Mangal Ram Namasudra vs Premananda Namasudra

M.C. Pathak, J.—This appeal by the Defendant is from the judgment and decree of the learned Subordinate Judge, Cachar at Silchar, The Plaintiff filed that suit for specific performance of an agreement dated 10-3-1962. The Plaintiff sold the jote right of the suit land by a registered sale deed on 10-3-1962 to the Defendant and delivered possession thereof. On the same date there was an agreement between the Plaintiff and the Defendant to the effect that within three years the Defendant would reconvey the suit land in favour of the Plaintiff on receiving the sale price and accordingly the Defendant executed a registered Ekrarnama on 10-3-1962. Notwithstanding repeated demands the Defendant failed to reconvey the suit land. The Plaintiff tendered the consideration but the Defendant did not accept the same Hence the Plaintiff filed the suit for specific performance.

The Defendant contested the suit on grounds inter alia that the Plaintiff never approached the Defendant and made no demand for reconveyance of the suit land and that the Plaintiff never tendered the consideration to the Defendant, but he deposited the amount in court only after the expiry of the time of the contract. Hence according to the Defendant, the Plaintiff was not entitled to any decree for specific performance.

Several issues were framed on the pleadings of the parties and the learned trial court dismissed the suit holding that the Plaintiff made no tender of the consideration within time and his deposit in court was not valid in law.

An appeal was preferred before Munsiff. The learned Subordinate Judge allowed the appeal, reversed the judgment and decree of the learned trial court and decreed the Plaintiff''s suit. Hence this appeal by the Defendant.

Mr. K.P. Bhattacharjee, the learned Counsel appearing for the Appellant submits that in the instant case time was of the essence of the contract and since the Plaintiff failed to pay the consideration to the Defendant or to deposit the same within the stipulated period, the contract ceased and there could be no decree for specific performance of the contract. Mr. M.H. Choudhury, the learned Counsel appearing for the Plaintiff Respondent submits on the other hand that on a proper construction of the agreement Ext. 1 time was not of the essence of the contract and that the Plaintiff was ever ready to make the payment but the Defendant did not accept the same and therefore he had to deposit the consideration money in court in terms of the agreement itself. But as the challan was not passed by the court on the date of filing the suit but it was passed by the court on 15-3-1965, the Plaintiff could make the required deposit in treasury on 16-3-1965 and therefore the deposit was within time.

The first point that arises for consideration in this case is whether time was of the essence of the contract in the instant case. In Gomathinayagam Pillai and Others Vs. Pallaniswami Nadar, Shah J. delivering the majority judgment observed as follows:

Section 55 of the Contract Act which deals with the consequences of failure to perform an executory contract on or before the stipulated time provides by the first paragraph:

When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee if the intention of the parties was that time should be of the essence of the contract.

It is not merely because of specification of time at or before which the thing to be done under the contract is promised to be done and default in compliance therewith, that the other party may avoid the contract. Such an option arises only if it is intended by the parties that time is of the essence of the contract. Intention to make time of the essence, if expressed in writing, must be in language which is unmistakable: it may also be inferred from the nature of the property agreed to be sold, conduct of the parties and the surrounding circumstances at or before the contract. Specific performance of a contract will ordinarily be granted, notwithstanding default in carrying out the contract within the specified period, if having regard to the express stipulations of the parties, nature of the property and the surrounding circumstances, if it is not inequitable to grant the relief. If the contract relates to sale of immovable property, it would normally be presumed that time was not of the essence of the contract. Mere incorporation in the written agreement of a clause imposing penalty in case of default does not by itself evidence an intention to make time of the essence. In Jamshed Kodaram Irami v. Burjori Dhunjibhai. ILR 40 Bom 289 : AIR 1915 PC 83 the Judicial Committee of the Privy Council observed that the principle underlying Section 55 of the Contract Act did not differ from those which obtained under the law of England as regards contracts for sale of land. The Judicial Committee observed:

''Under that law equity, which governs the rights of the parties in cases of specific performance of contracts to sell real estate, looks not at the letter but at the substance of the agreement in order to ascertain whether the parties, notwithstanding that they named a specific time within which completion was to take place, really and in substance intended more than that it should take place within a reasonable time. Their Lordships are of opinion that this is the doctrine which the section of the Indian Statute adopts and embodies in reference to sales of land. It may be staled concisely in the language used by Lord Chairns in Tilley v. Thomas (1867) 3 Ch 61:

''The construction is, and must be in equity the same as in a court of law. A Court of enquiry will indeed relieve against and enforce, specific performance, notwithstanding a failure to keep the dates assigned by the contract, either for completion, or for the steps towards completion, if it can do justice between the parties and if (as Lord Justice Turner said in Roberts v. Berry (1853) 3 De G.M. 284) there is nothing in the ''express stipulations between the parties, the nature of the property, or the surrounding circumstances'', which would make it inequitable to interfere with and modify the legal right. This is what is meant, and all that is meant, when it is said that in equity time is not of the essence of the contract. Of the three grounds, mentioned by Lord Justice Turner ''express stipulations'' requires no comment. The ''nature of the property'' is illustrated by the case or reversions, mines, or trades. The ''surrounding circumstances'' must depend on the facts of each particular case.''

Their Lordships will add to the statement just quoted these observations. The special jurisdiction of equity to disregard the letter of the contract in ascertaining what the parties to the contract are to be taken as having really and in substance intended as regards the time of its performance may be excluded by any plainly expressed stipulation. But to have this effect the language of the stipulation must show that the intention was to make the rights of parties depend on the observation of the time limits prescribed in a fashion which is unmistakable. The language will have this effect if it plainly excludes the motion that these time limits were of merely secondary importance in the bargain, and that to disregard them would be to disregard nothing that lay as its foundation. Prima facie, equity treats the importance of such time limits as being subordinate to the main purpose of the parties, and it will enjoin specific performance notwithstanding that from the point of view of a Court of Law the contract has not been literally performed by the Plaintiff as regards the limit specified.''....

Fixation of the period within which the contract is to be performed does not make the stipulation as to time of the essence, of the contract.... Intention to make time of the essence of the contract may be evidenced by either express stipulations or by circumstances which are sufficiently strong to displace the ordinary presumption that in a contract of sale of land stipulations as to time are not of the essence, In the present case there is; no express stipulation, and the circumstances are not such as to indicate that it was the intention of the parties that time was intended to be of the essence of the contract. It is true that even if time was not originally of the essence, the Appellants could by notice served upon the Respondent call upon him to take the conveyance within the time fixed and intimate that in default of compliance with the requisition the contract, will be treated as cancelled. As observed in Stickney v. Keeble. 1915 A.C. 386 "where in a contract for the sale of land the time fixed for completion is not made of the essence of the contract but the vendor has been guilty of unnecessary delay, the purchaser may serve upon the vendor a notice limiting a time at the expiration of which he will treat the contract as at an end.... The Respondent must in a suit for specific performance of an agreement plead and prove that he was ready and willing to perform his part of the contract continuously between the date of the contract and the date of hearing of the suit."

In his dissentient judgment Bachawat J. also held that having regard to the decision in 43 Ind App 26 : AIR 1915 PC 83 the High Court rightly held that time was not of the essence of the contract.

In Ext. 1 the Ekrarnama in the Instant case the following stipulations are found:

By executing this agreement I promise that if you pay me the entire consideration money in one instalment within three years, after harvesting the standing crops, from today, I will execute a sale deed in your favour and get it registered and deliver possession of the lands described in the schedule. If within the stipulated period the consideration money is offered to me and I refuse to accept the same you will be able to get the sale deed executed through court after depositing the consideration money in court. If you cannot give me the entire amount at a time, you will be able to get the first schedule land by paying half the amount and you will be able to get the second schedule land again within the stipulated period. If within the stipulated period you do not take back the land by paying the consideration money you will have no claim at all in the lands described in the schedule after the end of the said stipulated period.

The contract in this case relates to sale of immovable property and therefore following the observations made by the Supreme Court in Gomathinayagam Pillai and Others Vs. Pallaniswami Nadar, (supra) it may be normally presumed that time was not of the essence of the contract. Mere incorporation in the written agreement of a clause imposing penalty in case of default does not by itself evidence an intention to take time of the essence of the contract. Since the agreement is for sale of land and more particularly in view of the stipulations regarding time of executing the contract as found in Ext. 1 and quoted above, I am clearly of the opinion that in the instant case time was not of the essence of the contract. I therefore hold that the finding of the learned Subordinate Judge to the effect that time was of the essence of the contract in the instant case is erroneous.

Even though time was not originally of the essence of the contract, the Defendant Appellant could by notice served upon the Plaintiff Respondent call upon him to take the conveyance within the time fixed and intimate that in default of compliance with the requisition, the contract would be treated as cancelled. No such notice was issued by the Defendant to the Plaintiff.

The next point that falls for consideration is whether the consideration money was offered or paid by the Plaintiff to the Defendant within the stipulated period. The Plaintiff in paragraph 3 of the plaint alleged that the Defendant was not accepting the consideration money and was not executing the sale deed, though he was assuring from time to time that he would accept the money and execute the sale deed. The learned Subordinate Judge found that it was proved at least that the Plaintiff expressed his willingness prior to the suit to pay the consideration to the Defendant but there was no corroborative evidence to show that the Plaintiff made actual tender of the amount. He also found that on the date of the filing of the suit, that is, on 10-3-1965. the Plaintiff carried some money but he took it back as the challan was not passed by the court on 10-3-1965 and the learned Subordinate Judge found that on the date of filing of the suit even, the Plaintiff was ready to deposit the required amount but he could not do so, as the challan was passed only after five days. It appears from the record that a challan for depositing a sum of Rs. 700/ - in Karimganj Sub-Treasury was filed in the court on 10-3-1965 along with the filing of the plaint. On 10-3-1965 the court ordered that on the recital in the plaint the Plaintiff might deposit Rs. 700/- in court at his own risk. The challan was passed by the court on 15-3-1965 and the amount was actually deposited to the Sub-Treasury on 16-3-1965. Hence the finding of the learned Subordinate Judge that the Plaintiff was, ready to deposit the required amount on the date of filing the suit is correct and the Plaintiff''s allegation was that the Defendant was not accepting the consideration money but deferring the same on some pleas. The stipulation in the agreement Ext. 1 also was to the effect that if the Defendant refused to accept the money the Plaintiff might deposit the same in the court and get the sale deed executed through court. When the Plaintiff filed the suit on 10-3-1965. he filed the challan also and had the challan been passed on the same date, the Plaintiff could have deposited the amount on the same date.

On the facts alleged and found proved I hold that in the instant suit for specific performance of the agreement the Plaintiff pleaded and proved that he was ready and willing to perform his part of the contract between the date of the contract and the date of the hearing of the suit.

In the result I hold that the learned Subordinate Judge was correct in decreeing, the Plaintiff''s suit. The decree of the learned Subordinate Judge is therefore affirmed and the appeal is dismissed. In the facts and circumstances of the case I make no order as to costs.