Applicability of the provisions of Explanation 1 to Section 16 of the Act to suit based on reconveyance agreement.

The defendant in O.S.No.1229 of 1981 on the file of the District Munsif, Dindigul, is the appellant in this second appeal. The plaintiff in the said suit is the respondent in this second appeal. For the sake of convenience the parties are referred to by their nomenclature given to them in the suit.

2. The plaintiff filed the suit for specific performance of an agreement to reconvey the property described in the plaint schedule. The case of the plaintiff is as follows: "The suit properly belonged to the plaintiff and he sold the same to the defendant on 2. 1975. On the same day an agreement to reconvey the property was executed, by the defendant in favour of the plaintiff for a sum of Rs.5,000. As per the terms of the said agreement, the defendant received a sum of Rs.10 out of the sale price of Rs.5,000 and it was agreed between the parties that the balance of Rs.4,990 should be paid within a period of two years after the lapse of five years from the date of agreement for reconveyance. The plaintiff approached the defendant on two occasions in the year 1979 and requested the defendant to execute the sale deed, but, the defendant refused to execute the sale deed, stating that the period as per the agreement had not started. On 16. 1980 the plaintiff sent a notice to the defendant and was received by the defendant on 7. 1990. As the defendant failed to execute the sale deed, the plaintiff was constrained to file the above suit for specific performance.

3. The defendant resisted the suit contending as follows:

"The defendant did not know about the alleged resale agreement dated 2. 1975 and he came to know about the agreement for resale only in the third week of June, 1980. The plaintiff was never ready with money at any time to purchase the property. The plaintiff has no right to enforce the agreement for resale as the agreement itself is not a genuine one. The plaintiff has no capacity to pay the sum of ‘Rs.4990 towards the balance of the sale consideration and he was not ready and willing to perform his part of the contract of sale."

4. The trial court held that the agreement for resale is true, and the plaintiff is entitled to a decree for specific performance. Consequently the trial court decreed the suit as prayed for, As against the judgment of the trial court the defendant filed an appeal in A.S.No.41 of 1984 before the Sub Court, Dindigul. The appellate court confirmed the findings of the trial court and dismissed the appeal. Aggrieved by the judgments of the courts below the defendant has preferred the present second appeal.

5. Mr.K.V.Subramaniam, learned counsel for the defendant strenuously contended that the suit agreement is dated 2. 1975; though the suit for specific performance was filed on 17. 1980 the sale price was deposited into court by the plaintiff only on 19. 1982; Inasmuch as the plaintiff failed to deposit the sale price into court before the expiry of 7 years from 2. 1975 the plaintiff failed to fulfil the stipulations in the sale agreement, Ex.1 and therefore, the plaintiff is not entitled to a decree for specific performance of the contract. In support of his contention learned counsel relied on the decisions reported in Mangalam Pillai v. C.S.A.Udayar, A.I.R. 1976Mad. 360, Samarapuri Chettiar v. A.Sundaram Chettiar, 37 M.L.J. 109: I.L.R. 42 Mad. 802: 521.C. 530, D.Anjaneyalu v. Venkataseshaiah, A.I.R. 1987 S.C. 1641 and C.Rogaiodi v. C.Balarami Reddi, A.I.R. 1989 A.P. 179. There is no merit in the contention of the learned counsel for the defendant. The sale agreement, Ex.A-1 is da ted 2. 1975. As per the terms of Ex.A-1, the plaintiff must be ready and willing to perform his part of the agreement and take the sale deed within 7years from 2. 1975. Admittedly the suit for specific performance was filed on 17. 1980. The entire sale price was deposited before the trial court on 19. 1982. Explanation (1) to Sec.16 of the Specific Relief Act, 1963 provides that where a contract involves the pa