Full Judgment Text
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PETITIONER:
SMT. BISMILLAH BEGUM (DEAD) M BY LRS.
Vs.
RESPONDENT:
RAHMATULLAH KHAN (DEAD) BY LRS.
DATE OF JUDGMENT: 21/01/1998
BENCH:
S.B. MAJMUDAR, M. JAGANNADHA RAO.
ACT:
HEADNOTE:
JUDGMENT:
J U D G M E N T
M. JAGANNADHA RAO, J.
The appellants are the legal representatives of the
deceased plaintiff. The suit was filed on 7.2.1958 seeking
specific performance of a contract of reconveyance dated
8.2.1955.
The brief facts of the case are that the appellants’
predecessor in interest who owned the suit house property in
Kanpur executed a registered sale deed dated 8.2.1955 for
Rs. 2.000\- in favour of the sole defendant (who has also
since died) and also simultaneously obtained an agreement of
reconveyance from the defendant on the same day. It appears
that the said agreement for reconveyance stipulated that in
case the seller was able to pay back the consideration
within a period of three years and certain expenses and
other monies expended by the purchaser towards repairs, the
seller would be entitled to get back the property. It is on
the basis of the above said agreement of reconveyance that
the seller filed the present suit on 7.2.1958.
In the courts below the questions as to whether time
was the essence of contract and whether the plaintiff was
ready and willing to perform her part of the contract were
debated. The courts below held that the plaintiff was not
ready and willing to perform the contract by way of offering
to repay - what has quoted in the reconveyance agreement -
within the period stipulated therein. It was also held that
time was the essence of the contract. When the matter came
up in Second appeal to the High Court it was argued for the
appellant - vendor relying upon a decision in the case of
A.H.Mama Vs. Flora Sassoon (AIR 1928 PC 208) that time was
not the essence of the contract in contracts of sale
regarding immovable property. However, the High Court held
that a close scrutiny of the plaint did not reveal that
there was any averment on the part of the plaintiff that she
was ready and willing to perform her part of the contract.
It was no doubt averred in the plaint that the vendor had
spoken to the defendant orally several times to receive the
stipulated amount and execute the reconveyance deed and get
it registered, but no dates on which the vendor allegedly
spoke to the defendant were mentioned. In fact the plaintiff
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relied only on a notice by telegram dated 6.2.1958 which was
referred to in the plaint and on the paragraph relating to
cause of action, proposing to repay. Apart from the said
notice there was no other documentary evidence to show that
any effort was made within the period of three years for
repayment of the consideration for the purpose of obtaining
reconveyance. The High Court has also observed that the
above said notice dated 6.2.1958 issued by the vendor to the
defendant purchaser was not addressed to his proper address
and in fact it never reached the defendant. Under such
circumstances, the High Court dismissed the Second Appeal
holding that there was neither any plea nor proof of
readiness and willingness on the part of the plaintiff to
perform her part of the contract.
In this appeal, learned counsel for the appellants had
contended that time is not the essence of the contract in
relation to contracts of immovable property and that it is
also not necessary to tender the amount or to deposit the
consideration amount in court except when directed by the
Court. It will be noticed that a provision to that effect
has now been incorporated in Section 16(c) of the Specific
Relief Act, 1963 but there was no such statutory provision
before 1963 Act. Learned counsel for the appellants also
relied upon a decision of the Calcutta High Court in Manik
Lal Vs. Shankar Lal (AIR 1962 Cal 103) for the proposition
that delay in payment of the sale consideration even in the
case of reconveyance contract would disentitle the plaintiff
to obtain specific performance if such delay had occurred on
account of the defendant’s attitude.
Even assuming that the above said decision of the
Calcutta High Court would support the point convassed by
learned counsel for the appellant it will be noticed that
the finding in the above said Calcutta case was that the
plaintiff was unable to perform his part of the contract
because of the defendant’s attitude. But in the present case
before us there is no proof that any attitude of the
defendant towards the plaintiff was the cause for the
plaintiff not being able to pay the amount to the defendant.
As already stated, the findings of fact arrived at by the
courts plaintiff to pay the sale consideration to the
defendant are findings of fact, binding in Second appeal.
We may also add that in contracts relating to
reconveyance of property time is always essence of the
contract as laid down by the Federal Court in the case of
Shanmugam Pillai & Ors. Vs. Annalakshmi Ammal & Ors. (AIR
1950 SC 38) and also laid down by this Court in Caltex
(India Ltd. Vs. Bhagwan Devi Marodia (AIR 1969 SC 405). The
relevant passage in the judgment of this Court in Caltex
(India) Ltd. at page 407 in para 3 reads as follows:
"At common law stipulations as to
time in a contract giving an option
for renewal of a lease of land were
considered to be of the essence of
the contract even if they were not
expressed to be so and were
construed as conditions precedent.
Equity followed the common law rule
in respect of such contracts and
did not regard the stipulation as
to time as not of the essence of
the bargain. As stated in
Halsbury’s Laws of England, 3rd
edn.. Vol. 3, Article 281. p. 165:
"An option for the renewal of a
lease, or for the purchase or re-
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purchase of property, must in all
cases be exercised strictly within
the time limited for the purpose,
otherwise it will lapse." This
passage was quoted with approval by
Danckworts L.J, in Hare Vs. Nicoll,
1966-2 QB 130, 145. A similar
statement of law is to be found in
Foa’s General Law of Landlord and
Tenant, 8th ed., Art. 453 p. 310,
and in Hill and Redman’s Law of
Landlord and Tenant, 14th ed., p.
54. The reason is that a renewal of
a lease is a privilege and if the
tenant wishes to claim the
privilege he must do so strictly
within the time limited for the
purpose."
The above passage refers both to options for renewal
and options to repurchase where, in regard to immovable
property, as a matter of law time becomes essence of the
contract. Therefore in regard to contracts of reconveyance
relating to immovable property, the principle laid down in
A.H. Mama Vs. Flora Sassoon (AIR 1928 PC 208) - that time is
not normally essence of the contract in contracts relating
to immovable property - does not apply. It is in fact, so
observed in Caltex (India) Ltd. case. In view of the
abovesaid decision of this Court relating to contract of
reconveyance, and inasmuch as the amount was not paid within
the stipulated time, the said option in favour of the
plaintiff must be deemed to have "lapsed". For the aforesaid
reasons, the appeal fails and is dismissed. No costs.