Research › Browse › Judgment

Gauhati High Court · body

1972 DIGILAW 32 (GAU)

Benode Behari Das Gupta v. Benoy Bhusan Choudhury

1972-05-26

BAHARUL ISLAM, R.S.BINDRA

body1972
Judgement BINDRA, J. :- This Letters Patent Appeal arises out of a suit instituted by Benode Behari Das Gupta against Benoy Bhusan Choudhury for specific enforcement of an agreement for reconveyance of the house in dispute by the latter to him. The suit was decreed by the Munsiff and an appeal filed by the defendant against the Munsiffs decree having proved abortive in the Court of Subordinate Judge, he filed second appeal in this Court. That appeal was allowed by a learned Judge of this Court on 6th February, 1969 with the consequence that the suit of the plaintiff was dismissed. 2. According to plaint allegations the plaintiff sold the house in dispute to the defendant for a sum of Rs. 400/-per registered deed dated 26-6-1957. On the same date the defendant executed another registered deed in favour of the plaintiff undertaking to retransfer the house to the latter on payment of Rupees 400/- to him at any time within a period of five years. It was the plaintiff who remained in possession of the house and he rented out the same to Unnayan Sangha Club. That Sangha terminated the lease and delivered possession of the house to the plaintiff on 2-6-1962. The plaintiff approached the defendant repeatedly for retransfer for the house to him on receipt of Rs. 400/-, but the defendant put him off. Ultimately the plaintiff sent a registered notice on 11-6-1962 to the defendant requesting him to appear at the Sub-registry office, Hailakandi, on 21-6-1962 for execution of a deed of reconveyance on receipt of Rs. 400/-. However, the defendant failed to reach Hailakandi on the date mentioned and so the plaintiff had to return from that station disconsolate. The plaintiff having lost hope that the defendant would honour his commitment within the period of 5 years, he filed the suit on 26th June, 1962, the last day of that period, in the Court of the Munsiff, Hailakandi, claiming specific enforcement of the agreement of reconveyance. 3. The defendant resisted the suit on grounds to be shortly mentioned, but he admitted that he had purchased the house from the plaintiff on 26-6-1957 and had simultaneously executed a deed undertaking to reconvey the house, to the plaintiff on repayment to him of Rupees 400/- at any time within the period of five years. 3. The defendant resisted the suit on grounds to be shortly mentioned, but he admitted that he had purchased the house from the plaintiff on 26-6-1957 and had simultaneously executed a deed undertaking to reconvey the house, to the plaintiff on repayment to him of Rupees 400/- at any time within the period of five years. It was alleged by the defendant that the house was on lease with the Club before its purchase by him, that the plaintiff made over possession of the house to him on execution of the sale-deed, and that the Club began paying rent thereafter to him. However, subsequently, the Club made default and so he filed a suit for the recovery of arrears of rent for a period of three years beginning June, 1959. The plaintiff gave it out at that time that he had received the rent from the Club and so the suit filed by him (defendant) against the Club was false. The defendant pleaded further that the plaintiff is much too poor a man to be in a position to arrange a sum of Rs. 400/- to claim retransfer of the house to him, and that actually he had filed the suit at the instance of persons inimically disposed towards him (defendant). It was denied by the defendant that the plaintiff had ever approached him for taking Rs. 400/- and for reconveying the house to him. In paragraph 5 of the written statement it was specifically stated that the plaintiff had not tendered Rs. 400/- to him at any time. However, oddly enough, no mention was made in the written statement respecting the registered notice sent by the plaintiff to the defendant on 11-6-1962 requiring him to reach Hailakandi for execution and registration of the deed of reconveyance on receipt of Rs. 400/-. 4. The trial Court settled the following three issues between the parties :- 1. Whether there is any cause of action for this suit ? 2. Whether the suit is maintainable in the present form without deposit of the consideration money in Court ? 3. To what relief, if any, is the plaintiff entitled ? 5. Under Issue No. 1 the point raised by the defendant before the trial Court was that the plaintiff had committed breach of the contract by his failure to tender the sum of Rs. 400/-within the stipulated period. 3. To what relief, if any, is the plaintiff entitled ? 5. Under Issue No. 1 the point raised by the defendant before the trial Court was that the plaintiff had committed breach of the contract by his failure to tender the sum of Rs. 400/-within the stipulated period. The trial Court negatived that contention of the defendant on the score that very fact of the plaintiff having filed the suit within a period of five years exhibited his readiness and willingness to perform his part of the contract. Consequently the issue No. 1 was decided in the affirmative. Issue No. 2 was also decided for the plaintiff on the finding that it was not obligatory for the plaintiff to deposit the sum of Rs. 400/- in Court while filing the suit. In the opinion of the trial Court, the plaintiff was ready and willing to perform his part of the contract and so he could not be denied the prayer for specific enforcement of that contract. In the result, the suit of the plaintiff was decreed on 31-1-1961 on the condition that he deposited Rs. 400/- in Court within 15 days. That deposit, it is not in dispute, was duly made by the plaintiff. 6. The learned Subordinate Judge held while dismissing the appeal of the defendant that the plaintiff was proved to have orally offered Rs. 400/- to the defendant before he issued the notice on 11th June, 1962, to the latter calling upon him to reconvey the house to him on receipt of Rs. 400/-. The Subordinate Judge also felt suspicious about the circumstances culminating the late delivery of the notice sent by the plaintiff to the defendant. The registered cover Ext. A bears two postal seals which show that though it reached the destination on 12-6-1962, but, surprisingly enough, it was not delivered to the defendant earlier than 22-6-1962. The Subordinate Judge presumed under the circumstances that there was something fishy about the late delivery of the registered notice. At any rate, that Court concluded, the notice had been received by the defendant much before the last date fixed for reconveyance and yet the defendant took no steps to contact the plaintiff for finalising the contract validly concluded between the two. 7. At any rate, that Court concluded, the notice had been received by the defendant much before the last date fixed for reconveyance and yet the defendant took no steps to contact the plaintiff for finalising the contract validly concluded between the two. 7. The learned Single Judge took note of the fact that the trial Court and the first appellate Court had concurrently found, on the basis of material on record, "that there was a valid tender of money by the plaintiff within the stipulated period of five years", but allowed the appeal on the findings that the plaintiff was bound in terms of the agreement to pay the sum of Rs. 400/- to the defendant within five years from the date of the contract and that he had not done so, nor had deposited the money in the Court while filing the suit. The learned Single Judge reached that conclusion on the basis of the following clause in the agreement Ext. 1 between the parties :- "At any time within five years from today if you return the consideration money. I shall be bound to execute a reconveyance in your favour. Otherwise you will have the right to get the deed of reconveyance through Court." It was not disputed before the learned Single Judge that time is an essence of the contract set up by the plaintiff and the learned Single Judge was of the opinion that on the failure of the plaintiff to pay Rs. 400/- within the period of five years he was not entitled to claim specific performance. 8. Shri S. K. Sen vehemently urged on behalf of the plaintiff-appellant that though time was an essence of the contract, all that the plaintiff had to do was to exhibit his readiness and willingness to pay the sum of Rs. 400/- to the defendant and that it was not obligatory for him to put the money into the pocket of the defendant within the prescribed period before he could pray for enforcement of the specific performance of the contract. 400/- to the defendant and that it was not obligatory for him to put the money into the pocket of the defendant within the prescribed period before he could pray for enforcement of the specific performance of the contract. It was further submitted by Shri Sen that the plaintiff had approached the defendant repeatedly for taking the money and reconveying the house, but the defendant put him off on one excuse or another, and that ultimately the plaintiff thought it safe to send a registered notice to the defendant requesting the latter to appear at Hailakandi for registration of the deed of reconveyance on receipt of Rs. 400/-. But that attempt too fizzled out as the defendant failed to reach Hailakandi on the date fixed. Shri Sen brought to the notice of this Court the Explanation appended to Clause (c) of Section 16 of the Specific Relief Act, 1963, providing that where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in Court any money except when so directed by the Court. It was submitted further by Shri Sen that the plaintiff had deposited the money in Court within the period given to him by the trial Court. Shri Dam, the learned counsel representing the defendant-respondent, urged, on the other hand, that the contract concluded between the parties was reciprocal in nature, that the plaintiff had to perform his part of the contract before he could call upon the defendant to execute the deed of recon-veyance in his favour, that the plaintiff having failed to pay Rs. 400/- before the last date fixed for the contract, he was not entitled to pray for specific performance of the contract. Shri Dam stated further that the defendant was not to blame for not reaching Hailakandi on 21-6-1962 inasmuch as the registered notice reached him on 22-6-1962. Shri Dam was critical of the fact that the plaintiff took no steps after 21st June, 1962, in contacting the defendant and instead rushed to the Court and that too without depositing the sum of Rs. 400/-. 9. Shri Dam was critical of the fact that the plaintiff took no steps after 21st June, 1962, in contacting the defendant and instead rushed to the Court and that too without depositing the sum of Rs. 400/-. 9. The points on which the parties counsel were agreed may be summarised as under : (1) That the time was an essence of the contract concluded between the parties; (2) That the plaintiff had not disentitled himself to specific enforcement of the contract save on the ground, qua which the parties were not at one, that he had not paid Rs. 400/- to the defendant by 25th June, 1962; (3) That the plaintiff had sent a registered notice to the defendant on 11th June, 1962, for registration of the deed of reconveyance on receipt of Rs. 400/-from him; and (4) That the notice ex facie reached the defendant after 21-6-1962. 10. It was not contended by Shri Dam that the defendant had tried to contact the plaintiff after he had received the notice. Therefore, the crucial question that falls for determination in this appeal is whether it was obligatory on the plaintiff not only to be ready and willing to perform his part of the agreement but also to pay Rs. 400/- to the defendant before 26th June, 1962, if he was anxious to get back the house. 11. The subject of reciprocal promises, in which category, by common agreement, the contract dated 26-6-1957 falls, is dealt with in Sections 51 to 58 of the Indian Contract Act. We are concerned only with Sections 51, 52, 54 and 55. Section 51 provides that when a contract consists of reciprocal promises to be simultaneously performed, no promisor need perform his promise unless the promisee is ready and willing to perform his reciprocal promise. The next Section 52 states that where the order in which reciprocal promises are to be performed is expressly fixed by the contract, they shall be performed in that order; and, where the order is not expressly fixed by the contract, they shall be performed in that order which, the nature of the transaction requires. The next Section 52 states that where the order in which reciprocal promises are to be performed is expressly fixed by the contract, they shall be performed in that order; and, where the order is not expressly fixed by the contract, they shall be performed in that order which, the nature of the transaction requires. Section 54 enacts that when a contract consists of reciprocal promises, such that one of them cannot be performed, or that its performance cannot be claimed till the other has been performed, and the promisor of the promise last mentioned fails to perform it, such promisor cannot claim the performance of the reciprocal promise, and must make compensation to the other party to the contract for any loss which such other party may sustain by the non-performance of the contract. The relevant part of Section 55 is to the effect that when a party to a contract promises to do a certain thing at or before specified time, or certain things at or before specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee, if the intention of the parties was that time should be of the essence of the contract. 12. Shri Sen contended that the case in hand is covered by Section 51 inasmuch as the reciprocal promises had to be simultaneously performed. He listed those promises as the payment of Rs. 400/- by the plaintiff to the defendant and execution of the deed of reconveyance by the defendant in favour of the plaintiff on receipt of Rs. 400/-. On the strength of that postulate Shri Sen canvassed that the plaintiff was obliged in law to pay the amount to the defendant only if the defendant exhibited his readiness and willingness to execute the deed of reconveyance in plaintiffs favour on receipt of the money. The counsel next submitted that despite that legal position the plaintiff had repeatedly offered the amount to the defendant but the latter had contemptuously spurned away the same. Shri Dam vigorously urged, on the other hand, that the case falls under Section 55 of the Contract Act, that the plaintiff was bound to pay Rs. The counsel next submitted that despite that legal position the plaintiff had repeatedly offered the amount to the defendant but the latter had contemptuously spurned away the same. Shri Dam vigorously urged, on the other hand, that the case falls under Section 55 of the Contract Act, that the plaintiff was bound to pay Rs. 400/- to the defendant latest by 26th June, 1962, and that unless that stage was reached the plaintiff had no legal sanction to claim specific performance of the contract. Shri Dam placed reliance on AIR 1963 SC 1182 , Simrathmull v. Nanjalingiah, to reinforce that submission. 13. Before proceeding to discuss the merits of the rival contentions raised by the learned counsel, we would like to emphasise that the defendant had never pleaded that the plaintiff could not claim specific enforcement of the contract for the reason that he had not paid him the sum of Rs. 400/- before the fixed date. His definite pleading was that the plaintiff had not tendered him Rs. 400/-at any time with the consequence that the plaintiff was not entitled to get the relief prayed for. The first appellate Court upheld the plea of the plaintiff that the latter had verbally requested the defendant for reconveyance of the house to him on receipt of Rs. 400/-. That Court was also categorical in its conclusion that apart from the tender of the money made by the plaintiff to the defendant orally, he (the plaintiff) had also made a valid tender of the money to the defendant when he sent to the latter a registered notice on 11-6-1962. These are clearly findings of fact which are not open to challenge in second appeal. It is relevant to mention that these findings were actually not assailed by Shri Dam during the course of arguments before us. The only point raised by him was that the plaintiff had failed to pay the money before 26th June, 1962. In view of the aforementioned findings of fact reached by the Subordinate Judge and the stand taken by Shri Dam, the real controversy as stated earlier, centres round the point whether the plaintiff was bound in law to make the payment of Rs. 400/- to the defendant before 26th June, 1962, ran out. 14. In view of the aforementioned findings of fact reached by the Subordinate Judge and the stand taken by Shri Dam, the real controversy as stated earlier, centres round the point whether the plaintiff was bound in law to make the payment of Rs. 400/- to the defendant before 26th June, 1962, ran out. 14. We believe that the plaintiff could have at the best tendered the money for it was beyond his competence to thrust the same into unwilling hands, nor is it the requirement of law that he should have thrown a sum of Rs. 400/-at the feet of the defendant to earn the qualification of having carried out his part of the agreement. In our opinion, the plaintiff will be taken to have discharged his legal obligations if we can reach the conclusion that he was mentally willing and physically ready to pay Rs. 400/- to the defendant at some time before the clock struck 12 on the night between 26th and 27th June, 1962. In that respect we have the clearcut findings of the Subordinate Judge that the plaintiff had "made repeated oral demands for reconveyance", that the plaintiff "had gone to the Hailakandi Sub-Registry Office with money on the above date (21-6-1962) and that he had waited there for the defendant who did not turn up" and that "valid tenders were made (both oral and written) by the plaintiff to the defendant for getting the reconveyance well within the stipulated period of 5 years and that the defendant did not comply." Since these findings of fact are not open to challenge, we have no hesitation in holding that the plaintiff made genuine attempts to pay money to the defendant, but the latter was not out to receive it for he had made up his mind to frustrate the plaintiffs repeated attempts at reconveyance. It is not surprising that the defendant should have taken recourse to such tactics. It has come in evidence that the house in dispute had been let out to the Club for Rs. 20/- a month which means a return of 5 per cent. per mensem. as against the normal return of about 5 per cent. per annum for investments in a real estate. It has come in evidence that the house in dispute had been let out to the Club for Rs. 20/- a month which means a return of 5 per cent. per mensem. as against the normal return of about 5 per cent. per annum for investments in a real estate. In a suit for specific performance of a contract the only demand of law is that the plaintiff should have been always ready and willing to perform his part of the agreement and not necessarily that he had actually performed that part of the agreement. In contracts relating to transfer of property it may not be possible for the transferee to pay the money to the transferor if the latter had changed his mind. To cite the instance of the case in hand, if, as is evident, the defendant was not out to reconvey the house to the plaintiff, we fail to see how could the plaintiff manage to make payment of the sum of Rs. 400/- to him. At the best the plaintiff could have tendered the money to the defendant and this he actually did. We may cite here appositely para 62 of the Law Commissions Report on the Specific Relief Act, 1877. It reads as under :- "In connection with contracts for sale, a question has arisen whether in order to establish his readiness and willingness the plaintiff should have made a tender of the money due from him to the defendant. The further question which has been raised is whether the purchaser must, in order to show his readiness and willingness, tender the money on the date fixed by the contract for completion. In a Calcutta case (1), it was held that such a tender must be made, while in a Bombay (2) case, it was held that an actual tender was not necessary for a suit for specific performance, and it was enough if payment was made as directed by the Court. The Bombay view seems to have support in the observations of the Privy Council in Bank of India v. Chinoy (3) where it has been held that the plaintiff in such a suit need not deposit the money in Court or prove his financial competence. The Bombay view seems to have support in the observations of the Privy Council in Bank of India v. Chinoy (3) where it has been held that the plaintiff in such a suit need not deposit the money in Court or prove his financial competence. Having considered the different aspects of the question, we recommend that it should be provided that it is not essential that the plaintiff should tender the money to the defendant or deposit it in Court except when so directed." It is apparent that the demand of the law is, at the highest, of tender and not of payment, as payment in a given set of circumstances may be difficult of accomplishment as in ours. 15. Shri Dam emphasised the poverty of the plaintiff and on that basis raised the argument that the plaintiff was not in a position to manage Rupees 400/- and so his claim that he had offered the amount to the defendant is false. This contention of Shri Dam is belied by the conclusions of fact reached by the Subordinate Judge and reproduced by us above as also by the observations of Privy Council in Bank of India case (supra). If the plaintiff was really poor as contended by Shri Dam, there was more reason for him to manage a sum of Rs. 400/- to get back the house which obviously is of much higher value. The Supreme Court observed in the case R. C. Chandiok v. Chuni Lal Sabharwal. 1970 (3) SCC 140 : ( AIR 1971 SC 1238 ) that "the very fact that they promptly filed the suit shows their keenness and readiness in the matter of acquiring the plot by purchase", and this is exactly what has happened in the present case when the plaintiff found that his verbal requests to the defendant and the notice served by him on the latter had failed to bring him any dividend. He filed the suit within five days of 21-6-1962, the date communicated to the defendant for a meet at Hailakandi for execution and registration of the deed of reconveyance. The plaintiff could have validly filed the suit by 26th June, 1962, and this is actually what he did. It was not contended that he had come to the Court belatedly or that his suit was barred by time. 16. The plaintiff could have validly filed the suit by 26th June, 1962, and this is actually what he did. It was not contended that he had come to the Court belatedly or that his suit was barred by time. 16. The clause of the contract (already reproduced above) on the basis of which the learned Single Judge founded his decision shows in our opinion, that the case falls under S. 51 rather than under Section 55 of the Contract Act. The plaintiff had indisputably the legal right, in terms of that clause, to pay Rs. 400/- at any time within five years of the date of the contract, but the moment he made up his mind to pay (1) Manik v. Abhoy, (1917) 37 Ind Cas 257 : (AIR 1917 Cal 283); (2) Tribhobandas v. Balmukundas, (1922) 67 Ind Cas 865 : (AIR 1923 Bom 231. (3) AIR 1950 PC 90 (96). the money to the defendant, the latter was bound to execute the sale deed in favour of the plaintiff right at that very moment unless they could mutually agree to defer its execution. In that context we find considerable force in the submission of Shri Sen that it is a contract consisting of two reciprocal promises to be simultaneously performed and not one where there could be any lag of time between payment of Rupees 400/- and the response by the defendant to execute the deed of reconveyance. No other interpretation of the clause, we believe is possible, nor could it be contemplated by the parties. 17. Supposing the plaintiff had learnt in advance that the defendant had no intention of honouring his part of the contract, would the law insist that the plaintiff still must manage somehow or other to pay Rs. 400/- to the defendant before he could claim specific enforcement of the contract. We think the reply to the question posed must be in the negative. If the defendant is unwilling to carry out his part of the commitment, it would be highly inequitable to call upon the plaintiff to take the hazard of making payment to the defendant in the full belief that the latter would not reconvey the house to him and he will have to knock at the door of the Court for specific enforcement of the contract. In the present case the amount involved is undoubtedly paltry, but in a given case the sum involved may be as big as 4 lakhs or even more. It would be expecting too much in such a case that the amount should be put into the hands of the defendant though it may be manifest that the latter would not, unless forced by the Court, execute the deed of reconveyance. It was held in the case of Manik Lal v. Shankar Lal, AIR 1962 Cal 103 that the ordinary rule governing vendors and purchasers is that the payment of the consideration is to be simultaneous with the execution of the deed and that it shall be made at the time when the conveyance is executed by the vendor. In any particular case, the High Court stated further, the parties may agree to deviate from the ordinary rule but unless there by any special contract, the parties are to follow the ordinary rule relating to payment between vendors and purchasers. The clause in question of the contract between the present parties, we think, does not constitute a special contract to the contrary, but corresponds, when closely examined, with the ordinary rule pointed out by the Calcutta High Court. Therefore, we have not been able to persuade ourselves to agree with the interpretation placed by the learned Single Judge on that clause of the agreement concluded between the parties. 18. In fairness we must make a brief reference to the Supreme Court judgment in the case of AIR 1963 SC 1182 , relied upon by Shri Dam. In that case the right to demand reconveyance was subject to two conditions, namely, (1) that the right must be exercised within two years, and (2) that the rent payable by the plaintiff to the defendant, from whom the plaintiff had taken the property in dispute on lease after selling the same to him, should not be in arrears for more than 6 months at any time. The plaintiff filed the suit within a period of two years, but by then he had gone into arrears for a period of seven months. On account of this latter circumstance, the Supreme Court held that the plaintiff was not entitled to enforce the contract for reconveyance of the property. The plaintiff filed the suit within a period of two years, but by then he had gone into arrears for a period of seven months. On account of this latter circumstance, the Supreme Court held that the plaintiff was not entitled to enforce the contract for reconveyance of the property. Evidently, the plaintiff had bound himself, as a price for getting back the property, that he would never fall into arrears of rent for more than six months at any time during the period of two years within which he could claim reconveyance, and since he had fallen into arrears for more than six months, he had forfeited the right to claim reconveyance. However, we find this case to be quite distinguishable from the facts of the case in hand. We have held above that immediately the plaintiff exhibited his readiness and willingness to pay the money to the defendant, the latter was obliged in terms of the agreement to execute the deed of reconveyance in plaintiffs favour, and that though the plaintiff approached the defendant a number of times, tendered the amount of Rs. 400/- to him, and requested him to execute the deed of reconveyance in his favour, the defendant exhibited reluctance and so the plaintiff did not pay the money. Therefore, we cannot attribute any legal fault to the plaintiff in the matters of discharge of his obligations under the contract. 19. We may now sum up our conclusions. We hold that the contract between the parties falls in the category of contracts involving reciprocal promises : that the plaintiff had option to pay Rs. Therefore, we cannot attribute any legal fault to the plaintiff in the matters of discharge of his obligations under the contract. 19. We may now sum up our conclusions. We hold that the contract between the parties falls in the category of contracts involving reciprocal promises : that the plaintiff had option to pay Rs. 400/- to the defendant at any time within five years counted from 26-6-1957; that immediately the plaintiff paid or tendered the money to the defendant the latter was bound in the terms of the contract to execute the deed of reconveyance in favour of the plaintiff and as such the contract is governed by the provisions of Section 51 of the Contract Act; that the plaintiff made repeated attempts to tender money to the defendant but the latter gave him a slip each time as he was determined not to reconvey the house to the plaintiff; that if the plaintiffs contention that the defendant was not out to honour his commitment is well founded, as we find it is, then the plaintiff was not legally required to manage paying somehow or other Rupees 400/- to the defendant; that even if the contract is covered by Section 55 of the Contract Act the plaintiff was not bound to pay Rs. 400/- to defendant if the latter was reluctant to reconvey the house to him; and that the entire blame for non-fulfilment of contract to this date rests on the defendant. 20. In the result we set aside the judgment and decree made by the learned Single Judge, and restore the decree of the Subordinate Judge. We direct further that the defendant shall pay costs to the plaintiff in all the Courts, 21. BAHARUL ISLAM, J. :- I agree. Appeal allowed.