Mehdi HussaIn Khan Vs. Nusrat Hasan - Court Judgment

B. S. A. Swamy, J.

1. The above three appeals are interconnected and between the same parties. As such they are being disposed of by this common judgment. Heard both sides. The plaintiff is the appellant herein. For the sake of clarity, the parties are referred as arrayed in O.S. 616 of 1975.

2. The plaintiff filed O.S. 616 of 1975 seeking specific performance of the agreement of re-conveyance (Ex. A-1) dated 21-10-1973. In the plaint he has stated that he is ever ready and willing to pay the consideration for re-conveying the suit schedule property, which was sold to the defendant under registered sale deed dated 21-10-1973 for a consideration of Rs. 20,000/- and was negotiating with one Dr. K. I. Askari elder brother of the defendant but the defendant evaded to receive the payment as such he was constrained to file the suit for specific performance. The defendant in the written statement, while admitting the relationship between Dr. Askari and herself has taken a stand that he has no authority to enter into any transaction with the plaintiff. She has also taken a plea that clause No. 3 in the agreement of re-conveyance where-under, it is stated that the time for re-conveyance can be extended by mutual consent was interpolated by the plaintiff and since time is the essence of the contract, the plaintiff cannot seek the relief of specific performance after expiry of the period mentioned in the agreement of re-conveyance. She has also taken a stand that the plaintiff is highly indebted and not having the capacity of paying the amount to her at the relevant point of time. It is also her case that since the portion of the house that was sold to her was under lease of Dolton Press, along with other portion of the house, the plaintiff agreed to pay Rs. 400/- for the portion that was sold to her towards rent from the date of sale and as per another agreement of even date Ex. B-3. The plaintiff was permitted to collect the rents up to January 1974 on condition that he pays the amounts to her subsequently and thereafter she is entitled to collect the rents from the tenant. When, the tenant was not paying the rents, she was forced to issue a legal notice, the details of which will be adverted to at the appropriate time. While, the above suit was pending, the defendant in the above suit filed O.S. No. 22 of 1977 for recovery of rents for the period from November 1973 to October 1974 @ Rs. 400/- which the plaintiff received from the lessee. Subsequently, she filed O.S. No. 84 of 1978, for the same relief for the remaining period.

3. The Trial Court on consideration of the matter, framed the following issues for adjudication.

'1. Whether the transaction of sale covered by registered sale deed dt. 21-10-1973 is not an absolute sale, but only a conditional sale in view of the agreement to re-convey of the same date?

2. Whether the time is essence of the contract as provided under Clause (3) of the reconveyance deed dt. 21-10-1978 and if so on the expiry of the period of one year the agreement stood cancelled?

3. Whether the plaintiff has been ready and willing to perform his part of the contract in time.

4. Whether the plaintiff is entitled to specific performance as prayed for?

5. To what relief?

4. In O.S. No. 22 of 77 and 84 of 1978 the following issue was framed for consideration.

'Whether the plaintiff is entitled to recovery of rents from the defendants'

5. In view of the similarity of point for consideration, the suits were clubbed and evidence was recorded in O.S. No. 616 of 1975. On behalf of the plaintiff P.W. 1 to 3 were examined and Exhibits A-l to A-31 were marked. On behalf of defendants D.W. 1 to D.W. 3 were examined and documents Ex. B.1 to B.47 were marked.

6. On appreciation of both oral and documentary evidence, the Trial Court held that the time is essence of the contract in re-conveyance of the property under the agreement and plaintiff has no means to pay the amount to get the property re-conveyed in his favour. As far as the rents are concerned, the plaintiff himself in witness box admitted that he has not paid any rents to the defendant. Hence, the Trial Court while dismissing the suit for specific performance in O.S. No. 616 of 1975, decreed the other two suits.

7. Aggrieved by the said judgment and decree, the plaintiff preferred C.C.C.A. No. 201/81, C.C.C.A. No. 2 of 1982 and C.C.C.A. No. 214 of 1981 respectively, on the file of this Court.

8. On consideration of the matter, learned single Judge of this Court has confirmed the judgment by holding that time is essence of the Contract and the plaintiff has not come to the Court with clean hands by relying on Ex. B-2 a letter written by plaintiff to Dr. Askari and Ex. B-10 letter written by plaintiff to the tenant, after expiry of the period prescribed in Ex. A-1 for getting the property re-conveyed. Aggrieved thereby, the present L.P.As. are preferred.

9. Mr. Vedula Venkata Ramana, learned counsel appearing for plaintiff argued the matter at length and tried to convince this Court firstly that the time is not an essence of the contract, secondly the agreement could not be acted upon because of the evasive attitude of the defendant. He further contended that the defendants have set up completely a false case. Hence, the judgments and decrees of the Courts below, have to be set aside and suit for specific performance has to be decreed.

10. Countering the arguments of the learned counsel for plaintiff, learned counsel for defendant Mr. M. V. S. Suresh Kumar submitted that time is the essence of the contract for re-conveyance and he brought to our notice the judgments on the subject, which are dealt with in the forthcoming paras. It is further submitted that on facts the learned Judges of the Supreme Court interpreted the judgments on Agreement of Sale, and the observations made therein cannot be taken as aid by the plaintiff on merits of the case. He further contended that time is essence of the contract, even in case of ordinary agreement of re-conveyance, if time is specified in the agreement. Hence, no inference can be drawn from the conduct of the parties that they waived the stipulated time before holding that time is not the essence of contract. He further contended that the plaintiff was never ready and willing to pay the sale consideration and in fact he is not having financial capacity to repay the said amount.

11. It is further contended that the plaintiff has come to the Court with false case and with unclean hands as such the relief of specific performance cannot be granted and drawn our attentions to authorities in support of the said proposition. It is further contended that the plaintiff never approached the defendant for re-conveyance of the property even after expiry of the stipulated time and on the other hand he was cooperating with the defendant by writing letters to the tenant to pay the rents to the defendant and it is only for the first time in Ex. A-8 reply dated 12-5-1975 to Ex. B-14 notice dated 24-7-1975 he has taken a round about turn and came up with a false plea. Nextly it is contended that the defendant has approached the Court nearly after lapse of 14 months after expiry of the period stipulated in getting the property re-conveyed and that the explanation offered by him is full of inconsistencies. Hence, the judgment of the trial Court as confirmed by the Appellate Court do not call for any interference by this Hon'ble Court under Clause 15 of the Letters Patent Act.

12. Before going into the merits of the case, we would like to refer to certain decisions referred by both the counsel to understand the scope and ambit of the jurisdiction of the Court in a suit for specific performance.

13. The Supreme Court in A. C. Arulappan v. Ahalya Naik, : AIR2001SC2783 . While considering the scope of Section 20 of the Specific Relief Act, held as follows :

'The jurisdiction to decree specific relief is discretionary and the Court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant specific relief, the Court need not grant the order for specific relief; but this discretion shall not be exercised in an arbitrary or unreasonable manner. Certain circumstances have been mentioned in Section 20 of the Specific Relief Act, 1963 as to under what circumstances the Court shall exercise such discretion. If under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the Court may not exercise its discretion in favour of the plaintiff. So also, specific relief may not be granted if the defendant would be put to undue hardship which he did not foresee at the time of agreement. If it is inequitable to grant specific relief, then also the court would desist from granting a decree to the plaintiff.'

14. After referring to case law on the subject, the Court further held as follows;

'It is settled law that the party who seeks to avail of the jurisdiction of a Court and specific performance being equitable relief, must come to the Court with clean hands. In other words, the party who makes false allegations does not come with clean hands and is not entitled to the equitable relief.'

15. To the same effect is the judgment in Lourdu Mari David v. Louis Chinnaya Arogiaswamy, : AIR1996SC2814 .

16. A learned single Judge of this Court in Kommtsetti Venkatasubbayya v. Karamsetti Venkateswarlu, AIR 1972 Andh Pra 279 held as follows :

'The plaintiff in my view, was not only disentitled to the discretionary relief on the ground that he has set up a false plea but also on the ground that discloses that he was not ready and willing to perform his part of the Contract.'

17. A three Judge bench of the Supreme Court in Gomathinayagam Pillai v. Palaniswami Nadar, : [1967]1SCR227 held as follows :

'But the respondent has claimed a decree for specific performance and it is for him to establish that he was, since the date of the contract, continuously ready and willing to perform his part of the contract. If he fails to do so, his claim for specific performance must fail.

18. The Court further held as follows :

The facts which have a material bearing on the first question have already been set out. Section 55 of the Contract Act which deals with the consequences of failure to perform an executory contract at or before the stipulated time provides by the first paragraph;

'When a party to a contract promises to do a certain thing at or before a 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. It is not merely because of specification of time at or before which the thing to be done under the contract is promised to be done and default in compliance therewith, that the other party may avoid the contract. Such an option arises only if it is intended by the parties that time is of the essence of the contract. Intention to make time of the essence, if expressed in writing, must be in language which is unmistakable : it may also be inferred from the nature of the property agreed to be sold, conduct of the parties and the surrounding circumstances at or before the contract. Specific performance of a contract will ordinarily be granted, notwithstanding default in carrying out the contract within the specified period. If having regard to the express stipulations of the parties, nature of the property and the surrounding circumstances, it is not inequitable to grant the relief. If the contract relates to sale of immovable property, it would normally be presumed that time was not of the essence of the contract. Mere incorporation in the written agreement of a clause imposing penalty in case of default does not by itself evidence an intention to make time of the essence.' At the same time, as far as the agreement of re-conveyance is concerned, the settled law is that 'whereunder an agreement an option to a vendor is reserved for repurchasing the property sold by him the option is in the nature of a concession or privilege and may be exercised on strict fulfilment of the conditions on the fulfilment of which it is made exercisable.'

19. Learned counsel for plaintiff strenuously contended before us that after the judgment of the Supreme Court in V. Penchimuthu v. Gowrammal, : AIR2001SC2446 the logical distinction between the ordinary agreement of purchase and an agreement of re-purchase is no more there and both of them to be treated alike.

20. It is true that in the V. Penchimuthu case (cited supra), the Supreme Court observed that 'No logical distinction can be drawn between an agreement to repurchase and an ordinary agreement of purchase just because the vendor happens to be the original purchaser and the purchaser happens to be the original vendor.'

21. At the same, it is to be noted that, their lordships having referred to the five Judges decision, the Federal Court in Shanmugam Pillai v. Annalakshmi Ammal, AIR 1950 FC 38 and decision of the Supreme Court in K. Simrathmull v. Nanjalingiah Gowder, : AIR1963SC1182 has observed on the fact of the case that the said agreement is not an agreement of re-conveyance, since it has none of the characteristics of an option. Having extracted, that portion of the agreement therein, the Court observed as follows :

'It is to be noted firstly, that the appellant could not, even if he were ready and able to, buy back the property before 3-5-1979 because it was made clear that the respondent would not accept any sale consideration before that date. The time-limit in this case was really for the benefit of the respondent, allowing five years uninterrupted user of the land without threat of repurchase by the appellant. Secondly, the clause does not provide that if the sale consideration were not paid before 3-5-1979 the appellant would lose his right to buy the property. Time was not stated to be of the essence of the contract. Thirdly, either of the parties could enforce the contract as it stood after five years. The agreement in question therefore was an ordinary agreement of sale.

To sum up : the mere fact that an agreement for sale is described as a reconveyance does not by itself mean that it is an option to repurchase nor does it in any way alter the substance of the deed. It merely records a historical fact -- that the property which is to be sold was being purchased by the person who used to be the owner. No logical distinction can be drawn between the agreement to repurchase and an ordinary agreement of purchase just because the vendor happens to be the original purchaser and the purchaser happens to be the original vendor. The agreement remains an agreement for sale of immovable property and must be governed by the same provisions of law'.

22. But at the same time their Lordships observed as stated supra. We feel having noticed the case law on the subject, without overruling those judgments, the learned Judges would not have made such an observation. In fact, the learned Judge on their own cannot overrule those judgments, since they were pronounced by larger benches. Hence, we have to hold that the observations of the learned Judges are obiter dicta or they do not relate to the facts of the case.

23. Learned counsel for plaintiff Mr, Vedula Venkata Ramana. though initially tried to contend that the distinction between the agreement of repurchase and the purchase is no more in existence, time cannot be made essence of the contract, even for repurchase of the property, having realized the difficulty in his way, started contending that though the agreement 16 named as an agreement to re-convey, the agreement cannot be treated as agreement of re-conveyance on the basis of the title and that the present agreement has to be considered as an agreement of sale but not as an agreement of re-conveyance.

24. To appreciate this contention, we have to refer to the agreement which is marked as Ex. A-1. While so, we must keep in mind that the property was sold to the defendant for a sum of Rs. 20,000/- under a registered sale deed and on the same day the defendant agreed to re-convey the property to the plaintiff, on payment of sale consideration of Rs. 20,000/-, within a period of one year from that date. Clauses 3 and 4 of the agreement read as under :

'3. That the 'time' is the essence of the contract. Hence, if the sale deed could not be completed within the agreed period, then this agreement would stand cancelled. Unless it has been revived by mutual consent by both the parties before the date of expiry.

4. That till the execution of sale deed in favour of the second party, the first party is the owner in possession of the said property and is entitled to realise rents and profits of the said property for her own benefits.'

25. The above clauses of the agreement, makes it abundantly clear that the defendant agreed to re-convey the property to the plaintiff within one year, if he pays the consideration that was paid to him on condition that he is allowed to receive the rents for the portion of the building that was conveyed to her under the sale deed. On the same day, the plaintiff addressed a letter to the defendant (Ex. B-2) which reads as under;

Dear Madam,

In connection with the sale of a part of my property at F'Maidan H No. 5-9-88, which has been executed today 21st October, 1973 at my residence I assure the following :--

1. That a rent of Rs. 400/- per month is fixed for the portion of property sold out to you that I shall ask the present tenant Dolton Press to pay you Rs. 400/- per month for the portion sold out to you.

2. As you have agreed in your letter I thank for deferring to collect 1st three months rent (i.e., from 21st October 1973 to 20th January, 1974) on 2lst January 1974 I shall pay you three months rent i.e., Rs. 1,200/- on 21st January 1974. For all the subsequent months you shall receive the rent of Rs. 400/- on the 21st of every month.'

26. From the above it is seen that out of the rent that is being paid to the plaintiff by the lessee, he agreed to part Rs. 400/- per month towards the rent for the portion of the building that was sold to her and he has allowed to collect rents for 3 months from 21st October 1973 to 20th January, 1974 and on 21-1-1974 he has to pay Rupees 1200/- to the defendant towards three months rent and thereafter for the subsequent months the defendant has to receive the rent of Rs. 400/- on the 21st day of every month directly from the lessee.

27. But it is to be seen that neither himself nor the tenant paid any amount to the defendant. On the other hand, the lessee denied his liability to pay any rent to defendant in Ex. B-7 reply dt. 29-5-1974 given to the lawyer's notice Ex. B-5 dt. 17-5-1974. After exchange of registered letters and after expiry of period of one year, the plaintiff addressed a letter dt. 10-1-1975 (Ex. B-10) to the lessee of the premises i.e. Rama Rao, wherein, the plaintiff has categorically admitted that the plot was sold by registered sale deed to defendant on 21-10-1973 and he agreed to part Rs. 400/- per month for the portion sold to the defendant out of the total rent of Rs. 950/- per month for the entire building leased out to him. In the last para of the said letter, he requested the lessee to remit Rs. 400/- every month to the defendant by obtaining a receipt thereof and the balance amount may be continued to be paid to him. It is now in evidence that either the plaintiff nor the lessee paid the amount, on the other hand, for the first time in Ex. A-8 dated 12-5-1975, while giving reply to the defendant legal notice Ex. B-14 which is copy of Ex. B-12 legal notice dt. 19-2-1975 in para 4 it is stated that there was an oral agreement between him and Dr. Askari for paying the total rental amount at the time of re-conveyance of the property. It is also interesting to note that in para 12, he stated that he is not under an obligation to pay the rent to the defendant and he requested the counsel for the defendant to advise his client to re-convey the property by receiving the sale consideration of Rs. 20,000/-

28. From the above, it is evident that the defendant agreed to re-convey the property within one year subject to the condition that the plaintiff has to pay Rs. 1200/-on 21-1-1974 for the portion that was sold. Since the plaintiff was allowed to collect the rents for 3 months from the date of sale and there after on receipt of the rent at Rupees 400/- every month from the tenant. Though, initially the plaintiff addressed a letter to the lessee Ex. B-10 dt. 10-1-1975 to pay the amount long after expiry of the time limit to get the property re-conveyed, by the time he got Ex. A-8 reply notice issued on 12-5-1975, he has taken a round about turn and started contending at one berth that he is not under an obligation to pay any rent and on the other there is an oral agreement with Dr. Asgari to pay the rent at the time of executing re-conveyance deed. In the penultimate para he requested the lawyer to advise defendant to execute re-conveyance by taking Rs. 20,000/-, from this even at the belated state he has not expressed his willingness to pay the rent due to the defendant under Ex. B-8.

29. On this aspect, learned counsel for plaintiff Mr, Vedula Venkata Ramana contends that if rents are not paid, it gives a fresh cause of action for the defendant to file a suit for recovery of the amount, but on that ground, the agreement cannot be treated as agreement of re-conveyance. But in the pleadings, the plaintiff proceeded on the assumption that it is an agreement of re-conveyance and he stuck to the version in his evidence also. Now, it is too late to contend that it is not an agreement of reconveyance but it is only an agreement of sale. Since, plaintiff, the vendor in Ex. B-17 could not avail the privilege or concession given to him in Ex. A-1, we reject the contention of the learned counsel for plaintiff on this aspect.

30. The next question that falls for consideration is that now since the law is well settled on the issue that the time is an essence of the contract in the case of a reconveyance, since it being a concession or a privilege given to the seller to repurchase the property under the agreement. In this regard, we have to see whether the plaintiff was ready and willing to pay the sale consideration before the stipulated time in Ex. A-1.

31. In the plaint, the plaintiff stated that he tried to offer the sale consideration to the defendant in presence of Dr. Askari and according to him, she refused to receive the same and thereafter he has given a telegram (Ex. A-4) on 20-10-1974 demanding re-conveyance of the property by stating that the defendant refused to receive the amount. Admittedly, these were denied by the defendant as well as Dr. Askari. If the fact of offering the sale consideration on 15-10-1974 is true and the same was refused by the defendant, any prudent person will immediately get a legal notice issued demanding the defendant to re-convey the property expressing his willingness to get the property re-conveyed to him.

32. Further in Ex. A-8 dated 12-5-1975 the earliest communication from plaintiff to the defendant's counsel no mention was made about the offer made by the plaintiff to the defendant on 15-10-1974, however, an omnibus statement was made that he tried to offer the money and the defendant evaded to receive the same. In his evidence, the plaintiff did not state as to where and at what point of time, he offered the money to the defendant in presence of Dr. Askari, On the other hand, Dr. Askari in his evidence produced voluminous documentary evidence to show that he being a Neuro Surgeon working in Government Hospital at Warangal has not only attended the hospital on that day but also conducted an emergency operation at about 5.00 p.m. on a child by name P. Ramachandran on that day and the case sheet of the patient was marked as Ex. A-44. The only suggestion made to him on this aspect was that by using his official position, he fabricated the record. In the above circumstances, we are of the opinion that it is a far-fetched argument. Another suggestion made was that it may take 3 to 4 hours journey between Hyderabad and Warangal. We do not want to go into this aspect, since, the plaintiff did not come with any specific plea that at a particular point of time and at a particular place he has offered the money. If he really offered themoney, on that particular day, he would nothave written the letters under Ex. B-2 andB. 10 the contents of which will be discussedlater. It is only an after thought on the partof the plaintiff to show that the agreementwas frustrated not because of him but because of the evasive attitude on the part ofdefendant.

33. Nextly the plaintiff contended that, he issued telegram under Ex. A-4 dt. 20-10-1974 demanding re-conveyance of the property. He also tiled certified postal receipts of the said telegram Ex. A-5 and A-6. In the certified copy there was no mention as to at what time the telegram was given. On the other hand, the plaintiff in his evidence stated that he has given the telegram at 7-30 p.m. on the last date of the time limit prescribed for getting the property re-conveyed in his name. Both the brother and sister stated that they have not received the alleged telegram. The plaintiff, having obtained a certified copy of the telegram, failed to get an endorsement from the postal authorities with regard to service of the telegram on the defendant. Even assuming for a moment that the said telegram was given by the plaintiff, in the absence of any proof that the same was received by the defendant, the knowledge of contents of the said telegram cannot be attributed to the defendant. Be that as it may, the telegram reads as under :

'In spite of tender of cash for re-conveyance of portion of property No. 5-9-88, you refused to receive it and execute re-conveyance deed. It is mala fide suitable legal action is being taken.'

34. Even in this telegram no mention was made that he is ready and willing to pay the amount even at the later stage. The contents of the telegram disclose that since the action of the defendant in refusing to receive the cash being a mala fide one, he want to take suitable action. Except, this we cannot presume or we cannot construe the telegram as readiness or willingness on the part of the plaintiff to pay the sale consideration. Hence, it can be safely concluded that the plaintiff was not prepared to pay the sale consideration and get the property re-conveyed.

35. On the other hand, after expiry of the time under Ex. B-2 dated 12-6-1974, he sent the rental deed for the suit schedule house, since, the lessee denied title of the defendant to the property and refused to pay the rent. Likewise, in Ex. P-10 dated 10-1-1975 he requested the tenant to pay the amount to the defendant. Had he really offered the money on 15-10-1974 and given the telegram on 20-10-1974, more so after obtaining certified copy of the telegram Ex. A-4 on 24-10-1974, he would not have addressed the two letters long after the expiry of the period prescribed under the agreement to get the property re-conveyed.

36. Hence, in the light of the settled proposition of law, we have to hold that time is the essence of the contract of agreement for re-conveyance and since the plaintiff failed to repay the amount within the stipulated time, the suits for specific performance cannot be decreed.

37. The next question that falls for consideration of the Court would be whether the plaintiff I having means to repay the sale consideration before claiming the relief of specific performance. The agreement holder has to prove that he is ever ready and willing to fulfil the obligation cast on him under the agreement. Learned counsel for petitioner tried to impress upon us that the plaintiff is having means to pay the sale consideration and drawn our attention to Ex. A-11 to A-16. While Ex. A-11 is copy of the wealth tax assessment order, Ex. A-12 to A-16 are self assessment wealth tax receipts. The trial Court having framed the issues for consideration and on analysis of the evidence recorded its findings, which read as under;

'But, P.W. 1 himself admitted in his cross-examination that S.C. 435 and S.C. 436 of 1978 on the file of the additional Judge, City Small Causes Court were decreed against him and he prayed for instalments of Rs. 50.00 per month on the plea of financial difficulty. Once he borrowed from Dr. Askari and he filed O.S. 1045 of 1971 on the file of the Second Assistant Judge, City Civil Court and he discharged that in instalments. He sold his car. He borrowed Rs. 10,000.00 from Bhagwandas and discharged it. He was also borrowing from Dolton Press and they used to adjust it towards rents. He sold 150 sq, yards to Dr. Askari in 1970 and 15 sq. yards to Dr. Amanullah. 110 sq. yards to Md. Ali Khan, again 10 sq. yards to Dr. Amanullah and 5 sq. yards to Mrs. Zeenat Aman. He did not deny that he issued a cheque for Rs. 1764-00. His Jagirdar father was borrowing petty amounts of Rs. 10.00 under Ex. B-8 and B-1. Evidently the rich ladies of the family also are not coming to the rescue of these people. It is therefore impossible to hold in the circumstances that the plaintiff is solvent enough to shell down Rs. 20,000.00 for obtaining re-conveyance.'

38. Learned counsel for plaintiff is not able to convince us to take a different view on this issue.

39. Now, we will proceed to analyse the documents relied upon by the plaintiff. Ex. A-11 dated 13-2-1980 is a copy of the Assessment Order of the Wealth Tax Officer, F-Ward, Circle I, Hyderabad for the year ending on 31-3-1975. It is true that the house property was valued about Rs. 2,75,000/-. At the same time, the Wealth Tax Officer has came to the conclusion that the Wealth Tax payable on the said house is Rs. 1583/- and since, the tax was not paid along with the return, he issued a notice under Section 18(1)(A) of the Wealth Tax for levying penalty. From this it is evident that the plaintiff is not having even a small amount during the said period of 1975. The other documents are Ex. A-12 to A-16, which are wealth tax receipts for the previous years and the tax paid during the said years range from Rs. 1060/- to Rs. 1400/-. For the year 1971-72 and 1972-73 under Ex. A-12 and A-13 a tax of Rs. 1486/- was paid. For the years 1973-74 onwards, he paid the tax at Rs. 1060/-. On the basis of these documents, it cannot be presumed that the plaintiff is having funds to pay the sale consideration, more so, in the light of the admission that he went on selling pieces of land from 1969 onwards and in fact he has sold even 5 sq. yards land to one Zeenath Aman. Hence, it is difficult to hold that the plaintiff was having sufficient funds to pay the amount at the relevant point of time. Even assuming for the sake of arguments that the plaintiff is having the funds, the next question that falls for consideration as to whether he is willing to pay the amounts or not?

40. The Apex court in His Holiness Acharya Swamy Ganesh Dassji v. Sri Sita Ram Thapar, : AIR1996SC2095 explained the distinction between the readiness and willingness, as under ;

'There is a distinction between readiness to perform the contract and willingness to perform the contract. By readiness may be meant the capacity of the plaintiff to perform the contract which includes his financial position to pay the purchase price. For determining his willingness to perform his part of the contract, the conduct has to be properly scrutinized. There is no documentary proof that the plaintiff had ever funds to pay the balance of consideration. Assuming that he had the funds, he has to prove his willingness to perform his part of the contract. According to the terms of the agreement, the plaintiff was to supply the draft sale deed to the defendant within 7 days, of the execution of the agreement, i.e., by 27-2-1975. The draft sale deed was not returned after being duly approved by the petitioner. The factum of readiness and willingness to perform plaintiff's part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The Court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of the contract. The facts of this case would amply demonstrate that the petitioner/plaintiff was not ready nor capacity to perform his part of the contract as he had no financial capacity to pay the consideration in cash as contracted and intended to bite for the time which disentitles him as time is the essence of the contract.'

41. From the above it is clear that, it is one thing to say that the plaintiff is having funds and it is another thing to say that he is willing to perform his part of the contract. As observed supra, even in Ex. A-8 dt. 12-5-1975. while giving reply to Ex. B-14, the plaintiff demanded that the defendant should execute the sale deed by receiving the sale consideration without reference to the rentals that are payable under the agreement.

42. It is strenuously contended by learned counsel for plaintiff that the value of the house owned by the plaintiff is much higher than the amount payable to the defendant.

43. Even assuming that the plaintiff is having a house worth some consideration, it is not his case that he has put the house to sale to pay the amount in question/sale consideration for re-conveyance of the property. Mere possessing a house itself does not indicate that he is having sufficient funds to pay the sale consideration. In the absence of any evidence to show that the plaintiff tried to perform his part under the contract by selling that house, we hold that he was never ready and willing to pay the sale consideration to the defendant.

44. Assuming for argument sake Ex. A-1 is not an agreement of re-conveyance and it is to be treated as an agreement of sale and time is not the essence of the contract, we have to consider whether the time was extended for obtaining the sale deed by mutual consent or whether the plaintiff has come to the Court with clean hands. We have already extracted Clause 3 of Ex. A-1, where a provision was made that the time can be extended by mutual consent by both the parties before the date of expiry.

45. As discussed above, except stating in the plaint and evidence that the plaintiff approached the defendant in the presence of D.W. 2 Dr. Askari, and offered the money, he has never taken a stand that the agreement period was extended by mutual consent. The earliest document on which he placed reliance is Ex. A-4 telegram which was alleged to have been given at 7.30 P.M. on the last date stipulated for claiming reconveyance of the house, we have already discussed the contents of the telegram and recorded a finding that even if the telegram was received by the defendants, it cannot be presumed that he offered the sale consideration to the defendant. In Ex. B-3, the defendant has accepted to receive the rent for the portion purchased by her @ Rs. 400/-from the lessee and when that amount was not paid, she started getting legal notices issued to the lessee. The lessee ultimately by Ex.B-7 dated 29-5-1974 informed the Advocate for the defendant that the plaintiff mortgaged the property occupied by deposit of title deeds, the interest payable by him is being paid from the rent payable by the lessee. The rent payable after the authorized deduction has been paid for all months including May 1974. He also stated that if the defendant is having any agreement with the plaintiff she may proceed against him to collect the proportionate amounts from him, with a copy to the plaintiff. What transpired thereafter has not come on record till 6-12-1974. On 6-12-1974, under Ex. B-2 the plaintiff forwarded a copy of the rental agreement entered into with the lessee duly tendering apology for delay in sending the rental deed. It is also interesting to note the last sentence of the said letter i.e. 'Hope you will take a quick decision and inform me at your earliest. It is not known under what circumstances, the plaintiff addressed a letter to the lessee viz. Rama Rao on 10-1-1975 on that date under Ex. B-10, he informed the lessee that, by a registered sale deed dated 21-10-1973, he sold a portion of the building to the defendant and agreed to part Rs. 400/- per month as rental for the portion sold to the plaintiff out of the total rent of Rs. 950/- for the entire building leased out to the lessee. In the second para he has stated that 'I hereby request you to remit Rs. 400/- per month every month to Miss. Nusrat Hasan by obtaining a receipt thereof. The balance of Rs. 500/- will be continued to be paid to me, A reply was issued which was marked as Ex. D-11 stating that he is not the lessee of the premises bearing No. 5-8-88 and as per his knowledge, even B. Nagi Reddy is not the Proprietor of M/s. Dolton Press.

46. In those circumstances, the defendant got issued a legal notice Ex. B-12 dated 19-12-1975, narrating the entire background, paras 7 and 8 are relevant, which read as under :

'That in spite of receiving several oral reminders and two legal notices from my client, a letter from Mr. Sudhakar and another from Mr. M. Ranga Rao of Dolton Press, you did not care to give any reply nor taken any steps for payment of rents to my client, on the other hand without any legal rights you have collected the rents of the property sold out to my client w.e.f. 21-10-1973 to this day unauthorisedly and illegally by concealment of the sale transaction in favour of my client and thus committed a serious offence and caused unlawful loss to my client ever since the registration of the sale deed dt. 21-10-1973. The rents from 21-10-1973 to 20-2-1975 work out to Rs. 6,400/- which remained unpaid to my client for the reasons stated above.

It appears that you are in collusion with your tenant deliberately harassing my client by concealing the true facts and thus causing unlawful loss to her. Your above conduct and motives amount to clear cheating to my client which is an offence under Penal Code.'

47. This notice was returned unserved. But the same was sent again and the same was received by the plaintiff. The said notice was marked as Ex.B-14. In his reply, for the first time, the plaintiff has taken a round about turn and tried to develop a case for filing a suit for specific performance. The letter is dated 12-5-1975, and the same was marked as Ex.A-8. Para 3 of the reply notice dt. 12-5-1975 read as under :

'As per the agreement to re-convey, executed by your client, your client will have to re-convey the property on receipt of the consideration of Rs. 20,000/- within a period of one year. One Sri Dr. K. I. Askari who is the elder brother of your client, negotiated the entire transaction on behalf of your client and he paid the entire amount under deed dated 21-10-1973 some amount by cash and the balance by cheques and your client was never in the picture. Dr. Askari paid the sale consideration and took the sale deed in the name of your client. The said Dr. Askari was the family Doctor of my client and he was the lessee of my client in respect of some property of my client and he also purchased the open site on which he constructed show rooms. There was absolute cordial relationship and mutual trust between my client and the said Dr. Askari. My client informed the said Dr. Askari that he was ready with money for getting re-conveyance of the property many times and the said Dr. Askari every time postponed the transaction on some pretext or other with an ulterior objective to see that the period of one year expires, so that the agreement to re-convey becomes unenforceable, my client tendered cash for re-conveyance of the property. Your client and your client refused to receive it and failed to execute the re-conveyance deed. My client gave a telegram dt. 20-10-1974 informing your client of her mala fide intention and your client was also informed that suitable legal action would be taken against her. Your client did not give any reply thereto, so it is quite clear that your client refused to receive the cash for re-conveyance of the property and refused to execute the re-conveyance deed. Your client is guilty of breach of contract and is liable in damages to my client and my client is entitled to get the property reconveyed in his name. It is not open to your client to try to throw the burden on my client. Your client had suppressed the fact of the existence of the agreement to re-convey and her refusal to re-convey the property in favour of my client.'

48. In Para 3 of the notice, as observed earlier, except stating that he informed D.W.2 that he is ready with money for reconveyance of the property many times and D.W.2 was postponing every time the transaction on some pretext or the other with an ulterior objective to see that the period of one year expires, so that the agreement to re-convey becomes unenforceable. However, he has not given any dates and in whose presence, he approached D.W. 2 and expressed his willingness to pay the amount for re-conveyance.

49. From the above, it is evident that the plaintiff knows the consequences, if he fails to get the re-conveyance of the property within one year and Dr. Askari is evading to receive the payment. In such a situation, any prudent person, will get a legal notice issued demanding re-conveyance of the property duly expressing his readiness and willingness to pay the amount. But that was not done. Secondly, for the first time, it was stated that a telegram was given on 20-10-1974, whatever may be the contents of the said telegram, any reasonable person having not received any reply from the defendant, would have immediately got a legal notice issued stating that in spite of issuance of the telegram the defendant is not performing her part of the contract and would have demanded for execution of a sale deed. Nothing of that sort has taken place till the suit is filed. On the other hand, he forwarded the rental agreement entered with lessee with a covering letter dated 6-12-1974 (Ex. B-2) and immediately thereafter in his letter dated 10-1-1975 addressed to the lessee (Ex.B-10), he admitted that he sold the property to the defendant and requested the lessee to pay Rs. 400/- towards rent for the portion of the house that was sold to the defendant out of Rs. 950/~ rent for the building and requested him to Pay the balance amount to him.

50. In Ex. A-8 the plaintiff came up with a new story as to non-payment of rents due to the defendant, by stating that he executed Ex. B-3 at the instance Dr. Askari further stated as follows :

'As a matter of fact, Dr. Askari told my client that he need not pay the rent to your client and he can pay the entire amount of Rs. 20,000/- with interest at the rate of Rs. 400/- p.m. at the time the execution of the re-conveyance deed. In view of the solemn promise and assurance given by Dr. Askari, my client did not inform his tenant to pay the rent to your client, The agreement dated 21-10-1973 is invalid and your client cannot rely upon it and cannot enforce it.'

51. From the above it is seen that firstly he has taken a stand that Ex.B-3 was executed with an understanding that the amount has to be returned at the time of re-conveyance and thereafter he has taken a stand that he is not under an obligation to pay the rent to him. On the other hand the defendant has to pay damages to him. However, it is not known for what purpose, he was demanding the damages, since, the property is not in the hands of the defendant and the same is in possession and enjoyment of the lessee and the rents are being received and enjoyed by the plaintiff. Hence, the question of paying any damages by the defendant does not arise. He nextly contends that in view of the oral understanding he did not inform the tenant to pay the rent to the defendant, which is obviously false in the light of Ex.B-10 letter addressed by him to the tenant.

52. Ultimately, he seeks execution of the re-conveyance deed on payment of sale consideration vide notice dt. 12-5-1975. Thereafter, he did not take any action to approach the Court. The suit was filed only on 28-11-1975 i.e. 13 months after expiry of the stipulated time for getting the re-conveyance and six months after issuance of Ex.A-8, wherein, for the first time, he has raised a plea for specific performance. Further it is interesting to note that the suit was filed without calling upon the defendant at any point of time either before expiry of the period prescribed in the agreement for execution of re-conveyance or after the expiry of the stipulated period demanding re-conveyance of the property.

53. Mr. Vedula Venkata Ramana, learned counsel for plaintiff submits that Ex. A-8 is a reply given to legal notice Ex. B-14 and the same has to be construed as the notice claiming re-conveyance. Which we are not prepared to accept since it is a reply to the legal notice sent by the defendant. All these things prove beyond doubt that the plaintiff having changed his mind long after the expiry of the stipulated period invented a new story to file this suit.

54. In K. S. Vidyanadam v. Vairavan, : AIR1997SC1751 while considering the issue 'whether time is essence of the contract or not and whether suit can be filed at a belated stage observed as follows :

'Shri Sivasubramaniam cited the decision of the Madras High Court in S.V. Sankaralinga Nadar v. P. T. S. Ratnaswaml Nadar, : AIR1952Mad389 holding that mere rise in prices is no ground for denying the specific performance. With great respect, we are unable to agree if the said decision is understood as saying that the said factor is not at all to be taken into account while exercising the discretion vested in the Court by law. We cannot be oblivious to the reality-properties-fuelled by large scale migration of people from rural areas to urban centers and by inflation. Take this very case. The plaintiff had agreed to pay the balance consideration, purchase the stamp papers and ask for the execution of sale deed and delivery of possession within six months. He did nothing of the sort. The agreement expressly provides that if the plaintiff fails in performing his part of the contract, the defendants are entitled to forfeit the earnest money of Rs. 5000 and that if the defendants fall to perform their part of the contract, they are liable to pay double the said amount. Except paying the small amount of Rs. 5000 (as against the total consideration of Rs. 60,000) the plaintiff did nothing until he issued the suit notice 21/2 years after the agreement. Indeed we are inclined to think that the rigor of the rule evolved by Courts that time is not of the essence of the contract in the case of immovable properties, evolved in times when prices and values were stable and inflation was unknown-requires to be relaxed, if not modified, particularly in the case of urban immovable properties. It is high time, we do so. The learned counsel for the plaintiff says that when the parties entered into the contract, they knew that prices are rising, hence, he says, rise in prices cannot be a ground for denying specific performance. May be, the parties knew of the said circumstance but they have also specified six months as the period within which the transaction should be completed. The said time limit may not amount to making time the essence of the contract but it must yet have some meaning. Not for nothing could such time limit would have been prescribed. Can it be stated as a rule of law or rule of prudence that where time is not made the essence of the contract, all stipulations of time provided in the contract have no significance or meaning or that they are as good as non-existent? All this only means that while exercising its discretion, the Court should also bear in mind that when the parties prescribe certain time-limit(s) for taking steps by one or the other party, it must have some significance and that the said time limit(s) cannot be ignored altogether on the ground that time has not been made the essence of the contract (relating to immovable properties) .

55. Even in Gomathi Nayagam Pillai's case : [1967]1SCR227 (cited supra) it is observed that 'Intention to make time is the essence if expressed in writing, must be in language which is unmistakable etc. From these two decisions it is seen that once a time limit is fixed, it has some significance and the same could be ignored altogether, more so in the absence of any proof or inference, that the parties by their conduct waive the said condition. Admittedly, in Clause 3 of Ex.A-1, time limit for re-conveyance was fixed as one year and no material whatsoever was placed by the plaintiff that defendant by her conduct waived the said condition.

56. Learned counsel for plaintiff further strenuously contended that the defendant has come to the Court with false case and drawn our attention to the pleadings, written statement and her evidence. It is true that in the written statement, as well as in the evidence the defendant has taken some extreme proposition by saying that Dr. Askari has nothing to do with the property, he is not competent to enter into agreement on her behalf so on and so-forth and she is not aware of the contents of the agreement. Clause 3 of Ex A-1 is interpolated by stating that time can be extended by mutual consent etc. We should always keep in mind that the parties in support of their case at times take extreme propositions. The Court is expected to see to what extent the extreme proposition taken by the party can dis-entitle them for getting the relief or denying the relief. It is a well settled proposition that the person who comes to Court must stand or fall on his own legs, than relying on the defence of the other side. Hence, we need not give much importance to the extreme stand taken in the pleadings by the defendants.

57. In Nirmala Anand v. Advent Corporation (P) Ltd., : [2002]SUPP2SCR706 the Apex Court while dealing with the considerations that have to weigh with the Court while granting the discretionary relief, observed as follows :

'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.

58. From the above discussion, the accusing finger points at the plaintiff than the defendant. Hence, on this ground also the relief for specific performance cannot be granted.

59. A Constitution Bench of Supreme Court in Chand Rani v. Kamal Rani, : AIR1993SC1742 held as follows;

'From an analysis of the above case law it is clear that in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract, the Court may infer that it is to be performed in a reasonable time if the conditions are :

1. from the express terms of the contract;

2. from the nature of the property; and

3. from the surrounding circumstances, for example : the object of making the contract.'

60. In Veerayee Animal v. Seeni Animal, : AIR2001SC2920 , the Supreme Court while dealing with 'reasonable time' held as follows;

'The word 'reasonable' has in law prima facie meaning of reasonable in regard to those circumstances of which the person concerned is called upon to act reasonably knows or ought to know as to what was reasonable. It may be unreasonable to given exact definition of the word 'reasonable'. The reason varies in its conclusion according to idiosyncrasy of the individual and the time and circumstances in which he thinks. The dictionary meaning of the 'reasonable time' is to be so much time as is necessary, under the circumstances, to do conveniently what the contract or duty requires should be done in a particular case. In other words it means as soon as circumstances permit. In P. Ramanatha Aiyer's case the Law Lexicon it defined to mean : 'A reasonable time, looking at all the circumstances of the case, a reasonable time under ordinary circumstances; as soon as circumstances will permit; so much time as is necessary under the circumstances, conveniently to do what the contract requires should be done; some more protracted space than 'directly', such length of time as may fairly, and properly, and reasonably be allowed on required, having regard to the nature of the act or duty and to the attending circumstances; all these convey more or less the same idea.'

61. En the present case, it is the case of the plaintiff that before expiry of the time for getting the re-conveyance, the plaintiff had approached D.W. 2 on number of times to pay the amount and that D.W.2 has evaded to receive the said amount till the time stipulated expires, so that the agreement of re-conveyance becomes frustrated. From this there cannot be any difficulty in holding that the plaintiff is fully aware and conscious of the consequences, if he fails to get the property re-conveyed in one year.

62. If the plaintiff is acting bona fidely, nothing prevented the plaintiff from approaching the competent Court immediately. Even after issuance of a telegram, whose receipt was denied by the defendant, the plaintiff did not move in the matter for nearly about 7 months, till he changed his stand in the reply Ex.A-8 dt. 12-5-1975. Even thereafter, he did not approach the Court immediately and waited for another six months to file the suit for specific performance. Hence, though the suit is filed nearly after expiry of 14 months period, the conduct of the plaintiff do not inspire the confidence of the Court to grant the relief.

63. In view of the above discussion, we do not find any merit in any of the contentions raised on behalf of the plaintiff. Though the defendant is entitled for costs throughout, keeping the pecuniary position of the plaintiff, we hold that the parties shall bear their own costs. The order of the learned single Judge is modified only to the extent of awarding costs and confirmed in all other respects.

64. In the result, the L.P.As fails and accordingly they are dismissed.

No costs.