JOSEPH VARGHESE Vs. ANNAMMA

JUDGEMENT

(1.) THIS appeal arises from a suit for specific performance of a contract to sell property.The plaintiff who lost the suit in both the courts has filed this second appeal.The defendant in the suit is the sister of the plaintiff.The plaint property is 3 acres in extent and is a portion of a property of larger area measuring 24 acres 78 cents.In this larger property the defendant obtained half share under a will executed by her father.The other half was to be enjoyed by the mother of the plaintiff and defendant during her life time and after her death each of her four sons including the plaintiff was to take the half share equally.The property was heavily indebted at that time.In 1952 all the brothers of the defendant excepting the plaintiff,along with their mother,released their rights in respect of their share to the defendant.On 29th Septem­ber 1955 the plaintiff released his right also in favour of the defendant under document No.1544.On the same day a document bearing register No.1545 was executed by the defendant in favour of the plaintiff,wherein the defendant agreed to convey 3 acres in 24 acres and 78 cents to the plaintiff in the event of the plaintiff paying the defendant Rs.2,500 and the period within which such payment was to be made was fixed as 8 years.The said period of 8 years was to expire on 29th September 1953.Subramonian A few days before the expiry of the period the wife of the plaintiff obtained a draft from the Changanacherry branch of the Canara Bank for Rs.2,500 in favour of the defendant and posted the said draft along with a letter to the defendant who was at Palghat intending it to be the payment of the purchase price agreed to under Ext.P -8 dated 29th September 1955.This was so despatched on 25th September 1963.For some reason,which is not seen explained,the letter seems to have reached the place of the addressee only on 30th September 1963,at which time it was noticed that the defendant was not in station.The letter was kept in deposit and when the defendant returned to the station it was tendered to the defendant,but was refused by her.According to the plaintiff,he had complied with the terms of Ext.P -8 which would entitle him to a conveyance of the suit property,but the defendant had defaulted to act in accordance with her obligations under Ext.P -8.This was the basis of the claim for specific performance.The defendant contended that the suit was not maintainable,since the tender was made only after the expiry of the period stipulated in Ext.P -8 and time being the essence of the contract the plaintiff must be deemed to have failed to perform his part of the contract within the period specified in the agreement.

(2.) THE trial court found that the agreement under Ext.P -8 was not one to sell property but was really an agreement of re -conveyance and in such an agreement time would be the essence of the contract and as such the plaintiff was not entitled to compel a sale in his favour when the tender was made only after the expiry of the period specified in Ext.P -8 agreement.The appellate court also construed Ext.P -8 agreement to be an agreement to re -convey and therefore held that time was the essence of the contract.It held that the plaintiff had not performed his part of the contract within the time specified in the agreement.In this view that court agreed with the trial court and dismissed the suit.It is the plaintiff who thus lost in the courts below that has filed this second appeal.

(3.) NORMALLY in an agreement to sell immov­able property time may not be the essence of the contract unless it is seen to be so not merely from the fact that a period has been stipulat­ed in the agreement for the performance but from other circumstances also.It must appear that the parties intended that the contract should be unenforceable against a party thereto if the other party defaults to perform his obligations within the time specified.Section 55 of the Contract Act embodies this rule.What could be said on this question has been succinctly stated by the Privy Council in the leading case Jamshed Khedaram Irani v.Burjerji Dhunjibhai A.I.R.1915 P.C.83. "Under that law,equity,which governs the rights of the parties in cases of specific performance of contracts to sell real estate,looks not at the letter but at the substance of the agreement in order to ascertain whether the parties notwithstanding that they named a specific time within which completion was to take place,really and in substance intended more than that it should take place within a reasonable time." Though this is the rule in regard to contracts for sale of immovable property,contracts for re -conveyance stand in a different position.Such contracts operate as options to re -purchase property and they form an exception to the rule of time being not the essence.In the case of a contract for re -conveyance the party who seeks to enforce the contract must exercise it within the time prescribed.This is because,in a contract for re -conveyance,there is no mutuality and since mutual obligations may not arise the contract must be construed strictly against the person in whose favour the option is provided for.The contract in the present case Ext.P -8 cannot be read as one of re -conveyance.In order to treat it as re -conveyance it is necessary to see whether the same right has been conveyed earlier.The concept of re -conveyance necessarily involves an earlier conveyance by the party in whose favour re -conveyance is provided for.Ext.P -8 agreement relates to 3 acres out of 24 acres 78 cents.May be that the plaintiff's share which was obtained under the will of his father and which was conveyed on the same day,earlier,to his sister,the defendant,might be somewhere about the same as the area covered by Ext.P -8,but it is not exactly the identical property.That sale deed which has been executed by him has not been produced in the trial court.It was produced in the appellate court and by agreement of parties I am marking it here as Ext.P -13.I have also marked the letter written by the defendant to the plaintiff on 2nd February,1963 as Ext.P -14.Ext.P -13 indicates that the right conveyed by him is Malayalam so long as it is not established that what was agreed to be conveyed under Ext.P -8 is the same as what was released under Ext.13 it cannot be said that the agreement Ext.P -8 is one of re -conveyance.