Judgments: Kania, C.J.-I have read the judgment prepared by Patanjalt Sastri, J. and agree with its line of reasoning and conclusion. Fazl Ali, J.-I concur in the judgment prepared by Patanjali Sastri, J. Patanjali Sastri, J.-This is an appeal from a judgment and decree of the High Court of Judicature at Madras reversing a decree for specific performance and delivery of possession passed by the Court of the Subordinate Judge at Madura. The appellants were originally owners of the properties in question which together with other properties they had mortgaged to the respondents family in 1921 and 1929. In January, 1937, the account in respect of the said mortgages was settled and, a sum of Rs. 31,300 having been found to be due to the mortgagee, the properties in suit were sold on 7th January, 1937, to the then manager of the family, Balasubramania Ayyar, in full discharge of the debts. Two days later, on 9th January, 1937, two further documents were brought into existence between the parties. One of them was a lease-deed executed by Balasubramania as lessor and the first appellant (hereinafter referred to as “the appellant”) as lessee on behalf of their respective families. The document recited that the property had been sold to the lessor and taken on lease by the lessee “from this day up to 30th April, 1943” and provided, inter alia, that “the lessee shall pay therefor the net lease amount, after deducting all expenses which he has promised to pay to the said lessor, in cash in seven instalments, viz., Rs. 700 by 30th September, 1937, Rs. 1.450 by 30th April, 1938, Rs. 1,450 by 30th April, 1939, Rs. 1,450 by 30th April, 1940, Rs. 1,450 by 30th April, 1941, Rs. 1,450 by 30th April, 1942, and Rs. 1,450 by 30th April, 1943-shall pay the lease amounts stated above by the respective due dates * * * * * * should the said lessee be in arrears of cash lease amount in respect of any instalment without making payment of the entire lease amount by the aforesaid due dates, which the said lessee has promised to pay in accordance with the aforesaid dne dates, the said lessee shall make good the entire loss caused thereby to the said lessor, out of his own funds and on his personal liability. Besides he shall forthwith forfeit his lease right without reference to subsequent instalments. Besides he shall forthwith forfeit his lease right without reference to subsequent instalments. Further, the said lessor shall hereby have the right to enter on the properties covered by the said lease, without reference to future instalments, and without intimating the said lessee and to enjov the same as he liked or to release the same to others according to his pleasure. Furthermore, should the said lessee be in arrears of cash rent in respect of any instalment without making payment of the entire cash rent which he has promised to pay on the due dates referred to above, the said lessor hereby has the right to realise the said arrears of cash rent together with interest at the rate of one per cent, per mensem from the date of default as stated above, by proceeding against the said lessee’s own funds, and against him personally.” On the same date the parties also executed a registered agreement whereby Balasubramania agreed to convey the properties to the appellant on payment of Rs. 31,500 out of which Rs. 10 was paid on that day and Rs. 31,490 was to be paid as provided therein. The agreement recited the sale of 7th January and the lease of the 9th idem. It also recited that the appellant “requested” that the said lands “should be sold to him alone” and that Balasubramania consented to do so “subject to the conditions mentioned hereunder” and the appellant consented “to obtain a sale” subject to those conditions. Then follow “conditions of agreement of sale” in these terms: “1. Party No. 2 aforesaid agrees to obtain a sale of the undermentioned properties in his name or in the name of others to be specified by him, paying a net amount of Rs. 31,500 as the sale price of the said properties within the period commencing from this day and upto 30th April, 1943, the said party No. 2 himself undertaking to bear all the expenses that may have to be incurred in respect of this sale, and party No.1 aforesaid agrees to sell the said properties accordingly receiving the net amount of Rs. 31,500. 2. If this agreement does not stand cancelled under clause 3 infra, this agreement shall be in force only up to 30th April, 1943. Time is the essence of this agreement. 3. 31,500. 2. If this agreement does not stand cancelled under clause 3 infra, this agreement shall be in force only up to 30th April, 1943. Time is the essence of this agreement. 3. Should the said party No. 2 without making payment of the amount in full, be in arrears in respect of anv instalment, out of the seven instalments of the lease amounts payable in each year on the 30th April of the respective year and of the lease amount alone payable by 30th September, 1937, on the succeeding due date, i.e., by 30th April, 1938, or, should, he be.in arrears without wholly paying the Sircar kist, etc.. pertaining to the lands covered by the lease, which he himself has promised to pay for the lease period, i.e., from fasli 1345 (1935-36) to fasli 1352 (1942-43) as mentioned in the lease deed, this sale agreement shall stand cancelled forthwith without reference to the subsequent due dates and furthermore, the aforesaid pary No. 2 shall forfeit all the rights and reliefs belonging to the said party No. a under this agreement. Subject to the aforesaid condition alone we have entered into this agreement of sale, with mutual consent.” There was a partition in 1938 between Balasubramania and his brother Rangaswami at which the properties in suit were allotted to the share of the latter subject to the rights and obligations under the lease and the agreement of re-sale. Rangaswami having died in October, 1942, the suit was filed on 5th March, 1943, against his widow and minor daughter, and they are the respondents to this appeal. In the plaint the appellant alleged, inter alia, that the aforesaid three documents, all of which were duly registered, were intended to form part of a single transaction constituting together a mortgage by conditional sale and that it was on that understanding that the three documents were executed by the parties. The appellant accordingly sought to redeem the mortgage and recover the properties by paying Rs. 31,500 into Court. Alternatively, “even in the view that the transaction amounts to a sale with a condition for repurchase” he claimed specific performance of the agreement to re-sell. He admitted that the payments of instalments due under the lease were “irregular and belated” but alleged that “whatever irregularities might have been committed before the 30th April. 31,500 into Court. Alternatively, “even in the view that the transaction amounts to a sale with a condition for repurchase” he claimed specific performance of the agreement to re-sell. He admitted that the payments of instalments due under the lease were “irregular and belated” but alleged that “whatever irregularities might have been committed before the 30th April. 1942, stand excused, condoned, waived and treated as non-existent.” The respondents traversed these allegations in their written statement and pleaded, inter alia, that, in view of section 58(c) of the Transfer of Property Act and section 92 of the Indian Evidence Act, the claim to redeem on the footing of a mortgage by conditional sale was unsustainable, that the sale of 7th January, 1937, was an outright and absolute sale of the properties which formed a portion of the hypotheca equivalent, in value to the amount due under the previous mortgages and that, as the “conditions” in the agreement of re-sale, the strict performance of which was a condition precedent for the accrual of a right to obtain a re-sale, were not fulfilled, the agreement was no longer binding on the respondents. The learned Subordinate Judge held that, having regard to the proviso inserted in section 58(c) of the Transfer of Property Act by the amending Act XX of 1929, it was not open to the appellant to claim that the three documents constituted a mortgage by conditional sale and to lead evidence to that effect. This view was not questioned and the claim for redemption was not pressed either in the High Court or before us. The Subordinate Judge, however, found that though none of the instalments of rent due under the lease (except the seventh and last which fell due only after the institution of the suit) was paid on the due date, the belated payment in each case was accepted by the lessor as a proper payment by waiving the delay and that, therefore, the conditions of the agreement providing for its cancellation in case of default in the punctual payment of any one of the instalments did not come into operation. He accordingly held that there was no forfeiture either of the lease or of the agreement and that, as the appellants were prepared to pay the last instalment and tendered the sum of Rs. He accordingly held that there was no forfeiture either of the lease or of the agreement and that, as the appellants were prepared to pay the last instalment and tendered the sum of Rs. 31,500 by depositing the same in Court before the date fixed for the payment thereof, they were entitled to a decree for specific performance. On appeal the learned Judges (Leach, C.J. and Lakshmana Rao, J.) do not appear to have devoted any consideration to the question whether the forfeiture of the lease was waived by the lessor accepting payment of rents for the subsequent years. Proceeding apparently on the finding of the Subordinate Judge that there was such waiver, they held that it did not affect the terms of the agreement to reconvey as “the terms of the lease and the terms of the agreement stood apart and that in accepting the rent after the due date the lessor had not waived his rights under the agreement”. They referred to the lessor’s letters dated 19th August, 1940 and 13th September, 1941, as showing that “in accepting payment of rent after the due date he was still insisting on his right of ignoring the agreement for re-sale because of the non-fulfilment of the conditions of that agreement”. In support of their conclusion they relied on the decision of Kay, J., in Bastin v. Bidwell1quoting certain observations of Mellish, L.J., in Finch v. Underwood2. They accordingly allowed the appeal and dismissed the suit. On behalf of the appellant Mr. Rajagopala Ayyangar raised two contentions: Firstly, that the agreement of the 9th January was, on a proper construction, an ordinary agreement for sale with mutual rights and obligations and not one reserving an option of repurchase to the appellant, that therefore clause (3) relating to punctual payment of the instalments of rent should not be construed and enforced strictly as a condition precedent and that the proviso for cancellation should be relieved against. Secondly, that even on the view that the agreement reserves an option to repurchase and the provision for cancellation on default of payments on the due dates is to be strictly enforced, inasmuch as the lease and the agreement form connected and interdependent transactions and the stipulation for punctual payment of the instalments had reference to the same identical sums, namely, the rents payable under the lease, the acceptance by the lessor, without any reservation, of the overdue instalments as duly and properly paid was a complete condonation of the delay in the payments and operated as a waiver of the forfeiture of the lease and the agreement alike. He sought to distinguish Bastin v. Bidwell1 and Finch v. Underwood2 by pointing out that the right of the lessee in those cases to obtain a renewal depended not merely on the due payment of the rent but also on the due performance of other covenants. Therefore, although the lessor accepted overdue payments of rent his refusal to grant a renewal was upheld as the lessee was in breach of the other conditions. In the present case, however, it was said, the only condition not fulfilled was the condition as to the punctual payment of the instalments of rents, and once the irregular payments were unconditionally accepted as payments there was no longer any default such as could be availed of as a ground for refusing performance of the agreement. I am unable to accept these contentions. On the first point, it is clear, from the surrounding circumstances and on the language of the instrument, that the appellant obtained a concession or privilege under the agreement. He was unable to pay off the long-outstanding mortgage debts and therefore agreed to sell a portion of the hypotheca in discharge of them under the sale deed of 7th January, 1937, which passed the absolute title in the property to the vendee. Two days later, at his request-so the agreement recites-the vendee agreed that he (the appellant) should have a right to repurchase the property on payment of practically the same price at any time before 30th April, 1943; that is to say, that the absolute right in the property passed to the vendee should be defeasible at any time during the period of six and odd years by the appellant exercising an option to repurchase. It was, at the same time, made plain that the vendee “consented” to this arrangement only “subject to the conditions”mentioned in the instrument, the appellant, too, for his part consenting “to obtain a sale” subject to those conditions. Counsel for the appellant laid stress on the words “party No. 2 agrees to obtain a sale” in clause (1) as indicating that the appellant was under an obligation to buy which could be specifically enforced by party No. 1, and that it was therefore not correct to say that the agreement reserved an option to the appellant to repurchase the property. It was an ordinary contract to transfer land, one party agreeing to sell and the other party agreeing to buy and there was no question, it was said of any benefit or privilege being conferred by the one on the other. This argument is, in my opinion, so opposed to the terms and intendment of the agreement that I have no hesitation in rejecting it. Clause (2) provides that the agreement was to be in force “only up to 30th April, 1943” unless it was cancelled earlier under clause (3). There could be no question, therefore, of its being enforced against the appellant specifically or otherwise after that date. It seems equally clear that it could not be enforced against him before that date, for otherwise, the time fixed in clause (2) for his benefit would have no meaning: That stipulation was designed to give the appellant, who having been unable to pay off the mortgage debts, had just sold the property, sufficient time for finding the necessary amount for its repurchase. The whole object of the agreement would be defeated if the appellant could be compelled before the date fixed to repurchase the property paying the price settled, though he could compel the other party to reconvey by offering the price at any time within the period. In other words, the appellant had the option of repurchase which he could exercise at any time before 30th April, 1943. The expression used in clause (1) “Party No. 2 agrees to obtain a sale”-not, be it noted, “agrees to buy”-is not inconsistent with this view. Those words seem to convey, in the context, no more than the opening paragraph wherein the appellant “consents to obtain a sale subject to the conditions” mentioned in the instrument. The expression used in clause (1) “Party No. 2 agrees to obtain a sale”-not, be it noted, “agrees to buy”-is not inconsistent with this view. Those words seem to convey, in the context, no more than the opening paragraph wherein the appellant “consents to obtain a sale subject to the conditions” mentioned in the instrument. That is to say, clause (1) was intended to emphasise the idea that the appellant had secured the privilege of repurchase only subject to the conditions set forth in that and the following clauses. It is well-settled that, when a person stipulates for a right in the nature of a concession or privilege on fulfilment of certain conditions, with a proviso that in case of default the stipulation should be void, the right cannot be enforced if the conditions are not fulfilled according to the terms of the contract. Such conditions, though relating only to payment of money, are not regarded as a penalty and courts of equity will not afford relief against a forfeiture for their breach. Thus, in Davis v. Thomas1 which was decided on very similar facts, there was a sale of the equity of redemption in a certain estate which was followed by a demise of the estate to the vendor for a term at a certain rent payable half-yearly. There was a collateral agreement whereby the vendor stipulated that he should have the right to repurchase the premises any time within five years at a price slightly in excess of the original price in case he “regularly paid the rent by 4th June and 26th October”, with a proviso that if default were made in the payment of rent within the stated periods the agreement was to be void. The vendor failed to pay the rent at the periods stated and distresses for it had been levied on the premises, but within the five years he applied to repurchase and at the same time tendered the arrears of rent then due. The vendee having refused to reconvey, a bill was filed claiming specific performance or redemption on the footing that the transaction was a mortgage. The bill was dismissed by the Master of the Rolls (Sir John Leach) and the decision was affirmed, on appeal by the Lord Chancellor (Lord Brougham). The vendee having refused to reconvey, a bill was filed claiming specific performance or redemption on the footing that the transaction was a mortgage. The bill was dismissed by the Master of the Rolls (Sir John Leach) and the decision was affirmed, on appeal by the Lord Chancellor (Lord Brougham). It was held (to quote the head-note) that though in cases of non-payment of money the court will relieve against the penalty or forfeiture, yet when it is not a question of penalty or forfeiture but a privilege is conferred upon payment of money at a stated period, the privilege is lost if the money be not paid accordingly. The decision of the Privy Council in Kilmor v. British Columbia Orchard Lands, Ltd.2, to which our attention was called is not in conflict with the above-mentioned principle. It was not a case of a stipulation for a right in the nature of a privilege or concession on fulfilment of specified conditions and the decision has no application here. It was urged that a strict enforcement of the provisions of clause (3) of the agreement would result in great hardship to the appellant as the value of the property in question has since greatly increased. Such considerations, however, can have no place in adjudging the legal rights of parties. As Viscount Finlay truly observed in Maclaine v. Gatty3- “It is much better that these rights should be enforced, even although there is hardship in the individual case, than that the principle should be trenched upon, as infringement of it might lead to confusion in law and possible hardship and difficulty in other cases.” The second contention of the appellant, viz., that the lessor, by accepting rents kept the agreement alive to the very end, is, in my opinion, equally untenable. Though the agreement provides that in case of default in the payment of any instalment on the due date it “shall stand cancelled forthwith”, it may be assumed that the provision means only that the agreement is voidable at the election of the party agreeing to resell. Though the agreement provides that in case of default in the payment of any instalment on the due date it “shall stand cancelled forthwith”, it may be assumed that the provision means only that the agreement is voidable at the election of the party agreeing to resell. Leaving aside the defaults in the payment of the first four instalments and the conduct of the lessor in relation thereto (as to which the matter may not be free from doubt), I think there can be no doubt as to what happened when the fifth instalment, which was payable before 30th April, 1941, was not paid Rangaswami, to whom the leasehold interest had passed and the appellant Had already attorned, sent a notice dated 13th September, 1941, to the appellant calling attention to his default and definitely stating that the lease had become forfeited and that he was “determining the lease through this notice”. He added that “for the same reason the aforesaid sale agreement has become cancelled”. He also demanded payment of the overdue sum of Rs. 1,450 with interest and delivery of possession and threatened suit if the demand was not complied with. It will be seen that by this notice Rangaswami unequivocally made his election not only to determine the lease but what is more important for the present case, to cancel and put an end to the agreement. After this, the sixth instalment became due on 30th April, 1942 and it was also not paid. So Rangaswami sent another notice to the appellant on 8th May, 1942, by which, while making no reference to the agreement which had already been “cancelled” and put an end to, he demanded the sum of Rs. 1,450 payable on 30th April, 1941, as “arrears of rent,” and “damages” at the rate of Rs. 1,450 per year subsequently “as you have been wrongfully and unjustly keeping the said properties in your possession and enjoyed them even after the aforesaid lease had been determined.” He threatened suit, again, in case of further delay in payment and delivery of possession. The appellant sent no reply to these notices but paid a sum of Rs. 2,450 on 3rd June, 1942 and a further sum of Rs. 450 on the 20th July following. The appellant sent no reply to these notices but paid a sum of Rs. 2,450 on 3rd June, 1942 and a further sum of Rs. 450 on the 20th July following. Both these payments were endorsed on the lease-deed in his own hand on the latter date in the following terms: “For my having cultivated your lands at Vilampatti from 30th April, 1940, onwards, amount paid by me to you on 3rd June, 1942, is Rs. 2,450 and amount paid this day, i.e.. 20th July, 1942, is Rs.450. Excluding this amount settled as due by me to you up to 30th April, 1942, is Rs. 447.” The question is: Did the acceptance of these payments in terms of this endorsement affect in any manner the position as it stood in relation to the agreement when these payments were made and accepted? The position then, as already pointed out, was that forfeiture for non-payment of rent had been incurred in respect of the lease as well as the agreement both of which had therefore become voidable at the instance of Rangaswami. Having the option to affirm or disaffirm the transactions he had elected by giving notice in writing of his intention to determine the lease and the lease had accordingly determined. By the same notice he had also terminated the agreement as he was entitled to do under the terms thereof. Acceptance of payments as rents for the subsequent period from the appellant who was continuing in possession might result in a renewal of the tenancy. But such renewal, even if one was to be presumed in the circumstances, could not ipso facto or of necessity, revive the appellant’s right of repurchase under the agreement which was a distinct transaction. I am unable to find anything, in the terms of the agreement or in the subject-matter to which it relates, to indicate that, after both the transactions had been lawfully terminated a renewal of the lease was to operate as a revival of the agreement. Much argument centered round the question whether the lease should be deemed to have been continued by Rangaswami subsequently accepting the payments made in June and July, 1942. Much argument centered round the question whether the lease should be deemed to have been continued by Rangaswami subsequently accepting the payments made in June and July, 1942. Though we are not directly concerned with the lease in this appeal, it has been urged before us, as it was urged in the courts below, that, inasmuch as the lease and the agreement are inter-linked by reason of the punctual payment of the instalments of rent being made a condition of the appellant’s rights under both, a continuance of the lease would result in a revival of the agreement. I have already expressed my view that the lease and the agreement could stand apart without the continuance of the one affecting the termination of the other. But, assuming that they must both stand or fall together, I see no justification for the view that acceptance by Rangaswami of the payments evidenced by the endorsement of 20th July, 1942, had the effect of continuing the lease notwithstanding its previous determination. The Subordinate Judge, without considering the effect of each endorsement of payment, held, generally in regard to all, that the forfeiture incurred had been waived, and the High Court, as already stated, proceeded on that assump tion. But I am unable to agree with that conclusion so far as the fifth and sixth instalments are concerned. The Subordinate Judge has, in my opinion, misconstrued the endorsement of the 20th July, 1942 and misunderstood its effect. When Rangaswami determined the lease by his notice dated 13th September, 1941, a sum of Rs. 1,450 payable for the year ended 30th April, 1941, had become due. In the next notice dated 8th May, 1942 he claimed that sum as an "arrear of rent" due under the lease, and he further claimed a like sum as "damages" for the subsequent period ended 30th April, 1942 as the appellant’s possession was "wrongful" during that period. The endorsement of 20th July, 1942 does not disclose in what character the two sums of Rs. 2,450 and Rs. 450 were paid and accepted. All that it shows is that accounts were settled "for my having cultivated your lands" from 30th April 1940 upto 30th April 1942 that Rs. 2,900 was paid and Rs. 447 remained due. It was said that Rs. 2,900 represented the fifth and sixth instalments and Rs. 447 the interest on overdue instalments. 450 were paid and accepted. All that it shows is that accounts were settled "for my having cultivated your lands" from 30th April 1940 upto 30th April 1942 that Rs. 2,900 was paid and Rs. 447 remained due. It was said that Rs. 2,900 represented the fifth and sixth instalments and Rs. 447 the interest on overdue instalments. There is nothing, however, to show, that the Rs. 2,900 was paid to the lessor as instalments of rent. Rangaswami had claimed the identical sum partly as an arrear of rent and partly as damages, and his acceptance of that sum was perfectly consistent with his claim. The language used in the endorsement appears to have been deliberately chosen to avoid the supposition that the "whole sum was accepted as "rent" payable under the lease, so as to lead to the inference of waiver of any right which Rangaswami had till then been asserting or claiming. It is very significant that, while all the previous endorsements [Exs. D-4 (a) to D-4 (e)] refer to the sums paid as the "lease amounts payable" on the various dates, the endorsement of 20th July, 1942 [Ex. D-4 (f)], which is the last of the endorsements, does not use that expression or make any reference to the lease but refers to the " amount paid " for " my having cultivated your lands." It cannot, therefore, be said that the acceptance of Rs. 2,900 in terms of the endorsement amounted to a renewal of the lease. It was argued that Rangaswami was bound, while accepting the payment, to make it clear that he was doing so only for the purpose of the lease and without prejudice to his rights under the agreement, and his failure to make such reservation amounted to a waiver of his right to enforce clause (3) of the agreement. There is no force in this argument which proceeds on a misconception as to what can amount to a waiver. As pointed out by Fry, J., as he then was, in Keene v. Biscoe1, there must be some conduct inconsistent with the right claimed or asserted before its waiver could be inferred or implied. In that case a creditor agreed not to call in the principal for two years if the interest was punctually paid. As pointed out by Fry, J., as he then was, in Keene v. Biscoe1, there must be some conduct inconsistent with the right claimed or asserted before its waiver could be inferred or implied. In that case a creditor agreed not to call in the principal for two years if the interest was punctually paid. On default made on the due date, he demanded payment of the principal sum but subsequently accepted the overdue interest. Holding that the creditor had not thereby waived his right to demand such payment, the learned Judge observed: " Where a right has accrued it can be waived, but to amount to waiver there must be something done which is inconsistent with the continuance of that right. Now, the right here was to immediate payment of £400 and interest, and the receipt of a portion of that sum is in no way inconsistent with that demand. I cannot conceive any case more different from that of receipt of rent after a forfeiture. * * * * * * * * The receipt of money as rent is inconsistent with the determination of the lease. But I see no inconsistency here ". Similarly, I can see no inconsistency in Rangaswami, who had terminated the agreement which had become voidable at his option on default of punctual payment, subsequently accepting the Rs. 2,900 which in any case was due to him by reason of the appellant having cultivated his lands for the two preceding years and which in fact had been demanded by his notice of 8th May, 1942. It appears to me to be impossible to construe the transaction of 20th July, 1942, as an abandonment of the position which Rangaswami took up in his notice of 13th September, 1941, wherein he clearly asserted his legal rights. There was some discussion at the bar as to whether the conditions mentioned in clause (3) of the agreement were conditions precedent or conditions subsequent, and it was said that the High Court erred in regarding them as conditions precedent and applying decisions relating to the construction and enforcement of such conditions. But nothing turns on this distinction. The point of importance is that they were conditions governing the appellant’s right, and though they related to punctual payment of money, must be strictly performed, annexed as they were to what was in the nature of a privilege or concession. But nothing turns on this distinction. The point of importance is that they were conditions governing the appellant’s right, and though they related to punctual payment of money, must be strictly performed, annexed as they were to what was in the nature of a privilege or concession. Both in Davis v. Thomas1 and Keene v. Biscoe2 referred to supra the conditions related to the payment of money at specified periods and were in their nature similar to the conditions we have here. In the former case, the landlord who had agreed to resell had levied distress for the overdue rents treating the lease as subsisting. In the latter, there was a delay of only three days in the payment of the interest. Nevertheless, the condition was strictly enforced and the party not paying the rent or the interest punctually was held to have lost the benefit of the agreement. As regards the decisions relied on by the High Court there are no doubt some distinguishing features but there are observations therein which would seem to support the view that a landlord who waives a breach of covenant resulting in a forfeiture of the lease is not precluded from setting up such breach in answer to a demand of the privilege or concession which he had agreed to grant only on due performance of that covenant. There remains the contention of the respondents that, in any case, inasmuch as Rs. 447 out of the instalments of rent due under the lease remained unpaid on 30th April, 1943, the last date fixed for payment of the price and calling for a reconveyance, the appellant’s claim for specific performance must fail. The appellant’s case is that Rs. 2,900, the payment of which is evidenced by the endorsement dated 20th July, 1942, represented the fifth and sixth instalments of rent due, and Rs. 447 represented the interest payable on overdue instalments, and that, as no time-limit was fixed for the payment of such interest either in the lease or in the agreement, the failure to pay it before 30th April, 1943, could not affect the appellant’s right to claim specific performance. As already noticed, there is nothing in the said endorsement to indicate that the sum of Rs. 447 was due as interest. As already noticed, there is nothing in the said endorsement to indicate that the sum of Rs. 447 was due as interest. All that we have in support of the mode of appropriation suggested above is the appellant’s statement in the course of his deposition that he had not yet paid or deposited “the sum of Rs. 447 due as interest”. Apparently on the strength of this statement the Subordinate Judge treated the sum as interest and held that its non-payment was not a breach of the terms of the agreement. The High Court, however, would seem to regard the sum as an unpaid part of the fifth and sixth instalments of rent. They observed: “By the 20th July, 1942, the lessee had paid less the sum of Rs. 447 what was due in respect of the fifth and sixth instalments.” However that may be, the proper mode of appropriation of the sums paid, in the absence of any indication to the contrary in the endorsement, or any other evidence, would be to apply the payments first in discharge of interest and the balance towards the principal sums due at the time of each payment-see Venkatadri Appa Rao v. Parthasarathi Appa Rao3. If so applied, the sum of Rs. 447 would have to be regarded as representing a portion of the principal sums due for the period ended 30th April, 1942. In that view, the appellant, not having paid all the instalments of rent due in full, in addition to the Rs. 31,500 before 30th April, 1943, as stipulated in the agreement, will not be entitled to the specific performance claimed by him The appeal fails and is dismissed with costs. Mahajan, J.-This is an appeal against the judgment and decree of the High Court of Judicature at Madras dated 12th July, 1945, which reversed the judgment and decree of the Subordinate Judge of Madura, dated 9th March, 1944, passed in Original Suit No. 21 of 1943. The appellants sued for redemption of an alleged mortgage by conditional sale and in the alternative for specific performance of an agreement of re-sale. They were held disentitled to redemption by reason of the proviso inserted in section 58(c) of the Transfer of Property Act by the amending Act of 1929 but were granted a decree for specific performance by the trial Judge. In appeal this was also refused to them. They were held disentitled to redemption by reason of the proviso inserted in section 58(c) of the Transfer of Property Act by the amending Act of 1929 but were granted a decree for specific performance by the trial Judge. In appeal this was also refused to them. Hence this appeal to us under our extended jurisdiction On the 13th October, 1921, a mortgage transaction in respect of 58-59 acres of agricultural lands was entered into between the parties (or those whom they represent), to secure a loan of Rs. 20,000, bearing interest at ten and a half per cent. The appellants were the mortgagors and the respondents the mortgagees. An additional loan of Rs. 5,000 was borrowed on the same security on the 12th March, 1929. On the 7th January, 1937, the sup due under these mortgages was Rs. 31,300, in spite of payments made meanwhile in the sum of Rs. 25,000. A settlement was arrived at between the parties on that date under which the mortgagors sold to the mortgagees 32.17 acres out of the mortgaged property for the above amount. Two days later an agreement of re-sale in respect of the land was executed between them, and the respondents agreed to sell the lands purchased by them, to the appellants for a price of Rs.31,500. The relevant terms of this agreement are these: 1. "Party No. a aforesaid agrees to obtain a sale of the undermentioned properties in his name or in the name of others to be specified by him, paying a net amount of Rs. 31,500 as the sale price of the said properties, within the period commencing from this day and up to 30th April, 1943 the said party No. 2 himself undertaking to bear all the expenses that may have to be incurred in respect of this sale, and party No. 1 aforesaid, agrees to sell the said properties accordingly receiving the net amount of Rs. 31,500. 2. If this agreement does not stand cancelled under clause 3 infra, this agreement shall be in force only up to 30th April, 1943. Time is the essence of this agreement. 3. 31,500. 2. If this agreement does not stand cancelled under clause 3 infra, this agreement shall be in force only up to 30th April, 1943. Time is the essence of this agreement. 3. Should the said party No. 2 without making payment of the amount in full, be in arrears in respect of any instalment, out of the seven instalments of the lease amounts payable in each year on the 30th April of the respective year and of the lease amount alone payable by 30th September 1937, on the succeeding due date, i.e., by 30th April, 1938 or, should he be in arrears without wholly paying the sircar kist, etc., pertaining to the lands covered by the lease, which he himself has promised to pay for the lease period, i.e., from fasli 1345 (1935-36) to fasli 1353 (1942-43) as mentioned in the lease deed, this sale agreement shall stand cancelled forthwith without reference to the subsequent due dates and furthermore, the aforesaid party No. a shall forfeit all the rights and reliefs belonging to the said party No. 2 under this agreement. Subject to the aforesaid condition alone we have entered into this agreement of sales, with mutual consent. 4. As advance in respect of this sale agreement, the aforesaid party No. 2 has paid Rs. 10 to the said party No. 1 in the presence of the Registrar. Excluding the said sum, the balance sale amount viz., Rs. 31,490 only is yet due as of sale, aforesaid." On the same day the land was leased to the appellants by the respondents for a period of six years. The relevant portion of this document runs thus: " The said lessee shall pay therefor, the net lease amount after deducting all expenses, which he has promised to pay to the said lessor in cash in seven instalments, viz., Rs. 700 by 30th September 1937, Rs. 1,450 by 30th April, 1938, Rs. 1,450 by 30th April, 1939, Rs. 1,450 by 30th April, 1940, Rs. 1,450 by 30th April, 1941, Rs. 1,450 by 30th April, 1942, Rs. 700 by 30th September 1937, Rs. 1,450 by 30th April, 1938, Rs. 1,450 by 30th April, 1939, Rs. 1,450 by 30th April, 1940, Rs. 1,450 by 30th April, 1941, Rs. 1,450 by 30th April, 1942, Rs. 1,450 by 30th April, 1943-shall pay the lease amounts stated above by the respective due dates, without raising any plea such as loss due to act of State, act of God, etc., and irrespective of whether the said lessee has cultivated the said lease lands or not and whether the produce has been realized from the said lands or not, and I shall make endorsement of payment on the said lease deed itself, in support of payment so made; the said lessee shall also pay the sirkar kist, cess, tax, etc., pertaining to the lands covered by this lease for the entire period of lease, without default on the due dates fixed by the Government, out of his own funds shall have the same credited to the aforesaid lessor, shall obtain receipts and hand over the said receipts forthwith to the said lessor. Should the said lessee be in arrears of tax assessment, etc., due to Government in respect of the lands covered by this lease, in respect of any one instalment without making payment of the entire amount on the respective due dates in the respective faslis, in accordance with the due dates as fixed by Government, which the said lessee has promised to pay out of his own funds for the entire period of lease, i.e., from fasli 1346 to fasli 1352 (1936-37 to 1943-43) or should the said lessee be in arrears of cash lease amount in respect of any instalment without making payment of the entire lease amount by the aforesaid due dates which the said lessee has promised to pay in accordance with the aforesaid due dates, the said lessee shall make the entire loss caused thereby to the said lessor, out of his own funds and on his personal liability. Besides, he shall forthwith forfeit his lease right without reference to subsequent instalments. Further, the said lessor shall hereby have the right to enter in the properties covered by the said lease, without reference to future instalments and without intimating the said lessee and to enjoy the same as he liked or to re-lease the same to others according to his pleasure. Further, the said lessor shall hereby have the right to enter in the properties covered by the said lease, without reference to future instalments and without intimating the said lessee and to enjoy the same as he liked or to re-lease the same to others according to his pleasure. Furthermore, should the said lessee be in arrears of cash rent in respect of any instalment without making payment of the entire cash rent which he has promised to pay on the due dates referred to above, the said lessor hereby has the right to realize the said arrears of cash rent together with interest at the rate of one per cent, per mensem from the date of default as stated above, by proceeding against the said lessee’s own funds, and against him personally......" The first instalment of rent was paid in time. Default was committed in respect of the payment of the subsequent instalments on the due dates. They were, however, paid in the following manner:(i) The second instalment due on 30th April, 1938, was paid on the 13th May, 1938, and 1st October, 1938, and the payment was endorsed on the lease deed on the 25th December, 1938, without prejudice to the rights of the lessor on the basis of the sale agreement; (ii) the third instalment due on 30th April, 1939, was paid on the 12th December, 1939, and the payment was endorsed on the lease deed; (iii) the fourth instalment due on 30th April, 1940, was paid on 22nd December, 1940; (iv) the fifth and sixth instalments due on 30th April, 1941 and 30th April, 1942, respectively were paid together on 3rd June, 1942, and 20th July, 1942, to the fullest extent. The seventh instalment was not paid as the suit out of which this appeal arises was instituted before its due date. When the defaults occurred, correspondence started between the parties and the first of these letters is dated 2nd May, 1938. This was issued after the appellants had defaulted in the payment of the second instalment. It was stated therein that under condition No. 3 of the registered sale agreement is stood cancelled and that the appellants had forfeited all the rights and reliefs under the agreement which would not be in force thereafter. This was issued after the appellants had defaulted in the payment of the second instalment. It was stated therein that under condition No. 3 of the registered sale agreement is stood cancelled and that the appellants had forfeited all the rights and reliefs under the agreement which would not be in force thereafter. It also stated that if the amount was not paid within one week with interest, the lease executed on 9th January, 1937, would also become cancelled without reference to the subsequent instalments. Certain other matters which are not material were also stated in this letter. It seems that in pursuance of this notice the second instalment was paid, partly within a few days of its issue and partly in October, 1938. No steps were taken by the lessor to forfeit the lease and to enter into possession of the property. The rent due for the subsequent instalment, as already mentioned, was received on 12th December, 1939. When the fourth instalment was defaulted, a notice was issued on the 19th August, 1940, on behalf of the lessor again stating that the agreement relating to re-sale entered into on 9th January, 1937, stood cancelled. Demand was made for the amount due under the lease and it was further said that the lease also stood cancelled and that the lessee should not enter on the lands without obtaining the permission of the lessor. A suit was threatened. This notice had the desired effect and payment was made of the amount due on the 22nd December, 1940. A third notice was issued on the 13th September, 1941, after default had been made in the payment of the fifth instalment. After repeating the whole history of the previous defaults committed by the lessee the notice proceeds to say that even now the amount due on 30th April, 1941, has not been paid, that the lease has become forfeited and has been determined and as a consequence thereof the sale agreement has become cancelled. Demand was made for the payment of Rs. 1,450 together with interest at one per cent, and possession was asked to be delivered of the leased lands. A suit was threatened if the requirement of the notice were not fulfilled. In spite of this notice the lessee committed default in the payment of the sixth instalment as well. Demand was made for the payment of Rs. 1,450 together with interest at one per cent, and possession was asked to be delivered of the leased lands. A suit was threatened if the requirement of the notice were not fulfilled. In spite of this notice the lessee committed default in the payment of the sixth instalment as well. Within a month of this default another notice was issued by the lessor to the lessee. After referring to the previous notice it proceeds to say that possession has not been re-delivered, arrears of rent have not been paid, and that the lessee is wrongfully occupying the properties even though the lease has been determined. The amount due was demanded within one week from the receipt of the notice and delivery of possession was also asked for. A suit was threatened in case the lessee failed to comply with the requirements of the notice. It was after service of this notice that the amount due on the two instalments was paid, partly in June, 1942, and partly in July, 1942. It appears that on the 20th July, 1942, accounts were made between the parties and the following endorsement was made on the lease deed: “For my having cultivated your lands at Villampati from 30th April, 1940, onwards, amount paid bv me to you on 3rd June, 1942, is Rs. 2,450, and amount paid this day, i.e., on 20th July, 1942, is Rs. 450. Excluding this amount setteld as due by me to you up to 30th April, 1942, is Rs. 447.” This amount of the two overdue instalments was paid and on account of interest owing to defaults, a sum of Rs. 447 remained due. No steps were taken to dispossess the lessee and to resume possession of the lands. On the 24th December, 1942, before the seventh instalment fell due, a notice was again issued by the lessor to the lessee. After recounting the previous history of the dealings between the parties, the notice stated as follows: “thereupon, you paid Rs. 2,450 on 3rd June, 1942, and Rs. 450 on 20th July, 1942, that you represented to him that you would forthwith pay Rs. After recounting the previous history of the dealings between the parties, the notice stated as follows: “thereupon, you paid Rs. 2,450 on 3rd June, 1942, and Rs. 450 on 20th July, 1942, that you represented to him that you would forthwith pay Rs. 447 towards the balance and subsequent interest and damages, hand over the kist receipts for fasli 1351 and deliver possession of the properties to him and went away, that you have been gaining time without paying the balance due, without delivering possession of the properties and without handing over the kist receipts for fasli 1351 and that, as the lease had been determined on account of your default and as you have been ploughing and cultivating the properties wrongfully, improperly and contrary to the agreement, you should, for the current fasli and till possession of those lands is delivered as aforesaid, be paying either paddy at the rate of 800 kalams of 54 Madras measures each or cash of Rs. 7,500 being the price thereof at the present market rate by way of damages and that you should also pay the balance amount of Rs. 447 together with the subsequent interest thereon”. A note was appended to the notice in the following terms: “As, according to the registered notices sent to you on 19th August, 1940 and 13th September 1911, by the late T.V.Rangaswami Ayyar Avargal, the sale agreement, dated 9th January, 1937 has become alreadv cancelled on account of your default, further notice is hereby given to you that it is not in force and that you have no manner of right in respect thereof.” On the 8th February, 1943, a reply was sent to this notice on behalf of the appellants, in which it was claimed that the appellants were entitled to specific performance of the agreement and their right was unaffected by any of the matters referred to in the respondents’ notice. On the 5th March, 1943, the appellants filed the suit giving rise to this appeal for the reliefs already stated and with the results above mentioned. On the 5th March, 1943, the appellants filed the suit giving rise to this appeal for the reliefs already stated and with the results above mentioned. The trial Judge decreed specific performance on the finding that the penal provisions of paragraph 3 of the agreement did not come into effect so as to take away the plaintiffs’ right to obtain a reconveyance and that though the payments of instalments of rent were not made on the due dates, yet they had been accepted by the lessor without any reservation and this conduct on his part showed that he had agreed to extend the time for making them by waiving the delay. The plaintiffs were directed to deposit a sum of Rs. 2,184 due on the terms of the lease, in Court along with Rs. 31,500, the sale price, and the respondents were ordered to take these amounts on executing the necessary conveyance. The learned Tudges of the High Court held that the lessor did not, as he had a right to do, forfeit the lease, but that he made it quite clear that in accepting the payments of rent after the due date he was still insisting on his right of ignoring the agreement for re-sale because the non-fulfilment of the conditions of that agreement. Following the decision in Bastin v. Bidwell1, their Lordships allowed the appeal and dismissed the plaintiffs’ suit for specific performance. The question for consideration is whether the High Court rightly held that the case stood decided on the rule laid down in Bastin v. Bidwell1. In my judgment the rule laid down by their Lordships of the Privy Council in Kilmer v. British Columbia Orchards Lands, Limited2 and in Devendra Prasad Sukul v. Surendra Prasad Sukul1 is applicable to this case in preference to that laid down in Bastin v. Bidwell2. The case which is very analogous to the present is Davis v. Thomas3and it appositely brings out the distinction between the two sets of cases. In cases of non-payment of money on due dates the Court relieves against penalty or forfeiture; but when it is not a question of a penalty or a forfeiture, but a privilege is conferred upon payment of money at a stated period, the privilege is lost if the money is not paid accordingly. In cases of non-payment of money on due dates the Court relieves against penalty or forfeiture; but when it is not a question of a penalty or a forfeiture, but a privilege is conferred upon payment of money at a stated period, the privilege is lost if the money is not paid accordingly. If it is held that on the 9th January, 1937, a privilege was conferred upon payment of money at a stated period on the appellants by the respondents, then the rule laid down in Davis v. Thomas3 or Bastin v. Bidwell2 will apply. On the other hand, if it is held that the provision that in case of non-payment of money, the lease as well as the sale agreement will stand cancelled is in the nature of a penalty or amounts to a forfeiture clause then the relief by way of specific performance cannot be refused and the rule in Bastin v. Bidwell3 will not govern the case. The cases cited on behalf of the appellants all relate to option contracts. In some of them renewal of a lease could be claimed if certain payments were made punctually or if certain acts were done by the lessee. In others an indulgence was promised or a privilege conferred by one party on the other on fulfilment of certain conditions. In these it was held that the privilege could only be availed of if the conditions on the basis of which it was conferred were strictly complied with. In Davis v. Thomas3, the plaintiff, being entitled to the equity of redemption of a certain estate, conveyed the same to Mrs. Twyning, the mortgagee, in consideration of £1,800 made up of the mortgage debt and of an additional sum of money paid to him. In Davis v. Thomas3, the plaintiff, being entitled to the equity of redemption of a certain estate, conveyed the same to Mrs. Twyning, the mortgagee, in consideration of £1,800 made up of the mortgage debt and of an additional sum of money paid to him. The mortgagee demised the estate to the plaintiff for a term of 99 years, determinable on the death of the survivor of him, his wife, and son, at a rent of £105, payable half-yearly at Lady-day and Michaelmas; and on the lease there was endorsed on agreement signed by the mortgagee, by which it was stipulated that, in case, the plaintiff regularly paid the rent due at Lady-day by the 4th of June, and the rent due at Michaelmas by the 26th of October, he should be at liberty to repurchase the premises at the price of £1,850, at any time within five years; but if default were made in the payment of the rent within the stated periods, the agreement was to be void. The plaintiff failed in the payment of his rent at the periods stated but within five years applied to repurchase and at the same time tendered the arrears of rent then due. The defendant refused to permit the repurchase with the result that the bill was filed by the plaintiff to have the benefit of the stipulation in that respect. He was non-suited and the judgment was delivered in the following terms: “Upon the other question, can I reasonably hold that where a man has mortgaged an estate, and two years afterwards has made a conveyance of that estate, and then, again, three months subsequently, upon obtaining a lease of the same estate from the purchaser, procures to be endorsed upon that lease, by way of indulgence, a power to repurchase the property on certain terms,-can I reasonably hold, that,‘because he obtains this power of repurchase, all the different instruments form parts of one conveyance? And yet, unless I am to hold that, and unless I am to lay it down, moreover, that the man who possesses such a right of repurchase though acting with his eyes open, and using words the most stringent (and no words can be stronger than those which are employed here), to make time of the essence of the contract, can never, in any event, deprive himself of the benefit of that contract, I cannot possibly arrive at the conclusion that the decision of His Honour ought to be reversed. Looking to the language of the condition, which is positive and express, I cannot say that the plaintiff comes in due time, or that he has entitled himself by his conduct to the benefit which he now claims.” In Bastin v. Bidwell2, on which reliance has been placed by the High Court, the lease of a house contained a covenant by the lessee to pay the rent and keep the premises in repair, and to paint the outside and inside at certain fixed periods, the lessor covenanting that the lessee should be entitled, on giving six months’ notice before the end of the term, to have a further lease for twenty-one years upon paying the rent and performing and observing the covenants in his lease. The lessee applied for a renewal of the lease, but the lessor refused to grant such renewal, on. the ground that the covenants had not been fulfilled either at the date of the six months’ notice or at its expiration. It was held that the performance of the covenants was a condition precedent to the lessee’s privilege of having a renewed lease, and, the requisite painting and repairs not having been completed either when the six months’ notice was given or when it expired, the lessee was not entitled to a renewal of his lease. The learned Judge at page 250 observed as follows: “First of all looking to the scheme of the whole thing, it is apparent that what is granted to the tenant by this covenant is a privilege. He is to be entitled to renew, i.e., in every sense a privilege. I di not think the cases of Boone v. Eyre1 and Stapers v. Curling2 affect the matter at all. To use the technical language in Boone v. Eyre1, this is a matter which goes to the whole consideration. He is to be entitled to renew, i.e., in every sense a privilege. I di not think the cases of Boone v. Eyre1 and Stapers v. Curling2 affect the matter at all. To use the technical language in Boone v. Eyre1, this is a matter which goes to the whole consideration. It is obvious the meaning was this: the landlord must have intended by a covenant worded like this to say: ‘I shall have the term in which to see whether you are such a tenant as I shall think it right and expedient to grant a new lease to, and the test I propose in words is this, whether when you come for your new lease, or whether at some time or other you have paid your rent and performed your covenants’. I am not able to see, looking at the scheme of the whole lease, how these can be anything but words of condition. Then I look at it grammatically, and I find the words to be these, ‘And further, the lessees shall be entitled, on giving six months’ notice before the expiration of the term, to have a further lease of twenty-one years at a certain rent, upon the lessees paying the rent and performing and observing the covenants.‘I put to Mr. Leeke, who argued this case extremely well, this point, is it possible to deny that the giving oT six months’ notice was a precedent condition? Of course, he was bound to admit that must be a precedent condition. But then the very same phraseology is used with respect to the covenants. It is upon performing the covenants; and looking at it grammatically, if ‘on giving six months’ notice’ are words in which a condition is expressed, why should not ‘upon performing covenants’ similarly express a condition? Grammatically, I think that construction is one which is a fair construction of this clause. Therefore, upon the whole, looking to the intention of the parties, and looking to the grammatical construction of the clause, I think, construing this, as I quite agree every Court is bound to construe such a provision, with regard to the whole lease and to the meaning and intention of the parties to be gathered from every part of it, it is a condition and not a covenant.” I now proceed to examine the true nature of the agreement in the present case. The appellants as mortgagors on the 7th January, 1937, were in the situation that a debt of Rs. 31,300 was due from them and they had no means to pay it. They therefore sold to the mortgagees a part of the mortgaged property for the mortgage debt. Two days later, the mortgagees executed in their favour an agreement of re-sale under which the mortgagors could demand specific performance of it within a period of six years on payment of a price of Rs. 31,500. Rs. 10 was paid by way of earnest money. For the period during which the re-sale agreement was to be operative the mortgagors were left in possession of the whole property on foot of a lease the period of which was the same as of the agreement itself. The rent due was payable in seven instalments. It is not unlikely that the mortgagee agreed both to give a lease and an agreement of re-sale because without these he might not have been able to obtain the sale deed and may have to go to Court to recover his debt. He however stipulated that he would have a right to forfeit the lease as well as the agreement of sale and would have the power to cancel it if the instalments were not punctually paid. A double penalty was provided in case the payments were not punctually made. The forfeiture and cancellation clauses secured to the mortgagees the punctual performance of the terms of the lease. After the expiry of the period given to the buyer, the seller had a right to claim specific performance of the agreement of sale if he desired the sale price in preference to the property. The agreement of re-sale is a concluded contract between the parties, which both of them could mutually enforce, subject, of course, to the condition that the seller could not enforce it within the time stipulated. This point was not disputed by the learned counsel for the respondents. He argued that the contract was unilateral up to a stage and bilateral later on. The buyer could enforce the contract at any moment. The seller was given the power to forfeit the lease and to cancel the agreement of sale in case the buyer defaulted in punctual payments of the lease instalments. He argued that the contract was unilateral up to a stage and bilateral later on. The buyer could enforce the contract at any moment. The seller was given the power to forfeit the lease and to cancel the agreement of sale in case the buyer defaulted in punctual payments of the lease instalments. It has further to be observed that the buyer could not himself commit a default and then urge that the contract of sale stood cancelled. The option to cancel was vested in the seller alone. He could waive the cancellation if he so desired. No option of any kind has been conferred by this agreement on the buyer. He is not in a position to say “I will not buy the property and I do not like to enforce it. I thank you for your indulgence but it does not now suit me to avail of it”. He cannot commit default and say “the agreement is at an end”. It is not a case where any indulgence has been shown to the buyer or a case where a privilege has been conferred upon him, which he may take benefit of or not at his choice or at his sweet will and pleasure and tell the seller that he does not want the contract of sale to subsist and is prepared to cancel it and make the seller bound by such declarations and conduct on his part. Under this agreement it was open to the seller to enforce specific performance of the agreement and to recover the price if the buyer committed a breach anticipatory or otherwise. It cannot be disputed that if the market went down, the seller inspite of default, if he chose, could specifically enforce the agreement. He could do the same even if the buyer informed him that he did not want the privilege. This agreement is one which binds both parties hand and foot with mutual rights. To a contract of this nature the rule of option contracts, like Bastin v. Bidwell1 or of privilege cases like Davis v. Thomas2 is not applicable at all and the learned Judges of the High Court were in error when they held that the case was concluded by the decision in Bastin v. Bidwell1. To a contract of this nature the rule of option contracts, like Bastin v. Bidwell1 or of privilege cases like Davis v. Thomas2 is not applicable at all and the learned Judges of the High Court were in error when they held that the case was concluded by the decision in Bastin v. Bidwell1. The correct rule applicable to the case is the one laid down by their Lordships of the Privy Council in Kilmer v. British Columbia Orchard Lands, Limited3. In that case an agreement for sale by the respondent company of lands in British Columbia for a price to be paid in instalments at specified dates contained a clause of forfeiture both of the agreement and of all payments of past instalments of purchase money in case of default of punctual payment of any one instalment; and time was declared to be of the essence of the agreement. Default having been made, the company sued to enforce the forfeiture. The appellant paid into Court the instalment due and counterclaimed for specific performance. It was held that the condition of forfeiture was in the nature of a penalty from which the appellant was entitled to be relieved on payment of the purchase money due. It was held that |the case was entirely within the ruling of the Dagenham Dock case4. In In re Dagenharm (Thames) Dock Company: Ex parte Hulse4, a company incorporated by Act of Parliament for making a dock agreed with a landowner to purchase a piece of land for £4,000, of which £2,000 was to be paid at once, and the remaining £2,000 on a future day named in the agreement, with a provision that if the whole of the £2,000 and interest was not paid off by that day, in which respect time was to be of the essence of the contract, the vendors might re-possess the land as of their former estate, without any obligation to repay any part of the purchase-money and it was held that this stipulation was in the nature of a penalty, from which the company was entitled to be relieved on payment of the balance of the purchase-money with interest. Devendra Prasad Sukul v. Surendra Prasad Sukul5, a mortgage was executed in’favour of certain persons to secure repayment of Rs.23,000. Devendra Prasad Sukul v. Surendra Prasad Sukul5, a mortgage was executed in’favour of certain persons to secure repayment of Rs.23,000. In order to discharge the mortgage a registered sale deed was executed under which the appellants sold part of tie mortgaged property to the respondents for Rs.31,000. The sale deed, which embodied the act of transfer, was executed by the first appellant and consented to by the other appellants. It stated that at that date Rs. 29,072 principal with interest and compound interest was due under the mortgage and payable to the mortgagees and that of the purchase price Rs. 29,072 was left in deposit with the purchasers for them to discharge the sum due to the mortgagees. The balance of Rs. 1,928 was paid in cash. The sale deed further stipulated that if the sum due to the mortgagees had not been met by the purchasers by December 30, 1925, and the consideration money remained with them, the sale deed should be cancelled and null and void. The purchasers obtained possession of the property and paid Rs. 10,000 to the mortgagees on October 15, 1925, in part discharge of principal and interest. Nothing further having been paid the appellants on August 16, 1926, sought a declaration that the sale deed had become cancelled and null and void and a decree for recovery of possession of the property and for interest and mesne profit. On September 14, 1926, the respondents paid the final balance of Rs. 22,131 due to the mortgagees. The Subordinate Judge was of the opinion that time was of the essence of the contract and declared the sale deed null and void. The High Court of Patna allowed the appeal and held that the sale was not a conditional one and that time was not of the essence of the contract. Lord Thankerton, while delivering the judgment of their Lordships of the Privy Council, observed as follows: “In the present case the contract of sale and the act of transfer are embodied in the same deed . In their Lordships’ opinion, the clause in dispute is to be regarded as an integral condition of the contract of sale, providing the date for completion of the contract of satisfaction of the balance of the contract price. In their Lordships’ opinion, the clause in dispute is to be regarded as an integral condition of the contract of sale, providing the date for completion of the contract of satisfaction of the balance of the contract price. The statement in the deed that the vendor has already received the entire consideration money cannot be taken literally so as to contradict the clear fact that the balance of the price had not been paid to the vendor himself, but was to be paid thereafter to his creditors by the date prescribed. In the opinion of their Lordships there is nothing in section 31, which merely declares that a limitation upon a condition subsequent is a lawful method of grant, to exclude the right of the Court to give relief to the purchaser who fails to make payment of the price, or part thereof, by the date agreed upon in the contract of sale. Their Lordships are therefore unable to accept the first contention of the appellants.” These two cases clearly show that even in cases where the sale price is to be paid in instalments and punctual payment of instalment is insisted upon and is made the essence of the contract and in cases of default it is provided that the contract of sale shall stand cancelled, it has been held that the Court can relieve against such a clause. The case of punctual payments of lease instalment cannot be placed on a higher footing than the case of punctual payments of the instalment of the sale price itself. A default in payment of one instalment of lease money involved the buyer in two serious consequences, forfeiture of the lease and deprivation of a very valuable right under the sale agreement. The seller is fully safeguarded by the right conferred upon him to recover the full amount due along with interest at one per cent, and by his right to enforce specific performance of the agreement if the property fell in value. The penalty provided against the buyer is wholly disproportionate to the injury suffered by the seller on account of delay in the payment of the instalments. The clause therefore is in the nature of a penal provision and the term is one in terrorem. Moreover, the coming into existence of the right of the buyer under the agreement is not conditional on the performance of any condition. The clause therefore is in the nature of a penal provision and the term is one in terrorem. Moreover, the coming into existence of the right of the buyer under the agreement is not conditional on the performance of any condition. It is not a case of either a condition precedent or a condition subsequent because the rights under the agreement came into existence at once on its completion. It was conceded that next day after the execution of the agreement before any instalments fell due the buyer could claim specific performance of the contract of sale, though the right of the seller to claim specific performance was postponed. That fact however does not detract from the binding nature of the contract and of its immediate enforceability. Once it is conceded that the contract of sale was enforceable the moment it was signed, no question can arise that its coming into existence depended on the fulfilment of a condition precedent or that by reason of a condition subsequent the right would automatically cease on its non-fulfilment. In my opinion, therefore, clause 3 of the agreement is in the nature of a penal or a forfeiture clause and the Courts of equity can relieve against it and grant specific performance by giving compensation to the seller in respect of the injury caused to him by default of the buyer. Reference was made to the decision in Samarapuri Chettiar v. Sudarsanachariar1, in which it was held that the right to repurchase was in the nature of an option and must be exercised according to the strict terms of the power. The material terms of the agreement were as follows: “If you or any one authorized by you pay up the sale amount to me or my heirs at any time within five years from this day, within a 1st October, 1913, myself or my heirs shall sell to you.....This agreement will not be valid after the stipulated period. After the expiration of the said period, you will claim no right or privilege whatever to this agreement.” The plaintiffs did not pay the price on the stipulated date and tendered it after a year and few months after the stipulated time. After the expiration of the said period, you will claim no right or privilege whatever to this agreement.” The plaintiffs did not pay the price on the stipulated date and tendered it after a year and few months after the stipulated time. Sadasiva Ayyar, J., held that if the transaction evidenced by the document was not a mortgage, the right to repurchase being an option must be exercised according to the strict terms of the power. The case is clearly distinguishable from the facts of the present case. It was not a case where the seller could enforce specific performance against the buyer. Munshi Lal v. Ahmed Mirza Beg1, was however a case near the present case and the rule laid down in it has greater application to the facts of this case than laid down in Samarapuri Chettiar v. Sudarsanachariar2. It was observed therein that the remedy of forfeiture given to the seller was in the nature of a liability imposed on the defendants as a punishment for their committing a breach of the agreement. In order to constitute a penalty all that is necessary to establish is that there is an element of punishment in it, however well deserved and temperate such punishment might be. It is not possible to say that in the present case there is no element of punishment in the stipulation that default in the punctual payment of instalments would not only lead to forfeiture of the lease itself but would also entitle the seller to cancel a valuable agreement of sale regarding property worth Rs. 31,500. It has to be pointed out that the seller is at the same time entitled to recover the full amount of the instalments along with quite a good rate of interest. Reference was also made to the decision in Burjorji Shapurji v. Madhavlal Jesingbhai3. In that case there was a contract for the payment of a larger sum with a concession enabling a smaller sum to be paid in a particular way in full satisfaction. It was observed that the terms of the agreement must be carried out according to the intention of the parties and that time was of the essence of the contract. That case is no authority for a decision of this case. Reliance was placed on certain observations made by the House of Lords in Maclaine v. Gatty4. It was observed that the terms of the agreement must be carried out according to the intention of the parties and that time was of the essence of the contract. That case is no authority for a decision of this case. Reliance was placed on certain observations made by the House of Lords in Maclaine v. Gatty4. In that case it was stipulated that on punctual payment of interest the loan shall not be called in for fourteen years and that the five per cent, interest stipulated for in the bond should be modified to four per cent, so long as interest at the said lower rate was punctually paid. Default having been made in the punctual payment of interest, it was observed that the rights under the bond should be strictly performed. This case is again one governed by the rule relating to option or concession contracts. For the reasons given above I am of the opinion that the High Court was in error when it applied the rule in Bastin v. Bidwell5 to the agreement in quesion here. It should have been held that the default clause was in its nature penal and the Court could grant relief against it on giving proper compensation to the seller. There is another aspect of this case on which the trial Judge based his decision. He held that by receipt of subsequent payments of the lease instalments the lessor had waived the forfeiture of the lease and as soon as that stood waived, the penalty mentioned in clause 3 of the sale agreement automatically became unenforceable. If belated payments of rent were treated as good payments under the lease, and condoned the default, clause 3 of the agreement in that event could not furnish a defence to the respondent to resist a claim of specific performance. The High Court affirmed the decision of the trial Judge on the question of waiver. This finding was not challenged in the first instance before us by the learned counsel for the appellants but towards the tail end of his arguments he urged that as regards the payments of the fifth and the sixth instalments there was no waiver by acceptance of the overdue instalment. This finding was not challenged in the first instance before us by the learned counsel for the appellants but towards the tail end of his arguments he urged that as regards the payments of the fifth and the sixth instalments there was no waiver by acceptance of the overdue instalment. It was conceded that the first four instalments having been received the lease subsisted till then because the act of the lessor in receiving those instalments put an end to the right of forfeiture. Receipt of rent after the forfeiture has been incurred is an act inconsistent with the continuance of forfeiture; in other words, such a receipt is inconsistent with the termination of the lease. As regards the fifth and the sixth instalments, however, all that happened was that the amount already due was received. In the terms of section 112 therefore there has been no waiver of this forfeiture. The finding as to waiver can, however, be supported on the ground that when accounts were made between the parties in July, 1942, and a sum of Rs. 447 was determined to be due, and the payments made in June and July were treated as payments towards instalments of rents overdue, the accounting seems to have proceeded on the assumption that the lease still subsisted. It is not conceivable that the lessee made accounts with the lessor and paid the amounts of the two overdue instalments and admitted liability for the interest due except on the understanding that the lease still subsisted. It has to be remembered that these accounts were made in July, 1942, and were for the period ending 30th April, 1942, the date on which the sixth instalment fell due. If the accounts had been made up to July 1942, the matter might have been different. In my opinion, this account was on the basis that the relationship of lessor and lessee still subsisted and the respondent had given up the demand for re-entry on the leased premises. The notice issued after July, 1942, calling upon the lessee to give up possession also indicates that the previous demand for possession was not regarded seriously. It was only when Rs. 477 were not paid that the demand for delivery of possession was repeated. The notice issued after July, 1942, calling upon the lessee to give up possession also indicates that the previous demand for possession was not regarded seriously. It was only when Rs. 477 were not paid that the demand for delivery of possession was repeated. Be that as it may, even if no waiver is held proved, the provision of sections 114 and 114-A of the Transfer of Property Act would fully apply to the case and entitle the Court to relieve the lessee of the penalty of forfeiture which he had incurred by reason of the defaults. If the lessor, as threatened by him, instituted a suit for dispossession of the lessee on the basis of the defaults incurred, the lessee was entitled to plead in defence the provisions of section 114 of the Transfer of Property Act and the Court was bound to dismiss the suit if the amount due was paid in Court. That being so, it cannot be held that the lease stood automatically forfeited. Once it is held that the lease does not stand automatically forfeited, and the penal clause of forfeiture in the lease is unenforceable in view of the provisions of section 114 of the Transfer of Property Act, it is difficult to hold that by virtue of clause 3 of the agreement the contract of sale stands cancelled. One act of default in respect of the same amount of money entailed in its consequence two penalties and if relief is given in respect of that default by the Court, that does away with the forfeiture of the lease, it is not possible to hold that the other penalty for the same act can be enforced by the holder of it. The sting of the default clause primarily had a fatal effect on the lease, but once it is held that the sting is of no effect, then it is difficult to say that it can fatally affect the agreement. The agreement of re-sale and the lease were substantially parts of one arrangement. The lease was to subsist for six years because that was the outside limit fixed for the enforcement of the agreement. It could never have been intended that the lease would subsist but the sale agreement would stand cancelled. Either both stand cancelled or both have to be considered alive. The lease was to subsist for six years because that was the outside limit fixed for the enforcement of the agreement. It could never have been intended that the lease would subsist but the sale agreement would stand cancelled. Either both stand cancelled or both have to be considered alive. It cannot be that one is afloat and the other is drowned. Relief against forfeiture is given on payment of the amount due along with full compensation and once that is done, the punctuality of payment of instalments no longer remains as the essence of the contract. Any other rule than the one that I propose to apply to this case will work great hardship and injustice. The value of property has gone up considerably. The respondents wish to retain it under cover of the default clause, which clause causes a very small injury to them and for which they can be adequately compensated, while strict enforcement of it operates to the great detriment of the appellants. Such a harsh consequence, if possible, has to be avoided if it does not in any way transgress any well-established principles. Such a course is consistent with the rules of equity, justice and good conscience. It must also be observed that the acceptance of overdue payments of monies payable by instalments by a creditor amounts to a waiver of a default clause which provides that on non-payment of any instalment the whole amount will become due. When a creditor is entitled to claim the whole amount and yet he receives one or two overdue instalments it is inconsistent with the right to claim the whole amount and thus amounts to a waiver. If the instalments payable under the agreement are treated independent of the lease money, then receipt of the overdue instalment by the creditor amounts to a waiver of the default and annuls the penalty of cancellation. For the reasons given above I am of the opinion that this appeal should be allowed, the decision of the High Court set aside and that of the trial Judge restored. Mukherjea, J.-I regret, that it has not been possible for me to accept the view taken by the majority of my learned colleagues. In my opinion, the decision of the High Court is wrong and this appeal should be allowed. Mukherjea, J.-I regret, that it has not been possible for me to accept the view taken by the majority of my learned colleagues. In my opinion, the decision of the High Court is wrong and this appeal should be allowed. The suit out of which this appeal arises was commenced by the present appellants as plaintiffs, for redemption of an alleged mortgage by conditional sale, of the property in suit, the mortgage said to be constituted by three documents: the first of which purported to be an out-and-out sale of the property in question, the second an indenture of lease executed by the purchaser in favour of the vendor in respect of the same and the third an agreement of re-transfer by which the vendee agreed to re-transfer the property to the vendor on the terms and conditions set out therein. In the alternative, there was a prayer for specific performance of the agreement for re-purchase in case the documents were held not to constitute a mortgage in law. After the case was opened in the trial Court, it was ruled by the learned Subordinate Judge that as admittedly there were more than one document in the present case and the condition of re-transfer was not embodied in the same instrument which effected or purported to effect the sale, the transaction could not be regarded as mortgage in view of the proviso to clause (c) of section 58, Transfer of Property Act, introduced by the amending Act of 1929, and the plaintiffs, therefore, Were not competent to lead evidence to show that the three documents taken together amounted to a transaction by way of mortgage. This position, it seems, was not controverted by the plaintiffs when the case came up in appeal before the High Court, and the point has not been canvassed before us. We are not, therefore, concerned with the question of redemption of any mortgage in the present case; the only question for consideration is whether the plaintiffs are entitled to a decree for specific performance of the agreement for re-sale of the suit property; and on this point the Courts below have taken divergent views, the trial Judge being of opinion that the plaintiffs were entitled to a decree, whereas the High Court in appeal has held otherwise. To appreciate the contentions that have been raised before us, it would be necessary to narrate a few material facts. The plaintiffs appellants, who are 7 in number, are members of a joint Hindu family and the property in suit, comprising an area of 32.17 acres of wet land, was admittedly owned by this family. On 13th October, 1921, the appellants 1 and 2 acting on behalf of the whole family borrowed a sum of Rs. 20,000 from one Visvanath Ayyar, who together with his two brothers, constituted an undivided Hindu family, and, as a security for the loan, executed in favour of the creditor a simple mortgage bond hypothecating the property in dispute along with other properties, the interest stipulated to be paid being 10½ per cent, per annum and in case of default 12 per cent, per annum with yearly rests. On 12th of March, 1929, the appellant No.1, as karta of the family, borrowed a further sum of Rs. 5,000 on the security of the said property and executed a second mortgage bond in favour of Balasubramania Ayyar, who was one of the undivided brothers of the mortgagee under the first instrument. Several sums of money were paid from time to time by the mortgagors towards these debts and in the beginning of January, 1937, the total amount due on the mortgages after crediting the payments already made stood at Rs. 31,300. There were talks between the parties regarding the convenient way of paying of these debts and eventually the three documents were brought into existence, one of which was executed on 7th of January, 1937, and two others on 9th of January following. By the first deed (Exhibit D-1) the mortgagors sold to Balasubramania Ayyar the suit property for a consideration of Rs. 31,300 which was the amount due by the vendors on the two mortgage bonds mentioned above. Two days later, on 9th of January, 1937, Balasubramania executed a deed of lease (Exhibit D-4) in respect of the same property in favour of appellant No. 1 for a term of 6 years and odd months, the lease to expire on 30th April, 1943. The total rent payable for this period was stipulated to be paid in seven instalments; the first instalment of Rs. 700 being payable before the 30th of September, 1937 and the remaining six yearly instalments of Rs. The total rent payable for this period was stipulated to be paid in seven instalments; the first instalment of Rs. 700 being payable before the 30th of September, 1937 and the remaining six yearly instalments of Rs. 1,450 each to be paid within the 30th April, 1938 and the same day in each of the five successive years. It was laid down in the deed of lease that in default of payment of any of these instalments on or before the due date, the lessee should forfeit his interest in the lease. Simultaneously with this indenture of lease and on the same day there was an agreement for sale (Exhibit P-1) executed by and between the lessor and the lessee, by which it was agreed that the lessee would purchase the property in suit from the lessor on payment of a sum of Rs.31,500 which could be paid any time between then and the 30th of April, 1943, and the stipulation as to time would be of the essence of the agreement. Clause 3 of this agreement, which is material for our present purpose, runs as follows: “Should the said party No. 2 (the lessee) without making payment of the amount in full, be in arrears in respect of any instalment, out of the seven instalments of the lease amounts payable in each year on the 30th April of the respective year and of the lease amount alone payable by 30th September, 1937, on the succeeding due date, that is by 30th April, 1938........this sale agreement shall stand cancelled forthwith without reference to the subsequent due dates and further more, the aforesaid party No. 2 shall forfeit all the rights and reliefs belonging to the said party No. 2 under this agreement.” It is to enforce specifically this contract of sale that the present suit was brought. Though Balasubramania alone figured as the ostensible purchaser in the sale deed, it is not disputed that he acquired the property on behalf of the family. There was a partition between him and his other brothers and the property in suit together with all rights and liabilities attached to it was allotted to Rangaswami Ayyar, one of the brothers of Balasubramania. Rangaswami died in 1942 and his two daughters, who are his heiresses in law, are the defendants in the present suit. There was a partition between him and his other brothers and the property in suit together with all rights and liabilities attached to it was allotted to Rangaswami Ayyar, one of the brothers of Balasubramania. Rangaswami died in 1942 and his two daughters, who are his heiresses in law, are the defendants in the present suit. The suit was filed on 5th of March, 1943, and simultaneously with the filing of the plaint, the plaintiffs deposited, in Court, the sum of Rs. 31,500 which was the purchase money payable under the terms of the agreement of sale. It was not disputed that the money was paid within the time specified in the agreement and the only substantial defence which the defendants put forward, in resisting the plaintiffs’ claim for specific enforcement of the contract of sale, was that there being default on the part of the plaintiffs in payment of the rent instalments due under the lease in terms of clause 3 of the agreement of sale, the agreement stood cancelled under the provision of that clause and the plaintiffs lost all their rights under it. This is the point round which the whole controversy between the parties practically centered. The learned trial Judge on a consideration of the facts appearing on the record, held that out of the seven instalments of rent payable by the lessee, the first instalment was paid within time as contemplated by clause 3 of the agreement of sale and the seventh instalment had not become due when the suit was filed, though the plaintiffs averred their readiness and willingness to deposit the amount due under this instalment as soon as the Court directed them to do so. As regards the remaining five instalments, the finding of the Subordinate Judge is that all of them were paid after the due dates. The second instalment which was payable before the 30th April, 1938, was paid partly on 13th May, 1938, and partly on the 1st of October following. As regards the remaining five instalments, the finding of the Subordinate Judge is that all of them were paid after the due dates. The second instalment which was payable before the 30th April, 1938, was paid partly on 13th May, 1938, and partly on the 1st of October following. Soon after the due date for this instalment expired, Balasubramania gave a notice (Exhibit P-2) to the first plaintiff on 2nd May, 1938, intimating to him that as there was default in the payment of the lease amount within the due date,‘the agreement of sale stood cancelled, and if the amount was not paid together with interest within one week from the date of the notice, the lease would be cancelled also and the property let out to others. The two payments mentioned above, though made out of date, were, however, accepted by the lessor, and on 25th December, 1938, the endorsement (Exhibit D-4c) on the back of the lease, in token of this payment, expressly stated that the lessee paid these amounts without prejudice to the rights of the lessor to cancel the agreement in case of default of any future instalment. The Subordinate Judge held, therefore, that the delay in payment of the second instalment was expressly waived by the lessor. The third instalment which was due on 30th April, 1939, was actually paid on 12th of December, 1939, and accepted by the lessor. This is evidenced by the endorsement (Exhibit D-4d) and it is to be noted that Rangaswami, to whom this property was allotted on partition, did not, after this default, serve any notice upon the plaintiff’s complaining of non-payment of this instalment. The fourth instalment, which had to be paid before 30th of April, 1940, was not paid till the 2nd December in that year. On 19th August, 1940, Rangaswami Ayyar gave a notice (Exhibit P-3) to the plaintiffs stating inter alia that by reason of non-payment of the instalment both the lease and the agreement for sale stood cancelled. He, however, accepted the amount when it was paid in December, 1940, and the endorsement (Exhibit D-4e) which evidences this payment, describes it as the lease amount due on 30th April, 1940. He, however, accepted the amount when it was paid in December, 1940, and the endorsement (Exhibit D-4e) which evidences this payment, describes it as the lease amount due on 30th April, 1940. The fifth instalment payable on 30th April, 1941, was not paid within that year at all, and apparently it remained unpaid when the sixth instalment became due on 30th April, 1942, although a notice (Exhibit P-4) in terms of the previous notices was sent by Rangaswami to the first plaintiff on 13th September, 1941. After 30th April, 1942, Rangaswami Ayyar gave another notice (Exhibit P-5) in which it was stated that as the lessee did not pay the fifth instalment, the lease was determined by the previous notice (Exhibit P-4) and the lessee was, therefore, in unlawful possession of the property which he should surrender at once and pay the lease amount by way of damages. After this, the plaintiff paid Rs. 2,450 on 3rd of June, 1942, and the balance of Rs. 450, on 10th of July, following. The endorsement evidencing this payment is (Exhibit D-4f) and it runs thus: “For my having cultivated your lands at Vilampatti from 30th April, 1940, onwards, amount paid by me to you on 3rd June, 1942, is Rs. 2,450 (two thousand four hundred and fifty), and amount paid this day, i.e., on 20th July, 1942, is Rs. 450 (four hundred and fifty). Excluding this amount settled as due by me to you up to 30th April, 1942, is Rs. 447 (four hundred and forty-seven).” The learned Subordinate Judge was of opinion that the two payments aggregating to Rs. 2,900 fully covered the amounts due under the fifth and the sixth instalments and the sum of Rs. 447 mentioned in the endorsement represented only the interest due on account of the belated payments. It was held by the Subordinate Judge that although all the five instalments were paid after the expiry of due dates, on each occasion the irregularity was condoned and the delay waived by the lessor who accepted the payments as instalments due under the lease. It is true, the learned Subordinate Judge points out, that the agreement of sale created an obligation separate from and independent of that created by the lease but the payments that had to be made under clause 3 of the agreement were in reality payments due under the lease. It is true, the learned Subordinate Judge points out, that the agreement of sale created an obligation separate from and independent of that created by the lease but the payments that had to be made under clause 3 of the agreement were in reality payments due under the lease. If overdue instalments were accepted by the lessor as payment of instalments under the lease and the forfeiture incurred for non-payment was waived, it would amount to acceptance of payments under the terms of the agreement also, unless an intention to the contrary was expressed by the lessor when he accepted these payments. According to the learned Subordinate judge the endorsements did not show that these payments were accepted subject to any reservation of the rights of the lessor under the agreement of sale. Even taking these payments in relation to the agreement for sale merely, the Subordinate Judge held that under section 63 of the Indian Contract Act it was open to the promisee to dispense with or remit the performance of a contract either in whole or in part or to extend time for its performance. The circumstances of this case indicated that the time for making these payments was extended by the lessor. The result was that the plaintiffs’ claim for specific performance of the contract was allowed and they were directed to pay the sum of Rs. 1,450 due under the seventh instalment and also certain other sums of money as interest and revenue cists. Against this decision, the defendants took an appeal to the Madras High Court and the appeal was heard by a Division Bench consisting of Leach, C.J. and Lakshmana Rao, J. The learned Judges while accepting, or rather assuming as correct, the findings of fact arrived at by the trial Judge held differing from the latter that irrespective of the fact that the lessor did not insist on a forfeiture of the lease for non-payment of the instalments, as the payment of these sums at stated times was a condition precedent to the enforceability of the contract of sale, the plaintiffs, who did not fulfil these conditions and were in default according to law, were incapable of enforcing the contract. In this view of the case the judgment of the trial Court was reversed and the plaintiffs’ suit dismissed. In this view of the case the judgment of the trial Court was reversed and the plaintiffs’ suit dismissed. Being aggrieved by this decision, the plaintiffs applied for and obtained leave to appeal to the Privy Council. Before the records could be transmitted to England, the jurisdiction of this Court was enlarged by Act I of 1948 and the appeal has now come up for hearing before this Court. The only point for our consideration in this appeal is whether the High Court was right in holding that in view of the plaintiffs’ failure to fulfil strictly the conditions laid down in clause 3 of the agreement mentioned above, the contract stood cancelled and was incapable of being enforced in law. To answer this question we have to determine precisely the meaning and legal effect to be given to the provision of clause 3 of the agreement, and for this purpose a careful examination of the language of the document would be essential. The document is divided into four clauses. The first clause embodies the agreement by and between Balasubramania Ayyar on the one hand and the plaintiff No. 1 on the other and the latter agreed to buy and the former to sell the suit properties for a consideration of Rs. 31,500 exclusive of all expenses which are to be borne by the purchaser, the purchase money to be paid any time between the date of agreement and 30th April, 1943. In my opinion, this was not a mere privilege or concession given to the plaintiffs which they could avail of on fulfilment of certain terms. The three documents, though in law would not constitute a mortgage, were really parts of one and the same transaction and the agreement seems to be that the vendors would remain in occupation of the property as lessees under the purchaser, and the latter would refrain from taking possession of the same unless and until the vendors fail to purchase the property in terms of the agreement. It was a bilateral agreement creating rights and liabilities on both sides and was not a mere offer which the defendants’ predecessor agreed to keep open for a certain length of time. The fact that a period of six years and odd was given to complete the purchase is really immaterial. It was a bilateral agreement creating rights and liabilities on both sides and was not a mere offer which the defendants’ predecessor agreed to keep open for a certain length of time. The fact that a period of six years and odd was given to complete the purchase is really immaterial. The stipulation as to time might be and was, in fact, the essence of the agreement but such covenants occur in ordinary contracts of sale and do not by any means affect the nature of the transaction. I am unable to hold on the facts of this case that the plaintiffs got anything in the nature of an indulgence by reason of this contract. Apparently the defendants’ side wanted money and not property. They had already got more than Rs. 25,000 upon a loan of Rs. 25,000 only and for the further sum of Rs. 31,300, which was the exact amount clue in January, 1937, the conveyance was executed. The conveyance was taken obviously because the mortgagors were not in a position at that time to pay the entire mortgage money in cash. It was not, however, against the interest of the mortgagee purchaser to let the debtors have their property back again on payment of the sum of Rs. 31,000 and odd which was the amount due at that date of the sale, provided they got adequate compensation in lieu of interest during the period which was allowed to the plaintiffs to complete the purchase. This was the bargain between the parties which apparently was for the benefit of the both sides and in my opinion, it is to be treated as an ordinary contract of sale and not a mere indulgence or privilege given to one side only. The second clause lays down that if the agreement does not stand cancelled under the subsequent clause 3, it shall remain in force up till 30th of April, 1943. The stipulation as to time was made the essence of the agreement and it is not disputed by the parties that this, in fact, was the position in law. Then comes the third clause, the material portion of which I have set out already. The stipulation as to time was made the essence of the agreement and it is not disputed by the parties that this, in fact, was the position in law. Then comes the third clause, the material portion of which I have set out already. It is to be remembered that on the very day that the agreement was entered into, there was a lease granted by Balasubramania Ayyar to the plaintiff No.1 in respect of the property in suit, the period of which was exactly the same during which the agreement for sale would remain in force. The rents for the lease were made payable in certain instalments, the dates of which were fixed and it was one of the conditions of the lease that the lessee would forfeit his interest if there was default in the payment of any of these instalments within the specified time. The intention of the parties clearly was that the party to whom the property originally belonged would remain in occupation of the same as lessee under the other party on payment of rents within certain fixed dates so long as he was not exercising the right of purchase under the terms of the agreement. To ensure due payment of these rent instalments, there was a forfeiture clause in the lease which entitled the lessor to avoid the lease in case of default in the payment of rents; and to make the position of the lessor still stronger, it was laid down in clause 3 of the agreement that in case there were arrears in respect of any of the instalments of the lease amounts after the due dates mentioned in the agreement, the agreement for sale would also stand cancelled and the plaintiffs will lose all their rights under it. Strictly speaking, the payments required under clause 3 of the agreement were not payments in connection with the sale at all; they were quite extraneous and collateral to the transaction of purchase and sale and the only object was that the threat of losing all benefits under the agreement might keep the lessee perpetually alert and alive to his duty of paying the instalments of rent with punctilious regularity. The rest of the document is not material for our present purpose. The rest of the document is not material for our present purpose. Now, it has been found by both the Courts below that there was, in fact, a failure on the part of the plaintiffs to pay five out of the seven instalments in proper time. It has also been found by both the Courts that all these payments though, made subsequent to due dates, were accepted by the lessor. The question is what is the legal effect of the acceptance of these overdue payments? Can the lessee be said to be in arrears in regard to these instalments within the meaning of clause 3 of the agreement and as a result thereof to have lost all his rights under the same? The Division Bench of the High Court answered this question against the plaintiffs, relying on a decision of Kay, J., in Bastin v. Bidwell1, where the learned Judge relied, amongst others, on an earlier pronouncement of Mellish, L.J., in Finch v. Underwood2. It seems to me that the decision in Bastin v. Bidwell1 has very little bearing on the present case. In that case there was a covenant by the lessor of a house that the lessee would be entitled on giving six months’ notice before the end of the term, to have a further lease for 21 years “upon paying the rents and observing the covenants in the lease.” The covenants were that the lessee would pay the rent, keep the premises in repairs and paint the outside and inside of the house at stated periods. The lessee applied for renewal by giving six months’ notice before the end of the term but the lessor refused to grant such a renewal on the ground that the covenants were not fulfilled. The lessee brought a suit for specific performance of the contract and it was dismissed on the ground that the performance of the covenants was a condition precedent to the lessee’s privilege of having a renewed lease and the requisite repairs and paintings not having been done-neither when the six months’ notice was given nor when it expired-the lessee was not entitled to a renewal of the lease. The decision is an authority for the proposition which can scarcely be disputed that when the contract is in its origin conditional and dependent upon the fulfilment of a condition precedent, it is a good defence to a suit for specific performance of such agreement that the condition precedent was not fulfilled. It is to be noted that only a privilege of renewal was given in this case to the lessee which was dependent upon the performance of a condition precedent, and this condition was not performed at all. In the case before us, as said above, the plaintiffs were not given a mere privilege or option of re-purchase and the payment of the lease instalments was not a condition precedent to the accrual of the contractual right. The rights under the contract were already in existence and the non-payment of rent was to work forfeiture of existing rights. Quite apart from this, in Bastin v. Bidwell1 the condition was not performed at all, and the question that arises for consideration in the present case, namely, what is the effect of the acceptance of the belated performance by the promisee, did not arise for consideration in that case. The observation of Mellish, L.J., in Finch v. Underwood2 does not carry the matter any further. In this case also there was a contract for renewal by the landlord conditional on the performance of certain covenants by the lessee, one of which was that the interior of the premises should be kept in repairs. One of the tenants had become a bankrupt and the other tenant applied for renewal of the lease. Admittedly there was want of repairs in terms of the covenant at the date when the new lease was applied for. It was held that the tenant was not entitled to renewal; firstly because, the condition precedent to the renewal of the lease was not fulfilled and secondly because, the agreement being to grant a lease to two persons jointly, the landlord, could not be called upon to grant lease to one of them. It appears that in this case there was a clause in the lease entitling the lessor to exercise his right of re-entry if there was a failure on the part of the tenants to pay rent or if either or both of them became bankrupts. It appears that in this case there was a clause in the lease entitling the lessor to exercise his right of re-entry if there was a failure on the part of the tenants to pay rent or if either or both of them became bankrupts. One of the tenants, as said above, did become a bankrupt and in spite of this the landlord went on accepting rents from the other tenant without exercising his right of re-entry. Mellish, L.J., observed in course of his judgment that from the fact that the landlord waived his right of re-entry which he could exercise by reason of one of the tenants having been adjudged a bankrupt, it did not follow that the condition precedent to the granting of the new lease was also waived. The learned Judges of the Madras High Court seemed to think that these observations of Lord Justice Mellish fortified the view they had taken, namely, that although the lessor did not forfeit the lease in the present case and waived the forfeiture by accepting the defaulted payments of rent instalments, that by itself would not amount to waiver of the forfeiture of the rights of the plaintiffs under the agreement for sale. The learned Judges totally overlooked that specific performance was refused in the case of Finch v. Underwood2 on the ground of nonrepair of the premises by the tenant which was a condition precedent to his being entitled to a new lease under the terms of the tenancy and which condition was not fulfilled at all. The learned Judges also overlooked that the landlord in that case by accepting rent from the lessee only waived the forfeiture occasioned by the bankruptcy of one of the tenants and this had nothing to do with the covenant relating to the repairs of the premises which remained unfulfilled at the date when the renewed lease was prayed for. In the case before us, though the payment of the rent instalments was necessary for keeping alive the rights of the lessee under the agreement, yet the obligation to pay these rents arose out of the lease and not out of the agreement for sale. The payments were identically the same and if the lessor treated them as proper payments under the lease, the condition of clause 3 of the agreement would prima facie be fulfilled. The payments were identically the same and if the lessor treated them as proper payments under the lease, the condition of clause 3 of the agreement would prima facie be fulfilled. Lastly, in Finch v. Underwood2, there was no question of the lessee’s losing any existing rights as in the present case. The right to have a renewal could accrue when the covenants were fulfilled and admittedly one of the covenants was not fulfilled. It seems to me that the decisions relied upon by the learned Judges of the High Court are of really no assistance to us, and to arrive at a decision in the present, case there are two matters which require consideration: (1) Whether on the facts of this case the acceptance of the overdue instalments of rent by the lessor amounted to waiver of the forfeiture of the rights of the plaintiffs under the provision of clause 3 of the agreement of sale? And (2) Even if there was no waiver of forfeiture by the predecessor of the defendants, could the plaintiffs claim relief against such forfeiture under any principle of law or equity? So far as the first point is concerned, it cannot be disputed that the conditions laid down in clause 3 of the agreement were exclusively for the benefit of the first party and it was for that party to choose whether the agreement should be avoided or not when there was default by the other side in the performance of the covenants contained in that clause. It cannot be and has not been argued that the agreement automatically stood cancelled as soon as there was default in the payment of any of the instalments of rent by the plaintiffs. It was certainly open to Balasubramania or Rangaswami Ayyar to remit the payment of all or any of these instalments or to extend the time for payment of the same, and there was nothing in law which prevented the first party from waiving the forfeiture that would result from nonpayment of the instalments at proper time by the other party. The point for our consideration is whether on the facts admitted and found there has been such waiver on the part of the defendants’ predecessor. Ordinarily, acceptance of overdue instalment is treated as prima facie evidence of waiver, though by itself it may not be conclusive on the point. The point for our consideration is whether on the facts admitted and found there has been such waiver on the part of the defendants’ predecessor. Ordinarily, acceptance of overdue instalment is treated as prima facie evidence of waiver, though by itself it may not be conclusive on the point. Waiver may be proved by a variety of facts and it is not possible to define them exhaustively. On behalf of the respondents it has been argued that there was no waiver of forfeiture of the rights under the agreement in the present case; firstly because the defendants’ predecessor even if he accepted payments of these instalments as payments under the lease, did not treat them as payments under the agreement at all. In the second place, it is said that the defendants’ predecessor having elected to forfeit the agreement by expressly serving a notice upon the plaintiffs, the acceptance of rents which accrued prior to the date of the notice would not amount to waiver of forfeiture. It is also argued that the Courts below were wrong in holding that the lessor did not forfeit the lease in the present case. The first contention is really not of much substance. As has been said already, the payments required to be made under clause 3 of the agreement were not payments in relation to the contract of sale at all; they had to be made by the second party only in discharge of his obligation as lessee under the first party. If the first party accepted the instalments as proper payments under the lease, there in fact would be no arrears of any instalment upon which the forfeiture clause could work. Even conceding, as has been said by the learned Subordinate Judge, that it was open to the lessor to say that even if he accepted the payments under the lease, he did not abandon his right under the agreement, the fact remains that he said nothing like that and in the absence of any reservation to that effect, he would be deemed bound by the legal consequences of his own action. As regards the second contention, it would be seen that the first notice given by Balasubramania to the plaintiff No. 1 (Exhibit P-2) is dated the 2nd of May, 1938, and as the first instalment, which was payable within 30th of September, 1937, was paid actually on 27th October, 1937 and the due date for the second instalment had already expired, it was stated in this notice that the addressee had forfeited all his rights both in the lease as well as in the sale agreement. After this, a part of the second instalment was paid on 13th May, 1938 and the balance on the 18th of October following. Acceptance of these amounts, which were due prior to the date of forfeiture, may not amount to waiver. But the endorsement of payment (Exhibit D-4c) made on 25th December, 1938, expressly stated that the amounts were paid subject to and without prejudice to the rights of the lessor to cancel the agreement on account of default in the payment of any instalment in future. Forfeiture for default in the payment of the first and the second instalments was thus expressly waived by the defendants’ predecessor. The third instalment fell due on 30th April, 1939 and it was paid on 12th December, 1939. This payment was accepted and Rangaswami Ayyar, to whom the property was allotted, did neither serve any notice nor perform any other overt act expressing his intention to avoid the agreement by reason of non-payment of the third instalment within the due date. The delay in payment of the third instalment was thus condoned by Rangaswami Ayyar. The fourth instalment, which was due on 30th April, 1940, was not paid on that date and certainly this non-payment could have been made ground for forfeiture. Rangaswami did serve a notice (Ex. P-3) on 19th of August, 1940, expressing his intention to cancel both the lease and the agreement. After this notice, he accepted payment of the fourth instalment in December 1940. This acceptance again, by itself may not constitute waiver as the amount accepted was already due. After this there were defaults as regards the fifth and the sixth instalments which fell due on 30th April, 1941 and 30th April, 1942, respectively. On 13th September, 1941, the lessor served a notice on the plaintiff No. 1 (Ex. This acceptance again, by itself may not constitute waiver as the amount accepted was already due. After this there were defaults as regards the fifth and the sixth instalments which fell due on 30th April, 1941 and 30th April, 1942, respectively. On 13th September, 1941, the lessor served a notice on the plaintiff No. 1 (Ex. P-4) intimating to the lessee that the lease and the agreement had both been cancelled as the third and the fourth instalments had not been paid in proper time and the fifth instalment had not been paid at all. No reply was given to this notice by the plaintiff No. 1. On 8th of May, 1942, another notice was given by Rangaswami Ayyar to plaintiff No.1 (Ex. P-5), in which it was said that the lease was cancelled already by the notice (Ex. P-4) and the lessee was in unlawful possession of the property which he must surrender at once and that he should pay the instalments of rent with interest as damages. The most important thing in connection with the notices is that it does not say anything about the agreement of sale and does not purport to cancel it. So far as the agreement for sale is concerned, the defendants’ predecessor purported to cancel it by the two notices (Ex. P-3 and Ex. P-4) which were sent on 19th of August, 1940 and 13th September, 1941. The sixth instalment had not then become due and on the facts found by the trial Judge which were not reversed in appeal, the amount due under the sixth instalment must be taken to have been paid by the plaintiffs partly in June and partly in July 1942 and accepted by the defendants’ predecessor. For purposes of keeping alive the agreement for sale, it was immaterial that a sum of Rs. 447 still remained outstanding as interest, for clause 3 of the agreement speaks of instalments merely and not of any interest due upon the same. It was also immaterial that in Ex. D-4f the amounts were not specifically described as lease instalments, but as one portion of these really represented the sixth instalment which became due after the notices (Ex. P-3 and Ex. P-4) were issued, the acceptance of that amount after the defendants’ predecessor elected to forfeit the agreement for sale, would certainly amount to waiver in law. The subsequent notice (Ex. P-3 and Ex. P-4) were issued, the acceptance of that amount after the defendants’ predecessor elected to forfeit the agreement for sale, would certainly amount to waiver in law. The subsequent notice (Ex. P-6) given by Balasubramania after the death of Rangaswami Ayyar cannot revive the forfeiture which was already waived. I think, therefore, that on the facts of this case, as have been found by the Courts below, it must be held that there was waiver of the defaults in the payments of the lease instalments as contemplated by clause 3 of the agreement by acceptance of these instalments after the due dates. For similar reasons, I think that there was no forfeiture of the lease in the present case, and the concurrent findings on this point by both the Courts below are perfectly right. As the trial Judge has correctly pointed out, there was no forfeiture exercised by the lessor in connection with the sixth instalment and the last notice (Ex. P-5) does not refer to this instalment at all. After the right of forfeiture was exercised on the basis of non-payment of the fifth instalment, the sixth instalment was accepted and this would constitute waiver of forfeiture according to law. The sum of Rs. 447 has been expressly found by the trial Judge to represent the interest for the belated payments and this finding is supported by the uncontradicted evidence of plaintiff No.1. Too much reliance cannot, in my opinion, be placed upon the wording of the acknowledgment (Exhibit D-4(f). It is true that it describes the payment as made by the plaintiff No.1 on account of his having cultivated the lands and does not specifically refer to the lease. It is to be noted that the lease itself nowhere used the word ‘rent’. It speaks only of ‘instalments’ which connote payment of certain specified sums of money at specified periods. According to the findings of the Courts below, the payments under Ex. D-4f represent the fifth and the sixth instalments payable under the lease. If that is so, it is not, in my opinion, material that the acknowledgment does not expressly mention these payments as having been made under the lease. According to the findings of the Courts below, the payments under Ex. D-4f represent the fifth and the sixth instalments payable under the lease. If that is so, it is not, in my opinion, material that the acknowledgment does not expressly mention these payments as having been made under the lease. I think, therefore, that the Subordinate Judge, who examined the evidence in this case with meticulous care, arrived at the right conclusion and the learned Judges of the High Court did not approach the case from the proper standpoint. As has been already said, the question whether the lease has been forfeited or not does not concern us materially for our present purpose. If the payments were those which the defendants’ predecessor were entitled to receive under the terms of the agreement and they were received by him after waiving the delay, the agreement cannot possibly stand cancelled. Assuming however, for the sake of argument that there was no waiver of forfeiture of the agreement for sale, cannot the plaintiffs pray for relief against forfeiture on the well-recognised principles which are acted upon by Courts of equity in cases of this description and seek specific performance of the contract after the forfeiture is relieved against? It is said that a party may not trifle with his contract and still seek the aid of a Court of equity, but it is also true that the bar will not be administered in a spirit of technicality and so as to defeat the ends of justice1. The Courts of equity have always made a distinction between that which is a matter of substance and that which is a matter of form. If the forfeiture clause is in the nature of a penalty and is designed merely as a thing in terrorem in order to ensure due payment of money, there is clear equity in relieving the party against the breach of such stipulation provided the other party is adequately compensated for the loss he has sustained. If the forfeiture clause is in the nature of a penalty and is designed merely as a thing in terrorem in order to ensure due payment of money, there is clear equity in relieving the party against the breach of such stipulation provided the other party is adequately compensated for the loss he has sustained. As Story observes in his well-known work on Equity Jurisprudence: “In reason, in conscience, in natural equity, there is no ground to say because a man has stipulated for a penalty in case of his omission to do a particular act (the real object of the parties being the performance of the act), that if he omits to do the act, he shall suffer an enormous loss wholly disproportionate to the injury to the other party. If it be said that it is his own folly to have made such a stipulation, it may equally well be said that the folly of one man cannot authorise gross oppression on the other side......... There is no more intrinsic sanctity in stipulations by contract than in other solemn acts of parties which are constantly interfered with by Courts of equity upon the broad ground of public policy or the pure principles of natural justice. Where a penalty or forfeiture is designed merely as a security to enforce the principal obligation, it is as much against conscience to allow any party to pervert it to a different and oppressive purpose, as it would be to allow him to substitute another for the principal obligation2.” In the case before us, the object of clause 3 of the agreement was undoubtedly to secure that the instalments of rents reserved by the lease were duly and punctually paid. That is the principal obligation which the parties wanted to enforce. The agreement for sale was a different and totally unconnected matter and the forfeiture of the rights under the agreement was the penalty designed to secure the due payment of the instalments payable under the lease. In such circumstances, equity will certainly relieve against any literal default and enforce specific performance of the substantive agreement between the parties notwithstanding the failure to keep the dates assigned for a mere collateral purpose, provided no injustice is done to the other side and he suffers no wrong which cannot be compensated properly. In such circumstances, equity will certainly relieve against any literal default and enforce specific performance of the substantive agreement between the parties notwithstanding the failure to keep the dates assigned for a mere collateral purpose, provided no injustice is done to the other side and he suffers no wrong which cannot be compensated properly. The decision of the Judicial Committee in Kilmer v. British Columbia Orchard Lands, Ltd. 3 , is a clear authority on this point. In this case there was an agreement for sale, by respondent company, of lands in British Columbia, for a price to be paid in instalments at specified dates, which contained a clause of forfeiture both of the agreement and of all payments of past instalments of purchase-money in case of default of punctual payment of any one instalment; and time was declared to be of the essence of the agreement. Default having been made, the company sued to enforce the forfeiture; the appellant paid into Court the instalment due and counter-claimed for specific performance. It was held by the Judicial Committee that by the law of British Columbia as well as by English law, the condition of forfeiture was in the nature of a penalty from which the appellant was entitled to be relieved on payment of the purchase money due. The case before us is even stronger. Here time was not made the essence of the agreement so far as clause 3 was concerned, though it was expressly made so in clause 2; and furthermore, the payments contemplated by clause 3 were not in connection with the sale transaction at all. These principles of equity law are undoubtedly applicable to India and, in my opinion, even if there was any forfeiture in present case the plaintiffs are entitled to be relieved against it. As I have already stated, the agreement in the present case did not confer a mere privilege upon the plaintiffs which they could avail of only upon payment of money at stated periods but it was a bilateral agreement creating rights and obligations on both sides. The decision in Davis v. Thomas1, where the facts are very much similar to those of the present case is clearly distinguishable in principle. It was held there that no relief against penalty could be given in cases where only a privilege is created for the benefit of one party. The decision in Davis v. Thomas1, where the facts are very much similar to those of the present case is clearly distinguishable in principle. It was held there that no relief against penalty could be given in cases where only a privilege is created for the benefit of one party. It was conceded that such relief could be given when the agreement did not create a mere privilege. In the present case my opinion is that as no privilege or indulgence merely was created in favour of the plaintiffs, there is no reason why the principles of equity Courts which grant relief against penalty should not be applied in the case before us. The terms upon which the decree was given by the trial Judge seem to me to be very fair and proper. The defendants were not only given full interest at the rate of 12 per cent, par annum but they were allowed all other expenses which they had to incur on account of the property in suit. In my opinion, the appeal should be allowed, the judgment of the High Court should be set aside and that of the trial Judge restored with costs to the plaintiffs appellants in all the Courts. By the Court.-In accordance with the opinion of the majority of Court the appeal is dismissed with costs. V.S. ------ Appeal dismissed.