Nagendra Prasad Singh, J.:— Defendants second set are the appellants. Plaintiff-respondents instituted the suit in question in the court of learned Munsif, Sasaram, for declaration that they have acquired title to the land described in Schedule A of the plaint, by virtue of a sale deed dated 4.1.1963 executed by the defendant first set and for a direction to the defendant first set to hand over the original sale deed and to receive Rs. 1500/- the consideration money for the sale in question.
2. According to the plaintiffs, the land in question belonged to the defendant first set, who agreed to sell the same to the plaintiffs for a consideration of Rs. 1500/. In pursuance of the said agreement, a sale deed was executed in favour of the plaintiffs, which was registered on 4.1.1963 According to the plaintiffs, the consideration money of Rs. 1500/- was to be paid to the defendant first set at the time of the handing over of the registration receipt; at the village however, the title was to pass with the execution of the sale deed in question. Further case of the plaintiffs was that after the registration of the sale deed, they approached defendant first set on several occasions and tendered the consideration money and asked for the registration receipt, but defendant first set neither accepted the consideration money nor made over the registration receipt. The conduct of the aforesaid defendant created suspicion and, accordingly, the plaintiffs sent a registered notice on 18.1.1963 (Ext. 3) to the defendant first set, which was served on 21.1.1963 Even after the service of the said notice, he neither accepted the consideration money nor granted the registration receipt. They later learn that he had executed another sale deed in favour of defendants second set, i.e, the appellants on 11.1.1963 (Ext. Kha-2) after cancelling the earlier deed on 10.1.1963 (Ext. Kha-1). On the aforesaid allegations, a declaration was sought for, as already stated above, that the plaintiffs had derived title on the basis of the sale deed executed in their favour and the sale deed executed in favour of the defendants second set-appellants was inoperative and no title passed to them. The suit in question was filed on 4.2.1963
3. Learned Munsif, on a consideration of the materials on record, came to the conclusion that the plaintiffs have acquired valid title to the suit land on execution and registration of the sale deed in question, in spite of the fact that the consideration money was not actually paid. He was of the view that the defendant-appellants had purported to purchase the land in question with knowledge and notice of the sale in favour of the plaintiffs, and, as such, they have derived no title to the same by virtue of the sale deed executed in their favour on 11.1.1963 He further held that the plaintiffs were entitled to get the custody of the original sale deed which was then in custody of the court, after depositing a sum of Rs. 1500/- being the consideration money in court for payment to the defendant first set. On these findings the suit was decreed. The appeal filed on behalf of the appellants was also dismissed by learned Subordinate Judge who affirmed the findings of the learned Munsif.
4. Learned counsel appearing on behalf of the appellants has challenged the findings of the courts below that the plaintiffs acquired title to the land in question with the mere execution and registration of the sale deed. According to learned counsel, in the facts and circumstances of the present case, title was to pass only after payment of the consideration money, which admittedly was not paid at the time of the execution and registration of the sale deed.
5. The question whether title to the property covered by a sale deed will pass to the vendee or not without payment of the full consideration money has been a subject matter of controversy from time to time and it has been pointed out on several occasions by this Court that it has to be ascertained on the facts and circumstances of each case. In some cases even if no consideration money has been paid, still the parties to the deed might agree that title will none-the-less pass to the vendee. In other cases, payment of the consideration money may be the condition for passing of the title to the vendee. This aspect of the matter has been considered in several Bench decisions of this Court, and reference in this connection may be made to the cases of (1) Md. Murtaza v. Abdul Rahman* (A.I.R 1949 Patna 364), (2) Motilal Sahu v. Ugrah Narain Sahu (A.I.R 1950 Patna 288) (3) Panchoo Sahu v. Janki Mandar (A.I.R 1952 Patna 263) and (4) Siva Narayan Sah v. Baidya Nath Prasad Tiwary (A.I.R 1973 Patna 386). Recently, this very Bench has considered the same point in the case of (5) Mosst. Orhulia v. Prasad Yadav alias Ram Prasad Yadav (Second appeal No. 386 of 1971, disposed of on 29-7-1977).
6. On the basis of the aforesaid decision it can be said that it is almost settled that the question whether title passes on mere execution and registration of a deed or only on payment of consideration depends upon the intention of the parties, to be gathered from the deed. It has also been held that though the sale deed may recite that the consideration has been paid, but there is nothing to prevent the parties from adducing evidence to show that the recital is untrue and that, in fact, the consideration was not paid; this will not be barred by Section 92 of the Evidence Act. In the present case, there is no dispute so far as the second aspect is concerned. The sale deed in question recites that consideration money has been paid and there is nothing due from the vendee to whom the possession has also been delivered. But, the plaintiffs admit that neither the consideration money was paid nor possession delivered to them at the time of the execution and registration of the aforesaid deed. In this view of the matter, the only question that has to be answered is as to whether even without payment of the consideration money title has passed to the plaintiffs or not the second question which is germane is that even if it is held that the title in the facts and circumstances of the case did not pass with the execution and registration of the sale deed, whether it passed at a later stage when the consideration money was offered by the plaintiffs to the defendant first set. Learned Subordinate Judge has reproduced a portion of recitals of the sale deed in his judgment. After reciting the amount of consideration, the deed recites as follows:—
7. From the aforesaid recital it is obvious that the parties to the sale deed had agreed that title to the land in question should pass to the vendee only after payment of the full consideration money. Admittedly, the consideration money was not paid at the time of the execution and registration of the deed. The courts below have held that in spite of that title did pass. It is difficult to accept such a finding. This aspect of the matter has been examined in detail in the aforesaid cases, i.e, (1) Md. Murtaza v. Abdul Rahman* (A.I.R 1949 Patna 364, (2) Motilal Sahu v. Ugrah Narain Sahu (A.I.R 1950 Patna 288), (3) Panchoo Sahu v. Janki Mandar (A.I.R 1952 Patna 263) (4) Shiva Narayan Sah v. Baidya Nath Prasad Tiwary (A.I.R 1973 Patna 386) and (5) Mosst. Orhulia v. Prasad Yadav alias Ram Prasad Yadav (Second Appeal No. 386 of 1971), disposed of on 29.7.1977 In my opinion, the plaintiffs did not acquire title on mere execution and registration of the sale deed.
8. Learned counsel appearing for the plaintiff-respondents submitted that even if it is held that title did not pass with the execution and registration of the sale deed, it did pass when the consideration money was offered by the plaintiffs to the defendant first set, and in support of this contention reliance was placed on the Bench decision in (4) Shiva Narayan Sah v. Baidya Nath Prasad Tiwary (A.I.R 1973 Patna 386). In that case Shambhu Prasad Singh, J., having held that in the facts and circumstances of that case title did not pass to the vendee with the execution and registration of the deed because it was to pass only after payment of the full consideration money, held that it actually passed when the plaintiff tendered the balance of the consideration money, which fact had been accepted by both the courts below. Learned counsel appearing for the appellants made an attempt to distinguish the said judgment saying that in that case, according to the terms of the deed itself the balance amount was to be paid at the time of exchange of equivalents, and as such, even if tender of the balance amount was made later, title could have passed. According to him, in the instant case, once the consider ration money was not paid at the time of execution and registration of the deed, as had been agreed to, the transaction fell through and any subsequent offer or tender is of no consequence.
9. Every party to a agreement is expected to observe the terms of the agreement in form as well as in spirit and even in the instant case, the plaintiffs having agreed to pay the consideration money at the time of the execution and registration of the document should have paid the same. But whether such failure will ipso facto result in the agreement coming to end, has to be ascertained from the terms of the deed, the conduct of the parties and other surrounding circumstances. It is well known that the agreement which are entered into the mercantile world in which time is made essence of contract, non-performance of the part of the contract-by one of the parties to it, in view of Section 55 of the Contract Act, results in making the contract voidable at the option of the promisee and he can treat the contract as not binding on him. But, there are many other contracts, including contracts for sale of land, where although the time of completion is mentioned, still courts of equity have introduced a presumption that the time was not the essence of the contract. The Privy Council in the case of (6) Jamshed Khodaram Irani v. Burjorji Dhunjibhai (A.I.R 1915 Privy Council 83) pointed out that Section 55 of the Contract Act does not lay down any principle which differs from those under the law of England as regards contract to sell land in that connection it was observed,
“Under that law equity which governs the rights of the parties in cases of specific performance of contracts to sell real estate, looks not at the letter but at the substance of the agreement in order to ascertain whether the parties, notwithstanding that they named a specific time within which completion was to take place really and in substance intended more than that it should take place within a reasonable time.”
10. It was further observed,
“The Special jurisdiction of equity to disregard the letter of the contract in ascertaining what the parties to the contract are to be taken as having really and in substance intended as regards the time of its performance may be excluded by any plainly expressed stipulation. But to have this effect the language of the stipulation must show that the intention was to make the rights of the parties depend on the observance of the time limits prescribed in a fashion which is unmistakable. The language will have this effect if it plainly excludes the notion that these time limits were of merely secondary importance in the bargain, and that to disregard them would be to disregard nothing that lay at its foundation. Prima facie, equity treats the importance of such time limits as being subordinate to the main purpose of the parties, and it will enjoin specific performance notwithstanding that from the point of view of a Court of law the contract has not been literally performed by the plaintiff as regards the time limit specified. This is merely an illustration of the general principle of disregarding the letter for the substance which Courts of equity apply, when, for instance they decree specific performance with compensation for a non-essential deficiency in subject-matter.
11. But equity will not assist where there has been undue delay on the part of one party to the contract, and the other has given him reasonable notice that he must complete within a definite time. Nor will it exercise its jurisdiction when the character of the property or other circumstances would render such exercise likely to result in injustice.”
12. The Supreme Court also accepted the aforesaid view in the case of (7) Gomathinayagam Pillai v. Palaniswami Nadar (A.I.R 1967 Supreme Court 868). In my view, the same principle can be applied while examining the cases where under the terms of the deed the vendee had agreed to pay the consideration money with the execution and registration of the deed, but having not done so, tenders it within a reasonable time before the vendor repudiates the contract. In the instant case, the defendant first set has not taken the stand that he had repudiated the contract even before 10.1.1963 when the deed of cancellation was executed. If the amount is tendered by the defaulter after such repudiation, it is of no consequence. A vendor cannot be expected to wait indefinitely to enable the vendee to perform his part, and he is at liberty in such a situation to sell the property to another person. In my opinion, in cases where the tender or payment of the consideration money is made by the vendee before the vendor repudiates the contract, the vendee will acquire a valid title over the properties covered by the deed in question. As such, if it can be found that the plaintiffs had tendered the amount on any day after 4.1.1963 and before 10.1.1963 when the deed of cancellation was executed, then title will pass to them and the defendant-appellants did not acquire title on basis of a deed executed in their favour by defendant first set on 11.1.1963 The courts below have not considered this aspect of the matter, perhaps, because of the finding that title passed with the execution and registration of the deed. Court of appeal below has briefly dealt this aspect of the matter in paragraph 14 of its judgment, and has accepted that the consideration money was tendered by the plaintiffs. But, the crucial question was as to whether it was tendered prior to 10.1.1963 Some of the witnesses of the plaintiffs have stated that it tendered the next day of the execution of the deed but notice appears to have been given on 18.1.1963, after the deed of cancellation and execution of the sale deed in favour of the appellants. If notice had been given prior to the cancellation. I would have accepted on the basis of the notice that the tender had been made by the plaintiffs before the cancellation. In this view of the matter, it is just and proper that the case should be remanded for a fresh consideration by the court of appeal below on this aspect of the matter. If it is held that the case of oral tender by the plaintiffs before the cancellation of the deed is not worth acceptance, then the learned Subordinate Judge shall dismiss the suit of the plaintiffs. If, on the other hand, he holds that the evidence of the witnesses can be accepted, then he shall decree the suit in question. While examining the evidence on record, learned Subordinate Judge shall bear in mind that generally after a deed is cancelled for non-payment of the consideration money, the earlier vendee claims that he had already made tender of the consideration money, which was refused by the vendor.
13. In the result, the appeal is allowed, Judgment and decree passed by the court of appeal below is set aside and the case is remitted back to the learned Subordinate Judge for disposal in accordance with law and in the light of the observations made above. In the circumstances, there will be no order as to costs.
14. P.S Saha, J.:— I agree.
Case remanded.