LiveLaw Supreme Court Half-Yearly Digest 2026 - Specific Relief Act & Transfer of Property Act

Specific Relief Act, 1963 & Transfer of Property Act, 1882 - Supreme Court Half Yearly Digest Jan - Jun, 2026

Specific Relief Act, 1963 – Discretionary Relief – Impact of Unexplained Delay / Laches in Filing Suit – Approaching Court at the Fag End of Limitation - For claiming an equitable relief like specific performance, the plaintiff's conduct must be beyond reproach - Merely filing a suit within the three-year statutory limitation period prescribed under the Limitation Act is not enough - The plaintiff must approach the Court promptly and with diligence - An unexplained delay or waiting until the fag end of the limitation period to file a suit after a categorical refusal/breach by the defendant reflects a clear lack of continuous readiness and willingness, thereby disentitling the plaintiff to discretionary relief. [Relied on N.P. Thirugnanam (Dead) by LRs. v. Dr. R. Jagan Mohan Rao, (1995) 5 SCC 115; His Holiness Acharya Swami Ganesh Dassji v. Sita Ram Thapar, (1996) 4 SCC 526; Umabai v. Nilkanth Dhondiba Chavan (Dead) by LRs., (2005) 6 SCC 243; Man Kaur (Dead) by LRs. v. Hartar Singh Sangha, (2010) 10 SCC 512; Rajesh Kumar v. Anand Kumar, (2024) 13 SCC 80; Atma Ram v. Charanjit Singh, (2020) 3 SCC 311; Paras 35-42] Mohammed Khaleel v. Jayamma, 2026 LiveLaw (SC) 638 : 2026 INSC 651

Specific Relief Act, 1963 – Section 16(c) – Financial Readiness – Evaluation of Financial Documents Generated Post-Suit - To establish financial readiness, the plaintiff must place reliable and acceptable evidence on record proving the availability of sufficient funds at the relevant time namely, within the contractually stipulated period or at the time of filing the suit - Financial documents, such as Fixed Deposit Receipts (FDRs), generated several years after the institution of the suit cannot be accepted as proof of financial readiness during the crucial interregnum between the agreement's execution and the suit's filing. [Paras 35-43] Mohammed Khaleel v. Jayamma, 2026 LiveLaw (SC) 638 : 2026 INSC 651

Specific Relief Act, 1963 – Section 16(c) (Prior to 2018 Amendment) – Specific Performance of Contract – Continuous Readiness and Willingness – Nature, Burden of Proof, and Financial Capacity - The relief of specific performance is an equitable remedy rooted in discretion and governed by settled legal principles - Section 16(c) mandatorily requires a plaintiff seeking specific performance to explicitly aver and continuously prove both "readiness" (signifying financial capacity) and "willingness" (reflecting conduct and intent) from the date of the execution of the agreement right up to the date of the decree - Failure to satisfy these requirements disentitles the plaintiff to relief. [Paras 29-31] Mohammed Khaleel v. Jayamma, 2026 LiveLaw (SC) 638 : 2026 INSC 651

Specific Relief Act, 1963 – Section 16(c) – Readiness and Willingness – Requirement of – Readiness and willingness must be gathered from the entirety of facts and circumstances, including the overall conduct of parties - It is not a theoretical requirement; payment of a substantial portion of the sale consideration can be a significant indicator of the plaintiff's readiness - so long as a suit for specific performance is filed within the period of limitation, mere delay cannot be a ground for refusing the relief - reiterated that the question of readiness and willingness is a question of fact to be determined based on the conduct of the parties and material circumstances. [Relied on Madhukar Nivrutti Jagtap v. Pramilabai Chandulal Parandekar (2020) 15 SCC 731; Paras 11-21] A. Shahul Hameed v. N. Malligarjuna, 2026 LiveLaw (SC) 604 : 2026 INSC 573

Specific Relief Act, 1963 – Key Legal Findings by Supreme Court – i. Validity of Agreement- The Supreme Court restored the Trial Court's finding that the sale agreement was genuine and valid, noting that the defendant's plea of it being a "security document" was an improbable afterthought unsupported by evidence; ii. Adverse Inference- The defendants' failure to reply to the plaintiff's legal notice creates an adverse inference against them; iii. Readiness and Willingness Established - The Supreme Court held that the plaintiff, by paying approximately 93% of the consideration and issuing a legal notice promptly after the defendants became evasive, demonstrated sufficient continuous readiness and willingness under Section 16(c) of the Act. A. Shahul Hameed v. N. Malligarjuna, 2026 LiveLaw (SC) 604 : 2026 INSC 573

Specific Relief Act, 1963; Section 28 — Exercise of Discretion — While considering applications for rescission or extension of time, the Court must adopt a justice-oriented approach and balance equities - The test is whether the decree-holder's conduct amounts to a "positive refusal" or "willful negligence" to perform their part - Delay in deposit need not be explained with the same rigor as an application under Section 5 of the Limitation Act – Supreme Court may compensate the judgment-debtor for the delay by imposing additional terms or costs on the decree-holder - The doctrine of merger applies only when a higher forum passes an order on merits - An order dismissing an appeal for non-prosecution (default) is specifically excluded from the definition of a "decree" under Section 2(2) of the CPC and does not result in the merger of the Trial Court's decree with the Appellate Court's order - An application under Section 28 should be treated as an application in the original suit and numbered as an interlocutory application, even if filed before the Execution Court (provided it is the court of first instance). [Relied on Ramankutty Guptan v. Avara, (1994) 2 SCC 642; Ram Lal v. Jarnail Singh, 2025 SCC OnLine SC 584; Sardar Mohar Singh v. Mangilal, (1997) 9 SCC 217; Paras 25-38] Anand Narayan Shukla v Jagat Dhari, 2026 LiveLaw (SC) 477 : 2026 INSC 463

Specific Relief Act, 1963; Section 28 — Extension of Time and Rescission of Contract — A decree for specific performance is in the nature of a preliminary decree - Supreme Court does not become functus officio after passing the decree and retains jurisdiction until the sale deed is executed - Under Section 28, the Court has discretionary power to either rescind the contract or extend the time for deposit of purchase money - There is no automatic rescission of the decree for non-payment within the stipulated period unless the decree specifically provides that the suit shall stand dismissed upon such failure. Anand Narayan Shukla v Jagat Dhari, 2026 LiveLaw (SC) 477 : 2026 INSC 463

Specific Relief Act, 1963 — Section 28 — Execution of Decree for Specific Performance — Conditional Decree — Deemed Dismissal upon Default - Whether a decree of specific performance becomes inexecutable if the plaintiff-decree holder fails to deposit the balance sale consideration within the time stipulated by the Court - Held: Yes, A decree passed in a suit for specific performance is in the nature of a preliminary decree, and the Court retains control over it until the sale deed is executed or the decree is rendered inexecutable - If a conditional decree directs the execution of a sale deed subject to the deposit of the balance sale consideration within a specified period, the obligation is reciprocal - Non-compliance with the condition to deposit the amount within the stipulated time without applying for an extension within that period leads to the automatic dismissal of the suit - Supreme Court rejected the contention that subsequent permission by the Executing Court to deposit the money after the expiry of the period amounts to a "deemed extension" or condonation of delay - Once the time limit expires without compliance or an extension application, the decree ceases to exist in the eyes of the law and becomes completely inexecutable. Habban Shah v. Sheruddin, 2026 LiveLaw (SC) 466 : 2026 INSC 451

Specific Relief Act, 1963 — Section 28 — Necessity of Formal Application for Rescission of Contract - Is it mandatory for the judgment-debtor to file a formal application under Section 28 of the Specific Relief Act to rescind the contract before objecting to the executability of a defaulted decree? - Held: No, moving an application under Section 28 of the Act for rescinding the contract due to non-compliance is optional and immaterial - The failure of the judgment-debtor to seek formal rescission does not revive a decree that has already become inexecutable due to a default in payment - Supreme Court in given circumstances is not powerless to treat the contract as rescinded for non-compliance with the condition. [Relied on P.R. Yelumalai v. N.M. Ravi (2015) 9 SCC 52; Prem Jeevan v. K.S. Venkata Raman and Another (2017) 11 SCC 57; Balbir Singh and Another v. Baldev Singh (Dead) Through LRs and Others (2025) 3 SCC 543; N.P. Thirugnanam (Dead) by LRs v. Dr. R. Jagan Mohan Rao and Others (1995) 5 SCC 115; Paras 22-50] Habban Shah v. Sheruddin, 2026 LiveLaw (SC) 466 : 2026 INSC 451

Specific Relief Act, 1963 — Specific Performance of Contract — Readiness and Willingness — Non-appearance of plaintiff in the witness box — Effect of — Adverse Inference and Rebuttal - Non-appearance of the plaintiff in the witness box to prove the plaint case gives rise to an adverse presumption that the case set up is incorrect - this adverse presumption is a rebuttable presumption - If the presumption is successfully rebutted by other cogent evidence on record, it would not be material or applicable - Where the plaintiff's Manager deposes about the entire transaction based upon personal knowledge, having worked with the plaintiff since the execution of the agreement, such evidence cannot be discarded and sufficiently corroborates the plaint allegations, thereby successfully rebutting the adverse inference. [Paras 41, 42 & 43] Russi Fisheries v. Bhavna Seth, 2026 LiveLaw (SC) 402 : 2026 INSC 339

Specific Relief Act, 1963 – Section 31 – Intersection with Criminal Law – Held, it is a gross error to hold that criminal proceedings cannot be initiated unless registered instruments (like sale deeds) relied upon by the accused are first cancelled by a civil court - Civil and criminal remedies can proceed simultaneously even when allegations are identical. [Relied on Neeharika Infrastructure (P) Ltd. v. State of Maharashtra (2021) 19 SCC 401; Paras 41-60] Accamma Sam Jacob v. State of Karnataka, 2026 LiveLaw (SC) 368 : 2026 INSC 362

Specific Relief Act, 1963 – Section 31 – Criminal Procedure – Quashing of FIR – Section 482 of the Code of Criminal Procedure, 1973 (CrPC) – Interference at the Stage of Investigation under Section 156(3) CrPC – The Supreme Court set aside a High Court judgment that quashed an FIR at the inception stage - The High Court had reasoned that the dispute was primarily civil and required the cancellation of sale deeds under Section 31 of the Specific Relief Act before criminal proceedings could be sustained - The Supreme Court held that the existence of a civil remedy does not bar criminal proceedings if the allegations prima facie disclose a cognizable offence - At the stage of Section 156(3) CrPC, a Magistrate is only required to determine if a cognizable offence is disclosed, not to conduct a "mini-trial" or evaluate defense material - High Courts must exercise restraint and only intervene under Section 156(3) if the order lacks legal foundation or results in a failure of justice. Accamma Sam Jacob v. State of Karnataka, 2026 LiveLaw (SC) 368 : 2026 INSC 362

Specific Relief Act, 1963 – Sham and Nominal Documents – Loan Transaction vs. Sale Agreement – Probative Value of Contemporaneous Documents – Held that where a registered sale agreement and a separate MoU are executed on the same day, purchased from the same stamp vendor, and witnessed by the same individuals, such facts strongly probablize the defense that the sale agreement was merely security for a loan transaction rather than a genuine sale. [Paras 10-12] Muddam Raju Yadav v. B. Raja Shanker, 2026 LiveLaw (SC) 223 : 2026 INSC 214

Specific Relief Act, 1963 – Specific Performance – Discretionary Relief – Bona Fides of Plaintiff – Suppression of Material Facts – The Supreme Court upheld the High Court's decision to dismiss a suit for specific performance where the plaintiff suppressed the existence of a Memorandum of Understanding (MoU) executed on the same day as the sale agreement - held that specific performance is an equitable and discretionary relief that must be denied if there is even a slight doubt regarding the plaintiff's bona fides or if material facts have been withheld from the Court - A plaintiff approaching the Court with "unclean hands" by failing to mention a contemporaneous document that characterizes the sale agreement as a sham/nominal document for a loan transaction is not entitled to relief. Muddam Raju Yadav v. B. Raja Shanker, 2026 LiveLaw (SC) 223 : 2026 INSC 214

Specific Relief Act, 1963 - Sections 38–40 - Remedies — Restitutionary Remedy vs. Motor Vehicles Act Claims — Independent Action for Rights Violation - The Supreme Court distinguished between claims arising out of motor accidents and the violation of pedestrian rights - If the fundamental right to walk on a demarcated footpath is violated due to the failure of state/local actors, citizens are fully entitled to invoke constitutional remedies or public law restitutionary remedies (such as under Sections 38–40 of the Specific Relief Act, 1963) against the defaulting local bodies - This restitutionary remedy is independent of, and distinct from, any statutory compensation claim made under the Motor Vehicles Act, 1988. [Paras 15 - 20] Maniyar Iliyaz Shaik Riyaz v. P. Ayyappan, 2026 LiveLaw (SC) 632 : 2026 INSC 647

Specific Relief Act, 1963; Section 41(h) — Injunction when refused — Maintainability of suit for injunction simpliciter when title and possession are in dispute — The Supreme Court affirmed the High Court's decision that a suit for a bare mandatory injunction is not maintainable when there is a serious cloud over the title and possession of the property - the appropriate and efficacious remedy is to seek a decree for possession and declaration of title, rather than mere injunction - A suit for mandatory injunction without seeking possession is barred under Section 41(h) as an equally efficacious relief can be obtained through the usual mode of a suit for possession. [Para 13, 16, 22, 23] Sanjay Paliwal v. Bharat Heavy Electricals Ltd., 2026 LiveLaw (SC) 54 : 2026 INSC 61

Specific Relief Act, 1963 – Specific Performance – Necessary Parties – While a lis pendens transferee is not a necessary party, the vendor remains a necessary party in a suit for specific performance to fulfill contractual obligations and special covenants - if the vendor's estate is represented by multiple substituted heirs, the death of one such heir without timely substitution of their own LRs does not lead to the abatement of the entire appeal if other heirs of the vendor are still on record – Appeals allowed. [Relied on Mahabir Prasad v. Jage Ram & Others (1971) 1 SCC 265; Bhurey Khan v. Yaseen Khan (Dead) by LRs & Ors. 1995 Supp (3) SCC 331; Satyadhyan Ghosal & Ors. v. Deorajin Debi (Smt.) & Anr. AIR 1960 SC 941; Lala Durga Prasad and Others v. Lala Deep Chand and Others (1953) 2 SCC 509; Shivashankara v. H.P. Vedavyasa Char 2023 LiveLaw SC 261; Paras 36 - 44] Kishorilal v. Gopal, 2026 LiveLaw (SC) 39 : 2026 INSC 48

Specific Relief Act, 1963 – Specific Performance – Readiness and Willingness – Equitable Relief – Refund and Restitution – Complete Justice - In a suit for specific performance concerning an Agreement to Sell from 2008, the Supreme Court upheld the High Court's finding that the appellant failed to prove readiness and willingness as he lacked the financial wherewithal to pay the balance consideration of Rs. 5.21 crores on the due date and failed to visit the Sub-Registrar's office - Noted that the respondents also failed to fulfill contractual obligations regarding property mutation and conversion - Holding that the grant of specific performance is not an equitable relief after a passage of seventeen years – Supreme Court emphasized that equity must prevent unjust enrichment and restore parties to their original positions when both are at fault - To adjust equities and bring quietus to a dispute protracted for over a decade, the Supreme Court modified the High Court's order (which had allowed forfeiture of Rs. 60 lakhs earnest money) and directed the respondents to pay a lumpsum amount of Rs. 3,00,00,000/- (Rupees Three Crores) to the appellant for full restitution – Appeal partly allowed. [Paras 5-8] Subhash Aggarwal v. Mahender Pal Chhabra, 2026 LiveLaw (SC) 6 : 2026 INSC 11

Government Grants Act, 1895 — Section 3 — Scope of Overriding Mandate — Wider Interpretation vs. Narrow Interpretation - Section 3 of the GG Act embodies a clear legislative mandate that every Government grant shall take effect according to its tenor, notwithstanding any rule of law, statute, or enactment to the contrary - The expression "any rule of law, statute or enactment" is of the widest amplitude and admits of no restrictive construction - The approach which seeks to confine Section 3 merely to the exclusion of the Transfer of Property Act, 1882 (TP Act), by reading it in a narrow or truncated manner, is incorrect - While Section 2 of the GG Act expressly excludes the application of the TP Act, Section 3 travels further and grants primacy to the conditions, limitations, and stipulations contained in the Government grant itself, elevating them to a position of supremacy over any general or statutory law. [Paras 51, 52, 53] Union of India v. Sir Sobha Singh and Sons Pvt. Ltd., 2026 LiveLaw (SC) 413 : 2026 INSC 406

Property Law — Physical Possession vs. Underlying Title — Relief of Injunction Physical possession, such as cultivating crops, does not automatically equate to a valid underlying title of a land. Suit or relief of a permanent injunction cannot be treated under a superficial view if the underlying title itself is inherently defective or void. (See: Sayyed Ali v. A.P. Wakf Board, (1998) 2 SCC 642; P. Kishore Kumar v. Vittal K. Patkar, (2024) 13 SCC 455; Rangammal v. Kuppuswami, (2011) 12 SCC 220; Nagindas Ramdas v. Dalpatram Ichharam, (1974) 1 SCC 242) A.P. State Wakf Board v. Janaki Busappa, 2026 LiveLaw (SC) 423 : 2026 INSC 413

Property Law – Co-ownership and Definition of Landlord - Transfer of Property Act, 1882 – Sections 3 & 8 – Share certificates of land – Interest in land includes things attached to the earth, such as walls or buildings – Holders of share certificates of the land are co-owners of the building built thereon – Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 – Section 5(3) – Definition of 'Landlord' – A co-owner of the building who is entitled to receive rent or receives rent on behalf of another falls squarely within the statutory definition of a 'landlord' and possesses the locus to maintain an eviction petition. [Paras 42-46] Marietta D' Silva v. Rudolf Clothan Lacerda, 2026 LiveLaw (SC) 503 : 2026 INSC 496

Property Law / Land Revenue Records – Evidentiary value of mutation entries regarding possession – Held, while mutation entries alone do not create or transfer ownership rights, when such revenue records continue for many years, are supported by registered sale transactions, and remain unchallenged for a long period (a decade in the present case), they become relevant factors while considering possession and the conduct of the parties. [Paras 45 - 53] Mallika v. R. Nallathambi, 2026 LiveLaw (SC) 534 : 2026 INSC 529

Property Law — Declaration of Title — Adverse Possession — A claim for perfection of title by adverse possession cannot be sustained against the State/Union regardless of the duration of possession if the claimant fails to prove the specific point of time and basis upon which their predecessors entered possession - a decree obtained in an earlier suit where the true owner (Union of India) was not impleaded is non-est and not binding upon the Union – Appeals dismissed. [Relied on Union of India v. Ibrahim Uddin, (2012) 8 SCC 148; State of Karnataka v. K.C. Subramanya, (2014) 13 SCC 468; Paras 7- 11] Gobind Singh v. Union of India, 2026 LiveLaw (SC) 221 : 2026 INSC 211 : AIR 2026 SC 1303

Transfer of Property Act, 1882 — Section 52 — Doctrine of Lis Pendens in Money Decrees – Supreme Court rejected the argument that lis pendens does not apply to simple money suits - If Section 52 of the Transfer of Property Act were excluded from money suits, a judgment-debtor could easily defeat the decree by alienating property before execution, rendering the judicial process meaningless - Noted that "the true difficulties of a litigant begin only after they have obtained a decree". R. Savithri Naidu v. Cotton Corporation of India, 2026 LiveLaw (SC) 151 : 2026 INSC 150 : AIR 2026 SC 913

Transfer of Property Act, 1882 — Section 52 — Doctrine of Lis Pendens — Validity of transfers pendente lite - Transfers of the suit land made by a party during the pendency of the litigation/appeal are governed by the principle of lis pendens - A transfer pendente lite is neither illegal nor void ab initio but remains subservient to the rights of the parties eventually determined by the court, and must abide by the ultimate decree passed in the litigation - if the decree of specific performance is ultimately maintained and executed via due process, the sale deeds executed by the defendants to third parties during the pendency of litigation are held to be non est. [Relied on Vidhyadhar vs. Manikrao and Another, (1999) 3 SCC 573; Rajesh Kumar vs. Anand Kumar and Others, (2024) 13 SCC 80; Bholaram vs. Ameerchand, (1981) 2 SCC 414; Kashibai w/o Lachiram and Another vs. Parwatibai w/o Lachiram and Others, (1995) 6 SCC 213; Thomson Press (India) Ltd. vs. Nanak Builders & Investors (P) Ltd., (2013) 5 SCC 397; Paras 25-30, 45, 46] Russi Fisheries v. Bhavna Seth, 2026 LiveLaw (SC) 402 : 2026 INSC 339

Transfer of Property Act, 1882; Section 105 and Section 108 — Indian Easements Act, 1882; Section 52 — Lease vs. Licence — Interpretation of Deeds — The Supreme Court set aside a High Court judgment that had re-characterized a registered 99-year lease deed as a licence - held that when the nomenclature, text, and context of a document clearly indicate a "lease simpliciter," courts should not resort to purposive construction or ex-post facto circumstances to infer a different intention - A unilateral cancellation of such a registered lease deed, without bilateral agreement or meeting conditions under Section 111 of the Transfer of Property Act, is illegal and non-est. General Secretary, Vivekananda Kendra v. Pradeep Kumar Agarwalla, 2026 LiveLaw (SC) 204 : 2026 INSC 199

Transfer of Property Act, 1882 – Section 52 – Doctrine of Lis Pendens – Specific Performance – Execution of Decree – Code of Civil Procedure, 1908 – Order XXI Rules 35, 97, 98, 101, and 102 – Specific Relief Act, 1963 – Section 19(b) – The Supreme Court reaffirmed that a purchaser who acquires property during the pendency of litigation, as a transferee pendente lite, has no right to obstruct the execution of the decree and remains bound by the outcome of the proceedings, holding the transfer strictly subservient to the decree - Key findings held i. Doctrine of Lis Pendens and Transferee Pendente Lite: The principle of lis pendens enshrined in Section 52 of the Transfer of Property Act, 1882, is based on equity, good conscience, justice, and public policy - A transferee pendente lite is bound by the ultimate decree of the court, irrespective of whether they had notice of the pending suit or acted in good faith; ii. Registration of Lis Pendens (Bombay Amendment): Under the Maharashtra amendment to Section 52, once a notice of lis pendens is registered, the property cannot be transferred or dealt with so as to affect the rights of any party under a subsequent decree - The lack of knowledge of the proceedings is not a valid defense against the application of this doctrine; iii. Execution against Obstructionists: In execution proceedings for the delivery of immovable property, the Executing Court has the mandate under Order XXI Rule 97 and Rule 98 CPC to remove any person bound by the decree, including a transferee pendente lite, who resists or obstructs possession; iv. Adjudication of Rights in Execution: All questions relating to the right, title, or interest of an obstructionist arising under Order XXI Rule 97 must be determined by the Executing Court under Rule 101 and not by a separate suit - For transferees pendente lite, their title is subservient to the decree and is effectively extinguished by the court-executed sale deed; v. Interplay between Specific Relief Act and Transfer of Property Act: While Section 19(b) of the Specific Relief Act protects subsequent transferees for value without notice at a stage prior to the institution of a suit, it must give way to Section 52 of the Transfer of Property Act once a suit is instituted – Appeals dismissed. [Relied on Celir LLP v. Somati Prasad Bafna (2024 SCC Online SC 3727); Sanjay Verma v. Manik Roy (2006) 13 SCC 608; Guruswamy Nadar v. P. Lakshmi Ammal (2008) 5 SCC 796; Jayaram Mudaliar v. Ayyaswami (1972) 2 SCC 200; Danesh Singh v. Har Pyari (2025 SCC OnLine SC 2805); Paras 41-64] Alka Shrirang Chavan v. Hemchandra Rajaram Bhonsale, 2026 LiveLaw (SC) 44 : 2026 INSC 52

Transfer of Property Act, 1882 – Section 58(c) – Mortgage by Conditional Sale vs. Outright Sale – No transaction shall be deemed a mortgage by conditional sale unless the condition for reconveyance is embodied in the document that effects or purports to effect the sale - In the absence of such a clause in the registered Sale Deed, the transaction cannot be construed as a mortgage by conditional sale. [Paras 44 - 49] Hemalatha v. Tukaram, 2026 LiveLaw (SC) 79 : 2026 INSC 82