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“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.”

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 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

 JUDGMENT

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

 2
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

 3
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

 4
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?

 5
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.

 6
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

 7
 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.

 8
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

 9
 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

 10
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 11

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