PUSHKARNARAYAN S. MAHESHWARI Vs. KUBRABAI GULAMALI

JUDGEMENT

(1.) [His Lordship after stating the facts and holding that the defendants had committed breach of contract on November 23, 1960, proceeded.] Though no issue in regard to whether the plaintiff was ready and willing to perform his part of the contract by paying the balance of the purchase price under the agreement for sale and tendering an engrossment of the conveyance for execution by the defendants, was framed by me, Mr. Diwan sought to contend that, even in regard to a claim for damages for breach of contract, it was incumbent on the plaintiff, not only to aver but also to prove, readiness and willingness on his part to perform the contract at the material time which, in this case, in view of my finding in the preceding paragraph, would be November 23, 1960. In support of that proposition, Mr. Diwan has cited several authorities. The first and the most important of them is the decision of the Privy Council in the case of Tan Ah Boon v. Johore State . It may be mentioned that this was an appeal to the Privy Council from the State of Johore which was not a part of British India but was an independent State in the Malayan peninsula, and the case was, therefore, decided in accordance with the English common law, as the Indian Contract Act was not applicable to the same. The facts of that case were that the Collector of Land Revenue had, by a letter written in answer to an application made by the appellant before the Privy Council, signified his approval to the alienation of 110 acres of State land to the appellant on payment of specified sums as and by way of premium as well as rent, and on certain other terms. The premium and the first year's rent was deposited as stipulated, but no grant had actually been executed or registered. The appellant paid the rent for 6 years but did not pay rent thereafter. The Collector then proceeded to attach and sell the land, and on a suit filed by the purchaser, an order for possession was made against the appellant. The purchaser re -sold the land at an enhanced price, and the appellant then brought the action out of which the appeal before the Privy Council arose, for damages for breach of the contract against the State of Johore, on the ground that the Collector's letter approving of the grant amounted to a contract entitling the appellant to grant of the land and to possession of it, and that the sale of the land was wrongful and was a breach of contract on the part of the State.

(2.) ON those facts, the trial Judge held that there was a breach of contract, as alleged, and awarded 17,500 dolars as damages. Upon appeal to the Court of Appeal of the State of Johore, that judgment was reversed and it was held that there was no action wrongfully committed or breach of contract, and that accordingly no damages were recoverable. On appeal to the Privy Council, it was observed in the judgment by Lord Roche that it was unnecessary and undesirable for the Privy Council to express any opinion on the considerable number of questions which were debated before it, and that the case should be decided on a much simpler ground. It was then observed (at p. 237 col. 2),.This is simply a common law action seeking damages for breach of an alleged contract, and nothing else. No plaintiff can maintain such an action unless he can aver and prove that he has performed or has at all times been ready to perform his part of the contract. This the appellant, owing to his serious default in payment of rent, was incapable of doing. In these circumstances then Lordships are of opinion that the appellant was not entitled to succeed in his action and that the Court of Appeal was correct in ordering that the claim should be dismissed. Though these observations are general in terms, they must be construed in the light of the facts of the case and limited to those facts. The said case was a case of an alleged breach of a contract to make a grant of land, a contract which necessarily involved reciprocal obligations to be simultaneously performed. The obligation on the part of the plaintiff -appellant in that case was to pay the stipulated rent and to observe the other terms, and the obligation of the State of Johore was to make a grant of the land to him and to let him have possession, of it on those terms. This position is clarified if one refers to an earlier judgment of the Privy Council in the case of Abdullah Bey v. Tenenbaum [1984] A.I.R. P.C. 91, which was also an action for breach of a contract to sell land in 'which the purchaser sued for refund of deposit as well as damages. Breach of the contract in question was held to have been established insofar as it was held that the appellant defendant had not offered a transfer which the plaintiff -respondent was bound to accept. In the judgment of the Board, Lord Tomlin went on to observe (at p. 92) that there, however, remained the question as to the readiness and willingness of the respondent to perform his part of the contract, that the said case being an appeal from Palestine and no provisions of Turkish law or any local ordinance having been brought to the notice of their Lordships, the case would have to be decided according to the English law applicable 'in the case of concurrent obligations,' and that 'readiness and willingness to carry out his obligation' has always been a condition precedent to the plaintiff's right to recover damages in respect of breach of one of two concurrent conditions. It is, therefore, clear that, in English law, it is necessary for a plaintiff to prove readiness and willingness to perform his part of the contract only in cases where the contract consists of concurrent obligations which are the same as what the Indian Contract Act calls reciprocal obligations' to be simultaneously performed. Mr. Diwan cited the English case of Howe v. Smith (1884) 27 Ch. D. 89 which was also a case of a contract for the sale of land in which the purchaser being not ready with his purchase money, the vendor, after repealed delays, re -sold the property for the same price, and the original purchaser brought an action for specific performance. The Court of Appeal, confirming the decision of the trial Judge, held that the purchaser had lost by his delay his right to enforce specific performance, and further held that the plaintiff having failed to perform his part within a reasonable time had no right to a return of the deposit. Fry L. J. in his judgment stated (at p. 103) that a purchaser seeking damages may recover if he can prove readiness and willingness to complete the transaction within a reasonable time after the stipulated day and that the inquiry which arose in the said case was, therefore, whether the purchaser can aver and prove such readiness and willingness within a reasonable time. On the facts of the said case, the conclusion of the Court of Appeal (at p. 105) was that there had been such default as justified the vendor in treating the contract as rescinded and the appeal was, therefore, dismissed. The observations of Fry L. J. mentioned by me were quoted with approval by the House of Lords in the case of Stickney v. Keeble [1915] A.C. 386. That was an action by a purchaser for the return of his deposit by reason of the vendor's failure to complete within the time fixed by a notice by the purchaser for completion of the sale, and it was held that there had been unnecessary delay in completion for which the defendant -vendors were responsible and the plaintiff was, therefore entitled to a return of the deposit. As far as decisions of Indian Courts are concerned, there is a considered judgment of a Division Bench of the Nagpur High Court in the case of Arjunsa v. Mohanlal in which English and Indian authorities on the point have been exhaustively reviewed and, after referring to Section 51 of the Contract Act which lays down that in the ease of a contract consisting of reciprocal promises to be simultaneously performed, no promisor need perform Ms promise unless the promisee is ready and willing to perform his reciprocal promise, it was held (at p. 349) that, although it was no longer necessary to prove actual tender of the money by the purchaser, he is required to show readiness and willingness. It was further observed that the purchaser proves readiness and Avillingness when he establishes that the contract was not completed, not because of his fault, but because of the fault of his opponent. It may be mentioned that in Arjmisa's case the suit had been filed by the vendor for damages for breach of a contract for the sale of cotton seeds, by a purchaser refusing to take delivery, but it has not been suggested and indeed, there would be 110 basis for such a suggestion, that the principle in regard to the proof of readiness and willingness is different in the case of contracts for the sale of land from that in the case of a sale of .movables. In my opinion, the learned judges of the Nagpur High Court who decided Arjunsa's case were right when they based their decision on Section 51 of the Contract Act, and held that the plaintiff was entitled to damages as he had proved readiness and willingness to perform his part of the contract. It may be mentioned that the learned judges who decided Arjunsa's case have rightly observed in their judgment (at p. 349) that caution would have to be exercised in applying this principle to cases of anticipatory breach of contract. The learned judges, however, stated that the case before them was one where a party to a contract for sale had called upon his buyer to come and take delivery after the due date for delivery had already passed and was suing for damages for failure to take delivery.

(3.) THE question 'that arises for my consideration, therefore, is, under which of the two categories does the contract in suit in the present case fall? Clause 7 of the agreement for sale (Exh. A) clearly specifies the order of performance of the reciprocal promises contained in the suit contract, in so far as it requires that the vendor must produce the necessary Wealth Tax Certificate 'before' the time for completion of the sale. The present case is, therefore, not one which falls within Section 51 of the Contract Act, but is one which falls under Section 52 of the Contract Act, as far as the obligation of the vendors to produce the Wealth Tax Certificate is concerned, it being clear on the documentary evidence in the case that that was the only outstanding obligation that remained to be performed by the vendor. In. that view of the matter, unless and until the Wealth Tax Certificate was produced by the vendors no question of the plaintiff being ready and willing to perform his part of the contract by payment of the price and the tendering of an engrossment of the conveyance arises at all, haying regard to the provisions of Section 54 of the Contract Act. It may be mentioned that, relying upon a decision of a single judge of this Court in the case of Rustamji v. Haji Hussein (1910) 2S Bom. L.R. 1165, Mr. Daji went further and sought to contend that if a party without justification cancels the contract, he disables himself from setting up any defence which he might otherwise have had to an action for damages. Having regard to the view which I have taken on the facts of the present case, viz. that it was not obligatory on the plaintiff to be ready and willing to pay the price and tender an engrossment of the conveyance until the defendants had produced the 'Wealth Tax Certificate as required by Clause 7 of the agreement for sale (Exh. A), it is not necessary for me to decide this point which raises a larger question of considerable importance.