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Ramdayal and ors. Vs. Purshottam Pannalal - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtMadhya Pradesh High Court
Decided On
Case NumberSecond Appeal No. 71 of 1955
Judge
Reported inAIR1959MP42
ActsLimitation Act, 1908 - Schedule - Article 115; Contract Act, 1872 - Sections 55
AppellantRamdayal and ors.
RespondentPurshottam Pannalal
Appellant AdvocateShiv Dayal, Adv.
Respondent AdvocateDikshit, Adv.
DispositionAppeal dismissed
Excerpt:
- - 1500/- in favour of the plaintiff-respondent agreeing to sell a piece of his landed property to him, within a period of 4 months, and on failure to repay the sum of rs. if it failed (as it actually did) for want of the permission, the terminus a quo for limitation is the date of the failure of the agreement. all this shows clearly that the four months mentioned in the agreement was not an essential term, but only the parties' pre-estimate of the duration of the permission proceedings......of the agreement.5. it goes without saying, that in the event of time being of the essence of the contract, limitation starts on the expiry of the period mentioned in the agreement. whether in a particular case time is of the essence of the contract, is almost always a question of fact, to be gathered from all the cir-cumstances including the recitals. if the recitals are specifically to the effect that the contract should be performed or the money refunded on a particular date, whether or not the proceedings for permission are still pending, one can find that time was of the essence of the contract.if the proceedings were pending, still the intending purchaser can claim his money at the end of the specified period, on the strength of such recital. on the other hand where as in this.....
Judgment:

H.R. Krishnan, J.

1. In this second appeal by the defendants from the concurrent judgments of the lower courts, the only material point at this stage is one on the law of limitation, which can be stated thus: There is a contract for the sale of property within a period specified in the agreement, with simultaneous payment of the price by the intending purchaser. Both parties are aware that the sale cannot take place legally, unless a particular authority sanctions it. Accordingly, at the instance of the intending purchaser the intending vendor applies for the permission immediately after the execution of the contract.

The proceedings for permission are disposed of long after the term mentioned in the agreement and the order is one refusing it. In a suit for the recovery of the price by the would-be purchaser, does limitation start from the date of the order refusing the permission, or the earlier date on which ended the term mentioned in the agreement? In other words, is time of the essence of the contract for sale, when it cannot take place till an authority beyond the control of the vendor has, to the knowledge of the purchaser, to approach for the permission to sell?

2. The relevant facts of the case are the following. On 4-3-1941 the uncle, predecessor-in-interest of the defendant-appellant, executed a bond for Rs. 1500/- in favour of the plaintiff-respondent agreeing to sell a piece of his landed property to him, within a period of 4 months, and on failure to repay the sum of Rs. 1500/- with interest at 1 per cent, per month. On the same date an application was made on behalf of the vendor to the Subha of the district in which the property was situate for permission to sell.

The Suba started proceedings on it; but they did not terminate within the 4 months period, and were actually disposed of on 8-12-1942 by an order refusing permission. The plaintiff filed the suit claiming repayment of Rs. 1500/- with interest, on 7-9-48 that is to say within 6 years (which was the limitation for suit of this nature under the Gwalior Limitation Act) from the date of the Suba's order, but longer than that period after 4-7-1941 which was the end of the four months period.

3. It may be noted that the original borrower having died his heirs Were sued, they being the very persons who contested the permission proceeding before the Suba on the ground of their being the pre-emptors. They admitted the liability of their uncle's property in their hands for the debts incurred by him in his life time. But they alleged that there has been no consideration; which however, has been rejected by both the lower courts, and need not be examined again here.

4. On law, the defence is that time was of the essence of the agreement, and that the refund fell due on 4-7-1941, whether or not the proceedings for permission were still pending. The plaintiff's stand on the contrary was that the period of 4 months mentioned in the agreement to sell was not of the essence of the contract, it being the intention of the parties that the agreement be performed, if and when it became legally performable. If it failed (as it actually did) for want of the permission, the terminus a quo for limitation is the date of the failure of the agreement.

5. It goes without saying, that in the event of time being of the essence of the contract, limitation starts on the expiry of the period mentioned in the agreement. Whether in a particular case time is of the essence of the contract, is almost always a question of fact, to be gathered from all the cir-cumstances including the recitals. If the recitals are specifically to the effect that the contract should be performed or the money refunded on a particular date, whether or not the proceedings for permission are still pending, one can find that time was of the essence of the contract.

If the proceedings were pending, still the intending purchaser can claim his money at the end of the specified period, on the strength of such recital. On the other hand where as in this particular case, there is no such recital we have to find out whether the parties intended that they should wait till the permission proceedings were disposed of or whether they intended that the agreement should be cancelled if the proceedings were still pending at the end of the four months. Here the parties not only knew that the Suba's permission was necessary but also agreed that proceedings should be started immediately after the execution of the agreement.

For reasons beyond their control the permission proceedings went on till December 1942. Nor was there any attempt on the part of either party to cancel the agreement at the end of 4 months period. All this shows clearly that the four months mentioned in the agreement was not an essential term, but only the parties' pre-estimate of the duration of the permission proceedings. This time was not of the essence of the agreement.

6. Thus it is clear that limitation began from 8-12-1942 and not from 4-7-1941. The suit was, therefore, in time. There is no other point properly arising for consideration in this second appeal. The appeal is accordingly dismissed with costs and pleader's fee to the plaintiff-respondent calculated on minimum contested scale.


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