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1991 Supreme(All) 367

IN THE HIGH COURT OF ALLAHABAD
N. N. Mithal, J.
NATHU SINGH, HARIYA - Appellant
Versus
JAGDISH SINGH, JHUMMAN - Respondents
Second Appeal 3395 Of 1978
Decided On : 04/05/1991

Advocates Appeared:
A.D.Prabhakar, VIJAI BAHADUR

In a suit seeking specific performance of a contract of reconveyance, time is of the essence of the contract, but each case ought to be decided on its own facts. The plaintiff's readiness and willingness to perform his part of the contract can be inferred from the contents of the notices sent by him to the defendant, even though the notices were not delivered.

Headnote:

SPECIFIC PERFORMANCE - RECONVEYANCE - TIME OF ESSENCE - READINESS AND WILLINGNESS - FINANCIAL CAPACITY - EFFECT OF ACQUISITION OF LAND - RELIEF - COMPENSATION.

Fact of the Case:

Plaintiff, the original owner of the land, transferred it to the defendant on 3-7-1973. Simultaneously, the defendant agreed to reconvey the property to the plaintiff for Rs. 15,000/- within two years. Before the suit, the plaintiff sent notices by registered post on 22-3-74 and 6-5-1975, but both were returned undelivered with an endorsement of refusal. The plaintiff filed a suit for specific performance of the contract.

Finding of the Court:

The lower courts held that time was of the essence of the contract and that the plaintiff had failed to prove his readiness and willingness to perform his part of the contract. The court also found that the plaintiff lacked the financial capacity to pay the sale consideration.

Issues: 1. Whether time was of the essence of the contract? 2. Whether the plaintiff had been and was always ready and willing to perform his part of the contract? 3. Whether the plaintiff had the requisite financial capacity to pay the sale consideration? 4. What is the effect of the acquisition of the land in question on the relief sought?

Ratio Decidendi: 1. Time is of the essence of the contract in a suit seeking specific performance of a contract of reconveyance, as distinguished from an agreement of sale. 2. The plaintiff's readiness and willingness to perform his part of the contract can be inferred from the contents of the notices sent by him to the defendant, even though the notices were not delivered. 3. The plaintiff had the requisite financial capacity to pay the sale consideration, as evidenced by the sale of other land belonging to him and the fact that he had received Rs. 15,000/- from the sale of the land in question. 4. The acquisition of the land in question does not extinguish the plaintiff's rights in totality. The plaintiff can still seek relief by proceeding against the amount awarded as compensation for the land agreed to be sold.

Final Decision: The appeal is allowed. The judgment and decree under appeal are set aside. If the decree for specific performance of contract in question is found incapable of being executed due to acquisition of subject land, the decree shall stand suitably substituted by a decree for realization of compensation payable in lieu thereof as may be or have been determined under the relevant Act and the plaintiff shall have a right to recover such compensation together with solatium; and interest due thereon.

( 1 ) THIS Second Appeal is by a plaintiff who was unsuccessful in both the courts below. Only two main questions are raised in the appeal. Firstly whether on the findings recorded, the plaintiff had failed to prove his readiness and willingness to perform his part of contract and secondly what value should be attached to the undelivered notices sent by the plaintiff prior to the suit ? one more question has emerged due to the change of circumstances during the pendency of the appeal. It is as to the effect of the acquisition of the land in question on the relief sought.

( 2 ) IT is undisputed that the plaintiff was the original owner of the land and on 3-7-1973 he had transferred the same to the defendant. Simultaneously the defendant admittedly had entered into an agreement for re-transferring the property to the plaintiff for a sum of Rs. 15,000/- within two years. Prior to the suit the plaintiff sent notices by registered post on 22-3-74and 6-5-1975 but both of them were returned undelivered with an endorsement of refusal. In the plaint it is averred that the plaintiff was always ready and willing to perform his part of the contract and despite being approached by the plaintiff on several occasions with requisite money the defendant avoided to execute the sale deed on one pretext or the other.

( 3 ) THE suit was contested mainly on the ground that the plaintiff had no capacity to pay sale consideration and that the plaintiff had never approached him for executing the sale deed. On the contrary, the defendant pleaded that the plaintiff himself had expressed his inability to arrange the requisite amount when the defendant had asked him to get the sale deed executed. The defendant also pleaded that he had spent considerable amount over improvement of the land, by boring a well and installing an engine over it after the plaintiff had refused. He denied having ever received any notice and contended that time being the essence of contract the suit was not maintainable.

( 4 ) THE lower appellate court formulated two points: (i) Whether the time was the essence of the contract as pleaded by the defendant, and (ii) whether the plaintiff had been and was always ready and willing to perform his part of the contract? On both these points the answer is against the plaintiff.

( 5 ) WHILE recording its finding on the first point the court took note of the difference which exists between an agreement of sale simpliciter and the one for reconveyance. In the former time is not of essence of the contract while in the latter it is because, in that case the party agreeing to reconvey the property holds a precarious title and it would be inequitable to keep him in that situation longer than stipulated by the parties to the agreement.

( 6 ) IN appeal the appellants learned counsel has very rightly not assailed this legal position. What he has tried to say is that plaintiff had asserted this right within time and even lodged the plaint within two years i. e. on 2-6-1975.

( 7 ) MAY he that in a suit seeking specific performance of a conrtract of re-coveyance as distinguished from an agreement of sale, time is of essence of the contract yet each case ought to be decided on facts of its own.

( 8 ) THE two notices sent by the plaintiff before the suit have both been duly proved. The notices were despatched under a pre-paid registered cover properly addressed but both of them have been received back with the endorsement of refusal. The Court have found that these notices had not been delivered to the defendant and therefore they are of no use at all, A faint attempt was made by the appellant to urge that this finding was erroneous but when the courts have concurrently found that after denial of service by the defendant the burden of proof again shifted on the plaintiff and he having failed to discharge it; the service of notice was not proved. This is a finding of fact and in Second Appeal this court will be loath to interfere with it. Reference to so

















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