Manicka Gounder vs Samikannu Gounder

T. Venkatadri, J.—This appeal arises out of execution proceedings in O.S. No. 297 of 1961, a suit instituted by the respondent for specific

performance of an agreement to reconvey the suit property dated 13th June, 1959 executed by the appellant to the respondent. The suit itself was

compromised and a consent decree was passed in and by which the respondent (plaintiff) should deposit a sum of Rs. 800 on or before 15th

November, 1962 and also deposit the necessary general stamp papers into Court for the appellant to reconvey the property to the respondent on

such deposit of the said amount by the respondent. The respondent did not deposit the amount as mentioned in the said decree on or before 15th

November, 1962. But filed E.P. No. 605 of 1962 on 26th November, 1962 after depositing the sum or Rs. 800 and praying the Court that the

appellant might be directed to execute a sale deed in favour of the respondent as per the terms of the compromise decree. By abundant caution,

the respondent filed M.P. No. 935 of 1962 in O.S. No. 297 of 1961 for extension of time for the payment of the said sum of Rs. 800 as per the

terms of the consent decree. He set up a plea that on or before 15th November, 1962 he tendered the money to the judgment-debtor (appellant

here) and that as he refused to receive the same, he did not deposit and therefore he had come to Court to execute his decree after depositing the

said sum of Rs. 800 and praying the Court to extend time for payment from 15th November, 1962 till the date of deposit made by him in the

Court. The Courts below disbelieved the story of the respondent but they came to the conclusion that time was not the essence of the contract in

respect of the immovable properties, granted the extension of time and directed the appellant here to execute a sale deed in respect of the suit

property in favour of the respondent. It is against the order of the Subordinate Judge of Cuddalore in appeal that the judgment-debtor has

preferred this Civil Miscellaneous second Appeal.

In this appeal, it is seriously contended by learned Counsel for the appellant that time is the essence of the contract in the case of reconveying

the suit property. In this connection he has drawn my attention to the decision of the Federal Court in Shanmugham Pillai v. Annalakshmi Ammal

(1950) S.C.J. 1 : (1950) 1 M.L.J. 683 : (1949) 50 F.C.R. 537. It has been laid down at page 546:

It is well settled that when a person stipulates for a right in the nature of a concession or privilege on fulfilment of certain conditions, with a proviso

that in case of default the stipulation should be void, the right cannot be enforced if the conditions are not fulfilled according to the terms of the

contract. Such conditions, though relating only to payment of money, are not regarded as a penalty and Courts of Equity will not afford relief

against a forfeiture for their breach.

This principle has been consistently followed later by the Supreme Court in K. Simrathmull Vs. S. Nanjalingiah Gowder, and this Court in

Balasundara Mudaliar Vs. Muthuvenkatachala Mudaliar (died) and Others, . There seems to be some force in the contention urged by learned

Counsel for the appellant. But we have to consider whether the extension of time can be granted in the circumstances of the instant case. It is

common ground that this is a suit for specific performance of the agreement to reconvey the suit property which originally belonged to the

respondent here. There is also the compromise decree in and by which certain time was fixed for depositing the sum of Rs. 800. Unfortunately as

noted by the Courts below, there is no default clause. In such a case, the Court should take into consideration that the suit should be deemed to be

pending but not finally disposed of. In Badul Shaker Sahib v. Abdul Rahiman Sahib (1922) 44 M.L.J. 107 the facts are similar. In that case a

decree for specific performance of a contract for sale provided (a) that, upon payment by the plaintiffs of a sum named within two months from the

date of the decree, the 1st defendant do execute and register a proper deed of conveyance of the properties in the schedule and (b) that upon

payment the 1st defendant do put the plaintiffs in possession of the said properties together with all title deeds. In such a case, Sir Walter

Schwabe, C.J., for the Bench observed at page 113;

Lastly it was contended, and this is a more difficult point, that as two years had elapsed from the date of the original offer of the money, the

plaintiffs were too late in bringing this suit. It is a well-established principle that persons who desire the assistance of the Court in obtaining

equitable relief must come quickly. In each case it is a question to be decided on the facts whether the delay on the part of the plaintiff is such that

the Court ought not to exercise its powers. In this case on the facts I think that the delay should be excused, for on the evidence, the plaintiffs were

put off for some time by the first defendant himself. The case has however been brought very late but in my judgment not late enough to compel us

to refuse relief at not being shown that the defendant has been prejudiced.

Veeraswami, J. in similar circumstances in Palanichami Nadar v. Gomathinayagam (1965) 78 L.W. 186 has held (head-note):

Even though the finding of the Court is to be accepted that the default was on the part of the purchaser as he was not ready with the funds to

complete the sale on 30th April, 1959, this is a case in which time was not of the essence of the contract and therefore the plaintiff will be entitled

to a decree for specific performance. Equity will look not at the letter but the substance of the transaction in ascertaining the intention of the parties

to the agreement, and notwithstanding an express stipulation, for execution of the sale within specified time, it would in substance regard the

intention of the parties as that the agreement should be performed within reasonable time. 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 time limit specified. But, equity will not assist where (1)

there has been undue delay on the part of the party seeking specific performance of a contract, (2) the other side has given reasonable notice to

him that he should complete within a definite time and (3) the exercise of the equitable jurisdiction will result in injustice.

There is also a decision which will be useful to refer, namely Bhagwat Saran Singh Vs. Mithila Saran Singh and Others, . There a party by an order

of the Court was required to deposit a certain amount in Court under a compromise and a time-limit was prescribed for it. But there was no

provision as to the effect of the non-payment of the said amount. In such a case the learned Judges held:

But if the time has expired and on account of absence of a provision in the petition of compromise or in the order as to the effect of non-payment,

the order has not operated automatically, then the Court has seisin of the matter and can still deal with it.

Therefore applying the above principles to the facts of the present case, like the Patna case, there is no provision for the default clause in the

preliminary decree. The respondent herein filed an application M.P. No. 935 of 1962 for extension of time. But it is not clear whether it is filed in

the execution side or in the original side itself. But the printed judgment reveals that the petition is filed on the original side in the District Munsi ''s

Court, Tindivanam. But the learned Counsel for the appellant contends before me that this order should be taken to have been passed in the

execution proceedings and if this is an order in the execution proceedings, certainly he is entitled to file an appeal. Without going into this question

whether M.P. No. 935 of 1962 has been filed on the original side or in the execution proceedings, I am of opinion that the Courts below have

rightly decided that the time should be extended to enable the respondent to deposit the money as per the terms of the compromise decree.

Whatever that might be, there is to my mind, as observed by the Federal Court when a concession is given for the reconveyance of the suit

property, the respondent here should have implicitly discharged that obligation as stipulated in the compromise. But at the same time this is a

specific performance of an agreement to reconvey the immovable property which originally belonged to the respondent. Taking all the facts into

consideration and in the interests of justice, I direct the respondent here to deposit another sum of Rs. 200 in addition to Rs. 800 already

deposited to the credit of the suit O.S. No. 297 of 1961, on the file of the District Munsif''s Court, Tindivanam. The respondent is entitled to have

the reconveyance of the property by executing the decree against the appellant.

The Civil Miscellaneous Second Appeal is dismissed subject to the above modification. No costs. Time for payment two months.

No leave.