KANDASWAMI MUDALIAR Vs. MUNUSWAMY UDAYAR

JUDGEMENT

(1.) THE defendant in the suit is the appellant in this Letters Patent Appeal. The plaintiffs filed the suit for specific performance of an agreement dated 21st August, 1952 executed by the defendant in favour of the plaintiffs for conveyance of certain items of the suit properties. The plaintiffs wanted to purchase one item of property from one Ramaswami. They were unable to raise funds. They approached the defendant and the defendant told the plaintiffs that because of the Debt Relief Act, he would not be in a position to advance money to the plaintiffs at a high rate of interest, but if the plaintiffs agreed, he would advance money on condition that the plaintiffs should convey not only the property that was proposed to be purchased but also the property they owned to the defendant and after such conveyance, the defendant would agree to transfer the property back to the plaintiffs on their paying the entire money with interest stipulated. Accordingly, sale deeds were executed in favour of the defendant by registered documents, dated 29th May, 1950. The defendant agreed to sell the property back to the plaintiffs and executed a registered agreement to sell in favour of the plaintiffs on 21st August, 1952. The agreement provided that the defendant agreed to sell the land to the plaintiffs for Rs. 7,000 and took an advance of Rs. 10 on 21st August, 1952 and agreed that if the plaintiffs paid the balance of Rs. 6,990 at any time before 12th April, 1957 to the defendant, the defendant or his heirs and representatives should execute and register a sale deed in favour of the plaintiffs at their cost. The defendant also agreed that if the plaintiffs paid Rs. 6,990 before 12th April, 1957 and if the defendant or his heirs and representatives failed to execute and register the sale deed in favour of the plaintiffs, the plaintiffs could file a suit for specific performance of the contract of sale. The agreement further provided that if the plaintiffs failed to pay the amount of Rs. 6,990 within 12th April, 1957 the plaintiffs would forfeit the advance paid by them and also forfeit the right to enforce specific performance and the agreement would stand cancelled. It is common ground that the plaintiffs did not pay Rs. 6,990 before 12th April, 1957 but filed the suit on nth April, 1960 for specific performance. But before filing the suit, they issued a notice saying that they were ready to meet the defendant at the Sub -Registrar's Office, Tirupattur with Rs. 6,990 for taking the sale deed. The defendant repudiated his liability to specifically perform the agreement.

(2.) THE defence taken to the suit was that the transaction was in the nature of an agreement of reconveyance and that time is the essence of the contract and as the plaintiffs had failed to pay the balance of Rs. 6,990 before 12th April, 1957, the plaintiffs could not specifically enforce the contract.

(3.) THE plaintiffs took the matter in second appeal to this Court. Venkatadri, J., considered the question whether Exhibit A -1 is an agreement simpliciter to sell the suit property or an agreement for reconveyance of the suit property. The learned Judge came to the conclusion that the agreement is an agreement simpliciter and that it was not an agreement for reconveyance and therefore time is not the essence of the contract and decreed the plaintiffs' suit. Hence this Letters Patent Appeal.