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Devan Man Mohan Lal Vs. L. Piary Lal and anr. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtAllahabad High Court
Decided On
Case NumberFirst Appeal No. 259 of 1965
Judge
Reported inAIR1973All16
ActsContract Act, 1872 - Sections 55 and 62
AppellantDevan Man Mohan Lal
RespondentL. Piary Lal and anr.
Appellant AdvocateK.C. Saxena, Adv.
Respondent AdvocateK.C. Agarwal, Adv.
DispositionAppeal dismissed
Excerpt:
(i) contract - agreement to reconvey - section 55 of contract act, 1872 - appellant transferred property to defendant as a mortgage by conditional sale - contended whether time was essential in such an agreement - held, fixed time in an agreement of reconveyance is of essence except in cases of unavoidable accident, fraud, misrepresentation etc. (ii) repudiation due to transfer - section 62 of contract act, 1872 - contended whether transfer of property by defendant was justified - held, contract cannot be repudiated because the vendee has transferred the property to another. - cantonments act[c.a. no. 41/2006]. section 346 & cantonment fund (servants rules, 1937, rules 13, 14 & 15: [h.l. gokhale, ag. cj, p.v. hardas, naresh h. patil, r.m. borde & r.m. savant, jj] jurisdiction of school.....kirty, j. 1. this appeal is directed against the decree passed by the learned additional civil judge, saharanpur, dismissing the suit filed by the appellant against the two respondents for specific performance of the contract to reconvey a house along with some land which the appellant had sold to respondent no. 1 for rs. 25,000/- by sale deed dated 12-12-1958. on that very date two other documents were executed. one was an agreement for the reconveyance of the property in question to the appellant by respondent no. i. the other document was a rent-note executed by the appellant in favour of respondent no. 1 agreeing to pay rent at the rate of rs. 250/- per month for the property in question. respondent no. 2 is a transferee from respondent no. 1. on 21-1-1959 respondent no. 1 transferred.....
Judgment:

Kirty, J.

1. This appeal is directed against the decree passed by the learned Additional Civil Judge, Saharanpur, dismissing the suit filed by the appellant against the two respondents for specific performance of the contract to reconvey a house along with some land which the appellant had sold to respondent No. 1 for Rs. 25,000/- by sale deed dated 12-12-1958. On that very date two other documents were executed. One was an agreement for the reconveyance of the property in question to the appellant by respondent No. I. The other document was a rent-note executed by the appellant in favour of respondent No. 1 agreeing to pay rent at the rate of Rs. 250/- per month for the property in question. Respondent No. 2 is a transferee from respondent No. 1. On 21-1-1959 respondent No. 1 transferred the property which he had purchased from the appellant for the same consideration of Rs. 25,000/-. In the plaint the appellant prayed that a decree for specific performance of the agreement to reconvey be passed either against defendant No. 1, i.e. the present respondent No. 1, or against the two defendants or against any one of them who may be found by the court to be liable to perform the contract The suit was contested by defendant No. 2 only. Defendant No. 1, namely, Piarey Lal alias Budh Sain does not appear to have entered appearance. No written statement was filed by him. The trial Court, on the pleadings of the parties, framed in all eight issues. Issues numbered 1, 2 and 3 related to a question which had arisen as to whether the transfer in favour of defendant No. 1 by the plaintiff made on 12-12-1958 was a mortgage by conditional sale or it was an out and out sale. Here it may be mentioned that in the plaint the plaintiff had set up an alternative case that the transaction was a mortgage by conditional sale, and he had also sought an alternative relief by way of redemption. The suit was decided by the trial Court against the plaintiff and the relief for redemption was also refused. The learned Counsel for the appellant rightly conceded that the plea that the transaction was a mortgage by conditional sale was not tenable. Similarly issue No. 6 was also an issue dealing with a question incidental to the main question whether the transaction was a mortgage by conditional sale. The remaining issues are as follows:--

(3) Whether defendant No. 2 is bound by the agreement dated 12-12-1958 between the plaintiff and defendant No. 1 as alleged in para 19 of the plaint? If so, its effect?

(5) Whether defendants Nos. 1 and 2 are to re-sell the property in favour of the plaintiff? If so, on payment of what amount?

(7) Plaintiff's relief, if any?

(8) Whether the suit is barred by time? These issues were also answered against the plaintiff and it was held that the plaintiff had no right to any of the reliefs claimed by him. The suit was, therefore, dismissed in toto.

2. As has already been mentioned, on 12-12-1958 three documents were executed. In this appeal we are not really concerned with the rent-note, nor are we directly concerned with the sale-deed dated 12-12-1958. The questions which directly arise and which require consideration are as follows: --

(1) Whether under the agreement dated 12-12-1958, Ext. 2, time was of the essence of the contract?

(2) Whether the subsequent sale by defendant No. 1 in favour of defendant No. 2 on 21-1-1959 had the effect of repudiating the agreement to reconvey the property to the plaintiff by defendant No. 1?

(3) Whether the suit was barred by limitation?

(4) Whether it was necessary for the plaintiff-appellant to prove that he was ready and willing to perform his part of the agreement or that he had called upon the defendants or defendant No. 1, at any rate, to re-convey the property within the stipulated period of two years?

3. Before proceeding to consider the above questions, we may mention that the trial Court has, found as a fact that the plaintiff did not within a period of two years from 12-12-1958 make any attempt nor offered to pay the amount of Rs. 25,000/- to the defendants or either of them. Here we may note that the trial Court has also recorded a finding to the effect that defendant No. 2 had never extended the period of two years mentioned in the agreement dated 12-12-1958; and another finding that defendant No. 2 is bound by the agreement dated 12-12-1958 between the plaintiff and defendant No. 1. The finding that defendant No. 2 was bound by the agreement executed by defendant No. 1 in favour of the plaintiff to reconvey the property has not been assailed before us by the learned Counsel appearing for respondent No. 2. Learned counsel for the appellant did not also directly challenge this finding, but in the course of arguments submitted that defendant No. 2 was not a privy to the said agreement and, therefore, the plaintiff had no legal right to demand performance of the agreement from defendant No. 2.

4. Sri K. C. Saxena, learned counsel for the appellant challenged the finding of the trial Court that the plaintiff had not within the stipulated period of two years offered to defendant No. 1 or defendant No. 2 to perform his part of the contract, nor tendered or offered to tender the requisite sum of Rs. 25,000/-. The material evidence on the point to which our attention was invited consists of the oral testimony of the plaintiff himself and that of Premnath Bhatia (P. W. 2) who at the relevant time, was, according to the plaintiff and the witness himself, the plaintiff's manager. Besides this oral testimony, there is only one other document on the record, namely, Ex. 6 dated 17-1-1961 which possibly may have some bearing on the matter. Ex. 6 is the reply given on behalf of defendant No. 2 to a notice dated 4-1-1961 which the plaintiff had given to defendant No. 2. The plaintiff did not summon the original notice dated 4-1-1961 from defendant No. 2 nor did he produce any copy thereof as secondary evidence. Therefore, we do not know what allegations had, in fact, been made in that notice dated 4-1-1961. Paragraph 3 of Ex. 6, however, suggests that in the notice dated 4-1-1961 an allegation was made that prior to the giving of the notice either the plaintiff himself or some other person on his behalf had approached defendant No. 2 with the demand for the reconveyance of the property on payment of Rs. 25,000/-. The said paragraph 3 reads:

'That it is denied that you or any person on your behalf ever approached or visited my client or that my client ever held out any promise to resell the property to you. The allegations made in the not ice in this respect are totally baseless and false.' It is, clear therefore, that even if there was some allegation in the notice dated 4-1-1961 about the plaintiff or his agent approaching defendant No. 2, that allegation was categorically denied. In the plaint it was avered (vide paragraph 22) that towards the end of November, 1960, the plaintiff had sent his representative to defendant No. 2 for the purpose of getting the property reconvcyed on payment of the requisite sum, but defendant No. 2 said that he would have no time in December, and that the plaintiff's representative should come in January with the requisite sum and that then the deed of re-conveyance would be executed with the concurrence and assistance of defendant No. 1. It was also alleged in the plaint that defendant No. 2 had assured the plaintiff's representative that no question of limitation would really arise. It was further alleged in the plaint (vide paragraph 23) that on such assurance being given by defendant No. 2, the plaintiff's representative went to defendant No. 1 in the beginning of December, I960 and intimated the said defendant about the allegations contained in paragraph 19 of the plaint and also about his visit to defendant No. 2. Defendant No; 1, it was alleged in the plaint, assured the plaintiff's representative that there was nothing to worry about and that the property would be re-conveyed and that there would be no question of limitation. It was also alleged in the plaint that defendant No. 1 asked the plaintiff's representative to come to him before going to defendant No. 2 again, as asked by the latter, in the month of January for obtaining the deed of re-conveyance, and that defendant No. 1 would also accompany the plaintiff's representative and get the necessary deed of re-conveyance executed. In evidence however, a departure was made by the plaintiff himself as also by his manager. The court below pointed out that there was substantial variation between the oral testimony of the plaintiff's witnesses and the averments made in the plaint. This was stated to be one of the reasons for not treating the plaintiff's witnesses as reliable. After hearing the learned counsel for the parties and after considering the relevant portions of the evidence of the plaintiff's witnesses, we are in full agreement with the view taken by the trial Court. There is also some inherent improbability in the version given by the plaintiff as regards sending his manager to defendant No. 2 in November and to defendant No. 1 in December 1960. Had it been a fact that the said Manager had visited defendant No. 1 and defendant No. 2 both and they had given certain assurances in regard to the execution of the deed of reconveyance, there appears to exist no reason why the plaintiff did not either go personally to the defendants or, at any rate, send his manager to them in January along with the requisite money for getting the deed of re-conveyance executed. In their depositions the plaintiff's witnesses have made no mention of any such visit in the month of January to either of the defendants. On the contrary, it seems that on 4-1-61 a notice was given by the plaintiff to both the defendants. The giving of the notice itself without making a second visit to the defendants suggests that the version given by the plaintiff about sending his manager to defendant No. 2 in November, 1960 and to defendant No. 1 in December, 1960 is not true. The finding given by the trial Court that prior to sending the notice dated 4-1-1961 the plaintiff did not approach either of the defendants for getting the deed of re-conveyance executed on payment of the requisite sum must therefore be affirmed.

5. Sri K. C. Saxena, however, urged that the aforesaid finding could not in any way affect the legal rights of the plaintiff under the agreement of re-conveyance dated 12-12-1958. It was contended firstly, that the time was not of the essence of the contract and secondly, that even though in that agreement, a period of two years was mentioned that did not necessarily mean that after the expiry of the said period, the plaintiff ceased to have any right to get the property re-conveyed. In support of this contention the learned counsel placed reliance on a number of reported decisions. Before considering these decisions we may here mention another argument of the learned counsel in this connection. It was submitted that admittedly defendant No. 1 had sold the house to defendant No. 2 by a sale deed dated 21-1-1959. This second sale deed is on the record, of which the paper No. is 19-C. It was contended that this act of selling the property in question by defendant No. 1 to defendant No. 2 by itself constituted in law an act of repudiation of the agreement to re-convey the property and that, therefore, it was not legally necessary for the plaintiff to offer payment of Rupees 25,000/- to defendant No. 1 in order to obtain the deed of re-conveyance, nor was it necessary for him to make a demand from either of the defendants for getting the necessary deed of re-conveyance executed, he shall deal with these arguments after we have dealt with the first question, namely, whether time was of the essence of the contract

6. The learned counsel besides placing reliance on some reported decisions, which we shall presently consider, also relied on the provisions of Section 55 of the Contract Act. It is true that ordinarily time may not be of the essence of the contract in an agreement to sell immovable property, but there is no law, to our knowledge, which provides that in no case shall time be of the essence of the contract to sell immovable property, even though in the agreement itself a definite time is fixed. Apart from that, there appears to exist some fundamental difference between an agreement to sell property and an agreement to re-convey a property sold. In a sense, it is true that they are both agreements; but as has been pointed out in a number of cases and by the Supreme Court itself in K. Simrathmull v. Nanjalingiah Gowder : AIR1963SC1182 a contract to re-convey is in reality a concession made by the vendee to the vendor. In some cases it has been described to be in the nature of a privilege. The Supreme Court quoted with approval a passage from Halsbury's Laws of England which we may ourselves profitably reproduce:--

'Where under a contract, conveyance, or will a beneficial right is to arise upon the performance by the beneficiary of some act in a stated manner or at a stated time, the act must be performed accordingly .........'.

The Supreme Court further affrmed the majority view of the Federal Court in Shanmugam Pillai v. Annalakshmi Animal, AIR 1950 FC 38, where it was held that if an option under an agreement is reserved to a vendor for repurchasing the property sold by him, the option is in the nature of a concession or privilege and may be exercised on strict fulfilment of the conditions, on the fulfilment of which it is made exercisable; and that if the original vendor fails to act punctually according to the terms of the contract, the right to repurchase will be lost and cannot be specifically enforced. In view of the clear enuunciation of the legal principles applicable to agreements to re-convey property, including immovable property, it seems hardly necessary to refer to or discuss other cases which do not directly deal with the question. Even so, we consider it desirable to refer to certain cases on which reliance was placed by Sri Saxena. Before, adverting to the said cases we may, however, refer to a Division Bench decision of this Court in Roshan v. Mahabir Prasad, (1951) 6 DLR 176 (All), in which also this Court considered the legal incidents of and the rights of the original vendor under an agreement to reconvey a property. The trial Court has relied on this decision. In our view, this case also fully supports the contention of the contesting defendant that time was of the essence of the contract and that the right which the plaintiff possessed under the agreement was in the nature of a concession or privilege. Of the cases cited by Sri Saxena on the question, the one which deserves particular mention is Gamathinaya-gam v. Palaniswami Nadar : [1967]1SCR227 . This case did not relate to an agreement of reconveyance. It appears that in that case appellants 1 and 2 had agreed to sell some land to the plaintiff-respondent. Originally no time was fixed for the completion of the sale. Subsequently, however, appellants 1 and 2, to whom some payments were made by the plaintiff-respondent in advance, agreed in writing stipulating that the sale deed will be executed on or before April 15, 1959. Thereafter some controversy arose between appellants 1 and 2 and the plaintiff-respondent. The sale deed was not executed within the stipulated time. Appellants 1 and 2 then filed a suit for specific performance of the contract. One of the pleas taken in defence was that time was of the essence of the contract and that since the plaintiff himself had failed to obtain a sale deed within the stipulated time he was not entitled to any relief. Therefore, one of the questions which arose for consideration was whether time was of the essence of the contract In dealing with this question, the Supreme Court referred to Section 55 of the Contract Act and observed as follows (vide para 4):

'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 on or before the contract. Specific performance of a contract will ordinarily be granted, notwithstanding default in carrying out contract within the specified period, if having regard to the express stipulation of the parties, nature of the property and the surrounding circumstances, it is not inequitable to grant the relief. If the contract relates to sale of immoveable 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.'

The aforesaid observations made with reference to an agreement to sell immoveable property and in the circumstances mentioned in the judgment cannot be aptly applied to a case of agreement to re-convey immoveable property where the parties to the agreement themselves have fixed a definite period. The reasons why the two agreements cannot be equated or placed on a parity have been mentioned in some English cases to which reference has been made in K. Simrathmull's case : AIR1963SC1182 (supra) and Roshan's case, (1951) 6 DLR 176 (All) (supra). In the case of a contract simpliciter to sell a property, the owner of the property agreeing to sell normally possesses an absolute and perfect title to the property and he agrees to convey or pass on that title to the premises. In the case of an agreement to re-convey, however, the original vendee acquires under the original sale deed from the original vendor a precarious title, in the sense that by agreeing to re-convey the same he undertakes a risk and uncertainty of acquiring an absolute and indefeasible title. It would, therefore, be inequitable under such circumstances to hold that even though in the agreement of re-conveyance a definite time is fixed that time Would not be of the essence of the contract. Nor in our opinion in such a case the court of equity, except in cases of unavoidable accident, fraud, misrepresentation etc., will give any equitable relief to the plaintiff, if it is established that he failed to strictly abide by the specific conditions subject to which the agreement of re-conveyance was executed. Sri Saxena also relied on Caltex (India) Ltd. v. Bhagwan Devi Marodia : [1969]2SCR236 and Satya Narayan v. Yelloji Rao : [1965]2SCR221 . The first case related to a lease which contained a term for renewal for a further period at the option of the lessee. It was held that the optional right given to the lessee was a privilege which could be exercised only upon a strict fulfilment of the conditions subject to which such privilege could be enjoyed by him. Such a person was not entitled to claim any equitable relief if he failed to act in accordance with the material conditions. This case far from supporting the appellant supports in our opinion, the contentions of the contesting respondent. In paragraph 6 of the judgment, it was indeed held:

'In the present case, the lease fixes a time within which the application for renewal is to be made. The time so fixed is of the essence of the bargain. The tenant loses his right unless he makes the application within the stipulated time. Equity will not relieve the tenant from the consequences of his own neglect which could be avoided with reasonable diligence.'

7. In Satyanarayana's case : [1965]2SCR221 the main question of law for decision was whether mere delay on the part of the plaintiff to institute a suit for specific performance of a contract for sale of immoveable property would be sufficient to disentitle him to the grant of an equitable relief under Section 22 of the Specific Relief Act, 1877, even though the suit was instituted within the period of limitation prescribed by Article 113 of the Limitation Act, 1908. It was answered in the negative. With respect, we may say that it was very aptly observed by the learned Judges:

'If the suit is within time, the delay is sanctioned by law; if it is beyond time, the suit will be dismissed as barred by time; in either case, no question of equity arises.' This question does not really arise in the instant case. The other question was whether on the facts and in the circumstances of the case, the plaintiff whose suit was within limitation should in equity be granted the relief sought. The Supreme Court was satisfied that except for some delay there were no circumstances which should induce a court to refuse in its discretion to give a relief of specific performance. In our opinion, no question of exercise of discretion arises here since the plaintiff had ceased to possess any subsisting right.

8. We, therefore, hold that time was of the essence of the contract and that the plaintiff having failed to perform his part under the contract within the stipulated time had no legal right to get the property reconveyed or to get a decree for a specific performance in that behalf.

9. As already pointed out, Sri Saxena realising the difficulty in the way of the appellant advanced an argument that in the instant case admittedly the property was sold by defendant No. 1 to defendant No. 2 on 21-1-1959; and that this act on the part of defendant No. 1 constituted a clear repudiation of the contract of re-conveyance. Therefore, according to the learned counsel, the plaintiff was relieved from the obligation to perform his part of the contract within the stipulated period, but he thereby did not lose his rights under the agreement. Repudiation of a contract may be express it may also be implied; and it can be inferred from material facts and circumstances as to whether there has or has not been a repudiation of the contract. The mere fact that a vendee has agreed to re-convey the property to the original vendor within a certain time does not legally prevent him from transferring the property. It is true that under the sale from the vendor he has acquired a precarious title which may be defeated at the instance of the vendor provided the vendor fulfills certain terms and conditions agreed to by the parties. If a person is, ready and willing, with full notice of such agreement to re-convey the property, to purchase the property in question and to acquire such title and interest in the property as the original vendee was capable of transferring, it cannot be said that he enters into a transaction which is illegal or void. If he steps into the shoes of the original vendee then whatever rights or remedies the original vendor had against the original vendee would be available as against the subsequent transferee also. This would be so because from the admitted OB established facts and material circumstances it can be inferred, in the absence of any express contract to that effect, that necessarily there was an implied contract by the subsequent transferee to abide by or to carry out the obligation of his vendor under the agreement of re-conveyance which the latter had executed in favour of the person from whom he had himself purchased the property. In the instant case in the sale deed dated 21-1-1959 (paper No. 19-C) it is clearly recited that defendant No. 1 had purchased the property from the plaintiff under a sale deed dated 12-12-1958 and had on that very date executed a separate agreement to reconvey the same to the plaintiff on certain terms and conditions. Clearly, therefore, defendant No. 2 had voluntarily purchased the property with the full knowledge of the agreement and the obligations of defendant No. 1 under the agreement. The sale deed dated 21-1-1959 itself provides as follows:--

'ab mushtari is jaidad movaiya ka meri tareh malik kamil swami wa adhikari ho gaya hai aur jo iqrarnama mazkoora bala morkha 12 December san 1958 iswi main ne bahak Diwan Man Mohan Lal mazkoor tahreer kar diya huwa hai. Is iqrarnama ki sharayat ku mushtari paband rahe ga.'

Thus defendant No. 2 not only had express notice of the agreement to re-convey the property but expressly undertook to be bound down by the same. It thus appears, to us that here it is not a case of any repudiation of the agreement by defendant No. 1. On the contrary defendant No. 1 sold the property subject to that very agreement itself. The question whether there has or has not been a repudiation of a contract is not a pure question of law. It may not be a pure question of fact either. But it would, at any rate, be a mixed question of fact and law. In our opinion, in the instant case, there was no repudiation of the agreement executed in plaintiff's favour by defendant No. 1 nor had the latter by selling the property to defendant No. 2 rendered the re-conveyance of the property to the plaintiff an impossibility. Further we may also mention that in the plaint Itself it was alleged by the plaintiff that when his representative visited defendant No. 2 he did not refuse to abide by the agreement nor did defendant No. 1 do so when such representative visited him in December, 1960. On the contrary, according to the plaint averment, defendant No. 1 assured plaintiffs representative that the plaintiff need not worry about limitation, that in January plaintiff's representative should come to him so that he may also accompany the representative during his visit to defendant No. 2 and that defendant No. 1 would get the necessary deed executed. Thus it would appear that in the plaint itself there was no averment in regard to repudiation of the contract within a period of two years. Although we have held that certain averments in the plaint are not true, even so those averments go to show that the plaintiff did not allege that there was any repudiation of the contract which relieved him of the obligation to perform his part of the contract

10. The learned counsel on the question of repudiation placed strong reliance on a Division Bench decision of the Madras High Court in Kincha Ramakrishnayya v. Kondamudi Sreeramulu AIR 1939 Mad 547. In that case there was an agreement under which some property was agreed to be sold by the plaintiff to the defendants for a certain sum. At the time of the agreement the property was in the possession and enjoyment of a lessee and it was stipulated that possession would be given to the vendee on the expiry of the term of that lease. The sale transaction was not completed for about a year. Meanwhile, it seems, the plaintiff on the expiry of the earlier lease executed a fresh lease. Ultimately the defendants refused to purchase the property. The plaintiff then filed a suit for specific performance of the contract under which the defendants had agreed to purchase the property. One of the points raised by way of defence was that the plaintiff by executing a lease had repudiated the agreement and the defendants, therefore, were no longer bound by the agreement nor could the agreement be specifically enforced against them. The learned Judge of the Madras High Court held that there had been no repudiation or abandonment of the contract by the plaintiff, nor did he commit any breach of the terms therefor or do anything in consequence of which he must necessarily be held to have incapacitated himself from discharging his obligation under the contract. The decree of the trial Court was set aside and the case was remanded for trial on certain other issues on merits. In view of the finding given in that case that there was no repudiation or abandonment of the contract we do not consider it necessary to refer to certain other observations made by the learned Judges. This case certainly is not an authority for the proposition that merely because defendant No. 1 in the instant case had sold the house to defendant No. 2 there came about a repudiation or abandonment of the contract. We had already mentioned that to our mind such a question is not a pure question of law. It has to be decided in every case, having regard to the facts and circumstances of that case, whether there was or was not any such repudiation of the contract as would relieve a party to a contract from performing acts which the contract itself requires him to do. The learned counsel also relied on two Supreme Court decisions in this connection. They are International Contractors Ltd. v. Prasanta Kumar Sur : [1961]3SCR579 and Durga Prasad v. Deep Chand : [1954]1SCR360 . In the first case it was held that in a case of a sale with an agreement to re-convey, if the Vendor makes an offer to repurchase and the purchaser repudiates the agreement of reconveyance, formal tender of price by the vendor is not necessary. On 4th February, 1941, some property was sold by the respondent to the appellant. On 10th February, 1941 there was an agreement between title parties for reconveyance within a period ending February 10, 1943. On 26th February, 1942 the respondent's Solicitor conveyed to the appellant that the respondent was ready and willing to have the purchase completed as early as possible on payment of the requisite amount Along with this letter a draft conveyance was sent for appellant's approval. Thereafter some more letters appear to have been written. On 18th December, however, the appellant's Solicitor sent a letter stating therein that their client, viz. the appellant, denied that there was any concluded or valid agreement for sale with the respondent or with any other person. By this letter no doubt the contract was expressly repudiated. It was in that situation that the Supreme Court held that it was not necessary for the respondent thereafter to actually tender the requisite amount. This case, therefore, cannot afford any guidance for the decision of the points arising in instant appeal, nor in this case has any such legal principle been laid down as can be applied to the instant case. In the second case, namely : [1954]1SCR360 , the Supreme Court in reality (in paragraph 40 of the judgment) was considering the form of the decree which should be passed in a suit for specific performance of a contract for sale where prior to the institution of the suit the property was sold by the original purchaser to another person. In considering this matter, the Supreme Court made certain observations of which benefit is sought to be taken on appellant's behalf by his learned counsel. Learned counsel referred to in particular, paragraph 40 of the judgment. We have carefully read that paragraph but we do not see therein anything from which it can be spelled out that in a case where the original purchaser has sold the property to another person he necessarily has rendered himself completely incapable of performing his obligation under the agreement. In some cases, as in the instant case, there may be a specific agreement between the subsequent purchaser and the original purchaser regarding conveyance of the property in pursuance of the original agreement of reconveyance entered into between the original vendor and the original purchaser. The Supreme Court in fact pointed out what would be the proper form of the decree in a case where the original purchaser who had agreed to reconvey the property has sold it to another purchaser.

11. The learned counsel also referred to passage from Anson's Law of Contract (22nd Edition occurring at page 441 and 442). The passage reads:

'If one party, by his own acts or default, makes further commercial performance of the contract impossible, he will be considered impliedly to have repudiated the contract, even though he has not, by words or conduct renounced his intention to fulfil it. Here also the impossibility may be created either before performance is due or in the course of performance.'

The quoted passage does not advance the case of the appellant any further than the rulings on which reliance has been placed by his counsel and which we have already noted earlier. However, in our view, the question does not really arise because we have held that neither in fact nor in law there was any repudiation or denouncement of the agreement by defendant No. 1 nor had he done anything which could have the legal result of causing a repudiation of the contract because its performance was rendered an impossibility.

12. The suit was instituted on 20-1-1962 at a time when Specific Relief Act, 1877 was in force. Section 27 of that Act provided that subject to certain exceptions (with which we are not concerned in this case) specific performance of a contract may be enforced against either party thereto; and any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who had paid his money in good faith and without notice of the original contract. In view of the statutory provisions contained in Section 27 above, it cannot be legally contended, as was sought to be done by Sri Saxena, that the plaintiff had no right to enforce the contract against defendant No. 2. Defendant No. 2, as already mentioned, never repudiated the agreement nor claimed to be a bona fide transferee for value without notice. He was certainly a transferee for value but he at the same time was a transferee who had purchased with full notice and knowledge of the agreement in question. In fact he undertook to abide by that agreement. The contention, therefore, that the plaintiff had no right to get the contract performed by defendant No. 2 because there was no privity or mutuality between the plaintiff and defendant No. 2 must be repelled. There is little room for doubt that under certain circumstances a person can enforce an agreement by which or under which he has acquired certain beneficial rights or interest even though he was not a party to the contract itself. It is only in cases where a person had undertaken to perform a personal covenant, which cannot be performed by his successor or representative, that it can be said that specific performance of the contract can be enforced, if at all, against the original contracting party only and not against any other person. That question does not arise in the instant case. Here the agreement was for the reconveyance of the property, the performance of which did not require any personal skill or personal qualification. If the sale deed could be executed by defendant No. 1, equally with his concurrence, the sale deed could be executed by defendant No. 2, to which transaction defendant No. 1 could be made to join, if necessary. Further the contract itself did not prohibit the plaintiff as a promisee from accepting performance from a third party.

13. The trial Court held that Article 113 of the Limitation Act, 1908, was not applicable. Without mentioning which other Article of the Limitation Act would cover the case the learned Judge, however, held that the plaintiff did not get the property retransferred and his right to obtain retransfer had come to an end and that the suit was barred by time. In holding that the suit was barred by time the learned Judge, to our mind, committed a clear error. He, it appears, mixed up the question of limitation with the question of accrual or survival of cause of action entitling the plaintiff to sue for a decree for the specific performance of the contract. In so far as the accrual of cause of action is concerned we have already indicated above that the plaintiff did not within the period of two years call upon the defendants to reconvey the property nor did he offer to pay the requisite sum of Rs. 25,000/-. We, therefore, agree with the finding of the court below that the plaintiff's right to seek specific performance had come to an end. The suit was bound to fail for want of a subsisting cause of action. The suit was liable to be dismissed on that ground and not on the ground that it was barred by limitation. Article 113 of the Limitation Act, 1908 prescribed a period of three years for a suit for specific performance of a contract. The period of three years was to be computed from the date fixed for the performance or if no such date was fixed when the plaintiff had notice that performance was refused. Here the period fixed under the agreement was upto 12-12-1960. Therefore, the suit could have been filed within three years from that date. Since the date for performance was fixed under the agreement, the second part which related to cases where no date was fixed could not apply. The suit was instituted on 20-1-1962 and was not barred by Article 113. No other Article of the Limitation Act, 1908 was attracted and the court below was wrong in holding that Article 113 did not apply.

14. For the reasons stated above the appeal fails and is dismissed. But having regard to all the circumstances of the case we direct the parties to bear their own costs.


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