Mussa Mahomed vs Motilal Itchalal

Norman Macleod, C.J.—The plaintiff filed this suit for specific performance of an agreement, dated the 27th February 1919, whereby the defendant agreed to sell to the plaintiff certain Immovable property in Bombay for Us. (sic)5,000. Clause 3 of the agreement was as follows:-

The purchaser shall pay the balance of the purchase money within three months from the date hereof time being of the essence of the contract on the execution by the vendor and by all other necessary parties (if any whom the vendor agrees to procure to join in the execution) of the conveyance of the said hereditaments, etc.

Whatever may have been the effect of that clause in the agreement, it is now admitted that the parties agreed that the time for completion of the contract should be extended beyond the three months mentioned in that clause. It must also be admitted that there was considerable delay on both sides in preparing requisitions for title, in answering the requisitions and in the preparation and approval at the draft conveyance.

On the 23rd August 1919 the defendant''s solicitors wrote:-

We extremely regret to note that we have not yet received the engrossment of the conveyance for our comparison. Requisitions on title were answered long ago. Your client had inspection of the trust deed, and they have been satisfied on all the points. Our client has waited sufficiently long for completion.

And the letter concluded:-

We are therefore instructed to request you to send us the engrossment for comparison. The draft conveyance has already been sent to you duly approved. We are expecting the engrossment within four days from the receipt hereof by you.

It is admitted that that letter Was not received by the plaintiff''s solicitors until the 25th August 1919 when they wrote:-

With reference to your letter dated 23rd instant we beg to state that the delay was on your client''s part in not replying to the requisitions in time and not furnishing the Municipal bill for a very long time. We received the Battaki only recently and have since then taken the engrossment in hand which we shall lot you have as soon as it is ready. Your client''s suggestion that our client has no money or that he is trying to secure a purchaser is an imaginary one. Our client''s moneys are lying idle with him since two months past and he is more eager to complete this matter than your client.

The defendants'' solicitors replied on the 27th August 1919:-

We are in receipt of your letter of the 25th instant. It is not true that our client delayed the matter. The Municipal bill was sent long ago and as you did not get the Battaki certified in time you asked our client to send a new bill. With reference to the second para of your letter we have not yet received the engrossment duly stamped for our comparison. It is strange that the engrossment should take such a long time. Please therefore note that unless the sale is completed before Monday 4 P.M. time being of essence our client will treat the contract as broken by yours, will forfeit the earnest money and proceed in the matter as advised.

That letter was received on the 28th August 1919 which was a Thursday, and it is admitted that the plaintiff did nothing further until the 2nd September 1919 when the plaintiff''s solicitors wrote:-

With reference to your letter dated the 27th ultimo we beg to state that you sent us only one Municipal bill after a very long delay, which delayed the certifying of the Battaki. It is not true that we did not get it certified in time. It would be absurd to expect to get the Battaki certified without Municipal bill. We now send you the engrossment of the conveyance for being compared by you which please return duly compared by you.

On the same day the defendant''s solicitors wrote:-

In continuation of our letter to you herein of the 27th ultimo, we are instructed to state that our client has forfeited the earnest money and reserves his right to proceed further against your client as he may be advised.

Thereafter the plaintiff tendered the purchase money but it was refused, and consequently the plaintiff had to file this suit.

Now, the law on the subject is clearly laid down in the case of Jamshed Khodaram v. Burjorji Dhunjibhai I.L.R (1915) Bom. 289. After referring to the decision of Lord Cairns in Tilley v. Thomas (1867) L.R. 3 Ch. 61 their Lordships continue:-

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 the parties depend on the observance of the time limits prescribed in a fashion which is unmistakable. The language will have this effect if it plainly excludes the notion that these time limits were of merely secondary importance in the bargain and that to disregard them would be to disregard nothing that lay at its foundation. Prima facie, equity treats the importance of such time limits as being subordinate to the main purposes 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. This is merely an illustration of the general principle of disregarding the letter for the substance which Courts of equity apply, when, for instance, they decree specific performance with compensation for a non-essential deficiency in subject-matter.

But equity will not assist where there has been undue delay on the part of one party to the contract, and the other has given him reasonable notice that he must complete within a definite time.

Therefore, assuming that, on 27th August 1919, there had been unnecessary delay on the part of the plaintiff which entitled the defendant to give him reasonable notice that he must complete within a definite time, the decision in this case depends entirely on whether in equity it can be considered that the defendant gave reasonable notice by his solicitors'' letter of the 27th August 1919. It is impossible to lay down any general rule as to what period can be considered as reasonable. It must depend entirely upon the various circumstances which are present in each case as it arises. But apart from those considerations, it would appear to me that in any case four days would not be reasonable notice for the completion of a contract of this nature.

No doubt, what actually was required to be done on the 27th August 1919 was only the engrossment and stamping of the conveyance and handing over of the purchase money, and it might be said all that could be done within the space of a few hours. But that is not the only consideration which must weigh with the Court. One has to consider whether as a matter of fact from the surrounding circumstances the defendant would be so prejudiced by further delay in the completion of the contract that equity would not assist the plaintiff in getting it performed.

Now, it cannot be said in this case that it would make very much difference to the defendant whether the contract was completed on Monday the 1st September 1919 or a few days later. Considering the extremely leisurely way in which both the parties had proceeded from the date of the contract, there was no reason why the defendant should be entitled to demand of the plaintiff that the matter should be completed within four days and that in default the contract should be considered as broken. Therefore, there being no special circumstances in the case which would demand that the contract should be completed on the 1st September 1919, it appears to me that that notice was not reasonable and that it offended against the general principles of equity which guide the Courts in dealing with a case of this description.

I think, therefore, that the decision of the Court below was wrong and that the plaintiff was entitled to the assistance of the Court in obtaining specific performance of the contract.

There will be a decree, then, for the plaintiff to the effect that on his paying the balance of the purchase price, the defendant should execute the conveyance.

The plaintiff to complete the Hale within one week.

The defendant to pay the costs of the suit and of the appeal.

Shah, J.

I concur.