The Supreme Court of India has ruled that a High Court exercising its jurisdiction under Section 100 of the Code of Civil Procedure, 1908, is not permitted to re-appreciate evidence and overturn concurrent findings of fact unless those findings are proven to be perverse, completely lacking evidentiary support, or riddled with material illegality. A division bench comprising Justice Sanjay Karol and Justice Vipul M. Pancholi set aside the orders of the Madras High Court and the First Appellate Court, thereby restoring a Trial Court’s decree for specific performance in favor of a buyer who had already paid nearly 93% of the total sale consideration.
Background of the Case
The dispute arose from a sale agreement executed on March 19, 2010, where the plaintiff (purchaser), A. Shahul Hameed, agreed to purchase a property under Survey No. 75/1 from the defendants (vendors) for a total consideration of Rs. 9,30,000/-. The plaintiff paid a substantial earnest amount of Rs. 9,00,000/-, leaving a nominal balance of Rs. 30,000/- to be cleared within four months at the time of the sale deed’s registration.
According to the plaintiff, he approached the vendors in July 2010 to finish the transaction, but they requested more time. By December 2010, the defendants became evasive, demanded extra money, and threatened to sell the property to a third party. The plaintiff issued a formal legal notice on February 1, 2011, and subsequently filed a suit for specific performance before the Court of the Subordinate Judge, Hosur (Trial Court).
The defendants resisted the suit by claiming the agreement was merely a nominal “security document” linked to an earlier 2009 land transaction with certain “Bangalore Buyers”. They asserted that because one patch of land in that previous transaction faced title defects, the current agreement was drawn up in favor of the plaintiff—a relative of those buyers—purely as financial security. They denied receiving the Rs. 9,00,000/- and disputed the plaintiff’s readiness and willingness to execute the contract.
The Trial Court decreed the suit in favor of the plaintiff on December 21, 2012, finding the agreement genuine and the security defense highly improbable. However, on August 28, 2014, the First Appellate Court modified the decree; while it agreed that the sale agreement was authentic, it denied specific performance on the ground that the plaintiff failed to show “readiness and willingness” under Section 16(c) of the Specific Relief Act, 1963, because he did not issue the legal notice immediately after the four-month contractual period expired. It ordered a mere refund of the advance with 6% interest.
On June 25, 2025, the Madras High Court went a step further in a Second Appeal, reversing the lower courts’ concurrent findings by holding that the sale agreement was indeed executed only as a security arrangement. It ordered the defendants to return Rs. 9,30,000/- with an enhanced 12% interest rate. This led the plaintiff to approach the Supreme Court.
Arguments of the Parties
The plaintiff contended that both the Trial Court and the First Appellate Court had correctly evaluated the oral and documentary evidence to establish the genuineness of the agreement. The plaintiff highlighted that parting with 93% of the total amount up front was a clear indicator of his continuous intention to complete the purchase, and a minor delay in sending a legal notice within the legal limitation period could not be weaponized against him.
The defendants argued that the High Court was right to look into the underlying nature of the transaction. They maintained that the document was never intended to operate as an actual sale agreement and was strictly a security device, pointing to an un-scribed, weakly witnessed reconveyance deed to support their stance. They also argued that the plaintiff had failed to perform any overt acts to complete the contract within the stipulated four months.
Court’s Analysis and Observations
The Supreme Court analyzed the matter by addressing the limitations of a High Court under Section 100 CPC and the legal standards required to prove readiness and willingness under Section 16(c) of the Specific Relief Act, 1963.
Limits of Interference Under Section 100 CPC
The apex court reiterated that the right to a second appeal is a statutory right, not an inherent right, and is strictly confined to substantial questions of law. It noted that the Trial Court and First Appellate Court had carefully scrutinized the evidence—including corroborative testimonies from the attesting witness and scribe—and found the security plea unconvincing. The defendants had failed to even call the “Bangalore Buyers” as witnesses to support their claims.
Citing Kondiba Dagadu Kadam v. Savitribai Sopan Gujar, the Bench observed:
“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. Adopting any other approach is not permissible.”
The High Court had impermissibly re-appreciated the facts to construct a completely new narrative, failing to show any inherent perversity or material illegality in the lower courts’ initial assessment.
Establishing Readiness and Willingness
The Supreme Court strongly criticized the First Appellate Court and High Court for ruling that the plaintiff lacked readiness and willingness. The Bench emphasized that the plaintiff had already paid Rs. 9,00,000/- out of the Rs. 9,30,000/- total value. Expressing this directly, the Court stated:
“If the plaintiff was unwilling to perform the contract, he would not have paid nearly 93% of the sale consideration.”
Invoking its previous ruling in Madhukar Nivrutti Jagtap v. Pramilabai Chandulal Parandekar, the Supreme Court clarified that the strict English rules of equity do not apply in India when a suit is instituted well within the prescribed statutory period of limitation. A short delay in sending a legal notice cannot automatically signal a lack of willingness, especially when the plaintiff provided a consistent explanation that the defendants had repeatedly asked for more time before turning evasive.
Furthermore, the defendants never replied to the legal notice they admitted to receiving, which created a strong adverse inference against them.
Decision
Allowing the appeal, the Supreme Court set aside the Madras High Court’s judgment dated June 25, 2025, and the First Appellate Court’s modification order dated August 28, 2014. The division bench fully restored the Trial Court’s initial judgment and decree dated December 21, 2012, directing the execution of the sale deed in favor of the plaintiff. All pending applications were closed.
Case Details
Case Title: A. Shahul Hameed v. N. Malligarjuna and Ors.
Case No.: Civil Appeal No. ______ of 2026 (@ Special Leave Petition (Civil) No. 32390 of 2025)
Bench: Justice Sanjay Karol, Justice Vipul M. Pancholi
Date: May 27, 2026
