A vendee is entitled to refund of earnest money where the vendor is unable to give a title free from reasonable doubt, even if time was not of the essence of the contract.

G. K. MISRA, J.

( 1 ) DEFENDANTS are the appellants. Defendant 2 is the brother and authorised agent of defendant 1 Plaintiff's case is that the disputed land belongs to defendant 1. She entered into an agreement Ex. 1 with the plaintiff on 7th October 1956 to sell the disputed land for Rs. 10,000/ -. Rs. 1000/-was paid as earnest money on the date of the execution of Ex. 1. There was a stipulation that the balance consideration would be paid by 30th October 1956 at the office of the Sub- Registrar, Balasore when the sale would be completed and that the vendor shall, on completion of the sale, deliver to the purchaser an abstract of her title to the property. Possession was also to be delivered on that day. Further terms of agreement are not relevant and need not be mentioned. On the 24th October 1956 the plaintiff was served with a notice (Ex. 2) from the Collector of Balasore prohibiting it from enclosing or possessing the disputed land as it was the subject-matter of a proceeding under Section 5 (1) of the Orissa Estates Abolition Act. The number and year of the proceeding was mentioned in the notice itself. The plaintiff was not aware prior to Ex. 1 that the disputed land was the subject-matter of such an enquiry. Plaintiff therefore came to Know that defendant 1 had not been recognised as a raiyat of the disputed land by the Anchal and her title was not free from doubt. After the service of the prohibitory notice defendant 1 could not execute a valid sale deed by 30th October 1956, as stipulated, and requested the plaintiff for extension of time. By a further agreement (Ext. 1/a)dated 1-11-1956, Incorporated in the body of Ex. 1, time was extended till the end of second week of January 1957. The contents of Ext. 1/a were to the following effect:

"that the said Samantani Sailarani Das (vendor) and the said M/s. G. P. and Co. (purchaser) for some overlooked circumstances not having been able to perform their part of the contract in time have hereby further agreed respectively to have the sale deed executed and registered and to pay the balance consideration on the date of registration as noted above and also to deliver possession of the land in question and to take possession thereof by the end of second week of January 1957. "

In paragraph 8 of the plaint, it was averred that the period was extended till the second week of January 1957 to enable defendant 1 to get herself recognised as a raiyat of the land by the Anchal and to obtain rent receipts therefor. As by the second week of January 1957 the proceeding under Section 5 (1) of the Orissa estates Abolition Act was not disposed of and the defendant 1 could not get recognition as a tenant by obtaining rent receipts, she was unable to execute the sale deed though the plaintiff was ever ready to perform its part of the contract. The plaintiff could not indefinitely wait and so served a registered notice (Ext. 4)dated 23-7-1957 for refund of the earnest money of Rs. 1000/- with interest at the rate of 12 per cent per annum from 7-10-56 and for refund of Rs. 340/-paid towards purchase of stamp. Despite the notice and several requests defendant 1 did not pay back the) amount. The suit was filed on 26-11-1957 for recovery of rs. 1500/- consisting of Rs. 1000/-towards earnest money, Rs. 340/-towards purchases of stamp and Rs. 160/- towards interest.

( 2 ) DEFENDANT 1 filed written statement without challenging most of the facts. She, however, pleaded that the plaintiff examined all her title-deeds and saw the rent receipts granted by the Anchal prior to the execution of Ex. 1. She was always ready to execute and sell the land, but due to the neglect and laches of the plaintiff, she could not do it. She could not give a reply to Ex. 4 as she was at calcutta attending upon her ailing husband. The plaintiff is not entitled to the claims as laid.

( 3 ) THE learned trial Court decreed the plaintiff's suit for Rs. 1000/- with interest at 12 per cent per annum from 7-10-56 to 25-11-1