterthought." (Para 21)

12. Legal Strategy Insight

• For the plaintiff (purchaser) seeking specific performance after the vendor refuses to perform: Document everything. Keep a diary of all conversations with the vendor. Send a legal notice as soon as the vendor's conduct indicates refusal – do not wait indefinitely. However, if you do not send a notice immediately, this judgment protects you as long as you file the suit within limitation and can explain the delay (e.g., the vendor kept promising to perform). Most importantly, ensure that you pay a substantial portion of the consideration as advance. The higher the percentage paid, the stronger your case on readiness and willingness. In this case, 93% was decisive. If you pay only a small token amount, the vendor may successfully argue that your readiness is not proved.

• For the defendant (vendor) who has received a large advance but now wishes to avoid the sale: If you have admitted execution of the agreement and received a large advance, your position is very weak. This judgment makes it clear that you cannot escape specific performance by raising a belated defence of "security document" without credible evidence. Your best option is to perform the contract or negotiate a settlement with the purchaser. If you genuinely believe the agreement was a security document, you must have documentary evidence (contemporaneous writings, credible witnesses, a separate agreement for reconveyance duly executed and attested). Oral testimony alone will not suffice, especially if the attesting witnesses are shown to be ignorant of the contents.

• For the First Appellate Court judge: When hearing an appeal against a decree for specific performance, you have the power to reappreciate evidence de novo. However, you must give cogent reasons for disagreeing with the Trial Court. If you concur with the Trial Court on the genuineness of the agreement but deny specific performance on the ground of readiness and willingness, you must examine the plaintiff's conduct holistically. Payment of a large advance is a strong factor in favour of readiness. Delay in issuing a legal notice, by itself, is not decisive. If you deny specific performance, you must show that the plaintiff's conduct was such that it made it inequitable to grant the relief. In this case, the First Appellate Court erred by focusing only on the timing of the legal notice while ignoring the substantial advance payment and the defendants' conduct in seeking time.

• For the High Court judge in second appeal: Before you interfere with a concurrent finding on readiness and willingness, ask whether the lower appellate court's finding is perverse. Perversity means that no reasonable person, on the evidence, could have reached that conclusion. If the lower appellate court has ignored a vital piece of evidence (e.g., a receipt showing payment of 93% of the consideration) or relied on inadmissible evidence, you may interfere. Otherwise, you must respect the concurrent findings. In this case, the High Court went even further and reversed the concurrent finding on genuineness – a clear overreach. The Supreme Court rightly corrected this error.