JUDGMENT The unsuccessful plaintiff is appellant. Her suit being O.S.No.1037 of 1979 for specific performance having been dismissed by the Court of II Additional Judge, City Civil Courts, Hyderabad, on 31.08.1982, she filed instant appeal about three decades ago. During the pendency, sole respondent (sole defendant) died. The appellant also died. Their legal representatives are now fighting the case in respect of a residential cum commercial premises situated in high value business area of Hyderabad known as Gunfoundry. In view of the long pendency, this Court suggested the parties to explore the possibilities of settlement. The counsel made attempts but reciprocal offers were perceived to be ‘too high’. The counsel, therefore, discharged their duty of presenting the case in this long pending appeal. With these brief remarks, to begin with; the plaintiff’s case and the defendant’s case – referring to them as such; is noticed below. Malanbee is owner of suit schedule property. The defendant was Deputy Secretary to Government of Andhra Pradesh. She was also having a dairy farm in Tandoor, looked after by her son Mohd.Usman. For her family needs, she borrowed Rs.20,000/- from the defendant. He agreed on condition of plaintiff executing registered sale deed as collateral security. He also agreed to reconvey the property. To give effect to the transaction, plaintiff executed registered sale deed on 17.08.1963 being document No.2370 of 1963. The defendant then executed deed of reconveyance on 18.08.1963 agreeing to re-sell the suit schedule property within five years for a consideration of Rs.31,000/-. On her request, on 14.08.1971 the defendant executed an endorsement on reconveyance deed extending the time for a further period of five years from 18.08.1971 to 17.08.1976. Both the parties also agreed to keep the said endorsement alive for a further period of three months but sale consideration was mutually revised upward to Rs.40,000/-. These facts are not disputed by the defendant. The plaint allegations which are disputed by the defendant may now be noticed. Plaintiff approached the defendant several times with money requesting reconveyance, in vain. The defendant dodged the issue on one pretext or the other. On 16.08.1976, the plaintiff, two mediators and her son went to the defendant with cash of Rs.40,000/-. He refused to accept the money and execute registered sale document. He demanded Rs.60,000/- over and above the agreed amount. Plaintiff approached the defendant several times with money requesting reconveyance, in vain. The defendant dodged the issue on one pretext or the other. On 16.08.1976, the plaintiff, two mediators and her son went to the defendant with cash of Rs.40,000/-. He refused to accept the money and execute registered sale document. He demanded Rs.60,000/- over and above the agreed amount. He was bent upon realizing the excess amount though he was enjoying the rents from tenants of two mulgies and other residential portions. Plaintiff then went to advocate Mr.Kamaluddin, who issued a telegraphic notice on 16.8.1976 requesting the defendant to be present on 16.11.1976 at the office of the Registrar, for executing and registering sale deed by accepting sale consideration of Rs.40,000/-. On 16.11.1976 the defendant did not turn up. Even thereafter the plaintiff went on requesting the defendant for reconveyance of the property, without any avail. On 21.05.1979 plaintiff sent two mediators to defendant’s house for negotiations. The defendant grew wild, abused and created the scene. The plaintiff’s son therefore filed criminal case being C.C.No.402 of 1979 under Sections 426, 504 and 509A of the Indian Penal Code, 1860, on the file of the Court of the Metropolitan Magistrate, City Criminal Courts, Hyderabad. The plaintiff is ready and willing to perform her part of the contract but the defendant failed to perform his part of the contract. The defendant filed written statement traversing the allegations of plaintiff which he disputed. He pleaded as follows. The plaintiff executed outright sale deed in his favour. The reconveyance agreement is an independent transaction. Time is the essence of the contact. As per the agreement dated 18.8.1963, the defendant agreed to reconvey the property within a period of five years but not before the expiry of initial three years for a sale consideration of Rs.31,000/-. The plaintiff did not comply with the terms and conditions thereof. In any event, not being full-fledged contract supported by consideration, the defendant is not bound to discharge the obligation. Subsequently, both the parties agreed to extend the time upto 17.08.1976 on enhancement of sale consideration of Rs.40,000/-. They also argued that deed of reconveyance shall be in force for a further period of three months. Plaintiff did not take any steps in that direction. Therefore, her claim is barred by limitation and the agreement is nullity and unenforceable. Subsequently, both the parties agreed to extend the time upto 17.08.1976 on enhancement of sale consideration of Rs.40,000/-. They also argued that deed of reconveyance shall be in force for a further period of three months. Plaintiff did not take any steps in that direction. Therefore, her claim is barred by limitation and the agreement is nullity and unenforceable. The defendant denied the allegations of the plaintiff that she went to him on 16.08.1976 with Rs.40,000/-, that the defendant demanded Rs.60,000/- more for executing sale deed and that the plaintiff issued a telegraphic notice. The plaintiff had been short of finances and she was not in a position to pay even the earnest money or balance sale consideration. The criminal case filed against him is false and frivolous which ended in acquittal. The defendant did not come forward to perform her part of the contract, as per the agreement, dated 14.08.1971 and therefore, her right to enforce the same had come to an end automatically. There is no valid agreement, and therefore, enforcement thereof does not arise. The plaintiff was neither ready nor expressed her willingness to perform her part of obligation and pay the sale consideration. The defendant pleaded that if the contract is enforced, it will cause great hardship to him and putting him in a disadvantageous position. The trial Court framed five substantial issues, which are as follows. (i) Whether the agreement dated 18.08.1963 is independent and is not an agreement of reconveyance binding the defendant as pleaded by him? (ii) Whether the second time extended agreement dated 14.08.1971 is true, valid and is not binding on the defendant? (iii) Whether the plaintiff was willing and ready to perform her part of the contract as pleaded by her? (iv) Whether the suit claims were barred by limitation? And (v) Whether the plaintiff is entitled for a decree for specific performance of the re-conveyance agreement as prayed for? During the trial, the plaintiff deposed as P.W.1, her son as P.W.2 and two mediators as P.W.3 and P.W.4. Her lawyer gave evidence as P.W.5. Ex.A1, certified copy of registered sale deed; Ex.A.2, conveyance deed; Ex.A.3, postal receipt; Ex.A.4, office copy of the telegram and Ex.A.5, Agreement/endorsement on Ex.A.2 were marked. The defendant was a lone witness who gave evidence as D.W.1 and marked Exs.B.1 and B.2. Her lawyer gave evidence as P.W.5. Ex.A1, certified copy of registered sale deed; Ex.A.2, conveyance deed; Ex.A.3, postal receipt; Ex.A.4, office copy of the telegram and Ex.A.5, Agreement/endorsement on Ex.A.2 were marked. The defendant was a lone witness who gave evidence as D.W.1 and marked Exs.B.1 and B.2. On consideration of oral and documentary evidence, the trial Court considered issues 1 to 5 together and held that Ex.A.2 agreement of re-conveyance is an independent contract, and that the endorsement/Ex.A.5, dated 14.08.1971 is true, valid but is not binding on the defendant, and therefore, the suit is barred by limitation. The trial Court also held that the plaintiff was not ready and willing to perform her part of contract, and therefore, she is not entitled to decree for specific performance, in view of the agreement of reconveyance, Ex.A.2 read with Ex.A.5. The sum and substance of the submissions made by plaintiff’s counsel may be noticed. In 1963, the property was worth Rs.2,00,000/-. As the plaintiff needed money, she borrowed Rs.20,000/- from the defendant and on his request executed Ex.A.1 which is a mortgage by conditional sale. She would not have been executed absolute sale deed for a meager sum of Rs.20,000/-. Ex.A.2 was executed a day after registration of Ex.A.1 which itself would prove the intention of the parties that Ex.A.1 was not intended to be a sale. As per Ex.A.2, for the first three years period, plaintiff cannot demand re-conveyance and it is only within five years after expiry of three years, plaintiff has to seek re-conveyance. This is further supported by Ex.A.5 endorsement made by defendant on Ex.A.2. Before expiry of the time period stipulated therein, as per the evidence on record, the plaintiff made adequate and sufficient efforts to obtain sale deed, in vain. Therefore, she had to issue Ex.A.4, telegraphic notice, through her lawyer P.W.5 and filed the suit. The lower Court erred in holding on issues 2 to 5 against the plaintiff even though the plaintiff was always ready and willing to perform her part of the contract. The evidence of D.W.1 remains uncorroborated and therefore, it cannot be the basis to deny the relief to the plaintiff. The parties extended the period for completion of the transaction consensually under Ex.A.5 and therefore, the intention has to be gathered from the surrounding circumstances. The evidence of D.W.1 remains uncorroborated and therefore, it cannot be the basis to deny the relief to the plaintiff. The parties extended the period for completion of the transaction consensually under Ex.A.5 and therefore, the intention has to be gathered from the surrounding circumstances. Under Ex.A.2 as extended by Ex.A.5, the time was extended upto 17.11.1976 and therefore, it is a transaction covered by Article 54 of the Limitation Act, 1963. The counsel relied on the plaintiff’s statement that she was ready and willing to perform her part of the contract which according to him remained uncontroverted. When D.W.1 admitted Exs.A.2 and A.5, it is for him to explain as to why he did not execute the sale deed. He relies on Indira Kaur v Sheo Lal Kapoor (1988) 2 SCC 488 : AIR 1988 SC 1074 , Babu Ram v Indra Pal Singh (1998) 6 SCC 358 : AIR 1998 SC 3021 and P.S.Ramakrishna Reddy v M.K.Bhagyalakshmi (2007) 10 SCC 231 : AIR 2007 SC 1256. Both the counsel relied on K.Simrathmull v Nanjalingaiah Gowder AIR 1963 SC 1182 , Chand Rani v Kamal Rani (1993) 1 SCC 519 : AIR 1993 SC 1742 , Bismillah Begum v Rahmatullah Khan (1998) 2 SCC 226 : AIR 1998 SC 970 , Babu Ram v Indra Pal Singh, Bishwanath Prasad Singh v Rajendra Prasad (2006) 4 SCC 432 and Ahmadsahab Abdul Mulla (2) v Bibijan (2009) 5 SCC 462 : AIR 2009 SC 2193 . As noticed supra, during the pendency, the defendant died and respondents 2 to 9 were brought on record as appellants. Second respondent also died. The counsel for respondents 3 to 7 and counsel for respondents 8 and 9 made the following submissions. The suit filed on 06.11.1979 is barred by limitation as P.W.1 admitted in the plaint that she went to D.W.1 on 16.8.1976 after the expiry of the time. According to them, the grace period of 3 months mentioned in Ex.A.5 is of no consequence. They would urge that in case of reconveyance, time is essence of the contract, that the plaintiff was not ready and willing to perform her part of the contract, and that Court ought not to exercise discretion. Though it is urged that Ex.A1 is mortgate by conditional sale, the Counsel for plaintiff does not seriously pursue that line of argument. They would urge that in case of reconveyance, time is essence of the contract, that the plaintiff was not ready and willing to perform her part of the contract, and that Court ought not to exercise discretion. Though it is urged that Ex.A1 is mortgate by conditional sale, the Counsel for plaintiff does not seriously pursue that line of argument. He mainly concentrated on the question of limitation and the question of non-performance of respective mutual obligations. Therefore, in this appeal, two points that arise for consideration are: whether the suit is barred by limitation in view of Ex.A2 read with Ex.A5, and whether plaintiff was ready and willing to perform her part of the contract? Whether the suit is barred by limitation? In a suit for specific performance of agreement of sale of immovable property, there is no presumption as to the time being essence of the contract. In Chand Rani, a Constitution Bench of the Supreme Court held that, “there is no presumption as to time being essence of the contract … … (but) even if it is not of the essence of the contract, the Court may infer that it has to be performed within a reasonable time, if the conditions are from the expressed from the terms of the contract, from the nature of the property and from the surrounding circumstances.” For the purpose of filing the suit, however, Article 54 of the Limitation Act, 1963, is attracted. A suit for specific performance of a contract has to be filed within three years from (i) the date fixed for the performance; or (ii) if no such date is fixed, when the plaintiff has notice that the performance is refused. Whether, a suit is filed within three years from the date of refusal of specific performance? It is a question of fact and the burden is always on the plaintiff to prove that there was a refusal by the defendant and that the suit is filed within three years after such refusal. In this case the suit document Ex.A.2 is an independent contract. It is not sale deed and it is a deed for reconveyance. In this context, the finding recorded by trial Court is extracted hereunder. This Ex.A2 was not executed on the same date when Ex.A1 was executed. In this case the suit document Ex.A.2 is an independent contract. It is not sale deed and it is a deed for reconveyance. In this context, the finding recorded by trial Court is extracted hereunder. This Ex.A2 was not executed on the same date when Ex.A1 was executed. However, from the conduct of the parties, it can be construed that, Ex.A2 is a reconveyance agreement, executed by the defendant agreeing to resale the same property to the plaintiff for a consideration of Rs.31,000/-. In case of a suit based on an agreement for reconveyance, the situation is however a little different. “In contracts relating to reconveyance of property, time is always the essence of the contract” (see Bismillah Begum). In Babu Ram referring to Bismillah Begum, the Supreme Court held that, “the time is essence of contract in a contract of reconveyance.” “If a vendor, who agrees to sell his immovable property under an agreement of sale or who executes a sale deed, is given the option to repurchase the property within a particular period, then such an option must be exercised strictly within the said period. The principle stated under Section 55 of the Contract Act that in regard to contracts of sales of immovable property, time is not the essence of the contract as stated by the Privy Council in Ardeshir H. Mama v. Flora Sassoon, AIR 1928 PC 208 : 55 IA 360 (PC), does not apply to contracts of reconveyance.” In Bishwanath Prasad Singh, the Supreme Court reiterated the law as under. Therefore, it is clear that what was involved in this case was the sale followed by a contemporaneous agreement for reconveyance of the property. Such an agreement to reconvey is an option contract and the right has to be exercised within the period of limitation provided therefor. It has also been held that in such an agreement for reconveyance, time is of the essence of the contract. The plaintiffs not having sued within time for reconveyance, it would not be open to them to seek a declaration that the transaction of sale entered into by them construed in the light of the separate agreement for reconveyance executed by the purchaser, should be declared to be a mortgage. Such a suit would also be hit by Section 91 of the Evidence Act, subject to the exceptions contained in Section 92 of that Act. Such a suit would also be hit by Section 91 of the Evidence Act, subject to the exceptions contained in Section 92 of that Act. There is no dispute that by executing Ex.A2, defendant agreed to sell the suit schedule property within a period of five years but not before expiry of three years from the date of Ex.A2 subject to payment of Rs.31,000/- by the plaintiff. Therefore, the plaintiff had to exercise option within five years after expiry of first three years. Thus the plaintiff had to exercise option on or before 17.08.1971. The parties do not seriously dispute this construction. There is also no dispute that before expiry of the period stipulated in Ex.A2 i.e., 17.08.1971, both the parties agreed, to extend the period for a further period of five years. The defendant executed an endorsement on Ex.A2 on 14.08.1971. The endorsement is Ex.A5. It is in Urdu and its translation in English reads as under. Extension with condition Period of extention Duration – 5 years No.1: from 18th August 1971 to 17th August 1976 After expiry of this, extension of three months time is to be given after that it will be null and void. No.2: Clause 1 of the agreement, it is mentioned Rs.31,000/-, instead of Rs.40,000/-, Rs.20,000/- is half of that, 14th August, 1971. Sd/- x x x 14.8.1971 Witness: Sd/- x x x (names are not mentioned, only signatures are present) A perusal of the above would show that defendant agreed to extend the time till 17.08.1976 to enable the plaintiff to exercise her option. That is not all. The plaintiff was given grace period of three months and defendant agreed that, “after the expiry of extended period further extension shall be for a period of three months and the agreement shall be in force till then.” This only means that after 17.8.1976, the plaintiff could exercise option on or before 17.11.1976. That is the proper construction of Ex.A2. The submission of the Counsel for defendants that the grace period of three years need to be ignored and the option cannot be exercised beyond 17.08.1976 is unsustainable. On a true construction of Ex.A2 and Ex.A5, this Court is of considered opinion that under Ex.A2 read with Ex.A5, the plaintiff had to exercise her option to seek reconveyance on or before 17.11.1976. The conduct of the parties also supports such interpretation. On a true construction of Ex.A2 and Ex.A5, this Court is of considered opinion that under Ex.A2 read with Ex.A5, the plaintiff had to exercise her option to seek reconveyance on or before 17.11.1976. The conduct of the parties also supports such interpretation. D.W.1 was put in possession. He was living in one portion and let out shops and other residential portions to various tenants. Therefore, in all probability, he thought that he would be in an advantageous position by extending the period. That is the reason why though the first period of eight years was to expire on 17.08.1971, he himself extended time upto 17.08.1976. He also agreed to keep the agreement in force for a further period of three months. Under Ex.A5, the defendant is also required to pay Rs.40,000/- instead of Rs.31,000/- as agreed in Ex.A2. This would also support the view that Ex.A5 was intended to be in force till 17.11.1976. It is in the evidence of P.W.1, P.W.2 and P.W.3 that plaintiff approached the defendant several times for extension of sale deed. In her evidence the plaintiff as P.W.1 deposed that on 16.08.1976, she, P.W.2 and P.W.4 went to the defendant requesting for sale deed. She also deposed that she was always ready and willing to perform her part of the contract, that she went to defendant with Rs.40,000/- seeking execution of sale deed and that defendant was not present. P.W.1 met the wife of defendant and on 15.11.1976 she got issued telegram under Ex.A3 postal receipt. Therefore, the factum of plaintiff approaching the defendant stands proved. In the cross examination, a suggestion was made to P.W.1 that before filing the suit, herself, P.W.2 and P.W.4 went to the suit schedule house with goondas. This itself suggests plaintiff was approaching the defendant. P.W.2 is son of P.W.1. He was taking care of dairy farm at Tandoor and other affairs. He also deposed that he was present when Ex.A2 and Ex.A5 were executed. He further deposed that on 16.08.1976, he went to D.W.1 with P.W.1 and P.W.4 with cash. The D.W.1 demanded Rs.60,000/- to Rs.70,000/-. Therefore they returned and issued telegram requesting defendant to come to the office of the Registrar. On 16.11.1976, he, P.W.3 and P.W.4 and his brother went to Registrar’s office but the defendant did not come for executing sale deed. The D.W.1 demanded Rs.60,000/- to Rs.70,000/-. Therefore they returned and issued telegram requesting defendant to come to the office of the Registrar. On 16.11.1976, he, P.W.3 and P.W.4 and his brother went to Registrar’s office but the defendant did not come for executing sale deed. In the cross-examination a suggestion was made that Ex.A4 postal receipt was not in relation to the telegram. Nothing is suggested in the cross examination to impeach the version of P.W.2 that they went to the house of D.W.1 on 16.08.1976. D.W.1 admits that he does not know P.W.3 and P.W.4. Therefore there should be very strong reasons to discard their evidence. Further, P.W.3 is Advocate’s clerk and nothing is suggested to him about these aspects except suggesting that he is deposing falsehood. When P.W.4 stated that he along with P.W.1 to P.W.3 went to the house of the defendant with money, nothing is suggested except a bald suggestion about a fact in issue being not correct, the law of evidence requires to accept the statement of witness as true. There are no strong reasons, therefore, to discard the evidence of P.W.1 to P.W.4 that the plaintiff went to the house of defendant on 16.08.1976. It is settled law that the absence of suggestion in cross-examination and the statement in chief examination, which remains uncontroverted, probablise the version of the witness. A reference usefully may be made to Chuni Lal v Hartford Fire Insurance Company Limited AIR 1958 Punjab 440, A.E.G.Carapiet v A.Y.Derderian AIR 1961 Cal 359 and Traders Syndicate v Union of India AIR 1983 Cal 337 . In Chuni Lal, referring to Browne v Dunn (1893) 6 R 67, Punjab High Court observed: It is a well established rule of evidence that a party should put to each of his opponent’s witnesses so much of his case as concerns that particular witness. If no such questions are put, the Courts presume that the witness’ account has been accepted. If it is intended to suggest that a witness was not speaking the truth upon a particular point, his attention must first be directed to the fact by cross-examination so that he may have an opportunity of giving an explanation. If no such questions are put, the Courts presume that the witness’ account has been accepted. If it is intended to suggest that a witness was not speaking the truth upon a particular point, his attention must first be directed to the fact by cross-examination so that he may have an opportunity of giving an explanation. In Browne v Dunn, Lord Herschell observed: I cannot help saying, that it seems to me to be absolutely essential to the proper conduct of a cause, where it is intended to suggest that a witness is not speaking the truth on a particular point to direct his attention to the fact by some questions put in cross-examination showing that that imputation is intended to be made, and not to take his evidence and pass it by as a matter altogether unchallenged, and then, when it is impossible for him to explain, as perhaps he might have been able to do if such questions had been put to him, the circumstances which, it is suggested, indicate that the story he tells ought not to be believed, to argue that he is a witness unworthy of credit. I have always understood that if you intend to impeach a witness, you are bound, whilst he is in the box, to give him an opportunity of making any explanation which is open to him; and, as it seems to me, that is no only a rule of professional practice in the conduct of a case, but it is essential to fair play and fair dealing with the witness.” In A.E.G. Carapiet, relying on Browne v Dunn, a Division Bench of Kolkata High Court held that an opponent has to put his essential and material case in the cross-examination, failure of which leads to a belief that the testimony of the witness could not be disputed. The relevant placitum from the judgment reads as under. The law is clear on the subject. Wherever the opponent has declined to avail himself of the opportunity to put his essential and material case in cross-examination, it must follow that he believed that the testimony given could not be disputed at all. It is wrong to think that this is merely a technical rule of evidence. It is a rule of essential justice. Wherever the opponent has declined to avail himself of the opportunity to put his essential and material case in cross-examination, it must follow that he believed that the testimony given could not be disputed at all. It is wrong to think that this is merely a technical rule of evidence. It is a rule of essential justice. It serves to prevent surprise at trial and miscarriage of justice, because it gives notice to the other side of the actual case that is going to be made when the turn of the party on whose behalf the cross-examination is being made comes to give and lead evidence by producing witnesses. It has been stated on high authority of the House of Lords that this much a counsel is bound to do when cross-examining that he must put to each of his opponent’s witnesses in turn, so much of his own case as concerns that particular witness or in which that witness had any share. If he asks no question with regard to this, then he must be taken to accept the plaintiff’s account in its entirety. Such failure leads to miscarriage of justice, first by surprise upon the party when he has finished the evidence of his witnesses and when he has no further chance to meet the new case made which was never put and secondly, because such subsequent testimony has no chance of being tested and corroborated. In Traders Syndicate, yet again, referring to A.E.G.Carapiet, Kolkata High Court observed. No suggestion was put to Kundu that the claim was not lodged on behalf of the plaintiff which was a must. Without such a suggestion, the defendant’s counsel was not entitled to argue that no claim in respect of the second consignment was made by the plaintiff and Kundu’s evidence on this point should be rejected. The fact remains that the case of the plaintiff as spoken to by her witnesses was never seriously impeached. No proper suggestions were made to the witnesses nor the witnesses were given an opportunity to explain the stand by making proper suggestions. Therefore, the case of the plaintiff stands proved. Further, as per Ex.A5, the time was extended upto 17.11.1976, because as already concluded supra, the grace period of three months after 17.08.1976 would also be available for the plaintiff to exercise her option under the deed of reconveyance, Ex.A2. Therefore, the case of the plaintiff stands proved. Further, as per Ex.A5, the time was extended upto 17.11.1976, because as already concluded supra, the grace period of three months after 17.08.1976 would also be available for the plaintiff to exercise her option under the deed of reconveyance, Ex.A2. In addition to the oral evidence, Ex.A4 office copy of the telegram dated 15.11.1976 issued by P.W.5 on behalf of P.W.1 would show that the defendant was requested to come to the office of Registrar, at any time on 16.11.1976. The denial by the defendant in his written statement as well as in his deposition that he did not receive any telegram is palpably a lie because Ex.A3 is postal receipt evidencing the dispatch of telegram on 15.11.1976 from the General Post Office, Hyderabad. The telegram was sent to the defendant at H.No.5-9-921 where he was residing. Under Section 27 of the General Clauses Act, 1897 (Central Act X of 1897), when a telegram is sent to the person with proper address, the presumption in law is that it is served, unless contrary is proved. Except mentioning that he did not receive Ex.A3, defendant did not make any effort to rebut the presumption. It is not his case that on 15.11.1976 or thereabout he was not in town or he had vacated the suit schedule house. Therefore, the telegram (Ex.A4 office copy) dated 15.11.1976 is served, by which defendant was requested to come to the office of Registrar on the next day. The non-response thereto is certainly refusal of defendant to perform his part of the contract, which comes within the ambit of second part of Article 54 of Limitation Act. The limitation therefore commenced from that date i.e., 16.11.1976. The suit filed on 06.11.1979 is, therefore, within time. In Babu Ram, the appellant before the Supreme Court was the plaintiff. He borrowed Rs.7,000/- from the sole defendant. When there was no payment, defendant filed the suit before insolvency Court for declaring the plaintiff as insolvent. In the said Insolvency Petition, they entered into an agreement where under the plaintiff agreed to transfer his immovable property in full satisfaction of the due amount and with a condition that he would repurchase the same for Rs.7,000/-within five years of reconveyance deed. The Insolvency Court permitted Official Receiver to execute the sale deed. In the said Insolvency Petition, they entered into an agreement where under the plaintiff agreed to transfer his immovable property in full satisfaction of the due amount and with a condition that he would repurchase the same for Rs.7,000/-within five years of reconveyance deed. The Insolvency Court permitted Official Receiver to execute the sale deed. But it was not executed nor the defendant issued any notice to plaintiff to execute the sale deed. Subsequently on 29.05.1964, the plaintiff was adjudicated as insolvent, giving liberty to apply for discharge within one year. Official Receiver then executed sale deed in favour of the defendant in which plaintiff also joined. Plaintiff moved for discharge unsuccessfully, but appeal was allowed holding that the insolvent discharged all the debts. Before the said appellate judgment, plaintiff issued notice to defendant within a period of five years for reconveyance, in vain, and then on 06.10.1969, he filed the suit for specific performance of the suit agreement dated 22.11.1963. The trial Court decreed the suit, which was confirmed by the first appellate Court. The High Court of Allahabad, however, allowed the defendant’s second appeal and reversed the judgment of first appellate Court inter alia on the ground that the time being the essence of the contract, the plaintiff failed to seek enforcement of the contract within the time stipulated in the reconveyance deed and, therefore, barred by limitation under Article 54 of Limitation Act. The Supreme Court reversed the High Court holding that the period of three years starts to run only after the defendant refused to execute the deed of reconveyance and that the suit filed on 06.10.1969 is within limitation. The relevant observations are as below. Under Article 54 of the Limitation Act, 1963, it is stated in the third column that the suit for specific performance has to be filed within 3 years from the date stipulated in the contract or from the date of refusal to perform the contract. In the present case, even though a period of 5 years is fixed for exercising the option to repurchase, it is not specified in the agreement that the vendee shall execute the deed of repurchase within a particular period from the date of exercise of option. Hence the first part of the third column of Article 54 does not apply. The second part applies. Hence the first part of the third column of Article 54 does not apply. The second part applies. Time therefore starts to run only from 22-7-1968, the date when the defendant refused to execute the deed of reconveyance. The suit was filed on 6-10-1969 within 3 years from 22-7-1968. The suit is in time as held by the trial court. The facts in Babu Ram are similar to the facts in this appeal. The period agreed in Ex.A2 admittedly was to expire on 17.08.1971. Even before that date, on 14.08.1971, the defendant endorsed on Ex.A2, agreeing to extend the time for a further period of five years i.e., upto 16.11.1976 including the grace period of three months. The plaintiff has proved that the defendant refused to execute the sale deed by his conduct, that she got issued Ex.A4 telegram on 15.11.1976 and when there was no response from the defendant, she filed the suit. From 16.11.1976 when the defendant refused to go to the office of the Registrar, the suit was required to file within three years and, therefore, the suit filed on 06.11.1979 is within limitation as per Article 54 of Limitation Act. The point is accordingly answered in favour of the appellants. Willing to perform the contract. In a suit for specific performance of contract, it is mandatory that the plaintiff must plead that he/she has performed or has always been ready and willing to perform the essential terms of the contract, which are to be performed by him/her, other than the terms performance of which have been prevented/waived by the defendant. It is well settled that compliance with Section 16(c) of the Specific Relief Act, 1963, and Forms 47 or 48 of Appendix-A to the Code of Civil Procedure, 1908, is an important aspect, which cannot be ignored by the plaintiff (see Pushparani S. Sundaram v Pauline Manomani James (2002) 9 SCC 582 ). In addition to complying with such law of the pleadings, the plaintiff must prove that he/she is willing to perform his/her part of the contract and that there is compliance with the requirement of continuous readiness and willingness at all stages, from the date of the agreement till the date of hearing of the suit (see Jugraj Singh v Raj Singh (1995) 2 SCC 31 : AIR 1995 SC 945 ). Mere statement in the pleadings and in the evidence would not be sufficient. The substance of the matter and surrounding circumstances including the conduct of the plaintiff are relevant to consider whether the plaintiff is ready and willing to perform that part of the contract. The exchange of notices between the parties prior to filing of the suit and the conduct of the parties are also relevant. The fact of depositing the money in the Court or producing Bank passbook and the like would not be determinative factors. In Chand Rani, dealing with this aspect, the apex Court observed as under. The next question is whether the plaintiff was ready and willing? The notices which were exchanged between the parties have to be looked into in determining readiness and willingness. On 10.9.1971 the plaintiff would say through the registered notice that ready money was available for purchase of the property which was followed up by a telegram. The stand is taken by the defendant that within 10 days from 26.8.71, the sum of Rs.98,000/- was not paid; hence, the sum of Rs.30,000/- stood forfeited. The redemption of the mortgage would be done and the income-tax clearance also would be obtained after the purchase of stamp paper. Where, therefore, the plaintiff was put on notice as to the stand of the defendant with regard to payment of Rs.98,000/- which again was reiterated in the notice dated 16.9.73, nothing would have been easier for the plaintiff than to pay the said sum. Therefore, in a given case, if the vendee does not pay the balance consideration after receiving the notice from the vendor, an inference can be drawn that the vendee was not willing to perform the part of the contract. “Nothing would have been easier for the plaintiff (vendee) than to pay the amount after receiving the notice from the vendor”. Conversely in transaction for reconveyance of property, if the original owner requests the purchaser to reconvey the property nothing would be easier than accepting the money and executing the sale deed. The evidence of P.W.1 that she approached the defendant on 16.08.1976 requesting execution of document that she got issued notice on 15.11.1976, in vain, on probabilities stand proved. Conversely in transaction for reconveyance of property, if the original owner requests the purchaser to reconvey the property nothing would be easier than accepting the money and executing the sale deed. The evidence of P.W.1 that she approached the defendant on 16.08.1976 requesting execution of document that she got issued notice on 15.11.1976, in vain, on probabilities stand proved. In their chief examination, P.Ws.1 and 2 made statement on oath that P.W.1 was always ready and willing to perform her part of the contract and that she had been approaching D.W.1 for getting back the property. In the cross-examination of these witnesses, especially, P.W.1, there is not even a suggestion that she was not ready and willing to perform her part of the contract. Applying the ratio in Chuni Lal, A.E.G. Carapiet and Traders Syndicate, it has to be held that the defendant did not seriously challenge the plaintiff insofar as the aspect of compliance with Section 16(c) of the Specific Relief Act. Immediately after receiving Ex.A4 telegram, defendant ought to have accepted the agreed sum of Rs.40,000/- and executed sale deed in favour of the plaintiff. The defendant was residing in the suit house and was also getting the rents from the tenants of mulgies and other portions and, therefore, he would have had thought otherwise. Indeed, as rightly pointed out by the Counsel for appellants, there is no suggestion made to P.W.1 that she was not ready and willing to perform her part of the contract. This is fatal to the defence of the defendant. Further when the plaintiff has proved Ex.A2 as well as her readiness and willingness to perform her part of the contract, the onus is certainly on the defendant to show strong reasons to deny the relief to the plaintiff. In that perspective, the submission of the Counsel for defendant with regard to minor inconsistencies in the evidence of plaintiff’s witnesses cannot have any significance. The Court cannot lose sight of the fact that the plaintiff is a widow and Pardanashin lady whereas the defendant is highly placed official in the State Secretariat and, therefore, the plea of defendant that the plaintiff was not ready and willing to perform her part of contract cannot be accepted. The Court cannot lose sight of the fact that the plaintiff is a widow and Pardanashin lady whereas the defendant is highly placed official in the State Secretariat and, therefore, the plea of defendant that the plaintiff was not ready and willing to perform her part of contract cannot be accepted. The plaintiff was very much interested in getting back her property and that is the reason why the defendant executed Ex.A2, and also extended the time for reconveyance under Ex.A5. The findings recorded by the Court below are not supported by reasons and all the aspects of the matter are not properly adverted to. The impugned judgment, therefore, suffers from error of law and liable to be set aside. In equity, the Court can refuse specific performance and award compensation. If the vendor sues for specific performance, he may retain the property and also seek compensation for the breach on the part of the purchaser. If the purchaser sues to specifically enforce the contract, in addition to such specific performance, he may also claim compensation additionally or in substitution of the performance. Section 20 of the Specific Relief Act confers discretion on the Court either to grant specific performance or review the decree for specific performance and award compensation. Sections 20 and 21 of the Specific Relief Act deal with discretion and powers of the Court to refuse specific performance and award compensation or to grant relief and compensation additionally. The three situations, as per Section 20, in which the Court may exercise discretion not to decree specific performance or (a) the terms of the contract or the conduct of the parties at the time of entering into contract or the circumstances under which the contract was entered into are such that the contract gives the plaintiff an unfair advantage over the defendant; or (b) where the performance of the contract would involve hardship on the defendant which he did not foresee where as its nonperformance would involve no such hardship on the plaintiff; or (c) where the defendant entered into contract under circumstances which makes or inequitable to enforce specific performance. Explanation I to Section 20(1) adumbrates the principle with inadequacy of consideration or the contract being onerous to the defendant or improvement in its nature, shall not be deemed to constitute an unfair advantage or hardship as contemplated in clauses 20(1)(a) and (b) respectfully. Explanation I to Section 20(1) adumbrates the principle with inadequacy of consideration or the contract being onerous to the defendant or improvement in its nature, shall not be deemed to constitute an unfair advantage or hardship as contemplated in clauses 20(1)(a) and (b) respectfully. Explanation II requires the Court to determine the hardship factor on the defendant within the meaning of clause (b) with reference to the facts at the time of acceptance of contract. Section 21 contains the principles for award of compensation inter alia providing that in determining the amount of compensation, the Court shall be guided by the principles specified in Section 73 of the Contract Act, 1872. Be it noted, under the said provision of the Contract Act, a party to the contract, who suffers the breach thereof, is entitled to compensation for any loss or damage caused to him thereby, and that while determining the damages, the means which existed of remedying the inconvenience caused by the non-performance of the contract must be taken into account. Applying these principles in appropriate case, the Court can award compensation to the plaintiff (purchaser) or vendor, while refusing specific performance of a contract. Similarly, if the decree in specific performance in favour of purchaser, results in undue hardship, other than the one indicated in Explanation I to Section 20(2), the Court may direct the purchaser to deposit enhanced amount to compel the defendant to perform the contract. A reference may be made to Gobind Ram v Gian Chand (2000) 7 SCC 548 , Nirmala Anand v Advent Corporation Private Limited (2002) 5 SCC 481 (hereafter referred to as Nirmala Anand-I) and P.D’Souja v Shondrilo Naidu (2004) 6 SCC 649 . In Gobind Ram, the vendor agreed to sell a house for a sum of Rs.16,000/- under agreement dated 2.09.1973. He did not perform the contract. The purchaser sued. The suit was decreed directing the purchaser to deposit balance sale consideration. The vendor’s appeal was also dismissed by Delhi High Court but to mitigate the hardship to the vendor, the High Court directed the purchaser to deposit a further sum of Rs.1,00,000/-. The amount was accordingly deposited. Before the Supreme Court, it was contended that award of compensation would be proper equitable relief. The Supreme Court dismissed the appeal. The vendor’s appeal was also dismissed by Delhi High Court but to mitigate the hardship to the vendor, the High Court directed the purchaser to deposit a further sum of Rs.1,00,000/-. The amount was accordingly deposited. Before the Supreme Court, it was contended that award of compensation would be proper equitable relief. The Supreme Court dismissed the appeal. But the Supreme Court so as to mitigate the hardship to the vendor (appellant in the apex Court) directed the purchaser to pay a further sum of Rs.3,00,000/-. The relevant observations are as below. In view of the above clear finding of the High Court that the appellant tried to wriggle out of the contract between the parties because of escalation in prices of real estate properties, we hold that the respondent is entitled to get a decree as he has not taken any undue or unfair advantage over the appellant. It will be inequitable and unjust at this point of time to deny the decree to the respondent after two courts below have decided in favour of the respondent. While coming to the above conclusion we have also taken note of the fact that the respondent deposited the balance of the consideration in the trial court and also the amount in the High Court, as directed. On the other hand the appellant, as held by the High Court, tried to wriggle out of the contract in view of the tremendous escalation of prices of real estate properties. However, to mitigate the hardship to the appellant we direct the respondent to deposit a further sum of Rs.3,00,000 within 4 months from today with the Registry of this Court and the amount shall be kept in short-term deposit in a nationalised bank. In Nirmala Anand, the respondent advertised in newspapers inviting applications for flats in the apartment block (Divya Prabha). In 1962, the appellant applied and entered into agreement for purchase of a flat No.71 for a sale consideration of Rs.60,000/-. The project was to be completed by June, 1969. But the consideration was dropped as Bombay Municipal Corporation terminated the lease of the plot on which Divya Prabha was to be constructed. Due to this, the construction was held up and again commenced in 1998 which was duly completed in 1999. In the meanwhile, in July, 1969, eight agreement holders instituted suit for specific performance of the agreement. But the consideration was dropped as Bombay Municipal Corporation terminated the lease of the plot on which Divya Prabha was to be constructed. Due to this, the construction was held up and again commenced in 1998 which was duly completed in 1999. In the meanwhile, in July, 1969, eight agreement holders instituted suit for specific performance of the agreement. During pendency, except Nirmala Anand and another, other plaintiffs settled the disputes with the builder. The trial Court found that the respondent committed breach of agreement but declined specific performance on the ground that the lease of the land stood terminated before the building was completed. The Division Bench dismissed the appeal and Nirmala Anand appealed to Supreme Court in 1998. During the pendency of the appeal, the builder offered to pay a sum of Rs.60 lakhs to the appellant in lieu of specific performance of agreement, but Nirmala Anand offered to settle the matter for an amount of Rs.1.20 crores or Rs.1.25 crores on the ground that the market value of the flat would be Rs.1.80 crores. Justice Doraiswamy Raju while holding that while granting a decree for specific performance, the Court can always make it conditional and the Court cannot be “unmindful of equities to be balanced” directed enforcement on condition of plaintiff Nirmala paying a sum of Rs.40,00,000/- (Rupees forty lakhs only) in addition to the sum already paid at the time of agreement of sale. The other learned Judge constituting the Bench Justice Ashok Bhan, however, dissented holding that “requiring plaintiff to pay further sum of Rs.40,00,000/- would/may frustrate the agreement itself as appellant may not be in a position to pay a sum of Rs.40,00,000/-“, although His Lordship concurred that the agreement of sale should be specifically enforced subject to certain conditions. The difference of opinion necessitated consideration of the Nirmala Anand’s appeal by three Judge Bench in Nirmala Anand-II v Advent Corporation Private Limited (2002) 8 SCC 146 . Writing for the unanimous Bench Justice Y.K.Sabharwal (as His Lordship then was) held that, “it would not be unreasonable and inequitable to make the appellant the sole beneficiary of the escalation of real estate prices and enhanced value of the flat in question” (and that) “there is no reason why the appellant who is not a defaulting party should not be allowed to reap to herself the fruits” observed as under. It is true that grant of decree of specific performance lies in the discretion of the court and it is also well settled that it is not always necessary to grant specific performance simply for the reason that it is legal to do so. It is further well settled that the court in its discretion can impose any reasonable condition including payment of an additional amount by one party to the other while granting or refusing decree of specific performance. Whether the purchaser shall be directed to pay an additional amount to the seller or converse would depend upon the facts and circumstances of a case. Ordinarily, the plaintiff is not to be denied the relief of specific performance only on account of the phenomenal increase of price during the pendency of litigation. That may be, in a given case, one of the considerations besides many others to be taken into consideration for refusing the decree of specific performance. As a general rule, it cannot be held that ordinarily the plaintiff cannot be allowed to have, for her alone, the entire benefit of phenomenal increase of the value of the property during the pendency of the litigation. While balancing the equities, one of the considerations to be kept in view is as to who is the defaulting party. It is also to be borne in mind whether a party is trying to take undue advantage over the other as also the hardship that may be caused to the defendant by directing specific performance. There may be other circumstances on which parties may not have any control. The totality of the circumstances is required to be seen. In P.D’Souza, a two Judge Bench referring to Nirmala Anand-I took a view that the same cannot constitute a binding precedent to the effect that in all the cases where there had been escalation of prices, the Court should either refuse to pass a decree of specific performance of contract or direct the plaintiff to pay higher sum. It may be mentioned here that Nirmala Anand-II decision by the three Judge Bench was not brought to the notice of P.D’ Souza Bench. It may be mentioned here that Nirmala Anand-II decision by the three Judge Bench was not brought to the notice of P.D’ Souza Bench. Be that as it is, it may be taken as well settled that the escalation of prices - even if it is abnormally high; cannot by itself be a ground to deny specific enforcement of contract of sale and in all cases there is no reason to direct the plaintiff (vendee) to pay higher amount keeping in view the escalation of prices. Whether the plaintiff was responsible for the delay, whether she was not responsible for the delay are certainly relevant while considering the matter. In this case, the parties entered into contract about four decades ago on 17.08.1963 and 18.08.1963. The plaintiff as informed was always ready and willing to perform her part of the contract. But, there is some unexplained delay on her part in not instituting the suit after issuing Ex.A.4, telegram and the suit was filed ultimately on 06.11.1979. The defendant was put in possession besides getting rents from mulgies and other portions of the house. He made improvements as deposed by him as D.W.1. According to him, after taking possession, he spent Rs.25,000/-to Rs.30,000/-for alternations and constructions. It is in the evidence of P.W.2 that the value of the property in 1963, was about Rs.2,00,000/- and at the time of trial in August, 1982, it was about Rs.5,00,000/-. There is no focused cross examination on this aspect. When it comes to valuations, the vendors and the vendees are bound to give their own versions which would benefit them. Therefore, much credence cannot be granted. The area of the property, the nature of the property, the increasing escalation of prices in real estate are all the matters which need to be considered. When it comes to valuations, the vendors and the vendees are bound to give their own versions which would benefit them. Therefore, much credence cannot be granted. The area of the property, the nature of the property, the increasing escalation of prices in real estate are all the matters which need to be considered. In Chimanlal v Special Land Acquisition Officer, Poona (1988) 3 SCC 751 : AIR 1988 SC 1652 , while considering “the question of valuation of lands under Land Acquisition Act”, Supreme Court enumerated seventeen (17) factors “which must be etched on the mental screen” inter alia these include, (principles 6, 7, 8, 10, 11, 12 and 13 of para 4 of SCC) (6) The determination has to be made standing on the date line of valuation (date of publication of notification under Section 4) as if the valuer is a hypothetical purchaser willing to purchase land from the open market and is prepared to pay a reasonable price as on that day. It has also to be assumed that the vendor is willing to sell the land at a reasonable price. (7) In doing so by the instances method, the court has to correlate the market value reflected in the most comparable instance which provides the index of market value. (8) Only genuine instances have to be taken into account. (Sometimes instances are rigged up in anticipation of acquisition of land.) (10) The most comparable instances out of the genuine instances have to be identified on the following considerations: (i) proximity from time angle, (ii) proximity from situation angle. (11) Having identified the instances which provide the index of market value the price reflected therein may be taken as the norm and the market value of the land under acquisition may be deduced by making suitable adjustments for the plus and minus factors vis-à-vis land under acquisition by placing the two in juxtaposition. (12) A balance-sheet of plus and minus factors may be drawn for this purpose and the relevant factors may be evaluated in terms of price variation as a prudent purchaser would do. (13) The market value of the land under acquisition has thereafter to be deduced by loading the price reflected in the instance taken as norm for plus factors and unloading it for minus factors. (13) The market value of the land under acquisition has thereafter to be deduced by loading the price reflected in the instance taken as norm for plus factors and unloading it for minus factors. (14) The exercise indicated in clauses (11) to (13) has to be undertaken in a common sense manner as a prudent man of the world of business would do. We may illustrate some such illustrative (not exhaustive) factors: Plus factors Minus factors Smallness of size Largeness of area Proximity to a road Situation in the interior at a distance from the road Frontage on a road Narrow strip of land with very small frontage compared to depth Nearness to developed area Lower level requiring the depressed portion to be filled up 5 Regular shape 5 Remoteness from developed locality 6 Level vis-à-vis land under acquisition 6 Some special disadvantageous factor which would deter a purchaser 7 Special value for an owner of an adjoining property to whom it may have some very special advantage 7 The Supreme Court also observed that while every case has to be dealt with on its own fact pattern bearing in mind all the factors as a prudent purchaser of land in which position Judge must place himself. Therefore, taking into consideration the plus factors and minus factors, one need to guess albeit objectively and rationale to arrive at the valuation. In land valuation cases, ordinarily, the basic registration value for the purpose of stamp duty and registration, fixed by the Government from time to time cannot be the basis. Therefore, one has to adopt a rationale method. The Inspector General of Registration and Stamps, Government of Andhra Pradesh has CARD web services (Computer Aided Registration Department). As per website, for the purpose of stamp duty and registration, the suit schedule property is valued at Rs.40,000/- (Rupees forty thousand only) per square yard. At that rate, the cost of the land itself would be Rs.1,20,00,000/-. The amount of Rs.40,000/-, which was agreed sale consideration as per Ex.A.5, if invested in 1976, would have fetched a reasonable return of minimum 15 to 20 lakhs. This has also to be discounted in the price of the suit schedule property. In the above situation, this Court is of considered opinion the method adopted as per Sections 45 and 48B of the Income Tax Act for computation of long term capital gains would be appropriate. This has also to be discounted in the price of the suit schedule property. In the above situation, this Court is of considered opinion the method adopted as per Sections 45 and 48B of the Income Tax Act for computation of long term capital gains would be appropriate. The Central Board of Direct Taxes has fixed ‘Price Indexation Factors’. For the year 2010-2011, it is 7.14. The same can be adopted as reasonable for determining the amount of consideration payable by the vendee to the vendor. As the Courts used to grant equitable relief to meet out equity to both the parties, the principles and factors specific to land acquisition cases may not be relevant. As the suit schedule property is a house, situated in a prime locality with high potential value and there is always presumption with regard to the increase in the price valuation, there may not be any serious objection to adopt the principles of valuation of immovable property under income tax law. Indeed, Section 20 which adumbrates equity jurisdiction of the Court requires the Court to exercise discretion in an unarbitrary, sound and unreasonable manner guided by judicial principles. P.W.2 deposed that in 1963, the value of the property was Rs.2,00,000/- (Rupees two lakhs only) and at the time of trial in 1982, it was Rs.5,00,000/- (Rupees five lakhs only). Taking 1982 value as the starting point and applying the price indexation method followed in income tax law, the value of the property would be Rs.35,70,000/- (Thirty five lakh seventy thousand only) (Rs.5,00,000 x 7.14 As per the circular of Central Board of Direct Taxes, the price indexation factor for 2009-2010 is 7.14.). Adopting this method is justified because any abnormal valuation as suggested by the parties to the lis (above Rs.1 crore or so) would be arbitrary especially when there is no evidence on record. The defendant or his legal representatives have been enjoying the property from 1963 and therefore, if the plaintiff is directed to pay such an abnormal price, it would amount to granting the decree of specific performance on one hand and take it back by the other as the plaintiff would not be in a position to pay such an abnormal price (see Nirmala Anand-I, paragraph 46). However, this Court hastens to add, the plaintiff to some extent delayed in getting back her property. However, this Court hastens to add, the plaintiff to some extent delayed in getting back her property. This mitigates the adverse situation faced by the defendant. Therefore, directing the defendant’s legal representatives to execute sale deed in favour of the plaintiff accepting an amount of Rs.40,000/- would be inequitable. Taking all the circumstances in to consideration, it would be fair to direct the plaintiff to deposit a sum of Rs.35,00,000/- (Rupees thirty five lakhs only) in the Court below within a period of four weeks from the date of receipt of copy of this Judgment. Thereafter, it shall be open to the defendant’s legal representatives to execute the sale deed and withdraw the amount. Needless to mention, if the defendant’s legal representatives fail to comply with the decree within stipulated time, it shall be open to the plaintiff to apply to the Court for execution of the sale deed. In the result, for the above reasons, the Judgment of the trial Court is reversed and this appeal is allowed in terms as above. There shall be no order as to costs insofar as this appeal is concerned.