Delay In Issuing Legal Notice No Ground To Deny Specific Performance If Suit Filed Within Limitation: Supreme Court

"In India mere delay cannot be a ground for refusing the said relief, for the statute prescribes the period of limitation. If the suit is in time, delay is sanctioned by law; if it is beyond time, the suit will be dismissed as barred by time; in either case, no question of equity arises," Supreme Court of India, in a significant ruling dated May 27, 2026, held that a mere delay in issuing a legal notice or filing a suit cannot be used to infer a lack of readiness and willingness if the action is brought within the prescribed period of limitation.

A bench comprising Justice Sanjay Karol and Justice Vipul M. Pancholi observed that unlike English equity rules, Indian law strictly adheres to statutory limitation periods, and delay within such periods is legally sanctioned.

The dispute arose from a sale agreement dated March 19, 2010, where the appellant (purchaser) paid Rs. 9,00,000/- out of a total consideration of Rs. 9,30,000/-. When the defendants failed to execute the sale deed, the plaintiff issued a legal notice on February 1, 2011, and subsequently filed a suit for specific performance. While the Trial Court decreed the suit, the First Appellate Court and the Madras High Court denied specific performance, primarily citing the delay in issuing the legal notice after the four-month period stipulated in the agreement.

The primary question before the court was whether a delay in issuing a legal notice after the expiry of the period stipulated in an agreement leads to an automatic inference that the plaintiff was not 'ready and willing' under Section 16(c) of the Specific Relief Act, 1963. The court also examined whether the High Court, in a second appeal under Section 100 of the CPC, was justified in reversing concurrent findings regarding the genuineness of the sale agreement.

High Court's Limited Jurisdiction Under Section 100 CPC

The Supreme Court began by reiterating that the High Court’s jurisdiction to interfere with concurrent findings of fact is extremely narrow. It noted that both the Trial Court and the First Appellate Court had found the sale agreement to be genuine and valid. The High Court, however, had reversed this finding by labeling the agreement a "security document" without demonstrating any perversity in the lower courts' reasoning.

"Interference with concurrent findings of fact is impermissible unless such findings are shown to be perverse, based on no evidence, or suffering from material illegality or misreading of evidence."

Readiness And Willingness Must Be Inferred From Overall Conduct

Regarding the second issue of 'readiness and willingness' under Section 16(c) of the SPA 1963, the bench observed that this must be gathered from the entirety of facts and circumstances. The Court highlighted that the plaintiff had already parted with 93% of the total sale consideration at the time of the agreement. This substantial payment was a strong indicator of the plaintiff's commitment to the contract.

"If the plaintiff was unwilling to perform the contract, he would not have paid nearly 93% of the sale consideration. Only a nominal amount of Rs. 30,000/- was left, which was payable at the time of execution of the sale deed."

Indian Law Sanctions Delay Within The Limitation Period

The core of the judgment addressed the distinction between English and Indian law regarding delay. The bench clarified that in India, once a suit is filed within the three-year limitation period, a "short delay" in approaching the court or issuing a notice cannot be held against the plaintiff. The rule of equity that exists in England does not apply here because the Indian legislature has specifically prescribed a statutory limitation period.

"When the suit for specific performance is filed within the period of limitation, delay cannot be put against the plaintiff."

Legal Notice Issued After Contractual Period Not Fatal To Suit

The Court noted that the plaintiff had consistently pleaded that he approached the defendants within the stipulated period, but they sought more time and later demanded more money. The legal notice was issued soon after the defendants became evasive. The bench held that the issuance of the notice after the four-month contractual period did not prove a lack of readiness, especially since the suit was filed well within the three-year limitation period.

"Merely because the legal notice came to be issued after expiry of four months from the stipulated period mentioned in the agreement, the same by itself cannot lead to an inference that the plaintiff was not ready and willing."

Adverse Inference Against Defendants For Failure To Reply

The Supreme Court also took note of the defendants' conduct, observing that they had failed to reply to the plaintiff’s legal notice despite admittedly receiving it. The Court held that an adverse inference must be drawn against the defendants, as their eventual defense—that the agreement was merely for security—appeared to be an afterthought and lacked evidentiary support.

The Supreme Court concluded that the High Court and First Appellate Court erred in denying specific performance based on the timing of the legal notice. By restoring the Trial Court’s decree, the bench affirmed that statutory limitation periods override equitable concerns regarding minor delays. The ruling reinforces that payment of a substantial portion of the consideration is a decisive factor in proving continuous readiness and willingness under the Specific Relief Act.

Date of Decision: 27 May 2026