In a contract of reconveyance of immovable property, time is generally considered to be of the essence of the contract, and the right to repurchase must be exercised strictly according to the terms of the agreement.

Headnote:
SPECIFIC PERFORMANCE - RECONVEYANCE - TIME OF THE ESSENCE - SALE WITH OPTION TO REPURCHASE - DISTINCTION - READINESS AND WILLINGNESS TO PERFORM - TRANSFER OF PROPERTY ACT, SECTION 58(C) - INTERPRETATION.
Fact of the Case:

Plaintiffs, the original owners of a field, executed a sale deed in favor of the defendant for Rs. 9,000/-. Simultaneously, the defendant executed an agreement of reconveyance, entitling the plaintiffs to repurchase the field within five years on payment of the consideration plus interest at 1.5% per month. The plaintiffs claimed specific performance of the reconveyance agreement, alleging that the defendant was guilty of breach of contract and seeking damages for the year 1962-63 during which the defendant was not entitled to remove fruits from the garden. The defendant contended that time was of the essence of the contract and the plaintiffs failed to obtain reconveyance on or before the stipulated date.
Finding of the Court:

The trial court held that time was not of the essence of the reconveyance agreement and decreed specific performance, directing the plaintiffs to deposit Rs. 17,100/- in court for payment to the defendant. Both parties filed appeals challenging the trial court's decision.
Issues: 1. Whether time was of the essence of the contract of reconveyance. 2. Whether the plaintiffs were entitled to specific performance of the reconveyance agreement. 3. Whether the plaintiffs were entitled to damages for breach of contract.
Ratio Decidendi: 1. The court distinguished between a contract of sale of immovable property and a contract of resale or reconveyance of immovable property. In the case of a reconveyance agreement, time is generally considered to be of the essence of the contract, and the right to repurchase must be exercised strictly according to the terms of the agreement. 2. The court relied on precedents holding that where an option to repurchase is reserved in a sale agreement, the option is in the nature of a concession or privilege and must be exercised strictly within the stipulated conditions. Failure to act punctually according to the terms of the contract results in the loss of the right to repurchase, and specific performance cannot be enforced. 3. The court found that the plaintiffs failed to prove that they were ready and willing to perform their part of the contract within the stipulated time. The plaintiffs' contention that the transaction was in the nature of a mortgage was not tenable in light of the provisions of Section 58(c) of the Transfer of Property Act, which bars an inquiry into whether a sale with a stipulation for retransfer is a mortgage when the stipulation is not embodied in the same document.
Final Decision: The defendant's appeal was allowed, and the plaintiffs' appeal was dismissed. The trial court's decree for specific performance was set aside, and the plaintiffs' suit was dismissed with costs throughout.

JUDGMENT - Chandurkar, J.

1. These two cross-appeals, one filed by the defendnat and the other filed by the plaintiffs arise out of a decree passed by the Civil Judge. Senior Divisons. Wardha decreeing the calim for specific performance of a contract of resale and directing the plaintiffs to deposit in Court Rs. 9,000/- plus Rs. 8,100/- on account of interest for payment to the defendnat within six months fromt he date of the decree. Admittedly the plaintiffs were the owners of filed khasra No. 96 area 6.95 acares in Bhumiswami rights situated at Jawoorwada. Tahsil Arvi. District Wardha. On 7.3.1957 the plaintiff executed a sale deed for a consideration of Rs. 9,000/- in respect of this field in favour of the defendant. The filed was already in possession of the defendant under a registed leas edeeed dated 5.6.1952 by which the right to pluck and remove the fruit from the garden or orange musambi, lemon and guava trees in the filed was transferred to the to the defendant for a period of five years from 1952-53 to 1956-57 foir a consideration of Rs. 7,000/-. The defendant was also entitled to pluck and remove the pails fromt eh said garden for the period 1957-58 to 1960-61 by naother agreement of the same date. On the date on which the sale deed was executed by the plaintiffs. The defendant also executed an agreement of reconveyance by which the plainitffs were entitled to obtain reconveyance of the said property on payment of the consideration of Rs. 9,000/- plus interest at 1 1/2 per cent. per month within five years from the date of the agreement. The agreement of reconveyance. According to the plaintiffs, they had offered to execute a mortgage by conditional sale or a usufructuary mortgage as they were already indebted to the defendant and they were in need of additional funds and though the defendant had agreed to take a mortgage by conditional sale or a usufructuary mortgaged, he insisted that the transaction though a mortgage, should be givne the shape of a sale with the condition of repurchase. According to the plaintiffs, they were entitled to get a resale after taking accounts of the income made by the defendant from the garden, but having found that the defendant dishonestly wanted to take advantage of the sale and the kararnama the plaintiffs even offered to pay the entire amount as stated in the kararnama in the first week of Mrach 1962. They had given a notice to the defendnat calling upon him to rener accounts but according to the plaintiffs, the defendant refused to abide by the real transaction or by the transaction as shown in the aforesaid sale deed and kararnama. The plaintiffs, therefore alleged int heri plaint that the defendant was guilty of breach of contract and they, therefore, claimed Rs. 6,000/- as damages for the year 1962-63 during which period the defendant was not entitled to remove the fruit from the garden. The plainitffs, therefore, claimed that the defendant be directed to execute a sale ded of field khasra No. 96 on receipt of the amount stated in the Kararnama dated 7.3.1957, or such amount as may be determined by the Court and place the plaintiffs in possession thereof and further to pay theplaintiffs Rs. 6,000/- on account of mesne profits as claimed.

2. In his written statement, the defendant pleaded that the previous transactions between on the parties were not relevant to the claim for specific performance of the contract of resale and for damages. According to him,t ime was of the essence of the contract of repurchase, and since the plaintiffs fialed to onbtain a reconveyance of the filed on or before 7.3.1962, the plaintiffs were not entitled to any relief. it was denied that the plaintiffs wanted to makje any payment as stipulated in the kararname. the defendnat denied that he was liable for damages for breach of contract and accoridng to him he was in possession of the field as onwer there of and that he was always ready and willing to abide by th terms of the kararnama. The defendnt

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