A delay in sending a legal notice to a seller cannot, by itself, be used to deny a buyer the relief of specific performance when the suit has been filed within the legally prescribed limitation period, the Supreme Court has ruled.
A Bench comprising Justice Sanjay Karol and Justice Vipul M. Pancholi held that a purchaser’s readiness and willingness to fulfil contractual obligations must be assessed from the overall circumstances and conduct of the parties, rather than from a single procedural delay.
The dispute arose from an agreement to sell executed on March 19, 2010. The buyer agreed to purchase a property for ₹9.30 lakh and paid ₹9 lakh upfront as earnest money, leaving only ₹30,000 to be paid at the time of registration of the sale deed. The transaction was to be completed within four months.
According to the buyer, he repeatedly approached the seller after the expiry of the stipulated period to complete the transaction. He claimed that the seller sought additional time and later demanded a higher amount. When the buyer declined, the seller allegedly threatened to transfer the property to someone else. A legal notice was eventually issued on February 1, 2011, calling upon the seller to accept the remaining consideration and execute the sale deed. Receiving no response, the buyer approached the civil court seeking specific performance of the agreement.
The trial court ruled in favour of the buyer, and the first appellate court affirmed that decision. However, the High Court overturned the concurrent findings, reasoning that the buyer’s failure to issue a legal notice within the contractual timeline reflected a lack of readiness and willingness under Section 16(c) of the Specific Relief Act, 1963.
The Supreme Court disagreed.
Reversing the High Court’s judgment, the Bench observed that excessive emphasis had been placed on the timing of the legal notice while ignoring the broader factual picture. The Court noted that the buyer had already paid nearly 97 per cent of the agreed sale consideration and had consistently sought completion of the transaction.
The Court held that the mere fact that the legal notice was issued after the contractual deadline could not automatically establish that the buyer was unwilling to perform his obligations, especially when the suit itself had been filed well within the limitation period prescribed by law.
The judgment stressed that readiness and willingness must be judged on the basis of the conduct of the parties and the surrounding circumstances. In the present case, the buyer’s substantial payment and efforts to complete the sale supported his claim.
The Court also found the seller’s conduct questionable. Despite receiving the legal notice, the seller neither denied the agreement nor responded to the allegations raised by the buyer. The Bench observed that such silence justified drawing an adverse inference against the seller and suggested that the defence raised later appeared to be an afterthought.
Reaffirming settled principles governing specific performance suits, the Court noted that where a claim is filed within the statutory limitation period of three years, delay in issuing a legal notice cannot by itself become a ground for refusing relief.
Relying on earlier precedents, the Bench reiterated that Indian law expressly prescribes limitation periods, and a suit filed within that timeframe cannot be rejected merely because the plaintiff waited before initiating legal action.
Consequently, the appeal was allowed, the High Court’s ruling was set aside, and the trial court’s decree directing specific performance of the agreement to sell was restored.
