REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1756 OF 2002

Gauri Shankar Prasad and Ors. …Appellants

Versus

Brahma Nand Singh …Respondent

J U D G M E N T

Dr. ARIJIT PASAYAT, J.

1. Appellants’ Second appeal in terms of Section 100 of the

Code of Civil Procedure, 1908 (in short the ‘Code’) having been

dismissed by the Jharkhand High Court, this appeal has been

filed. The  Title  Suit  No.17/92-49/93  was  decreed  by  the

learned Additional Munsif, Garhwa.  The judgment and decree

were upset by learned District Judge, Palamau in Title Appeal

No.10 of 1997. Second Appeal was filed by the plaintiffs before

the High Court.

2. The case of the plaintiffs-appellants is that the plaintiffs

were in need of money, hence, offered to mortgage their land

detailed  in  Schedule  D  of  the  plaint  with  condition  to

repurchase  the  same  on  consideration  of  Rs.36,600/-  The

defendant-respondent,  namely,  Brahmanand Singh and one

Dasrath Prasad Keshri  were willing to purchase  jointly the

land of Schedule D and, accordingly, the plaintiffs executed a

registered deed  of sale dated 5.2.1986. The respondent and

Dasrath  Prasad  Keshri on the  same  day  also  executed  a

registered  deed  of  agreement  and  agreed  to re-convey  the

purchased  land to the  plaintiffs on  payment of consideration

money to them. It has been alleged that  though  the deed of

sale was executed by the plaintiffs-appellants in favour of the

respondent and Dasrath Prasad Keshri, they always remained

in  cultivating  possession  of  the  lands,  as  described  in

schedule D of the plaint.  It is also alleged that the plaintiffs-

appellants  were in need of rs.15,000/-. The respondent and

Dasrath  Prasad  Keshari  became  ready  to  keep  the  land  in

mortgage, but only after calculating the interest thereupon at

the rate of 4 per cent for three years, the price was accordingly

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fixed at  Rs.36,600/-. It  is further alleged that the plaintiffs--

appellants  in  the  first  week  of  January,  1989,  repaid

Rs.5,500/-  to  the  respondent  in  presence  of  the  witnesses

upon which he promised to re-convey the suit land, but even

thereafter he did not re-convey the land and extended time for

execution  of  the  deed  of  re-conveyance  Ultimately  on

l0.4.1992,  Dasrath  Prasad  Keshri  received  consideration

money of his share i.e. Rs.18,300/- and executed the deed of

sale re-conveying half of the land of Schedule D in favour of

the  plaintiffs.  It  is  also  claimed  that  the  plaintiffs  also

requested the respondent  to receive his consideration money

and  to  re-convey  the  schedule  D land  of  his  share  but  he

delayed the matter,  whereupon the plaintiffs sent registered

legal notice to defendant No.l  but even then the respondent

failed to perform his part of contract and hence, the plaintiffs

filed the suit.   

3. The  respondent  contested  the  suit  and  filed  written

statement  alleging  therein  that  the  deed  of  agreement

contained a specific terms that if the plaintiffs paid back the

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consideration amount at any point of time within three years

then  the  respondent  and Dasrath  Prasad  Keshri  would  re-

convey the  land  of Schedule 'D' . It is also claimed that the

plaintiffs remained in possession of the land after execution of

the sale deed. The plaintiffs-appellants had never been willing

to  perform their  part  of  contract  nor they had paid  money

within the stipulated period of three years as contained in the

agreement. According to him, the plaintiffs-appellants never

paid any money to the defendant nor they had requested for

extension  of  time  nor  the  defendant  ever  orally  agreed  to

extend the time. He has also denied that on 10.4.1992 the

plaintiffs  tendered  any  consideration  money  nor  there  had

been any  such occasion till date and, as such, the plaintiffs

have lost their right of re-conveyance.

4. Ten  issues  were  framed  by  the  trial  court  and  the

witnesses were examined.  After having heard both the parties

and considering the evidence on record, the trial court decreed

the suit in favour of the plaintiffs-appellants. The defendant-

respondent preferred appeal before the District Judge against

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the judgment and decree of the court below, who after hearing

both sides and considering the evidence on record, allowed the

appeal  after  setting  aside  the  judgment  and  decree  of  the

court below.  

5. The  appellate  court  framed  the  following  points  for

consideration:-

I. Whether  the  suit  of  the  plaintiffs  is  barred  by  law  of Limitations?

II. Whether the plaintiffs-appellants were always ready and willing to perform their part of contract as envisaged u/s 16(c) of the Specific Relief Act?

III. Whether the time was essence of contract?

IV. Whether the plaintiffs-appellants are entitled to get decree of specific performance of contract, as prayed for?

V. Whether the judgment in question is fit to be set aside?

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6. The lower Appellate Court allowed the appeal by setting

aside the judgment and decree of the trial Court. The question

which was formulated by the High Court was as follows:

“Whether  the  time  was  an  essence  of agreement  (Ext.2)  and  whether  the plaintiffs/appellants were ready and willing to perform their part of contract.”

7. The lower Appellate Court considered the question as to

whether the plaintiffs-appellants had performed or had always

been ready and willing to perform the essential terms of the

contract  to  be  performed  by  him.  The  first  Appellate  Court

held that the plaintiffs never offered the consideration amount

within  the  period  fixed  by  the  contract.  The  other  alleged

vendee  Dasrath was examined in the Court below as PW-7.

The High Court noted that there was no material to show that

the  consideration  amount  was offered  within the  stipulated

period  of  three  years.   With these  findings,  the appeal  was

dismissed.  

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8. In  support  of  the  appeal,  learned  counsel  for  the

appellants  submitted  that  the  co-vendee  had  accepted  the

money. The first Appellate Court and the High Court should

not have held that the suit was barred by time or that there

was no evidence for offering payment of the balance money.  

9. Learned counsel  for the respondent on the other hand

supported  the  judgment  and  submitted  that  the  findings

recorded  by  the  first  Appellate  Court  were  arrived  at  after

analysing the evidence in great detail. Therefore, the Second

Appeal was really not competent.

10. Coming to the facts of the case it is to be noted that the

evidence of PW-7 the co-vendee clearly shows that no payment

was  made  in  his  presence.  His  evidence  is  to  the following

effect:

“After  3 years Gauri  Shankar did not return the whole amount but returned 5-7 thousand in  three  instalments.  How  much  in  total  he paid to me I do not remember. Like this only

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he paid money to B.N. Singh but the same was not paid in front of me.

That Gauri Shankar Bind and other failed to return the money till the date of 5.2.1989 as per the agreement said amount to me and B.N. Singh.”

11. The evidence of PW-2 is also not of any assistance to the

appellants. In his evidence in paras 3 and 6 it has been stated

as follows:     

“Dashrath Saav has returned the land to the  petitioners  when they  have  returned  the money. But B.N. Singh has not returned the land to the petitioner in spite of the fact that they  are  ready  to  pay  the  money.  The petitioners are also ready today to return the money.

I  have  knowledge  about  the  negotiation about  this  land.  I  have  no  idea  about  the documents which are prepared. No talks about sale of the land were held in front of me. The paper  are  for  the  mortgage  for  the  value  of Rs.36,000/-.”  

12. The High Court has rightly observed that the trial Court

has made a new case which was not the case of the parties.  

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13. Learned  counsel  for  the  appellants  fairly  conceded  that

though  the  clinching  evidence  about  the  payment  in  the

presence of the witnesses may not be there, according to  him

the evidence  has been wrongly analysed by the first appellate

court and the High Court. This Court has in several cases held

that  if  sale  and  agreement  to  repurchase  are  embodied  in

separate documents, it cannot be a case of the mortgage and in

such cases relating to re-conveyance time is always the essence

of the contract. (See Chunchun Jha v. Ebadat Ali (AIR 1954 SC

345).  In  Bismillah Begum (Smt.) v.  Rahmatullah Khan (dead)

by Lrs. (AIR 1998 SC 970)) it was held as follows:

“We  may  also  add  that  in  contracts relating to re-conveyance  of property,  time is always  the  essence  of  the  contract  as  laid down  by  the  Federal  Court  in  the  case  of Shanmugam Pillai v. Analakshmi Ammal (AIR 1950 FC 38) and also laid down by this Court in Caltex (India) Ltd. V. Bhagwan Devi Marodia (AIR  1969  SC 405).  The  relevant  passage  in the  judgment  of  this  Court  in  Caltex  (India) Ltd. At page 407 in para 3 reads as follows:

“At  common  law  stipulations as  to  time  in  a  contract  giving  an option for renewal of a lease of land were considered to be the essence of the  contract  even  if  they  were  not

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expressed  to  be  so  and  were construed  as conditions  precedent. Equity  followed  the  common  law rule  in  respect  of  such  contracts and  did  not  regard  the  stipulation as to time as not of the essence of the  bargain.  An  option  for  the renewal  of  a  lease,  or  for  the purchase or re-purchase of property must  in  all  cases  be  exercised strictly  within  the  time  limited  for the purpose otherwise it will lapse.”

14. In Chunchun’s case (supra) it was observed as follows:

“If the sale and agreement to repurchase are embodied in separate documents, then the transaction cannot be a mortgage, whether the documents,  are  contemporaneously  executed or not.

In the case of agreement of re-purchase, the  conditions  of  repurchase  must  be construed strictly  against  the original  vendor and  the  stipulation  with  regard  to  time  of performance of the agreement must be strictly complied with as the time must be treated as being of the essence of the contract in the case of an agreement of reconveyance.”

15. The  High  Court  also  noticed  that  the  claim  of  the

appellants  that  they  paid  the  consideration  amount  on

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10.4.1992  is  also  of  no  assistance  because  the  period  of

limitation  expired  on  5.2.1992  and  the  suit  was  filed  on

23.5.1992.  As rightly noted by the High Court, there was an

agreement  for  re-conveyance  and  there  was  specific

stipulation for re-conveyance of the land within a period of 3

years  which  was  admittedly  not  complied  by  the  plaintiffs-

appellants.  It is to be noted that the question formulated by

the High Court, by no stretch of imagination, is a substantial

question of law.   

16. The appeal is dismissed.   

…………………………J. (Dr. ARIJIT PASAYAT)

………………………..J. (P. SATHASIVAM)

New Delhi, July 11, 2008

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