An option to repurchase reserved to the vendor under his conveyance can be validly assigned, and the provisions of Section 23 of the Specific Relief Act apply to contracts of repurchase.

S. RAMACHANDRA IYER, C. J. :- The short point for determination in this appeal is whether an option to re-purchase reserved to the vendor under his conveyance can be validly assigned. Govindammal, the original owner of the property which forms the subject-matter of this litigation, executed a sale of it on 04-04-1953 in favour of the appellant for a sum of Rupees 12000. Three days later and as a part of the same transaction, the latter executed in favour of the vendor an agreement to reconvey the property for the same consideration if it were paid within a period of five years therefrom. It is not disputed that the agreement should be construed as conferring on the vendor an option to repurchase the property and that it is not an independent agreement for sale.

2. On 05-04-1958, Govindammal assigned her lights under the above agreement to the respondent for a consideration of Rs. 23000 a pail of which viz. Rs. 12,000 being reserved with him for payment to the appellant to obtain the property back. The respondent then called upon the appellant to receive the money and execute a reconveyance of the property. The appellant did not respond to the respondent's request for retransfer. A suit claiming specific performance followed. The main defence to the action was, and that is the only point urged in this appeal that the benefit of option to repurchase vested in Govindammal was not assignable. The learned Subordinate Judge overruled this contention, and, finding that the respondent was ready and willing to perform his part of the contract at all material times, granted a decree for specific performance.

3. It has been argued on behalf of the appellant that a clause for reconveyance of the property contained in sale deed or in an agreement forming part of the same transaction will not amount to a covenant which will run with the land and can therefore be enforced only by the actual parties to the conveyance. Support for this contention was sought from a decision of the Allahabad High Court reported in Gobardhan v. Raghubir Singh, AIR 1930 All 101. It was held in that case that a right of repurchase created in favour of specified individuals would not be one that ran with the land, but was in the nature of a mere privilege conferred upon the individuals specified under the document. The decision in that case turned mainly on the terms of the document of sale which was construed as conferring the right personally on the vendor. Under the English Law where a contract to purchase a land creates an equitable interest therein in favour of the purchaser, a covenant giving an option to repurchase has been held to create in favour of the vendor an interest in the property. See L and S. W. Rly. Co. v. Gomm, (1882) 20 Ch 562 at p. 581. But that rule may not apply in this country. It may be that a clause in a sale deed entitling the vendor to repurchase the property does not run with the land; but, being a contract, it must be capable of being specifically enforced provided that there are no circumstances disentitling that relief and such specific performance can be enforced against subsequent purchasers of the property with notice. If the clause of repurchase is continued in the document of conveyance itself or if it is even contained in a separate registered document, any subsequent purchaser of the property can be deemed to have had notice of that agreement and would be bound to a decree for specific performance.

Section 23 of the Specific Relief Act which enumerates the category of persons entitled to claim specific performance of contract does not support the extreme contention now advanced that specific performance could never be granted in favour of an assignee from one of the parties to the contract. That section says that besides the immediate parties to the contract, the representative-in-interest or the principal (if any such party was acting as his agent) can obtain specific- performance, provided (1) that the contract itself