Supreme Court Restores Specific Performance Decree, Rejects High Court’s Re-appreciation of Concurrent Findings
A bench of Justices Sanjay Karol and Vipul M. Pancholi held that the Madras High Court exceeded its Section 100 CPC jurisdiction by reversing concurrent findings on a genuine sale agreement.
The Supreme Court on 27 May 2026 set aside the Madras High Court’s judgment in a second appeal and restored the trial court’s decree for specific performance of a sale agreement dated 19 March 2010. The Court found that the High Court had impermissibly re-appreciated evidence to reverse concurrent findings of fact returned by both the Trial Court and the First Appellate Court — findings that the agreement was genuine, valid, and duly executed. The Court further held that the plaintiff had sufficiently established continuous readiness and willingness under Section 16(c) of the Specific Relief Act 1963, particularly given that he had already paid Rs. 9,00,000 out of a total consideration of Rs. 9,30,000 before the dispute arose. The decision reaffirms the narrow scope of the High Court’s jurisdiction in second appeals under Section 100 of the Code of Civil Procedure 1908.
How the Dispute Reached the Supreme Court
The plaintiff, A. Shahul Hameed, entered into a sale agreement dated 19 March 2010 with the defendants for the purchase of property bearing Survey No. 75/1 for a total consideration of Rs. 9,30,000. He paid Rs. 9,00,000 as earnest money, with the balance Rs. 30,000 to be paid at the time of registration of the sale deed, within four months.
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 pressed for execution, the defendants became evasive, demanded more money, and threatened to alienate the property to a third party. The plaintiff issued a legal notice on 1 February 2011 calling upon the defendants to receive the balance consideration and execute the sale deed. Receiving no reply, he filed OS No. 35 of 2011 before the Court of the Subordinate Judge, Hosur, seeking specific performance.
The defendants denied the claim entirely. Their case was that the sale agreement was never intended to be acted upon as a genuine agreement for sale. They contended it was merely a “security document” executed in connection with an earlier sale agreement dated 17 July 2009 involving purchasers from Bangalore. Under that earlier arrangement, certain lands were agreed to be sold to those Bangalore buyers, but one portion could not be conveyed due to title defects. The defendants claimed the subject agreement was executed in favour of the plaintiff — said to be a relative of the Bangalore buyers — as security to ensure completion of the remaining sale. They also relied on an alleged reconveyance deed executed by the plaintiff in their favour on the same date.
The Trial Court, vide judgment dated 21 December 2012, decreed the suit for specific performance. It found that the defendants had admitted execution of the agreement and their signatures, had not raised any plea of forgery, and had failed to reply to the legal notice. The defence of a security arrangement was found improbable and unconvincing.
The First Appellate Court, vide judgment dated 28 August 2014, concurred that the agreement was genuine and valid and rejected the security-document defence. However, it denied specific performance on the ground that the plaintiff had failed to establish readiness and willingness under Section 16(c) of the Specific Relief Act 1963, reasoning that the legal notice was not issued immediately after the four-month period stipulated in the agreement. It directed the defendants to refund Rs. 9,00,000 with 6% interest.
In the second appeal before the Madras High Court, the High Court went further. Vide its judgment dated 25 June 2025, it held that the sale agreement was never intended for sale of the suit property and was executed merely as a security for the earlier Bangalore transaction — reversing the concurrent finding of both courts below. It affirmed the denial of specific performance and directed the defendants to pay Rs. 9,30,000 with 12% interest per annum from the date of suit, with a charge created on the suit property. The plaintiff then approached the Supreme Court by way of Special Leave Petition (Civil) No. 32390 of 2025.
The High Court Exceeded Its Section 100 CPC Jurisdiction
The Supreme Court identified two issues: first, whether the High Court was justified in reversing the concurrent findings on the genuineness of the agreement while exercising jurisdiction under Section 100 CPC; and second, whether the plaintiff had established continuous readiness and willingness under Section 16(c) of the Specific Relief Act 1963.
On the first issue, the Court held that the High Court had clearly erred. Both the Trial Court and the First Appellate Court had, after appreciating oral and documentary evidence, concurrently found the agreement to be genuine, valid, and duly executed. The defendants had admitted execution and their signatures. No plea of forgery was raised in the written statement or at trial. The testimony of the plaintiff (PW1) was corroborated by PW2, an attesting witness, and PW3, the scribe, both of whom deposed consistently that Rs. 9,00,000 had been paid as advance consideration with only Rs. 30,000 remaining.
The alleged reconveyance deed was also disbelieved by the courts below. The scribe had not signed it. The attesting witness (DW-2) admitted during cross-examination that he was unaware of the contents, the survey number mentioned, and even the year of execution. DW-2 did not use the term “security” for the executed sale agreement. The reconveyance deed was accordingly held to lack credibility.
The Court also noted that even if the security-arrangement defence were accepted for the sake of argument, the defendants had placed no material on record to substantiate it. No evidence was adduced to show that the alleged sale transaction with the Bangalore buyers ever materialised. The defendants neither revoked the subject sale agreement after four months nor filed a suit for specific performance of the reconveyance deed. Critically, the Bangalore buyers were never examined to prove the alleged security arrangement or to establish that Rs. 9,30,000 was payable to them.
The Court reiterated the settled position on Section 100 CPC: the High Court’s jurisdiction in second appeal is limited to deciding a substantial question of law. Re-appreciation of evidence and interference with concurrent findings of fact is impermissible unless those findings are perverse, based on no evidence, or suffer from material illegality or misreading of evidence. Merely because another view is possible on the same material does not justify interference.
The Court drew on Kondiba Dagadu Kadam v. Savitribai Sopan Gujar, (1999) 3 SCC 722, for the proposition that where two inferences are possible from a given set of circumstances, the one drawn by the first appellate court is binding on the High Court in second appeal. It also referred to C. Doddanarayana Reddy v. C. Jayarama Reddy, (2020) 4 SCC 659, State of Rajasthan v. Shiv Dayal, (2019) 8 SCC 637, and the recent decision in Ramachandra Reddy v. Ramulu Ammal, (2025) 8 SCC 788 — the last of which was authored by Justice Sanjay Karol himself — all reiterating the limited scope of second appellate jurisdiction.
The Court found that the High Court, while interfering with the concurrent findings, failed to demonstrate that the conclusions of the courts below suffered from any perversity, material illegality, or ignorance of relevant evidence. In effect, the High Court had re-appreciated the evidence to reach a different conclusion, which is clearly impermissible within the limited scope of Section 100 CPC.
Readiness and Willingness: Conduct Assessed in Totality
On the second issue, the Court found it difficult to sustain the findings of the First Appellate Court and the High Court that the plaintiff had failed to establish readiness and willingness under Section 16(c) of the Specific Relief Act 1963.
The Court reiterated that readiness and willingness must be gathered from the entirety of facts and circumstances, including the overall conduct of the parties prior and subsequent to the filing of the suit. It referred to C.S. Venkatesh v. A.S.C. Murthy, (2020) 3 SCC 280, which held that the requirement is not that the plaintiff should continuously approach the defendant with payment or make incessant requests for performance, but that the plaintiff must be found standing with the contract without blameworthy conduct. It also referred to Madhukar Nivrutti Jagtap v. Pramilabai Chandulal Parandekar, (2020) 15 SCC 731, which held that when a suit for specific performance is filed within the period of limitation, delay cannot be put against the plaintiff.
The Court applied these principles to the facts. The plaintiff had paid Rs. 9,00,000 out of a total consideration of Rs. 9,30,000 — nearly 93% of the sale price. Only Rs. 30,000 remained, payable at the time of registration. The principal defence throughout was not that the plaintiff lacked readiness and willingness, but that the agreement itself was a nominal security document. Once that defence was concurrently rejected by both courts below, the Court found no logical basis to hold that the plaintiff lacked readiness and willingness, particularly given the substantial payment already made.
The Court also addressed the timing of the legal notice. The First Appellate Court and the High Court had held against the plaintiff because the notice dated 1 February 2011 was issued after the four-month period stipulated in the agreement had expired. The Supreme Court rejected this reasoning. The plaintiff had specifically pleaded and deposed that he approached the defendants within the stipulated period, but they sought further time. When he approached them again in December 2010, they became evasive and demanded additional money. The legal notice was issued shortly after the defendants refused to honour the agreement. Such conduct, the Court held, clearly demonstrates continuous willingness to perform.
The Court further noted that despite admittedly receiving the legal notice, the defendants issued no reply denying the agreement or disputing the plaintiff’s assertions. An adverse inference arose against the defendants, whose defence appeared to be an afterthought.
Order
The Supreme Court allowed the appeal. The impugned judgment and decree dated 25 June 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 August 2014 passed by the First Appellate Court, insofar as it denied the relief of specific performance, was also set aside. The judgment and decree dated 21 December 2012 passed by the Trial Court decreeing the suit for specific performance was restored. Pending applications, if any, were disposed of.