Supreme Court: Delay in Legal Notice Not Ground to Deny Specific Performance

The Supreme Court has held that a buyer's delay in issuing a legal notice to the seller cannot, by itself, be a ground to deny specific performance of an agreement to sell, so long as the suit is filed within the limitation period. The ruling in A. Shahul Hameed v. N. Malligarjuna, delivered by a bench of Justice Sanjay Karol and Justice Vipul M. Pancholi, restores a trial court decree in favour of a buyer who had already paid almost the entire sale consideration.

The judgment, reported as 2026 INSC 573, clarifies how courts must assess the buyer's readiness and willingness under Section 16(c) of the Specific Relief Act, 1963. It is a significant reaffirmation that substance prevails over technicality in specific performance suits.

The Facts: 93 Percent of the Price Already Paid

The dispute arose from an agreement to sell dated 19 March 2010. The total sale consideration for the property was Rs 9,30,000, of which the buyer paid Rs 9,00,000 as earnest money at the time of the agreement itself. Only Rs 30,000 remained payable at the time of execution of the sale deed, which was to happen within four months.

According to the buyer, he approached the sellers in July 2010 to complete the transaction, but they sought more time. In December 2010, when he insisted on execution of the sale deed, the sellers allegedly became evasive, demanded more money and threatened to sell the property to a third party. The buyer then issued a legal notice on 1 February 2011 calling upon the sellers to receive the balance and execute the sale deed. When no reply came, he filed a suit for specific performance.

The trial court decreed the suit in the buyer's favour and the first appellate court affirmed that decree. In second appeal, however, the Madras High Court reversed, treating the buyer's failure to issue the legal notice within the contractually stipulated time as proof that he lacked readiness and willingness under Section 16(c).

What the Supreme Court Held

Setting aside the High Court's judgment, the Supreme Court observed that the High Court had given primacy to a technicality while ignoring the attending circumstances and the overall conduct of the buyer, who had deposited Rs 9 lakh out of a total consideration of Rs 9.3 lakh.

The Court held that merely because the legal notice was issued after the four month period mentioned in the agreement, it could not be inferred that the buyer was not ready and willing to perform the contract, especially when the suit itself was instituted well within the prescribed period of limitation. Readiness and willingness, the Court said, must be assessed in light of the overall conduct of the parties and the circumstances of each case.

The Court also drew an adverse inference against the sellers, who admittedly received the legal notice but never replied to deny the agreement or dispute the buyer's assertions. Their defence, the Court noted, appeared to be an afterthought.

Limitation Is the Statutory Test, Not Promptness of Notice

The bench anchored its reasoning in settled precedent. It cited R. Lakshmikantham v. Devaraji, (2019) 8 SCC 62, which held that when a suit for specific performance is filed within limitation, delay cannot be put against the plaintiff. It also quoted the classic passage from Mademsetty Satyanarayana v. G. Yelloji Rao, AIR 1965 SC 1405, which explains that in India, unlike England, the statute prescribes a limitation period for specific performance suits. If the suit is in time, the delay is sanctioned by law; if it is beyond time, the suit fails as time barred. In either case, no separate question of equity arises.

The decision sits within a broader line of recent rulings on timelines in civil remedies. The Supreme Court has taken a strict view of unexplained delay in other contexts, as seen in its decision setting aside an arbitral award over a four year delay in the Lancor Holdings case. The difference is that limitation for a specific performance suit is fixed by statute, and conduct within that window is judged holistically.

Why This Matters for Property Buyers and Sellers

For buyers, the ruling confirms that paying a substantial part of the consideration and pressing for execution are strong evidence of readiness and willingness, even if a formal notice comes late. Buyers should still document every demand for performance and verify the seller's title before paying large sums. Checking the encumbrance certificate for the property remains an essential first step in any purchase.

For sellers, silence is costly. A seller who receives a legal notice and does not reply risks an adverse inference. Sellers dealing with property belonging to minors or joint families must also ensure the transaction is authorised, a point the Supreme Court recently examined in its ruling on guardianship rules for selling a minor's property.

Related Reading

For interim protection of property during litigation, see our guide on how to get a stay order from court in India.

After a sale deed is executed, updating revenue records is the next step. Read our guide on property mutation, known as dakhil kharij.

Key Takeaways

Delay in sending a legal notice does not defeat a specific performance suit filed within limitation. Readiness and willingness under Section 16(c) of the Specific Relief Act, 1963 is judged on the overall conduct of the parties, and payment of nearly the full consideration weighs heavily in the buyer's favour. A seller who ignores a legal notice invites an adverse inference. The decision in A. Shahul Hameed v. N. Malligarjuna restores certainty for buyers who have substantially performed their side of a sale agreement.