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Govind Lal Chawla v. C.K Sharma And Others

Allahabad High Court

May 19, 1978

Judgment

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Structured Summary of the Opinion: Govind Lal Chawla — Second Appeal

Factual and Procedural Background

This is a second appeal by defendant/appellant Govind Lal Chawla against a decree of the trial court (confirmed by the Additional District Judge, Allahabad) cancelling a sale deed dated 24-12-1966 that had been executed in favour of the appellant. The property in dispute is stated as No. 34 Muir Road (old Corporation No. 20), Allahabad.

Chronology and competing transactions (as stated in the opinion): - On 10-1-1966 vendors Mrs. M. Lucas and Mrs. C. Gordon executed an agreement for sale in favour of Madanlal (Ex. B-20) for Rs. 16,000 with Rs. 500 earnest money; the agreement required the vendors to clear a mortgage to Mr. G. Alphanzo and to execute the sale deed within six weeks. - On 4-8-1966 the vendors entered into a later agreement for sale in favour of respondent/plaintiff Sri C.K. Sharma for Rs. 17,000; an earnest sum (initially Rs. 5,000 and later a further Rs. 750) was paid and the plaintiff demanded execution of the sale deed and presence at registration on 26-12-1966; the vendors failed to attend then. - Madanlal (and later his claimed nominee, the appellant Govind Lal Chawla) sent demand notices; correspondence ensued. The vendors, after correspondence, executed a sale deed in favour of the appellant on 24-12-1966. - Plaintiff C.K. Sharma challenged that sale deed as illegal and sought either a direction for execution of a valid sale deed in his favour under his agreement dated 4-8-1966 or, alternatively, refund of amounts paid. The trial court cancelled the sale deed in favour of the appellant; the lower appellate court confirmed findings against the appellant; the present judgment disposes of the second appeal.

Legal Issues Presented

Whether, under the agreement dated 10-1-1966 (Ex. B-20), time was the essence of the contract.
Whether the agreement dated 10-1-1966 in favour of Madanlal stood revoked.
Whether the sale deed executed in favour of the appellant on 24-12-1966 was validly executed according to the terms of the agreement dated 10-1-1966 (i.e., whether the appellant could lawfully obtain the sale deed as nominee/beneficiary).
Whether the subsequent agreement dated 4-8-1966 in favour of plaintiff C.K. Sharma was void or ineffective.
Relief available to the appellant if any (i.e., whether the appellant's appeal succeeds).

Arguments of the Parties

Appellant (Govind Lal Chawla) and Madanlal — Core Contentions

The appellant (and Madanlal) maintained that the agreement dated 10-1-1966 in favour of Madanlal was valid and subsisted until a sale deed was executed in favour of Madanlal or his nominee.
They argued that under the 10-1-1966 agreement time was not the essence of the contract because the vendors had to satisfy conditions (clear a mortgage, obtain mutation) before the sale deed could be executed.
Madanlal and the appellant asserted that plaintiff C.K. Sharma had full knowledge of the pre-existing agreement and that the subsequent agreement (4-8-1966) was inoperative, void or ineffective as against the earlier contract with Madanlal.
The appellant asserted he was the real purchaser or the nominee/beneficiary of the Madanlal arrangement (alleged benami arrangement), and filed evidence including a document dated 8-12-1966 (Ex. B-16) describing the arrangement as benami.

Plaintiff (Sri C.K. Sharma) — Core Contentions

The plaintiff contended that he had a valid agreement for sale dated 4-8-1966 and had paid earnest sums; the defendants/vendors failed to execute the sale deed to him on the specified date and later executed a sale in favour of the appellant, which the plaintiff alleged was illegal and not binding on him.
He claimed the earlier agreement in favour of Madanlal either did not exist, stood cancelled by non-compliance or was otherwise vitiated, and therefore he was entitled to specific performance under his agreement or to refund of amounts paid.

Vendors/Respondents — Core Contentions

The vendors contended the appellant was a bona fide purchaser on the basis of the agreement dated 10-1-1966 (which contemplated sale in favour of Madanlal or his nominee).
They argued that under the 10-1-1966 agreement time was not of the essence because the vendors had to clear a mortgage and get mutation — tasks which affected readiness to execute the sale deed.
The vendors asserted Madanlal did not satisfy his obligations within the stipulated time and that the later agreement in favour of C.K. Sharma was entered into because of Madanlal's failure; they denied that the subsequent sale in favour of C.K. Sharma was ineffective.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Beni Sah v. Sew Sah (AIR 1949 Cal 661)	Held that whether time is of the essence depends on the intention of the parties and that intention is a question of fact; appellate restraint where concurrent findings of fact exist.	The respondent relied on this case to argue that the finding on whether time was essence was a factual finding and not open in second appeal. The court considered it but distinguished it in light of authorities that treat construction of documents as a question of law.
Jamshed Kodaram Irani v. Burjorji Dhunjibhai (AIR 1915 PC 83)	Privy Council authority referenced (distinguished in Beni Sah); used in discussion of fact-vs-law when considering time as essence.	Not applied directly; mentioned as having been distinguished in earlier case law and therefore not controlling for the court's analysis.
Jwala Ram v. Mathura Das (AIR 1931 Lah 696)	When interpreting a compromise decree, determination of default is a question of fact dependent on circumstances of each case.	The court noted this case but observed it dealt with compromise decrees, not ordinary agreements; thus it did not establish a rule that time could never be construed as non-essential in ordinary sale agreements.
Chuni Lal v. Mehta and Sons Ltd. v. Century Spinning and Manufacturing Co. Ltd. (AIR 1962 SC 1314)	Construction of a document of title or foundational document of rights raises a question of law.	The court relied on this principle to treat the construction of the agreement (and the question whether time was of the essence) as a legal question open to review in the second appeal.
Bhusawal Borough Municipality v. Amalgamated Electricity Co. Ltd., Bhusawal (AIR 1966 SC 1652)	Supports the proposition that construction of documents of title is a question of law.	Used alongside Chuni Lal to justify judicial review of the agreement's terms on a question of law, rather than purely factual review.
Gomathinayagam Pillai v. Palaniswami Nadar (AIR 1967 SC 868)	Reinforces the presumption that in contracts for sale of immovable property time is not ordinarily of the essence; intention to make it so must be clear and strong.	Adopted as part of the settled law that time is not usually of the essence in sale of land; helped the court conclude time was not essence under the 10-1-1966 agreement.
Govind Prasad v. Hari Dutt ((1977) 2 SCC 539 : AIR 1977 SC 1005)	Affirms that fixing a period does not automatically make time the essence; for immovable property, the normal presumption is that time is not of the essence and strong circumstances are needed to displace that presumption.	The court relied on this authority (following Gomathinayagam) to conclude the lower appellate court erred in treating the six-week stipulation as making time essential; the court found the presumption applied and that the agreement's other conditions showed time was not of the essence.

Court's Reasoning and Analysis

The court's reasoning proceeds in three main stages corresponding to the principal issues raised:

1. Whether time was of the essence under the agreement dated 10-1-1966

The court examined the express terms of Ex. B-20, particularly Conditions 3 and 4: Condition 3 required the vendors to clear a mortgage in favour of Mr. G. Alphanzo before execution of the sale deed; Condition 4 required the vendors to execute the sale deed within six weeks, and provided remedies for failure.
The court emphasized that the agreement contained interdependent conditions — the mortgage redemption and mutation steps had to be performed by the vendors before the sale deed could be validly executed — which demonstrated that rigid fixation of the six-week period did not automatically render time the essence.
Relying on Supreme Court authorities (notably Govind Prasad and Gomathinayagam Pillai) the court reiterated the established presumption that in contracts for sale of immovable property time is not ordinarily of the essence; the intention to treat time as essential must be clearly evidenced by strong circumstances. The court concluded that those circumstances were absent here and therefore time was not of the essence.
The court held that the lower appellate court erred in holding time to be of the essence in this case.

2. Whether the agreement dated 10-1-1966 stood revoked

The court reviewed the correspondence: Madanlal (or his nominee) sent a demand notice dated 1-12-1966 (Ex. 1) but that notice made no mention of the mortgage clearance or mutation. The vendors replied by letter dated 15-12-1966 (Ex. 11) asserting that Madanlal had failed to have the sale deed executed within six weeks and that his right had been lost; vendors also asserted the mortgage had been satisfied in time and that they had entered into an agreement with C.K. Sharma.
The court found contradictions in the vendors' position: a witness (Mr. G. Gordon) stated the mortgage was redeemed after the agreement in favour of C.K. Sharma was executed, undermining the vendors' claim that they had satisfied the mortgage before Madanlal's deadline.
The court observed that the vendors never communicated to Madanlal that the conditions (mortgage redemption and mutation) had been satisfied — communication that would have been necessary to enable Madanlal to procure execution of the sale deed. Because Madanlal was not given that intimation, he remained entitled to obtain the sale deed (within the statutory limitation period of three years), and the agreement did not stand revoked by the vendors' unilateral assertions.
The court applied Section 39 of the Indian Contract Act (stated in the opinion) to explain that a party cannot repudiate the contract unless there is refusal to perform or disablement to perform; here there was no disability on Madanlal's part and no clear acquiescence by him in termination of the contract.
The court therefore concluded the 10-1-1966 agreement subsisted and had not been validly revoked by the vendors.

3. Competence of the appellant to obtain and hold the sale deed

The agreement permitted execution of the sale deed in favour of Madanlal or "his nominee or nominees." The court analysed the nature of a nominee's entitlement: a nominee takes in a representative capacity (to get the deed executed on behalf of the principal), not necessarily in his own independent right.
The only evidence that the appellant was the true purchaser/nominee was his own testimony and a document dated 8-12-1966 (Ex. B-16) describing the transaction as benami. The court found Ex. B-16 did not constitute an effective nomination in writing that would entitle the appellant to priority over others; it stated that the agreement was benami but did not show that Madanlal had nominated the appellant to take the sale deed in his own right.
The court also recorded the appellant's admission that he had threatened the vendors on 22-12-1966 with criminal and civil proceedings if they did not execute the agreement in his favour — a fact that, considered together with the surrounding correspondence, supported the conclusion that the sale deed to the appellant was obtained by improper pressure and was not a valid exercise of a nominee entitlement.
Given these findings, both courts below were justified in concluding the appellant was not a legitimate nominee entitled to preference over the plaintiff C.K. Sharma and in cancelling the sale deed executed in favour of the appellant.

Holding and Implications

Holding: Appeal dismissed.

Implications and consequences: - The court upheld the cancellation of the sale deed that had been executed in favour of the appellant on 24-12-1966, confirming the orders of the lower courts. - The court concluded that time was not of the essence under the agreement dated 10-1-1966 and that the 10-1-1966 agreement had not been validly revoked by the vendors. - The appellant was found not to have a superior right as a nominee; the sale-deed executed in his favour was cancelled for reasons set out in the reasoning (absence of a valid nomination in his favour and evidence of coercion/threat). - The parties were ordered to bear their own costs.

Broader precedent: The opinion applies established Supreme Court principles (notably Govind Prasad and Gomathinayagam) about the presumption that time is not ordinarily of the essence in contracts for sale of immovable property and the legal character of document construction. The opinion does not purport to create a new legal principle beyond applying those precedents; its direct effect is limited to the parties and the cancellation of the sale deed in favour of the appellant.

Disposition

The second appeal by Govind Lal Chawla was dismissed. The courts below were held justified in cancelling the sale deed executed in favour of the appellant; the parties were directed to bear their own costs.

Show all summary ...

1. This second appeal has been filed by defendant Govind Lal Chawla against the decree passed by the trial court cancelling the sale deed dated 24-12-1966 executed by respondent No. 2 and Mrs. Lucas, predecessor-in-interest of respondents Nos. 3, 4 and 5 in favour of the appellant. That decree was confirmed by the Additional District Judge, Allahabad, Mrs. C. Gordon and Mrs. Lucas own house No. 34 Muir Road, Allahabad. Its corresponding old Corporation Number was 20. Both these ladies entered into an agreement for sale in favour of respondent Sri C.K Sharma for a consideration of Rs. 17,000/- on 4-8-1966. A sum of Rs. 5,000/- was paid towards the earnest money. Some time later a further sum of Rs. 750/- was paid to these two ladies towards the earnest money. According to the agreement, the sale deed was to be executed within a period of six weeks from the date of the agreement. Subsequently on 1-12-1966 Madanlal who is a pro forma respondent, sent a notice to vendors and endorsed its copy to Sri C.K Sharma. On 15-12-1966 the vendors in reply to notice dated 1-12-1966 refuted the allegations contained in it. They asserted that respondent Madanlal did not get the sale-deed executed within six weeks according to the stipulation contained in the agreement dated 10-1-1966 executed by the aforesaid ladies in his favour. They denied the existence of the agreement and they informed him of the agreement dated 4-8-1966 between the plaintiff-respondent Sri C.K Sharma and themselves. Subsequently, under the influence of some persons the two ladies did not support the fact of the execution of the agreement for sale in favour of the respondent Sri C.K Sharma. On 20-12-1966 the plaintiff respondent Sri C.K Sharma sent a registered letter to the two ladies to receive the sum of Rs. 11,250/- and to execute the sale deed and be present for registration in the office of the Registrar on 26-12-1966. The two ladies did not reach the office of the Registrar and failed to execute the sale deed. Later on the respondent Sri C.K Sharma received letter dated 31-12-1966 from Mrs. C. Gordon informing him that they had executed the sale deed in favour of the appellant on 24-12-1966. The sale deed, according to the plaintiff-respondent Sri C.K Sharma was illegal, inoperative and it was not binding on the plaintiff respondent. The sale deed was challenged on the ground that there did not exist any agreement for sale between the two ladies and respondent Madanlal. Even if any such agreement existed, it stood cancelled and vitiated on account of non-compliance with the terms of the agreement. It was also cancelled by these two ladies. Plaintiff respondent Sri C.K Sharma was entitled to get a valid sale deed executed in his favour under his valid agreement. The sale deed executed in favour of the appellant was void. The vendors were estopped from transferring the property in suit by sale in favour of the appellant. The sale deed, according to the terms of the agreement in favour of respondent Madanlal was to be executed within six weeks but it was not done. The agreement, therefore, stood cancelled. Plaintiff-respondent Sri C.K Sharma claimed that he was always ready and was still ready to perform his part of the contract. On these allegations the plaintiff respondent claimed relief for a direction to the respondents Nos. 1 and 2 to execute a sale deed in respect of 34 Muir Road, Allahabad, in favour of the plaintiff-respondent Sri C.K Sharma on receipt of the sum of Rs. 11,250/- from him. The alternative relief was for the refund of the sum of Rs. 5,750/-.

2. The respondent-vendors claimed that the appellant was a bona fide purchaser of the said property on the basis of the agreement dated 10-1-1966. The agreement provided that the sale deed would be executed in favour of respondent Madanlal or his nominee. The agreement with the respondent Madanlal dated 10-1-1966 contained the condition that the vendors would get their names mutated and they would satisfy a mortgage-debt due to Sri G. Alphanzo. It was claimed further that under the agreement dated 10-1-1966 the time was not the essence of the contract. Plaintiff-respondent Shi C.K Sharma had knowledge of the agreement dated 10-1-1966. The respondent however, got another agreement for sale executed subsequently for a consideration of Rs. 17,000/-. The subsequent agreement was inoperative, void and ineffective. The agreement dated 4-8-1966 was not binding on the vendors. The plaintiff-respondent prevented the vendors from complying with the agreement in favour of respondent Madanlal. Respondent Madanlal as well as the appellant filed the written statements. Madanlal claimed that the agreement for sale in favour of himself or his nominee dated 10-1-1966 was a perfectly valid document and subsisted till the sale deed was executed in favour of Madanlal or his nominee the appellant in his case. Under that agreement it was incumbent upon the vendors to satisfy Madanlal or his nominee about their title and its being free from any incumbrance and as such time was not the essence of the contract under agreement dated 10-1-1966. That agreement was never cancelled. Plaintiff-respondent Sri C.K Sharma had full knowledge of the said agreement. The agreement was not binding on respondent Madanlal. Respondent No. 1 had no right to purchase the property and he had no cause of action. To similar effect is the written statement of the appellant.

3. The main issues that arose before the trial court which are relevant for the purposes of this appeal related to the questions whether under agreement dated 10-1-1966 the time was the essence of the contract; and, whether the vendors had cancelled that agreement. The other questions related to the question whether the agreement in favour of the plaintiff-respondent was void.

4. In appeal before the lower appellate court the following points arose for decision:

“1. Whether time was the essence of the contract between the defendants Nos. 1 and 2/1 to ⅔ and the defendant No. 3?

2. Whether the agreement for salein favour of the defendant No. 3 was revoked?

3. Whether the sale executed in favour of the defendant No. 4 was validly executed according to the terms of agreement dated 10-1-1966?

4. Whether the agreement dated 4-8-1966 in favour of the plaintiff is void?

5. Appellant's relief, if any?”

5. On these points the learned Additional District Judge who heard the appeal heldthat the time was the essence of the contract between the vendors and Madanlal. On point No. 2 it was held that the agreement in favour of Mandanlal stood revoked. On point no. 3 also it was held that the sale deed executed in favour of the appellant is against the terms of the agreement dated 10-1-1966, Point No. 4 was also decided against the appellant. As a result of these findings the appeal was dismissed.

6. The main contentions that have been raised in this appeal relate to the question whether in the agreement dated 10-1-1966 time was the essence of the contract and whether the agreement dated 10-1-1966 stood revoked. The third contention relates to the validity of the sale deed executed in favour of the appellant on 24-12-1966. Before dealing with the question whether in this case time was essence of the contract or not, I shall deal with the objection raised by the counsel for the respondent. He has contended that the question whether the time was the essence of the contract or not is a finding of fact and there being the concurrent findings of the two courts below, the question cannot be agitated in second appeal. He has relied on Beni Sah v. Sew Sah (AIR 1949 Cal 661). It was held by Blank J. in that case, that the question whether the time was of the essence of the contract depended on the intention of the parties. The intention of the parties is a question of fact and this court will be bound by the proceedings of the courts below on the matter of fact. While taking this view the learned Judge distinguished the Privy Council case- Jamshed Kodaram Irani v. Burjorji Dhunjibhai (AIR 1915 PC 83). He also placed reliance on Jwala Ram v. Mathura Das (AIR 1931 Lah 696). In that case it was held that while interpreting the terms of a compromise decree, the question whether a default has or has not taken place is one of fact to be decided on facts of each case. It cannot be laid down as a matter of law that the time was not the essence of the contract in such cases. In these cases the question of interpretation of a compromise decree arose. They were not the cases in which the terms of a mere agreement between the parties came up for interpretation. It has, however, been held in numerous cases by the Supreme Court that the construction of a document is a question of law. If any cases are needed to be cited for this proposition they are to be found in AIR 1962 SC 1314, Chuni Lal V. Mehta and Sons Ltd. v. Century Spinning and Manufacturing Co. Ltd. and AIR 1966 SC 1652, Bhusawal Borough Municipality v. Amalgamated Electricity Co. Ltd. Bhusawal. It has been laid down in these cases that the construction of a document of title or of a document which is the foundation of the rights of parties necessarily raises a question of law.

7. I now proceed to examine whether the time was of the essence of the contract under the agreement in question. The vendors in this case had executed an agreement in favour of one Madanlal on 10-1-1966. The terms of the agreement Ex. B-20 have to be construed. The agreement was executed by Mrs. M. Lucas and Mrs. C. Gordon who claim to be the owners of 20, Muir Road. The agreement was executed in favour of Madanlal. According to the agreement the sale deed was to be executed in favour of Madanlal and/or his nominee or nominees. The consideration for sale was to be Rupees 16,000/-. The sum of Rs. 500/- was paid as earnest money. The stipulations in the deed of agreement were as below:—

“1. That in pursuance of the said agreement and in consideration of the said sum of Rs. 16,000 (Rupees sixteen thousand only), to be paid by the second party and/or the nominee or nominees of the second party, the first party shall transfer by way of absolute sale, the said premises No. 20, Muir Road, Allahabad, together with all the rights of the First Party in the land, and constructions to the Second Party and/or the nominee or nominees of the Second Party free of encumbrances.”

2. That, out of the said sum of Rupees 16,000/- the First Party has this day been paid a sum of Rs. 500/- (Rupees five hundred only) by way of earnest money, and the balance of Rs. 15,500/- (Rupees fifteen thousandand five hundred only) shall be paid to the First Party onthe execution of the sale-deed, before the Sub-Registrar, Allahabad.

3. That the said property is subject to a mortgage in favour of Mr. G. Alphanzo and thedues of the mortgagee will be cleared and paid by the First Party before the execution of the sale-deed.

4. That the First Party shall execute the sale deed within a period of six weeks from this date and in case of failureon his part to do so, the Second Party may adopt legal proceedings for specific performance or refund of his earnest money, as he may choose.

5. That in case the second party commits a default, the earnest money shall be forfeited.”

8. Conditions 3 and 4 are quite important. According to Condition 3, the mortgage deed in favour of Sri G. Alphanzo was to be cleared and paid by the vendors before the execution of the sale-deed. According to Condition 4, the vendors were to execute the sale deed within a period of six weeks from the date of the agreement and in case of his failure to do so, the Second Party was to adopt legal proceedings, and, according to the fifth condition in case of default of the vendees, the earnest money was to be forfeited. These stipulations show that before the sale deed could be executed the mortgage of Sri G. Alphanzo was to be satisfied and the sale deed was to be executed by the vendors within six weeks. Thus, in a case like the one before me the time could not be the essence of the contract. So far as the vendee in this case is concerned, he had to be satisfied about the fact that mortgage was cleared. It is also stated that before the sale deed could be executed the vendors had to get their names mutated over the property. These conditions had therefore to be satisfied, and, till they were satisfied the sale deed could not be executed. In Govind Prasad v. Hari Dutt ((1977) 2 SCC 539 : AIR 1977 SC 1005) following Gomathinayagam Pillai v. Palaniswami Nadar (AIR 1967 SC 868) it was held that, it is settled law that, “the fixation of the period within which the contract has to be performed does not make the stipulation as to time of the essence of the contract. If the contract relates to sale of immoveable property it would normally be presumed that time is not of the essence of the contract. The intention to treat time as the essence of the contract may be evidenced by circumstances which should be sufficiently strong to displace the normal presumption that in a contract of sale of land stipulation as to time is not the essence of the contract.” The lower appellate court has committed a grievous error by ignoring the basic rule laid down in these two cases, about presumption that in cases of immovable property time is not the essence of the contract. It has therefore to be inferred from the terms of the agreement and circumstances whether the time was the essence of the contract or not. So far as this case is concerned, as I have observed above, the time could not be the essence of the contract.

9. The next question that needs consideration is whether the agreement dated 10-1-1966 stood revoked. It is obvious that within six weeks, as mentioned in the deed of agreement dated 10-1-1966, the sale deed by the vendors was not executed in favour of Madanlal. Madanlal was bound to get the deed executed after the conditions of redeeming the mortgage and mutation were satisfied. Madanlal, however, on behalf of the appellant sent letter Ex. 1 dated 1-12-1966. This letter is a letter of demand against the vendors requiring them to execute the sale deed in their favour. This letter starts by referring to his registered letter dated 18-2-1966 sent to the vendors through his legal advisor. Although a copy of letter Ex. B-19 dated 18-2-1966 was filed by the appellant but the courts below have not found that any such letter was sent. In letter Ex. 1 there is no mention about the conditions of redeeming of the mortgage or of the mutation. In reply to this notice the vendors sent reply Ex. 11 dated 15-12-1966. In letter Ex. 11 it was denied that any letter dated 18-2-1966 referred to in Ex. 1 was received. It was admitted that the vendors had entered into an agreement dated 10-1-1966 for sale of premises known as 20, Muir Road and also for having received earnest money of Rs. 500. It was, however, asserted in this letter that the sale deed was to be executed within six weeks and the earnest money was to be forfeited on his failure to get the sale deed executed. He had failed to get the sale deed executed within that period. It was asserted that Madanlal had not paid the balance nor he has fixed any date on which he will be ready with the money in the registration office within the stipulated period. He was accused of having no ready money with him. It was further asserted that since he failed to get the sale deed executed within the stipulated time his right to get the sale deed executed was lost. It was also mentioned that the mortgage deed was redeemed in time but he still failed to get the sale deed executed after paying the balance of the agreed consideration. It was also mentioned that since the vendors were in urgent need of money they entered into another agreement with the plaintiff Mr. C.K Sharma who is a tenant in those premises. It was further mentioned that on account of failure of Madanlal to get the sale deed executed the vendors had no other option but to honour the agreement entered into with Mr. C.K Sharma. It appears that a copy of this letter was also sent to Mr. C.K Sharma. After this letter things developed differently against Mr. C.K Sharma. The sale deed was executed in favour of the appellant Govind Lal Chawla who claimed to be the nominee of Madanlal. From the correspondence it does not appear that at any stage the vendors had given notice to Madanlal about their having satisfied the conditions of the agreement that the mortgage in favour of Mr. G. Alphanzo was redeemed by them and also that they had got their names mutated. Unless Madanlal had intimation of the satisfaction of these conditions he could not get the sale deed executed. It is also wrongly mentioned in Ex. 11 that the mortgage was satisfied in time as Mr. G. Gordon, the witness (D.W 1), who is the husband of one of the vendors, has stated that the mortgage in favour of Mr. G. Alphanzo was redeemed after the agreement for sale was executed in favour of Mr. C.K Sharma. Thus, it is obvious that the agreement subsisted and it was open to Madanlal to get the sale deed executed within the period of limitation of three years. The lower appellate court has observed that the appellant or Madanlal were bound by the statement of the vendors contained in the statement in his agreement. This is queer logic that the notices were bound by the statement of the person, who gave them notice for revoking the contract. The mere fact that at a later stage the vendors executed the sale deed in their favour would not place them in such a position which would estop them from challenging the statement contained in Ex. 11. I have therefore no hesitation in coming to the conclusion that the agreement dated 10-1-1966 did not stand revoked. Section 39 of the Indian Contract Act lays down that when a party to the contract has refused to perform, or disabled himself from performing his promise in its entirety, the promises may put to an end to the contract, unless he has signified by words or conduct, his acquiescence in its continuance. This section gives a right to repudiate a contract when a party to the contract has not performed his part of the contract or has disabled himself from performing the contract. So far as this case is concerned, there was no disability on the part of the vendee to perform any part of the contract. The conditions under the agreement had to be performed by the vendors and they did not give notice to the vendee of satisfying the conditions of the agreement. The vendee bad only to get the sale-deed executed. The agreement could not, therefore, be repudiated by the vendors on the ground that the vendee had not performed his part of the contract.

10. I now take up the last question about the competence of the appellant vendee Govind Lal Chawla to get the sale deed executed in his favour. The agreement mentioned that the vendors had agreed to sell their said property to the second party and/or the nominee or nominees of the second party. The agreement was between Madanlal and the vendors but the sale-deed was to be executed in favour of either Madanlal or his nominee or nominees. Madanlal has not been examined. The only witness examined is the appellant himself. He has stated in his examination-in-chief that he was the real purchaser. The agreement dated 10-1-1966 was entered by Madanlal on his behalf. It was a Benami transaction in his favour. Madanlal was not the real purchaser. He was the real purchaser. He has also stated that on 8-1-1966 he had himself paid the sum of Rs. 500/- to Madanlal for passing it on as earnest money to the vendors. In his cross-examination he has also stated that he had a feeling that if his name was mentioned directly in the agreement the vendors may show their unwillingness to execute the agreement in his favour. The only writing giving an authority to the appellant to get the sale-deed executed from Madanlal is Ex. B-16. This document is dated 8-12-1966. It is stated in it; In reality I made the contract on behalf of Sri Govind Lal Chawla, resident of 20, Muir Road, Allahabad (' He was the tenant in the premises in dispute) Benami for certain reasons.' It was also stated in case the vendors did not execute the contract of their own accord the executant will file a suit for specific performance of the contract and make the appellant a coplaintiff with him, who will properly look after the case with him provided Sri Chawla spent money over litigation in court expenses and if he fails in that suit appellant would be responsible for the costs of the suit.

11. This document does not mention anywhere that Chawla was the nominee of Madanlal and all that was mentioned in it was that the agreement was entered into Benami in favour of Chawla although the vendee shown in the agreement was Madanlal. All that the agreement dated 10-1-1966 means is that the sale-deed would be executed in favour of Madanlal and/or his nominee or nominees. That only means that the nominee would get the sale-deed executed on behalf of Madanlal and not in his own right. Moreover, there is no document of nomination in favour of the appellant to Ret the sale-deed executed which might have been executed by Madanlal. The appellant had admitted in his statement on oath that there was no need for him to obtain any nomination in writing in his favour. A peculiar feature of this case is also the admission of Sri Chawla that before getting the sale-deed executed an his favour on 24-12-1966 he had threatened the vendors. His statement is:

“Main 22-12-1966 Ko personally Party No. 1 Va Do Ko Threaten Kar Aaya Ki Agar Vey Mere Hak Men Bainama Na Karenge to Main Unke Khilaf Fauzdari Va Dewani Karyawaii Karenge.”

12. It is perhaps in this background that he succeeded in getting the sale-deed executed in his favour after the vendees had sent letter Ex. B-11 on 15-12-1966. The courts below were perfectly justified in holding that the appellant was not the nominee of Madanlal. Madanlal had a right to get the sale-deed executed in his favour in preference to plaintiff-respondent but the appellant had no right to get any preference over the agreement executed in favour of the plaintiff-respondent. Both the courts were, therefore, perfectly justified in cancelling the sale-dead executed in favour of the appellant.

13. The appeal is, therefore, dismissed. However, in the circumstances of the case, the parties are ordered to bear their own costs.

14. Appeal dismissed.