The Supreme Court has restored a trial court decree directing execution of a property sale agreement, holding that the Madras High Court exceeded its powers under Section 100 of the Civil Procedure Code by reappreciating evidence in a second appeal.
A bench of Justices Sanjay Karol and Vipul M. Pancholi ruled that once the trial court and first appellate court had concurrently found the sale agreement to be genuine, the High Court could not interfere with those factual findings without showing perversity or illegality.
Background of the Case
The dispute arose from a sale agreement dated March 19, 2010, under which the plaintiff, A. Shahul Hameed, agreed to purchase land from the defendants for Rs.9.30 lakh. According to the agreement, Rs.9 lakh was paid in advance, while the remaining Rs.30,000 was to be paid at the time of registration within four months.
The plaintiff claimed he repeatedly approached the defendants to complete the transaction, but they delayed the execution of the sale deed and later allegedly demanded additional money. After issuing a legal notice in February 2011, he filed a suit seeking specific performance of the agreement.
The defendants, however, argued that the agreement was only a “security document” connected to an earlier land transaction involving third-party purchasers from Bengaluru and was never intended to be acted upon as a genuine sale agreement.
Findings of Lower Courts
The trial court decreed the suit in favour of the plaintiff in December 2012 after holding that the agreement was genuine and enforceable. It noted that the defendants had admitted their signatures on the agreement and had not alleged forgery during the proceedings.
Later, the first appellate court agreed that the agreement was valid but denied specific performance on the ground that the plaintiff had not sufficiently proved his “readiness and willingness” to perform the contract within the stipulated period. Instead, it ordered refund of the advance amount with interest.
The Madras High Court, in second appeal, upheld denial of specific performance and treated the agreement as merely a security arrangement, while directing refund of Rs.9.30 lakh with 12% interest.
Supreme Court’s Observations
The Supreme Court disagreed with the High Court’s approach and said the scope of interference under Section 100 CPC is extremely limited.
“The High Court reappreciated the evidence so as to come to a different conclusion, which is clearly impermissible within the limited scope of Section 100 CPC,” the bench observed.
The Court pointed out that both the trial court and first appellate court had carefully examined oral and documentary evidence before concluding that the agreement was genuine. It also noted that the defendants failed to produce convincing evidence supporting their claim that the document was merely a security arrangement.
On the issue of readiness and willingness, the bench held that the plaintiff’s conduct showed continuous intention to complete the transaction.
“If the plaintiff was unwilling to perform the contract, he would not have paid nearly 93% of the sale consideration,” the Court noted.
The Court further said that mere delay in issuing a legal notice could not, by itself, defeat a claim for specific performance when the suit had been filed within the limitation period.
Decision
Allowing the appeal, the Supreme Court set aside the Madras High Court judgment dated June 25, 2025, along with the first appellate court’s findings denying specific performance.
The Court restored the trial court decree dated December 21, 2012, directing enforcement of the sale agreement in favour of the plaintiff.
Case Details
Case Title: A. Shahul Hameed v. N. Malligarjuna & Ors.
Judge: Justice Sanjay Karol and Justice Vipul M. Pancholi
Decision Date: May 27, 2026
