In sale and repurchase agreements, time is of the essence, and a valid tender must be made within the specified time for enforcing the agreement.

Grille, C J—On 10-6-1935 the plaintiffs-appellants Shriram and Onkar, father and son, executed a sale-deed of three fields in mouza Goulkhede in the Amraoti district for Rs. 1250 in favour of the defendant-respondent Rambilas (vide Ex. D-1). On the same day was executed a separate deed of agreement whereby Rambilas gave the plaintiffs the option of repurchasing the property if they paid Rs. 1400 in the month of February in any year between 1-3-1986 and 1-3-1940, and it was therein laid down that any plea for an extension of the period would not be entertained.

2. On 29-2-1940, that is to say one day before the period mentioned in the deed of agreement (Ex. P-1) expired, the plaintiffs filed a suit for possession of the fields, alleging that they were redeeming the mortgage, and the suit was in fact one for accounts and redemption. In the alternative, it was claimed that if the transaction were proved to be one of sale and repurchase they asked for specific performance of the agreement of resale and claimed to have given notice of their desire to repurchase on 14-2-1940 (vide Ex. P-2) and that the cause of action had arisen on 26th February on which date they had asked the defendant to meet them at Daryapur to execute the sale-deed and the defendant had done so. The defence was that the transaction was not a mortgage, that there had been no tender at all of the money which was necessary for the fulfillment of the agreement to repurchase, and that time was of the essence of the contract. The plaintiffs' evidence as to what happened at Daryapur on 26th February and also their evidence of a further unpleaded tender in the small hours of 29th February was disbelieved and the plaintiffs' suit dismissed. In appeal, only the claim for specific performance was pressed and the lower appellate Court held that time was of the essence of the agreement, that no valid tender was made within the time fixed, and that the appellants could not enforce the condition of resale after 1-3-1940 even if the suit had been filed on 29-2-1940. Against this decision a second appeal has been preferred.

3. It is very clear that the transaction is not a mortgage, that there was a sale, that possession was delivered according to the terms of the sale-deed despite the plaintiffs' denial of this in the plaint and the production of evidence which was disbelieved, and that the agreement to resell did contain a specific term that time was of the essence of the contract.

4. In support of the contention that time was not the essence of the contract reliance is placed on the Privy Council decision in Jamshed Kodaram v. Burjorji Dhunjibhai, 1915 AIR(PC) 83. The cases however where there is an option of repurchase of immovable property once sold form an exception to this equitable rule, as has been noted in Pollock and Mulla's Indian Contract Act, Edn. 7, at p. 302, and where a time limit has been laid down in the agreement of repurchase and where there is no question of mutual obligation the exceptional provision for the seller's benefit must be exercised strictly within the time prescribed. This has been laid down in Samarapuri Chettiar v. ASUTHARSANA CHETTIAR, 1919 AIR(Mad) 544 and also in Maung Wala v. Maung Shwe Gun,1924 AIR(Rang) 57. Further in Maung Po Yin v. Maung Shwe Kin,1923 AIR(Rang) 42 the law on the subject and the distinction from cases where there is an option to repurchase and the decision in Jamshed Kodaram v. Burjorji Dhunjibhai, 1915 AIR(PC) 83 are emphasised by the appropriate quotation from Halsbury's Laws of England. The citation from vol. 21 at p. 72 is as follows:

If, however, the intended arrangement is not a lending and borrowing transaction but an absolute sale, accompanied by a contemporaneous agreement for repurchase or a stipulation that conveyance should be void upon payment of a certain sum at a fixed time, this does not entitle the vendor to such a right to redeem as is incidental to a mortgage, but creates a mere right or purchase