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Madras High Court
RAMAPRASADA RAO,RATNAVEL PANDIAN
Mangalam Pillai - Appellant
Versus
C.S.Appavoo Udayar - Respondent
Decided On : 10/24/1975
CONTRACT - SALE - RECONVEYANCE - TIME OF ESSENCE - OPTION OR PRIVILEGE - DELAY - LOSS OF RIGHT - SPECIFIC PERFORMANCE - DENIED.
Fact of the Case:
Plaintiff filed a suit for specific performance of a contract under which the first defendant purported to convey the suit property for a sum and consideration of Rs. 11,500/-. The plaintiff also sought for redelivery of possessions of the suit properties and for a direction as against the first defendant to account for the mesne profits ever since the date he was dispossessed of the properties to the date of actual re-delivery of possession. The first defendant claimed that the sale was valid and not vitiated by undue influence, coercion, or fraud. The lower court found that the sale was valid and that the plaintiff was entitled to get the conveyance of the suit properties from the defendants, as Ex. A-4 cannot be understood or interpreted as an agreement of reconveyance but only as an agreement of conveyance.
Finding of the Court:
The court held that Ex. A-4 was an agreement of reconveyance and not an agreement of sale, and that the plaintiff had lost his right to seek specific performance of the contract due to his failure to come to the portals of the court within the agreed time. The court also held that defendants 2 to 4 were bona fide purchasers for value without notice of any defect in the first defendant's title.
Issues: 1. Was the deed dated 4-1-1964 by the plaintiff in favor of the 1st defendant not an out and out sale? 2. Is the plaintiff entitled to get reconveyance of the suit properties for all or any of the reasons stated in the plaint? 3. Are the defendants 2 to 6 bona fide alienees entitled to protection? 4. Is the plaintiff entitled to rendition of accounts? 5. Is the suit barred by limitation? 6. To what relief, if any, is the plaintiff entitled?
Ratio Decidendi: 1. In cases where the subject-matter of the bargain is immovable property, time is not the essence of the contract, unless the parties have agreed that it should be. 2. However, in cases where the parties contemplate to reconvey property purchased by them and such an agreement of reconveyance is contemporaneous with the primary sale of the property, and there is a stipulation in the agreement of reconveyance that certain things have to be performed within a certain time and in accordance with certain stipulations, then such covenants including the stipulation as to time has to be respected to the last letter, and equity will not interfere and extend its arm of sympathy by varying or modifying the express stipulations conditions and covenants of such a contract of reconveyance. 3. In such cases, equity arrays itself with common law and enforces such agreements of reconveyance in accordance with its tenor and strict conditions. 4. The reason behind this leaning of equity towards the common law is that if a specific time is agreed upon under the terms of the reconveyance, within which time the parties who could claim performance of such an agreement could claim it, then he can do so only within the prescribed time. 5. The right to re-purchase is equatable to an option or a privilege granted to the vendor in the primary sale to seek for such reconveyance. 6. As privileges cannot be gained at the whim and fancy of the grantee, he should be alert and seek for its performance. 7. A prescription as to time in an agreement of reconveyance cannot be made elastic as by the end of the definite time fixed for its performance, there is an automatic lapsing of that privilege and the loss of the option in the grantee of the same.
Final Decision: The court dismissed the suit, holding that the plaintiff was not entitled to a decree for specific performance. However, each party was directed to bear their own costs in the appeal and in the lower court.
RAMAPRASADA RAO, J.:- The first to the fourth defendants in O. S. No. 298 of 1966 in the court of the Subordinate Judge of Tiruchirapalli are the appellants. The plaintiff one C.S. Appavoo Udayar filed a suit for the specific performance of a contract under which the first defendant purported to convey the suit property for a sum and consideration of Rs. 11,500/-. The plaintiff also sought for redelivery of possessions of the suit properties and for a direction as against the first defendant to account for the mesne profits ever since the date he was dispossessed of the properties to the date of actual re-delivery of possession. The relevant facts which led to the institution of the suit for specific performance on 3-10-1966 are as follows:-
Under Ex. A-1 dated 2-5-1962 the plaintiff mortgaged certain properties not covered by the suit. It was discovered that the plaintiff did not have any title to such properties. Consequent upon such a misconduct and misrepresentation on the part of the plaintiff and as the first defendant's security was in jeopardy, he gave a complaint to the police for cheating as against the plaintiff, under Section 420, Indian Penal Code. Thereafter, the parties adjusted their serious differences in and by which the plaintiff agreed to execute a sale deed over the suit properties and did execute the sale deed under Ex. A-3 dated 4-1-1964 for a sum and consideration of Rs. 10,000/-. This document was registered as document No. 259 on 21-4-1964. It may be of interest to note that consequent upon the adjustment of differences as above outside court, the Criminal Case by then laid by the first defendant as against the plaintiff was dismissed and the plaintiff was discharged on 31-12-1963. It is common ground that during the period of negotiations as above the necessary stamp papers for the sale of the suit properties by the plaintiff to the first defendant were purchased on December 22 and 31, 1963. Though the sale deed was executed on 4-1-1964 under Ex. A-3, it was registered contemporaneously with another agreement Ex. A-4 dated 8-1-1964 in and by which the first defendant agreed to sell back the suit properties within one year from the date of execution of the sale deed Ex. A-3. It is not in dispute that the plaintiff never made it appear that he was interested in the re-purchase of the property during the period of one year which was the period agreed upon for the re-conveyance of the property by the first defendant to the plaintiff. As within the period contemplated for purchase under Ex. A-4 the plaintiff did not seek for a reconveyance thereof, the first defendant sold the suit properties under Ex. A-7 dated 29-11-1965 to defendants 2 to 4, who thereafter transferred the properties in favour of the 5th and 6th defendants. The plaintiff's case as pleaded in the court below is that the sale deed Ex. A-3 is not a sale at all and if at all one it is void under Sections 23 and 16 of the Contract Act. His case is that he was coerced and compelled to execute the sale deed and he had not the necessary intent to convey title thereunder. In any event he would aver that the term of one year provided for the reconveyance of the property under Ex. A-4 is not the essence of the contract and even the terms of Ex. A-4 literally interpreted would only give the impression that it is an agreement to convey immovable property which was the subject matter of an earlier sale and not an agreement to reconvey. As in the case of contracts to convey immovable property, time is never understood as the essence of the bargain, the first defendant cannot escape the legal liability to sell the property in accordance with the terms of Ex. A-4 and that his later dealings under Ex. A-7 whereby he conveyed the property to defendants 2 to 4, who in turn transferred the same to defendants 5 to 6 are inoperative and not binding on the plaintiff. It is said that the plaintiff was dispossessed from the properties on 4-4-1966 and in
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