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PETITIONER: INTERNATIONAL CONTRACTORS LTD.

       Vs.

RESPONDENT: PRASANTA KUMAR SUR.

DATE OF JUDGMENT: 25/01/1961

BENCH: KAPUR, J.L. BENCH: KAPUR, J.L. SHAH, J.C.

CITATION:  1962 AIR   77            1962 SCR  (2) 579  CITATOR INFO :  E&D        1989 SC 606  (4)

ACT: Sale-Repudiation  of  contract by vendor-Suit  for  specific performance,  if  lies  without formal  tender  of  Purchase money.

HEADNOTE: The  appellant  purchased the property in dispute  from  the respondent  but soon thereafter there was an  agreement  for reconveyance  of  the property to the  respondent  within  a period  of two years for almost the same value for which  it was  ’sold.   The relevant clause of this agreement  was  as follows:- " Clause 3-The purchase shall be completed by the purchasers within two years, i.e., to say on or before the 10th day  of February, 1943, time being the essence of the contract.   If the purchasers shall on or before the 10th day of  February, 1943, pay to the vendor a sum of Rs. 10,001 the vendor shall at the cost of the purchasers execute such conveyance as may be necessary  for conveying and  transferring  its  right, title   and  interest  in  the  said  property   free   from encumbrances, if any, created by it." Before  the expiry of the stipulated period  the  respondent entered  into correspondence with the appellant  asking  for the  completion  of the agreed reconveyance  and  intimating that the purchase money was ready to be paid, but after some correspondence the appellant’s solicitors totally repudiated the agreement for reconveyance.  The respondent did not then tender  the  price agreed to be paid and filed  a  suit  for specific performance which was dismissed by the trial  court on  the ground that the respondent had not paid  the  money. The High Court decreed the suit. Held, that as the appellant had totally repudiated the  con- tract for reconveyance and had failed to perform his part of the  contract it was open to the respondent to sue  for  its enforcement and the High Court was right in holding that the respondent   was   entitled  to  a   decree   for   specific performance. In a case of total repudiation of the agreement for sale  it was useless to make a formal tender of the purchase money. Hunter  v.  Daniel  (1845)  4 Hare  420,  and  Chalikani  v.

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Zamindar  of  Tuni  and  Others  (1922)  L.R.  50  I.A.  41. followed. Ismail  Bhai Rahim v. Adam Osman I.L.R. [1938] 2  Cal.  337, distinguished.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 205 of 1956. Appeal  from the judgment and decree dated May 26, 1954,  of the  Calcutta High Court in Appeal from Original Decree  No. 127 of 1950. 580 D.   N. Mukherjee, for the appellants. N.   C. Chatterjee and R. B. Biswas, for respondents Nos. 1(a) and 2. 1961.  January 25.  The Judgment of the Court was  delivered by KAPUR, J.-This is an appeal against the judgment and  decree of the High Court of Judicature at Calcutta.  The  appellant was  the defendant in the suit out of which this appeal  has arisen  and  respondent  No. 1 was the  plaintiff,  and  the second  respondent was a proforma defendant.  The  facts  of this case are these: On  February  4, 1941, the respondent sold the  property  in dispute  to  the  appellant for a sum  of  Rs.  10,000.   On February  10, 1941, there was an agreement for  reconveyance within  a period up to February 10, 1943, for a sum  of  Rs. 10,001.  The relevant clause of this agreement was the third clause which was as follows : -               " Clause 3.-The purchase shall be completed by               the purchasers within two years, i.e., to  say               on or               before  the 10th day of February,  1943,  time               being  the  essence of the contract.   If  the               purchasers shall on or before the 10th day  of               February, 1943, pay to the vendor a sum of Rs.               10,001  the  vendor shall at the cost  of  the               purchasers  execute such conveyance as may  be               necessary  for conveying and transferring  its               right, title and interest in the said property               free from encumbrances, if any, created by it.               " On  November  26, 1942, the solicitor for respondent  No.  1 wrote a letter to the appellant stating that that respondent was  ready  and willing to have the  purchase  completed  as early as possible on payment of Rs. 10,001.  Along with that letter a draft conveyance was sent for approval but all this was   subject  to  the  result  of  a  search  as   to   the encumbrances, if any, created by the appellant.  On November 30,  1942,  the solicitors for the appellant  company  wrote back  saying that immediate arrangements should be made  for giving  inspection  of the agreement of sale  on  which  the respondents  were  relying as the appellant  was  unable  to trace the copy of the said agreement from its record. 581 Again on December 11, 1942, the respondent’s solicitor sent a letter stating :               "  My  client is very eager  to  complete  the               purchase  and  the  full  consideration  money               therefore is lying idle in his hands awaiting,               the return of the relative draft conveyance as               approved by you on your clients’ behalf." To this the reply of the appellant’s solicitors dated December 18, 1942, was:-

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             "   Our  clients  deny  that  there  was   any               concluded  or  valid agreement for  sale  with               your  client  or  with  any  other  person  in               respect of the above premises." On June 10, 1943, respondent No. 1 filed a suit for specific performance  and  in the alternative for redemption  on  the footing that the transaction was in reality a mortgage.  The trial  court  dismissed the suit oil May 16,  1950,  holding that  the  transaction on the basis of which  the  suit  was brought was not a mortgage but was out and out sale with  an agreement for repurchase and as the vendor had not paid  the money  " punctually according to the terms of the  contract, the   right  to  repurchase  was  lost  and  could  not   be specifically  enforced  ", and the court had  no  power  ’to afford  any relief against forfeiture of this  breach.   The plaintiff-respondent took an appeal to the High Court and it was  there  held  that  the  failure  on  the  part  of  the respondents   to   actually  tender  the   amount   of   the consideration does riot bar a suit for specific  performance because  after  the  repudiation  of  the  contract  by  the appellant,  the tender would have been a useless  formality. The  appeal was therefore allowed and the suit for  specific performance decreed.  It is against this judgment and decree that the appellant has come in appeal to this Court. The correspondence which has been proved in this case  shows that  when  the  respondent’s  solicitor  called  upon   the appellant  to  reconvey  the  property  in  dispute  to  the respondent  and also sent a draft conveyance, the  appellant denied  that there was any concluded or valid agreement  for sale  in  respect of the property in dispute.   This  was  a complete repudiation of the contract to reconvey which the 582 appellant had agreed to by cl. 3 of the agreement which  has been  set  out above.  As the appellant had  repudiated  the contract  and had thus failed to carry out his part  of  the contract  it  was  open to the respondent  to  sue  for  its enforcement.   But it was argued on behalf of the  appellant that  the  respondent did not tender the  price,  i.e.,  Rs. 10,001 nor was he in a position to do so and in that view of the  matter the respondent is not entitled to get  a  decree for specific performance.  In cases of this kind no question of  formal  tender of the amount to be paid arises  and  the question  to be decided is not whether any money was  within the  power  of  the respondent  but  whether  the  appellant definitely and unequivocally, refused to carry out his  part of the contract and intimated that money will be refused  if tendered.   The principle laid down in Hunter v. Daniel  (1) is  applicable to cases of this kind.  In that case  Wigram, V. C., stated the position as follows:-               " The practice of the Courts is not to require               a party to make a formal tender where from the               facts stated in the Bill or from the  evidence               it  appears the tender would have been a  mere               form  and that the party to whom it  was  made               would have refused to accept the money.  " Lord  Buckmaster in Chalikani Venkatarayanim v. Zamindar  of Tuni (2) accepted this statement of the law and observed:-               "  Their Lordships think that that is  a  true               and  accurate expression of the law,  and  the               question therefore is whether the answer  that               was  sent on behalf of the mortgagee  amounted               to a clear refusal to accept the money.  " This principle applies to the facts of the present case also and the question is whether the answer sent on behalf of the appellant  amounted to an unequivocal refusal to  carry  out

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its part of the contract which in our opinion it was. It was next contended that the offer made by a solicitor  is not a proper offer in law and therefore when (1) (1845) 4 Hare 420; 67 E.R. 712.  (2) (1922)  50 I.A. 41, 47. 583 the  solicitor for the respondent called upon the  appellant to  execute the documents they were not bound to do so.   We are  unable to accord our assent to this  proposition.   The case upon which the Counsel for the appellant relied,  i.e., Ismail  Bhai Rahim v. Adam Osman (1), in our opinion has  no application to the facts and circumstances of this case.  It was  held  in that case that the offer made  by  a  promiser through  a solicitor to pay a debt with interest thereon  at the date of the offer does not of itself afford a reasonable opportunity  to  the  promisee  of  ascertaining  that   the promisor is able and willing to perform his promise.  Unless there  is  something peculiar in the circumstances  of  that case that case does not lay down good law.  It is  difficult to see why a tender made through a solicitor who is for that purpose an agent, is not a proper tender. In  our  opinion  the  High  Court  rightly  held  that  the respondents  were  entitled to a decree  for  specific  per- formance and we therefore dismiss this appeal with costs. Appeal dismissed.