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Case Number

Appeal No. 497 of 1964

Attorney(S)

For the Appellant: A.Bhujanga Rao, A.Gopal Rao, A.Subba Rao, Advocates.

Judges

Venkatesam
Gopal Rao Ekbote, JJ.

Acts

section 21 (c).

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Smart Summary

Structured Summary of the Judgment

Factual and Procedural Background

This is an appeal by the plaintiff (K. Venkatasubbaiah) against the decree and judgment of the learned Subordinate Judge, Tenali, in O.S. No. 65 of 1961. The trial court rejected the plaintiff's claim for specific performance of a sale agreement and granted limited monetary reliefs relating to sums already paid.

Material facts (as recorded in the opinion):

The suit property derived from a gift by the mother of the 1st defendant (Padmalayamba) of approximately 10 acres (the "suit land").
On 6 June 1958 the vendors (1st defendant and 2nd defendant) executed a sale agreement in favor of the plaintiff (exhibit a‑1 and counterpart exhibit b‑3). The contract recited a price of Rs. 3,000 per acre (Rs. 30,000 total), Rs. 2,000 received as advance, a further Rs. 8,000 to be paid on or before 22 August 1958, and the balance Rs. 20,000 within three years from 22 August 1958 (with interest at 5%). The agreement recited that the plaintiff was put in possession on 6 June 1958.
The plaintiff alleged he paid an additional Rs. 10,000 on 18 January 1960 (receipt exhibit a‑2) and that he had the balance ready in 1961; he filed suit for specific performance on 22 August 1961 (with alternative claim for damages).
The defendants contended (inter alia) that time for payment of Rs. 8,000 was the essence of the contract, the plaintiff breached by failing to pay on time, that the 2nd defendant was not authorised to receive money for the 1st defendant, and that the plaintiff was guilty of laches or not ready and willing to perform.
The trial court dismissed the suit for specific performance and damages but: (a) decreed Rs. 2,000 with interest against the 1st defendant on the plaintiff relinquishing possession; and (b) decreed Rs. 10,000 with interest against the 2nd defendant from the date of exhibit a‑2, and ordered the plaintiff to pay defendants' costs.
The plaintiff appealed against that decision; the appellate court recorded evidence, analysed legal principles and reversed the trial court in key respects (see Holding and Implications).

Legal Issues Presented

Whether the time for payment of Rs. 8,000 on or before 22nd August, 1958 was the essence of the contract.
Even if time was of the essence, whether the contract had been avoided by the 1st defendant.
Whether the receipt of Rs. 10,000 by the 2nd defendant was binding on the 1st defendant and amounted to a waiver of the 1st defendant's right to rescind the contract.
Apart from delay in payment of Rs. 8,000, whether the plaintiff was otherwise ready and willing to perform the contract.
Whether the plaintiff was disentitled to claim specific performance either on the ground of default in payment of Rs. 8,000 or on the ground that he was not ready and willing to perform the contract.
Whether the plaintiff became disentitled to specific performance by reason of the clause relating to security in exhibit a‑1 and exhibit b‑3 being vague and indefinite (invoking section 21(c) / section 29 issues).

Arguments of the Parties

Appellant (Plaintiff) / Counsel for Appellant

The plaintiff asserted the validity of the sale agreement (exhibits a‑1 and b‑3), payment of Rs. 2,000 as advance on 6 June 1958 and Rs. 10,000 on 18 January 1960 (exhibit a‑2), measurement of the land, improvements to the land costing Rs. 5,000 and readiness to perform.
The plaintiff contended that time for payment of Rs. 8,000 was not the essence of the contract and that the defendants had not validly rescinded the agreement; the Rs. 10,000 receipt and subsequent conduct demonstrated acquiescence/acceptance.
On appeal, counsel argued the trial court misapplied the law as to 'time as essence', 'waiver/acceptance', and 'readiness and willingness' and invited specific enforcement (or at least enforcement against the 1st defendant under section 16 of the Specific Relief Act) while abandoning enforcement of the security covenant if necessary.

1st Defendant (and her counsel)

Admitted the execution of the agreement but asserted that time for payment of Rs. 8,000 was the essence and the plaintiff's failure to pay by 22 August 1958 amounted to a breach that disentitled him to specific performance or damages.
Maintained that the Rs. 10,000 said to have been paid to the 2nd defendant was not authorised and was not binding on her; she denied ratification and claimed laches on the plaintiff's part.
Asserted that the plaintiff's possession after default was that of a trespasser and disputed payments, measurement dates and other facts alleged in the plaint.

2nd Defendant (and his counsel)

Contended he was neither a necessary nor a proper party except to give security; denied authority to receive sums on behalf of the 1st defendant; admitted receiving Rs. 10,000 but claimed it was on the plaintiff's responsibility and without authority from the 1st defendant.
Argued the plaintiff was not ready and willing to perform and was guilty of laches; defended against claims for specific performance and damages.
On appeal, counsel for the 2nd defendant argued that the security clause was too uncertain to be specifically enforced (relying on section 21(c)/section 29 and section 93 of the Evidence Act for exclusion of extrinsic evidence to clarify ambiguity).

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Jamshed Khodaram Irani v. Burjorji Bhujibhai (Privy Council; cited ILR and AIR citations)	Equity looks to the substance of agreements regarding time; a specific time may not make time "of the essence" unless clearly intended; intention may be inferred from pre‑contractual communications but not from post‑contractual events.	The court relied on this authority to underscore that a mere stipulated date does not automatically render time the essence of a sale of land; the court examined the agreement language and pre‑contract circumstances to see if intention was unmistakably expressed.
N. Palanichami Nadar v. Gomathinayagam Pillai & Ors. (ILR (1965) 2 Mad. 613; A.I.R. 1966 868)	Presumption that time is not of the essence of a land sale is not displaced merely by stipulating a particular time or a default clause; repeated extensions indicate parties did not intend time to be of the essence.	The court cited this decision to support the presumption that time was not of the essence in the present contract, noting extensions and conduct inconsistent with strict adherence to the date.
Gomathinayagam Pillai & Others v. Palaniswami Nadar (Supreme Court, (1967) 1 S.C.R. 227)	Reaffirmed that to make time of the essence the contractual language must be unmistakable; time may be made essence by express stipulation or strong pre‑contract circumstances; even if time not originally essence, party may by notice make it so.	The court applied the Supreme Court's exposition (Shah, J.) in concluding that exhibits a‑1 and b‑3 did not contain language unmistakably making time the essence and that the defendants did not validly give notice making time of the essence.
Garikapati Veerayya v. Nannapaneni Subbayya Choudary & Others ((1966) cited)	Principles on pleadings and proof of readiness and willingness to perform — plaintiff must plead readiness/willingness and cannot on appeal adopt an alternate case that he could have raised required funds if he pleaded he had cash ready.	The court considered this authority in assessing the plaintiff's pleadings and evidence. It examined whether the plaintiff had properly pleaded and proved continuous readiness and also evaluated documentary evidence (bank deposits and stamps) showing actual readiness by May 1961.
Ardeshir H. Mama v. Flora Sassoon (A.I.R. 1938 P.C. 208; cited in Gomathinayagam)	Authority that the vendee must plead and prove readiness and willingness to perform continuously between contract date and hearing in suits for specific performance.	The court invoked the principle to require proof that the plaintiff was ready and willing to perform from contract to decree; it examined the plaintiff's bank deposits and other evidence to conclude he satisfied this requirement after the Rs.10,000 payment.

Court's Reasoning and Analysis

The appellate court conducted a document‑based and conduct‑based analysis applying the statutory principle in Section 55 of the Contract Act and the equity principles explained in the cited precedents. The court's reasoning proceeded in identifiable steps:

1. Construction of the Agreement and whether time was "of the essence"

The court closely scrutinised exhibits a‑1 and b‑3: they contained a price schedule (Rs. 3,000 per acre), Rs. 2,000 "bayana" received, Rs. 8,000 due on or before 22 Aug 1958, and the balance over three years with interest at 5%.
The court found no express clause making time the essence, nor clear pre‑contract circumstances recorded in the documents that would displace the legal presumption that time is not of the essence in land sale agreements.
The absence of a forfeiture/penal clause or interest provision specifically for the Rs. 8,000 instalment, and the long (three‑year) extension for the Rs. 20,000 balance, were treated as indicia inconsistent with an intention to make the short Rs. 8,000 deadline decisive.
The court considered extrinsic communications (letters exhibits b‑2, b‑1 and b‑4) and the parties' conduct: it concluded these communications did not establish either that time was intended to be the essence at contract formation or that the defendants had given an unequivocal rescission notice thereafter.
The receipt dated 18 January 1960 (exhibit a‑2), signed by the 2nd defendant and attested by the father‑in‑law (d. W. 2), was regarded as strong evidence of subsequent acceptance/condonation of delay and inconsistent with the position that the contract had been treated as avoided.
Based on documentary language and subsequent conduct (acceptance of monies, failure to give formal notice of rescission, failure to return advances), the court concluded time for payment of Rs. 8,000 was not the essence of the contract.

2. Authority to receive payments, acquiescence and waiver

The court assessed credibility of testimony about where and to whom payments were made and who controlled the transaction (d. W. 2 — the father‑in‑law — was responsible for negotiations and conduct of the sale on behalf of the 1st defendant).
It found the evidence supported the inference that the 2nd defendant received Rs. 10,000 with the knowledge and acquiescence of the father‑in‑law (d. W. 2) and that the plaintiff believed he was paying money in furtherance of the contract; the receipt did not record that the deposit was conditional.
The court rejected defendant witnesses' accounts that the Rs. 10,000 was conditional or unauthorised, observing omissions in written statements and lack of corroboration (for example, no refund, no registered notice rescinding, and no contemporaneous conditional receipt wording).
Consequently the court held the late payment and subsequent conduct amounted to acceptance/ratification and constituted a waiver by the 1st defendant of any right to treat the contract as avoided for the earlier default.

3. Readiness and willingness to perform (plaintiff's capacity)

The court reviewed pleadings and evidence on readiness/willingness: the plaint averred that the plaintiff had always been ready and willing and that he made the balance of consideration ready by May 1961.
Documentary proof accepted by the court included bank receipts (exhibits a‑3 to a‑5 showing deposits totalling Rs. 21,500) and purchase of stamp papers (exhibit a‑6) by 24 May 1961.
The court examined conflicting testimony about earlier tendering of Rs. 8,000 but found the crucial point to be the plaintiff's readiness after the Rs. 10,000 payment; it accepted that the plaintiff had the capacity to raise and did keep the balance ready in May‑June 1961.
Applying authorities on pleading and proof of readiness (notably Garikapati and Ardeshir), the court concluded the plaintiff had proved continuous readiness/willingness from the date of deposit in May 1961 to the date when the 1st defendant refused to execute the deed.

4. Severability of the security covenant and scope of specific enforcement

The court considered whether the covenant by the 2nd defendant to furnish security was too uncertain to enforce and whether the covenant to execute sale deed by the 1st defendant could be severed and specifically enforced alone (invoking section 16 of the Specific Relief Act, 1877 — identical to section 12(4) of the 1960 Act).
On construction and on facts the court found the covenant to execute the sale deed by the 1st defendant was separate and independent of the 2nd defendant's covenant to furnish security: the 1st defendant was the owner entitled to the sale proceeds; the 2nd defendant merely joined to promise security.
Because the covenant to execute the deed stood on a separate footing it could be specifically enforced against the 1st defendant even if the security covenant could not be enforced against the 2nd defendant.

5. Credibility findings and ultimate relief

The appellate court disagreed with several credibility assessments of the trial court: it rejected the trial court's reasoning that absence of an interest clause for Rs. 8,000 indicated that time was of the essence and held that the trial court erred in not treating the receipt and later conduct as condonation/acceptance.
Having found (a) time was not of the essence; (b) the contract was not rescinded; (c) the Rs. 10,000 payment was accepted/ratified; and (d) the plaintiff was ready and willing by May 1961, the appellate court proceeded to decree specific performance against the 1st defendant and dismissed the suit as against the 2nd defendant.
Practical directions were given: the plaintiff to deposit the balance with interest into court within two months (credit for Rs. 2,000 and Rs. 10,000), the 1st defendant to execute sale deed within one month after notice, with registration and stamp costs borne by the plaintiff; if the 1st defendant defaults the court may get the deed executed. Costs directions were also given.

Holding and Implications

Holding: The appeal was allowed; the decree of the trial court was set aside in part. The appellate court decreed specific performance against the 1st defendant (Padmalayamba) and dismissed the suit as against the 2nd defendant (Jaganmohan Rao).

Direct consequences and practical directions (as ordered by the court):

The plaintiff must deposit into court within two months the balance of the sale price with interest according to exhibit a‑1 after crediting Rs. 2,000 and Rs. 10,000 already paid and after giving notice thereof to the 1st defendant.
Within one month of such notice the 1st defendant shall execute the sale deed in respect of the suit property on the plaintiff's stamp papers (or the exhibited stamps) or on new stamps supplied by the plaintiff, and shall register it at the plaintiff's expense.
If the 1st defendant defaults in executing the sale deed, the plaintiff is permitted to have the sale deed executed through the court.
The suit is dismissed as against the 2nd defendant; the appellant (plaintiff) is entitled to costs here and in the court below from the 1st defendant; the 2nd defendant bears his own costs here and below.

Broader legal implications: The judgment applies established equitable principles about when time is "of the essence" in contracts for sale of land, the need for unmistakeable language or strong prior circumstances to make time the essence, the effect of subsequent acceptance/condonation and of conduct (including receipt of money) amounting to waiver, and the separability of covenants for the purposes of specific performance (section 16 / section 12(4) concept). The court did not purport to lay down any novel legal doctrine beyond applying the authorities it cited.

This summary is confined to facts, findings, reasoning and citations as they appear in the provided opinion. No information beyond the text of the opinion has been added.

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Kilaru Venkatasubbayya v. Kalluri Padmalayamba And Another

Venkatesam, J.:-

(1) This appeal is preferred by the sole plaintiff against the decree and judgment of the learned subordinate judge, tenali, in o. S. No. 65 of 1961 on his file, rejecting his claim for specific performance of a contract to sell immovable property in his favour, and granting a decree for part of the consideration which he had paid thereunder. The facts leading to this appeal may shortly be stated.

(2) One kalluri rangayya, resident of moparru village in tenali sub - district, guntur district, had two sons (1) varaprasada rao, husband of the 1st defendant, padmalayamba, and (2) jaganmohan rao, the 2nd defendant. Rangayya (d. W. 2) and landed property which he divided between himself and his two sons. His elder son, varaprasada rao, who is a doctor, opened an x'ray clinic at nizamabad, and has been carrying on his profession at nizamabad since 1952, and living there with the 1st defendant, whom he married in 1950. Jaganmohan rao, the 2nd defendant, though he obtained master's decree in arts, settled down in moparru and is attending to the cultivation of his lands. The lands which fell to the share of varaprasada rao were managed by rangayya, who was keeping the income therefrom. It is not disputed that the relations between the father and his two sons, despite the division of the properties, were cordial and affectionate.

(3) The mother of the 1st defendant owned ac. 14 - 54 of seri magani land situate in five survey numbers in nelapadu village, also in tenali sub - district, having got it from her father. Out of the said land, she gifted in 1955 ac. 10 - 00 (thesuit land) to her daughter, the 1st defendant, and the rest of the land to her elder brother, by two separate deeds. Lingarao chowdary, husband of the 1st defendant's elder sister, who arranged the marriage of the 1st defendant, was managing the suit land, leasing it to tenants, collecting the makta, and remitting it to the 1st defendant. Evidenty apprehending legislation in favour of tenants, rangayya personally cultivated the suit lands in 1956 and 1957, and remitted the income to d - 1. Though it does not appear that the ac. 10 - 00 of land was exactly measured, after the gift in favour of d - i, it was assumed that the land managed by lingarao chowdary and cultivated by the father - in - law of the 1st defendant was approximately of that extent.

(4) In april, 1958, when the 1st defendant visited moparru, she expressed her desire to her father - in - law rangayya, to sell the suit land and purchase some land in nizamabad. By about the end of may, 1958, rangayya went to nizamabad and informed her that k. Venkatasubbaiah, (the plaintiff) had offered to purchase the suit land at rs. 3,000 per acre, to which the 1st defendant agreed. Thereafter, rangayya returned to his village, and arranged the sale transaction with the plaintiff. He got exhibit a - 1, the sale agreement executed by d - 1 and d - 2 in favour of the plaintiff, and also the counterpart, - exhibit 6 - 3 executed by the plaintiff. Both exhibits a - 1 and b - 3 were written by sreeramakrishnaiah (p. W. 2) on 6th june, 1958 at tenali, and were attested by the plaintiff's brother - in - law, sakhamaru lakshmiah (p. W. 3) and rangayya (d. W. 2). As the 1st defendant was not present then at tenali exhibit a - 1 was taken to nizamabad and her signature obtained. Exhibit a - 1 recited that the property agreed to be sold ac. 10 - 00 was the streedhana property of the 1st defendant, in which she had absolute rights, and that the sale price was fixed at rs. 3,000 per acre, or in all, rs. 30,000. - it also recited that rs. 2,000 was received by the executants as advance (bayan) at the time of the execution, that a further sum of rs. 8,000 was to be paid to them before 22nd august, 1958, and the balance of rs. 20,000 within three years from 22nd august, 1958 with interest at 5 per cent. The sale deed was to be obtained by the plaintiff in his favour or anyone nominated by him, at their expense and get it registered. It also recited that the scheduled property was put in possession of the plaintiff that very day (6th june, 1958) and that, at the time of obtaining the sale deed the exclusive property of the and defendant,. Sufficient for the sale amount, should be given as security by a registered instrument. Exhibit a - 1 further provided that the suit land should be measured diagonal - wise before the stipulated period, and the price paid to them (d - 1 and d - 2) according to that measurement.

(5) In the plaint it was averred that in addition to rs. 2,000 the plaintiff paid rs. 10,000 to the 2nd defendant on behalf of both the defendants, on 18th january, 1960, and obtained the receipt, exhibit a - 2. The land was also measured in 1961, and the extent of ac. 10. 00 determined. The plaintiff made the balance of consideration ready before 22nd august, 1961, and was demanding the fulfilment of the terms of the contract, but the defendants were putting off the same.

(6) Thereupon, he issued telegraphic notices to both the defendants on 21st august, 1961. The plaintiff effected improvements to the land spending rs. 5,000 as a result of which the yield increased from 4 to 5 to 20 or 25 bags, per acre and the price of the land also rose from rs. 3,000 to rs. 5,000 per acre, and there were offers from others at that rate. The defendants with a view to make profit stated that there was no necessity to furnish security, and that he should take the sale deed without security, or give up the contract altogether. The plaintiff had always been ready and willing to perform, his part of the contract but the defendants were likewise bound by it and committed default. The suit was filed on 22nd august, 1961, praying for specific performance of the contract, directing the 1st defendant to execute the sale - deed for the suit property, and the 2nd defendant to execute security bond, undertaking to indemnify the plaintiff with regard to future disputes, or, in the alternative, to award damages for rs. 20,000.

(7) The suit was resisted by both the defendants. In her written statement, the 1st defendant admitted the suit contract to be true, but averred that time was the essence of the contract and that the plaintiff being under an obligation to pay rs. 8,000 on or before 22nd august, 1958, he was unable to do so, and committed a breach in that regard. Consequently, he was not entitled to the equitable relief of specific performance, or to damages. The 2nd defendant was added as a party to the contract merely for imposing on him the obligation of furnishing security at the time of execution of the sale - deed. The 1st defendant alone was the absolute owner of the suit property, and the 2nd defendant had nothing to do with it, and the plaintiff was fully aware of the same. The balance of consideration was payable only to the 1st defendant, and she did not authorise the 2nd defendant to receive nor the plaintiff to pay any sum on her behalf. The 1st defendant was not personally aware of the alleged payment of rs. 10,000 to the 2nd defendant on 18th january, 1960. When she was informed about it by the and defendant, she did not agree to treat it was a payment made to her in furtherence of the contract. The said payment, even if true, is not valid, nor binding on her. Even in this respect, the plaintiff is guilty of laches. As the plaintiff committed default in the payment of rs. 8,000 the 1st defendant treated the contract as cancelled, to the knowledge of the plaintiff. The plaintiff's possession thereafter was that of a trespasser. She denied that the plaintiff spent rs. 5,000 or any amount for improvements, and even if true, he did so only as a trespasser. The allegation in the plaint that the land was measured and ascertained to be 10 acres, or that the plaintiff made ready the balance of the consideration within the time fixed, and was demanding fulfilment of the contract, and other allegations, were denied, and they were characterised as inventions. It was averred that the land was yielding 20 or 25 bags per acre even on the date of the contract. The defendant sent a proper reply to the telegraphic notice, and as the plaintiff in anticipation of her suit to recover possession, filed the suit for specific performance.

(8) The 2nd defendant, in a separate written statement, contended that he was neither a necessary nor a proper party to the suit, as his only obligation was to give security in the event of the plaintiff being entitled to get a sale deed from the 1st defendant. The plaintiff was guilty of laches, and had not fulfilled the terms of the contract under which time was the essence. He is therefore, not entitled to specific performance. The 2nd defendant cannot be made liable for damages. He admitted that the plaintiff paid him rs. 10,000 on 18th january, 1960 though admittedly, he was not the owner of the property. The payment was made on the plaintiff's own responsibility, and not because the 2nd defendant was the agent of the 1st defendant for that purpose. There was no authorisation in that regard.

(9) When the 2nd defendant remonstrated with the plaintiff that the contract was annulled for non - payment of rs. 8,000 on or before 22nd august, 1958, and he (d - s) would not receive it, the plaintiff persuaded him to receive rs. 10,000 on the representation that he would manage to secure the consent of the 1st defendant for the said payment. On receipt of the telegraphic notice from the plaintiff, the 2nd defendant solicited instructions from the 1st defendant, who refused to accept the payment or ratify the same. The 2nd defendant expressed his willingness to give back the amount to the plaintiff. As there were laches on the part of the plaintiff, he was not entitled to specific performance. The plaintiff is not entitled to costs of the suit. The other allegations in the plaint were not admitted.

(10) On these pleadings, the learned subordinate judge framed appropriate issues. On a consideration of the evidence adduced, and the law bearing on the question, he found on issue exhibit - 4 that time fixed for payment of rs. 8,000 was the essence of the contracts by asnd august, 1958; on issue i that the payment of rs. 10,000 to the and defendant was not binding on the 1st defendant; onissue 5 that the suit contract was not rescinded by the 1st defendant as pleaded by her; on issue 6 that the plaintiff committed breach of the contract in not paying rs. 8,000 and was not entitled to the relief of specific performance; on the additional issue that the plaintiff had not established his readiness to perform the contract and hence not entitled to specific performance; on issue 2 he found that, as the plaintiff was guilty of breach of the essential term of the contract, he was not entitled to claim even damages; and on issue 3 that the 2nd defendant was a necessary party. On those findings, he dismissed the suit for specific performance as well as damages, but gave a decree for rs. 2,000 with interest at 5 1/2 per cent, against the 1st defendant on the plaintiff relinquishing possession of the suit property to her, and against the and defendant for rs. 10,000, with interest at 5 1/2 per cent, from the date of exhibit a - 2, (18th january, 1960) till payment, and directed the plaintiff to pay the costs of both the defendants.

(11) Aggrieved by this decision, the plaintiff has preferred this appeal. Sri narsa raju, the learned counsel for the appellant, canvassed before us the correctness of the several findings of the trial court. The points in controversy, may therefore, be stated as follows : - (1) whether the time for payment of rs. 8,000 on or before 22nd august, 1958 is the essence of the contract. (a) even if it is found in the affirmative, whether the contract has been avoided by the 1st defendant. (3) whether the receipt of rs. 10,000 by the and defendant was binding on the 1st defendant, and amounted to a waiver of the 1st defendant's right to rescind the contract. (4) apart from the delay in the payment of rs. 8,000 whether plaintiff was otherwise ready and willing to perform the contract. (5) whether the plaintiff is disentitled to claim specific performance either on the ground of default in payment of rs. 8,000 or his not being ready and willing to perform the contract. (6) whether the plaintiff became disentitled to specific performance by reason of the clause relating to security in exhibit a - 1 and exhibit b - 3, being vague and indefinite, and therefore void. We shall now consider the validity of these contentions. The first three can conveniently be taken up together.

(12) The law bearing on the question, when time is of the essence of the contract in the case of an agreement to sell land is well established. Section 55 of the contract act is in the following terms : -

"when a party to 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 promisees, if the intention of the parties was that time should be of the essence of the contract."

If it was not the intention of the parties that time should be of the essence of the contract the contract does not become voidable by the failure to do such thine at or before thespecific time, but the promisee is entitled to compensation from the promisor for any loss occasioned to him by such failure.

(13) If in case of a contract voidable on account of the promissor's failure to perform his promise at the time agreed, the promisee accepts performance of such promise at any time other than that agreed, the promisee cannot claim compensation for any tom occasioned by the non - performance of the promise at the time agreed, unless, at the time of such acceptance, he gives notice to the promissor of his intention to do so. It is manifest from this section that by mere failure to performa a term of the contract before the specified time, even if time should be of the essence of the contract, it onlv becomes voidable at the option of the promisee. If time is not intended to be. Of the essence of the contract, the promisee is only entitled to compensation for anv loss occasioned to him by such failure. Even if the contract is voidable if the promisee accepts its purformance at any other time, the promisee cannot claim compensation for any loss occasioned, to him by the non - performance within the stipulated time, unless at the time of such acceptance he gives notice to the promisor of his intention to do so.

(14) It is clear from authorities that an intention to make time the essence of the contract must be expressed in unmistakable language, or may be inferred from what passed between the parties before, but not after, the contract was made. Accordns to section 66 of the contract act, the rescission of a voidable contract may be communicated or revoked in the same manner and subject to the same rules as apply to the communication or revocation of a proposal. Since a contract, even there the time is of the essence, is only voidable, it is enforceable by law at the option of the promisee, but not at the option of the promissor. It is therefore, necessary that the rescission must be express and unequivocal, whether it be by communicating the rescission as provided for in section 66, or bringing a suit to set aside the contract.

(15) In the leading case of jamshed khodaram irani v. Burjorji bhwjibhai, 1. L. R. (1916) 43 i a. 26 : (1916) 30 m. L. J mad. 46. 186: i. L. R. 4o bom. 289: a. I. R. 1915 p. C. 83. The privy council laid down that section 55 of the contract act did not lay down any principle which differed from those that obtained as regards contracts for the sale of land by which equity in such a case 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 intended no more than it should take place within a reasonable time. It was also laid down that equity will also infer an intention that time should be of the essence of a contract from what has passed between the parties prior to the signing of the contract, the construction of which cannot, in the contemplation of equity, be affected by what takes places after it has once been entered into. It was further held that in that case there was nothing in the language of the agreement or subject - matter to displace the presumption that for the purpose of specific performance time was not of the essence of the bargain, not did the appellant bind himself by his correspondence subsequent to the agreement to a new agreement that time, even if it was not originally of the essence, should be made so.

(16) In n. Palanichami nadar v. Gomathinayagam pillai and others, i. L. R. (1965) 2 mad. 613 : a. I. R. 1966 868 following the decision of the privy council in jamshed khodaram irani v. Burjorji bhunjibhai, it was laid down that the presumption that time was not of the essence of an agreement to sell immovable property, was not displaced either by the stipulation in the second or third agreement of a particular time before which execution of sale was contemplated, or by the default clause in any of them, and that the fact that time was extended more that once showed that the parties did not stick to the time as being of essence of the contract.

(17) An appeal was preferred against this decision, to the supreme court in gomathinayagam pillai and others v. Palaniswami nadar, (1967) 1 s. C. R. 227 :a. I. R. 1967 s. C their lordships upheld the finding of the high court that time was not of the essence of the contract, but reversed it on another ground, viz - , that the high court did not consider the effect of the finding of the trial court that the vendee was not ready and willing to perform the contract. Shah, j. , speaking on behalf of the majority, and adopting the decision of the privy council cited above, held that 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 observation 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 as its foundation. His lordship also observed that intention to make time of the essence of the contract may be evidenced by either express stipulations or by circumstances which are sufficiently strong to displace the ordinary presumption that in a contract of sale of land stipulation as to, time are not of the essence; it was also held that even if time was not originally. Of the essence, the appellants could by notice served upon the respondent call upon him to take the conveyance within the time fixed and intimate that on default of compliance with the requisition the contract, would be treated as cancelled.

(18) Bearing these principles in mind, we shall now examine the evidence in this case as to whether the time for payment of rs. 8,000 was of the'essence of the contract. The answer to that mainly depends upon the construction of the contract as embodied in exhibit a - 1 and b - 3. The relevant recitals in exhibit a - 1 are as follows: - the 1st defendant had been residing at nizamabad, and consequently unable to cultivate the suit lands. By leasing out the lands, it was feared that rights might be conferred on tenants. It was therefore, decided to acquire new property in their native village of moparru, and with that object the property was agreed to be sold. The extent of the land to be sold was ac. 10. 00 and the price was agreed to be rs. 3,000 per acre. Rs. 2,000 was received by them (the vendors) as "bayana" or advance from the vendee. A further sum of rs. 8,000 had to be paid on or before 22nd august, 1958, and the balance of rs. 20,000 within three years from 22nd august, 1958 with interest at 5 per cent. The land was to be measured diagonally within the time stipulated, and the price so arrived at was to be paid subject to the conditions as aforesaid. Since the 2nd defendant had agreed to give security of his separate property, the plaintiff would have nothing to do with the new property to be purchased by them. The scheduled property was put in possession of the plaintiff even on that day (6th june, 1958) and from then he would pay the tax payable to the government, and the defendants had nothing to do with it. The counter - part of the agreement, exhibit 6 - 3, is substantially in the same terms but it does not recite the reasons for the suit lands being sold by the vendors, or that the new property would be acquired in the village of moparru. It is clear from these two documents, that time for payment for of rs. 8,000 was not expressly made the essence of the contract, nor do they recite any circumstances from which such an inference may unmistakably be drawn, displacing the presumption in law to the contrary. It is significant to note that it has not even stipulated that in the event of rs. 8,000 not being paid within the stipulated time, the advance would be forfeited. A rate of interest has been provided on the balance of rs. 20,000 but no rate of interest was prescribed for rs. 8,000 and on the strength of this circumstances, it is argued that the payment of rs. 8,000 was intended to be the essence. Exhibit a - i, recited that the lands were intended to be acquired in moparru with the sale price, but not at nizamabad, as sought to be made out in evidence. It is also noteworthy that time was granted for paying the balance of rs. 20,000 for three years from 22nd august, 1958, which is not consistent with time for payment of money being intended to be of the essence. Since rs. 8,000 were stipulated to be paid within 2 1/2 months, while the balance of rs. 20,000 was to be paid only after three years, the parties might have thought it fit to provide for interest in respect of rs. 20,000, but not for rs. 8,000. That circumstance alone does not establish an intention of the parties contrary to the legal presumption. The next document for consideration is exhibit b - 2, a letter dated 6th august, 1958, purporting to be signed by the plaintiff and addressed to rangayya (d. W. 2).

(19) The plaintiff denied his signature as well as having written it. In this letter, it is stated that the plaintiff bargained for the sale of his land in burrapalem, but that was not settled, and that as soon as it was settled, he would pay rs. 8,000 with interest. The plaintiff wanted to explain to d. W. 2 all the facts personally, but as he was informed that it was not necessary, that letter was sent. It was also stated that the plaintiff was going to mahabubabad, and that d. W. 2 should not think that the amount was not paid, and that it would be paid with interest by harvesting time. It was also stated in exhibit b - 2 that he wanted even to borrow on interest, but it could not be procured. There is another letter, exhibit b - i dated 1st february, 1959,purporting to be written by the plaintiff on his letter - head to d. W. 2. Though the plaintiff did not admit his signature, he admitted the contents to be true. It was mentioned therein that he paid rs. 60,000 lumpsum, but had not obtained permission, and that the was wandering (evidently referring to some forest contract). It also stated that he again took that year a new coup (kotha kopu) for rs. 80,000 for which he was selling his paddy and arranging money, and also borrowing about rs. 30,000 from others, and that he was, therefore, hard - pressed. A portion of the letter is torn, which perhaps recited that the amount could not be realised before april or may, it also stated that he would not forget, and would pay the money. At the appointed time without fail, that by then, the money from the forest coups would have been completely recovered and that d. W. 2 should not think otherwise. It would, thus, be soon that even after the receipt of the letter, exhibit b - 2 (assuming it to be genuine) requesting for time for payment of rs. 8,000 neither d. W. 2 nor the 1st defendant had intimated that time was of the essence of the contract. Even after the expiry of the stipulated time, when the plaintiff by exhibit b - 1 promised to pay by about december, 1959. D. W. 2 or d - 1 did not protest against it, nor intimated him that the time for payment of rs. 8,000 was of the essence of the contract, nor made it the essence by notice.

(20) The next document is exhibit b - 4 dated 22nd november, 1958, purporting to have been written by. K. Varaprasada rao, the husband of the 1st defendant, to d. W. 2. In this letter the 1st defendant's husband enquired as to what happened to the tenali land, evidently referring to the suit land, as the village of melapadu in which it is situate, is near tenali. He further stated that if not implemented, meaning perhaps that if rs. 8,000 was not paid, the contract may be got cancelled, as he was afraid that it may be like the vajja anjanayulu affair, evidently referring to some other contract of sale where default was committed. It further recited that d. W. 2 should issue a notice and have the contract cancelled, and that taking possession of the land seems to be the best course. Though the genuineness of this letter was questioned by the plaintiff, since it is written on an inland letter paper bearing the postal seals, it is difficult to hold that it was brought into existence. Even so, exhibit 6 - 4 only expresses the opinion of the 1st defendant's husband regarding the default. It does not say that the parties intended that the time for payment of rs. 8,000 was of the essence of the contract, or that his wife was unwilling to extend the time, or that she had authorised him to write that letter. He only expressed his opinion that it might land to trouble if the contract is not cancelled. The most significant fact is that exhibit 6 - 4 does not say that d - 1 or her husband who wrote that letter, would give or had already given a notice cancelling the contract, but only suggested that d. W. 2 might send a notice and take back possession. Nor does this letter recite, as put forward in defence evidence, that the 1st defendant intended to purchase the land of dr. Krishna murthy in nizamabad, relying upon this payment of rs. 8,000 and that that contract had fallen through by reason of the non - payment by the plaintiff. This letter therefore, does not at all establihs the existence of any circumstances before the contract was executed, and to the knowledge of the plaintiff which displaced the presumption that time for payment was not of the essence of the contract.

(21) Exhibit a - 2 dated 18th january, 1960 is a stamped receipt, in the hand - writing of the 2nd defendant, and signed by him. It is attested by d. W. 2 and another n. Venkatasubbaiah. Apart from the question whether d - 2 had authority to receive that amount, it is very significant to note that the receipt of the amount by d - 2 was to the knowledge and with the acquiescence of d. W. 2. It may at once be pointed out that exhibit a - 2 does not support the defendants that rs. 10,000 was received by d - 2 on condition of the plaintiff persuading the 1st defendant to accept the belated payment. The important fact to be noted is that d. W. 2 had received by then exhibit b - 4, and educated and wordly - wise men as he (d. W. 2) and d - 2 are, d - 2 would not have received nor allowed to receive rs. 10,000 or passed the receipt, exhibit a - 2, without a recital that it was a conditional deposit, if time was of the essence of the contract, especially when by exhibit b - 4 the 1st defendant's husband had suggested to d - w. 2 that the contract might be got cancelled, and a notice sent to that effect to the plaintiff. We have, therefore, no hesitation in holding that the receipt, exhibit a - 2, apart from the question whether d - 2 or d. W. 2 had authority of d - 1 to receive the payment, or not, which will be considered later, falsifies the defendants' contention that time for payment of rs. 8,000 was intended to be essence of the contract.

(22) In the telegraphic notices sent by the plaintiff, exhibits a - 7 and a - 8 on 21st august, 1961 to the 1st defendant and the 2nd defendant respectively, he asserted that he paid rs. 10,000 and the balance was also ready, but that on account of the abnormal rise in the prices, the defendants were not performing their part of the contract, though the plaintiff was ready and willing, and that unless the contract was performed, he would file a suit. In fact, he filed the suit on 22nd august, 1961. In the reply exhibit a - 9, sent by the 1st defendant through lawyer on 24th august, 1961, it was stated for the first time that time was of the essence of the contract, that in spite of specific and clear condition, the plaintiff failed to pay rs. 8,000, by 22nd august, 1958, and that therefore she treated the contract as cancelled and the plaintiff had no rights under the contract and that rs. 2,000 paid by the plaintiff on 6th june, 1958 had become forfeited. Even in this reply the 1st defendant only stated that she treated the contract as cancelled, but not that it was ever communicated to the plaintiff, or, in what manner and by whom. In exhibit a - 9 she denied the fact of payment of rs. 10,000 and stated that she did not authorise any one to receive it on her behalf, and that, even if true, it would not bind her. It recited that the plaintiff delayed the contract very much and, contravened the essential term of the contract, and, therefore, he had no cause of action. The reply concluded by saying that as the contract was cancelled, the plaintiff had no right to be in possession of the property, and was liable to pay rent at 18 bags per acre for the last three years.

(23) Even in this notice d - 1 did not assert that the 1st defendant or her husband or d. W. 2 on her behalf rescinded the contract, or communicated it to the plaintiff. It is specially significant to note that even in exhibit a - 9 she did not state that because she intended to purchase from dr. Krishna murthy land in nizzmabad with that sum of rs. 8,000, that time was made the essence of the contract, or that by reason of plaintiff's default that contract fell through. The 2nd defendant, in his reply, exhibit a - 10 dated 26th august, 1901 stated that on that day (26th august, 1961) he informed his sister - in - law at nizamabad about the payment of rs. 10,000, that he was waiting to hear a reply from her, and that he would, in due course, inform the plaintiff. This reply of the 2nd defendant is very strange and ingeneous. He did not mention therein that it was received by him as a conditional deposit, as the plaintiff himself promised to persuade the 1st defendant to accept it. The and defendant who was a party to the contract, exhibit a - i, would have been the last person to receive rs. 10,000, if time was of the essence of the contract, much less would have failed to mention that it was received cnly as a conditional deposit, if that were true. It is also significant to note that exhibit a - 10 does not recite that d - 2 did not have authority of d - 1 to receive the payment. It is very significant to note that even in her written statement defendant 1 thad not averred that the clause relating to the payment of rs. 8,000 was made the essence of the contract, or that to the plaintiff's knowledge, she entered into contract with dr. Krishnamurthy for purchasing land at nizamabad, and had to pay him rs. 8,000 before 22nd august, 1958 or that it fell through by reason of the plaintiff's default, that the land agreed to be purchased was in nizamabad, but not in moparru as recited in exhibit a - 1. The case put forward, in the evidence that the sum of rs. 2,000 was paid not to the 2nd defendant at tenali, but to her at nizamabad, and that consequently, the plaintiff could not assume that under the contract the 2nd defendant had authority to receive the payment was not averred in her written statement. Apart from stating that, she treated the contract as cancelled to the knowledge of the plaintiff, she had not alleged any particular act done by her to the plaintiff's knowledge. She denied that the land was measured as alleged in the plaint, or that the plaintiff made ready the balance of consideration within the time fixed. It is admitted both by the 1st defendant (d. W. 1) and by her father - in - law (d. W. 2) that the whole matter relating to the sale contract was left to d. W. 2, that he carried on the negotiations and was charged with securing the performance of the contract, and by exhibit b - 4 he was even requested by the 1st defendant's husband to cancel the contract. It is also admitted by defendant 1 that d. W. 2 was the person who gave instructions for preparing the written statement, and in charge of the conduct of the suit on her behalf. The omission in the written statement to put forward a positive and specific case regarding the circumstances existing before the contract which made time the essence of contract, or why it was not cancelled either by d. W. 2 or by d. W. 1, apart from the other omission referred to supra, establish that the case now put forward by the defendant is not true, and that the written statement was kept vague with a view to improve the case during trial. The 1st defendant as d. W. 1 deposed that ten days before the contract her father in - law (d. W. 2) came to nizamabad and told her that the plaintiff was willing to purchase the suit land at rs. 3,000 per acre, and asked for. Her opinion, and she told him that it would be sold at that rate, but the vendee must pay at least rs. 10,000 as advance, so that she could acquire land at nizamabad. She stated that p. W. 1 and not p. W. 3, came to nizamabad with d. W. 2, and that p. W. 1 paid her directly rs. 2,000 at nizamabad, and that she signed exhibit a - 1. She objected why only rs. 2,000 was brought instead of rs. 10,000 as advance, and how property worth rs. 30,000 could be delivered when only rs. 2,000 was paid, and that she also objected to the recital in exhibit a - 1 that her object in selling the land was to purchase fresh land in moparru as being incorrect. The plaintiff stated that he made an effort to bring rs. 10,000, but was unable to raise it and that he would pay the balance of rs. 8,000 within 2 1/2 months. She then replied that the land would then be delivered only after the payment of rs. 8,000, but plaintiff said that by then the transplantation season would be over and that land had to be delivered immediately, and that d. W. 2 also assured her that it will be paid within 2 - 1/2 months. She further stated that herself, her husband, her father - in - law, and the plaintiff definitely intended that the time for the payment was the essence of the contract, and that she would not have signed exhibit a - 1 if it were not so. The plaintiff did not fulfil that term of the contract. She intended to purchase the land of dr. Krishna murthy, which was near her husband's land at nizamabad. In september, 1958, her father - in - law came to nizamabad with the letter written by the plaintiff (exhibit b - 2).

(24) She then complained to him (d. W. 2) that the land intended to be purchased from dr. Krishna murthy was lost because of the non - payment of rs. 8,000, that the contract might be cancelled and re - delivery of the land taken, and that she would return rs. 2,000 received by her. After returning to his village, d. W. 2 sent word through d. W. 3 (son of her husband's maternal aunt) that the plaintiff was not to be seen, and nothing could be dene in the matter. Thereupon, her husband addressed a letter exhibit b - 4, dated 22nd november, 1958, to d. W. 2. She also objected why in exhibit a - 1 it was mentioned that the land would be purchased in moparru instead of nizamabad, but the plaintiff stated that that clause was omitted in exhibit b - 3 and that she could purchase anywhere she liked. She was ready to perform her part of the contract, but the defendant committed breach in not paying rs. 8,000. She did not authorise d - 2 to receive money on her behalf from the plaintiff. In august, 1961, d - 2 sent word through d. W. 3 that the plaintiff paid rs. 10,000 subject to the condition that he (the plaintiff) would obtain her consent and ratification fo'r the payment, and enquiring whether he (d - 2) could retain the money, or should return it to the plaintiff. She replied that she did not want to receive the money. She denied the suggestion that there were disputes between herself and d - 2 with regard to the keeping of rs. 10,000, and consequently the sale - deed was not executed. The evidence of the 1st defendant that time for paying rs. 8,000, was of the essence of the contract cannot be accepted for several reasons. If really she wanted that the contract should be finalised in her presence, and, therefore, the plaintiff and d. W. 2 came to nizamabad with the agreement, and she, her husband and d. W. 2 all wanted that payment of rs. 8,000 by 22nd august, 1958, should be of the essence of the contract, the easiest thing would have been to have such a clause inserted in exhibit a - 1 especially when, according to her, the plaintiff was also present. But admittedly, that was not done, and there is no explanation for it the reason for payment of rs. 8,000 by 22nd august, 1958 being made the essence of the contract was that she had to pay the price to dr. Krishna murthy before that date, and that by reason of the plaintiff's default, dr. Krishna murthy sold away the land to someone else. Apart from such a case not having set up in her written statement, very curiously. Dr. Krishna murthy, also of nizamabad, was not examined to prove that fact. Further, she herself stated that she had not made up her mind whether she should purchase the land at ali sagar or nizamabad. Exhibit b - 4, addressed by her husband to d. W. 2 also did not advert to this fact, nor is it mentioned even in her written statement. Exhibit a - 1 on the other hand, mentions that the new property was intended to be purchased in moparru. To get over this difficulty, d. W. 1 deposed that when she objected to it, the plaintiff replied that that clause was omitted from exhibit b - 3, which is hardly a satisfactory explanation.

(25) Her evidence that she found fault with the plaintiff and her father - in - law for net paying rs. 10,000 and that she even wanted that the land should not be delivered till the payment of rs. 8,000 cannot at all be believed, as, if there was really such a discussion, she would have insisted on the insertion of a suitable clause in exhibit a - 1 to that effect. The story of the plaintiff instead of p. W. 3 going to nizamabad was evidently invented to probabilise her case that he, too, was aware of the urgency for the payment of rs. 8,000 and also that she never authorised the and defendant or her father - in - law to receive rs. 2,000 or rs. 8,000 on her behalf. Her evidence that rs. 2,000 was paid at nizamabad by the plaintiff, and not to d - 2 at tenali, cannot be believed firstly for the reason that it is not borne out by exhibit a - 1. Further it is not the defendant's case that the land was not delivered as recited in exhibit a - 1, after its execution on 6th june, 1958. Even according to the 1st defendant, the agreement was brought to nizamabad only on the 7th, and, if payment was made on 7th, the land would have been delivered only after the return to tenali, i. E. , earliest on the 8th. But that it is not the case of the defendants. We cannot believe that the plaintiff was put in possession of the land even without the payment of rs. 2,000 to d - 2 at tenali on 6th june, 1958. The agreement clearly recites that the land belongs only to the 1st defendant, and the price was due only to her, but that the consideration had to be paid to them, thereby empowering even the 2nd defendant to receive it on behalf of the 1st defendant. The other circumstances also probabilise this inference. Defendant 1 was away at nizamabad, and the 1st defendant and the 2nd defendant were admittedly on cordial terms. So far as d. W. 2 is concerned, the 1st defendant admitted that she had complete faith and confidence in her father - in - law, and that she did not even participate in the negotiations for the sale, and she left the whole matter in his hands. In fact, it is he that engaged the counsel, and prepared the written statement. We cannot, therefore, for a moment, believe that the 2nd defendant and d. W. 2 did not have the authority to receive rs. 2,000 on 6th june, 1958, or the balance of consideration. The sum of rs. 10,000 was received by d. 2 with the consent and acquiescence of d. W. 2 who had authority to represent her in the sale transaction even on her own admission. The failure of the 1st defendant and her husband to issue a notice to the plaintiff, rescinding the contract, or demanding d. W. 2 to do so because of plaintiff's default in paying rs. 8,000 establishes that it was not treated as the essence of the contract. If it were otherwise defendant i's husband having sent the letter, exhibit b - 4, the 1st defendant and her husband or d. W. 2 would have cancelled the contract. The explanation of d. W. 2 that because the plaintiff was not seen, d. W. 2 did not cancel the contract or take re - delivery of the land, is purile.

(26) As already noticed, there is no recital in exhibit a - 2 that it was received as a conditional deposit, subject to the ratification and acquiescence by the 1st defendant. It is impossible to believe that defendant 2 and d. W. 2, who were visiting nizamabad fairly often, even after the suit contract, suddenly stopped their visits after 1959, for no ostensible reason. It is also unnatural and improbable that defendant 2 and d. W. 2 would not have informed the 1st defendant and her husband about the payment of rs. 10,000 for nearly 1 1/2 years, till the plaintiff sent the telegraphic notice. Even assuming that defendant 2 and d. W. 2 had not intimated the 1st defendant about it, she or her husband would certainly have enquired as to what had happened to the payment of rs. 8,000 or would have demanded the plaintiff to make the payment. Admittedly, no such thing was done. This conduct is only consistent with the fact that the and defendant as well as d. W. 2 who had authority to receive rs. 10,000 received that amount to the knowledge of the 1st defendant and she acquiesced in the same. There is no evidence before us justifying the conclusion that the 1st defendant had even treated the contract as cancelled. There seems to be much force in the plaintiff's suggestion that the reason for defendant i committing breach of the contract was due to the fact that the 2nd defendant "was unwilling to part with rs. 10,000 if he were to execute the security bond.

(27) Rangayya, the father - in - law of the 1st defendant was examined as d. W. 2. In his chief - examination he stated that he consulted the 1st defendant, and she was willing to sell the suit land for rs. 3,000 per acre, but that she wanted at least rs. 10,000 to be paid as advance, as they intended to purchase land at nizamabad where they were cheaper than at moparru. He would have it that two or three days after he informed the plaintiff about it, the plaintiff stated that he could raise only rs. 8,000 but not rs. 10,000 and that he would pay rs. 2,000 and pay the balance within 2 1/2 months as he could not secure the full amount of rs. 10,000. The payment of rs. 8,000 he deposed was thus intended to be the essence cf the contract. He further deposed that he took objection to the recital in exhibit a - 1 that the land was intended to be purchased at mcparru, but that he was satisfied because that recital was omitted in exhibit b - 3. He stated that he and the plaintiff went to nizamabad, but not p. W. 3, and that the plaintiff paid rs. 2,000 directly to the 1st defendant there. He denied the suggestion that the plaintiff tendered rs. 8,000, within the stipulated time, but that he asked him to keep it and pay the same with interest when called upon by d. W. 2. He corroborated d - 1 as regards his going to nizamabad with the letter, exhibit b - 2, and her insisting on the contract being cancelled, and also his sending d. W. 3. He also deposed that after receiving exhibit b - 1 from the plaintiff, he wrote letters to the plaintiff, but he did not reply. Till the payment of rs. 10,000 was made the witness stated, the plaintiff was not to be seen. He stated that neither he nor d - 2 had authority to receive rs. 10,000 on behalf of the plaintiff and d - 1 did not like that it should be received. He showed exhibit b - 4 letter to the plaintiff, and both he and d - 2 refused to receive the amount. But when the plaintiff stated that if rs. 10,000 was kept with him, it might be spent away, and that he would obtain the consent of d - 1, they received it, and the receipt, exhibit a - 2 was passed. But exhibit a - 2 as already noticed, does not at all support that version. He denied the suggestion that disputes arose between d - 1 and d - 2, and that he assured the plaintiff that he would settle them and get the sale - deed executed.

(28) In his cross - examination d. W. 2 admitted that he and the plaintiff directly talked about the sale transaction and settled the terms of the ccntract, and that his daughter - in - law and his son authorised him to settle the sale of the suit land at rs. 3,000 per acre on condition of the vendee paying rs. 10,000 as advance. He admitted that the condition that the sale consideration should be paid to defendant 1 had not been mentioned in exhibit a - 1, and that he could not give any reason for it. He even went to the length of saying that he told the scribe that money should be paid to defendant - 1 and that time for payment of rs. 8,000 was intended to be the essence of the contract but that he could not give any reason why the scribe omitted to mention the same in exhibit a - 1. He did not even ask the scribe why he failed to mention the essential terms of the contract. If his evidence were true, d. W. 2 would not have allowed the 2nd defendant to receive rs. 2,000 as we have found. He would have it that, even though the plaintiff informed even before the execution of exhibit a - 1 that he would pay only rs. 2,000, and not rs. 10,000, and that the balance of rs. 8,000, would be paid only within 2 1/2 months, contrary to the instructions of d - 1, he did not inform that fact to defendant 1. The witness deposed that it was agreed that the contract would stand cancelled it rs. 8,000 was not paid within 2 1/2 months "which is not found in exhibit a - 1. His explanation that when he questioned the scribe about that omission, the scribe replied that it was unnecessary to mention specifically about it, and that he accepted it, which is most fantastic. He corroborated defendant i as to what happened at nizamabad at the time she signed exhibit a - 1. He stated that the whole document, exhibit a - 1, except the signature of d - 1 as well as exhibit d - 3 were completed at tenali. The witness admitted that he did not give a reply to exhibit b - 2, which is most unnatural, if time for payment of rs. 8,000 was the essence of the contract. He was not aware if there was any correspondence between d - 1 and her husband on the one hand and the plaintiff on the other. He admitted he did not issue any registered notice to the plaintiff, cancelling the contract as instructed by d - 1 and her husband in the scope of peacefully settling the matter, and he did not send it even after he was asked to do by his son in his letter, exhibit b - 4. Not did he send a reply to his son to exhibit b - 4. He then made the amazing statement that there was no written correspondence at all between himself and his son after exhibit b - 4, that is, for nearly 1 1/2 years, obviously to explain away the failure of d - 1 to cancel the contract. Contradicting himself he stated that he wrote a letter to the plaintiff to receive the refund of rs. 2,000 and deliver the land to him, but had not stated when it was written, nor did he file a copy of that letter. Apart from its being untrue, it is inconsistent with the evidence of d. W. 1 that d. W. 2 could not know the whereabouts of the plaintiff, and therefore could not take the necessary legal proceedings for cancelling the contract and get back possession. This witness contradicts the 1st defendant when he said that he also negotiated for the land of k. Lakshmaiah at mopatru, it is, therefore, clear that the story that with the sum of rs. 12,000, the land of krishna murthy was agreed to be purchased, but not any land at moparru, or that on account of the failure of the plaintiff to pay rs. 8,000 it fell though, cannot be accepted. Thus, the only circumstances relied on for making the payment of rs. 8,000 the essence of the contract has to be rejected.

(29) The evidence of the witness that rs. 2,000 was not paid by the plaintiff at tenali but at nizamabad, cannot be believed. His evidence that rs. 10,000 was received as conditional deposit is not only not born out but must be rejected as he stated that he did not at all intimate d - 1 or her husband about it, not even when he took the written statement for her signature. For obvious reasons, he went to the length of saying that neither d - 1 nor her husband came to moparru after the payment of rs. 10,000 to d - 2, and before the suit was filed. The evidence of d. W. A that he sent a reply to exhibit b - i is a clear after - thought. The letter was said to have been sent by ordinary post, which is itself very unlikely. He did not even file a copy of that letter, nor summon for the production of the letter sent by him. He did not even suggest that fact to the plaintiff. His evidence does not establish that either defendant 1 nor d. W. 2 treated the payment of rs. 8,000 on 18th january, 1960 as being essence of the contract. Nowhere in his evidence had d. W. 2 stated that the plaintiff was not put in possession on the 6th itself. Even without the payment of rs. 2,000, d. W. 2 would not have put the plaintiff in possession of the property. The evidence of d. W. 2 is not only opposed to documentary evidence but is most artificial and improbable. He attempted to support the case of the defendant somehow or other, and he is not a witness of truth. G. Papaiah, husband of the junior maternal aunt of d. W. 2, was examined as d. W. 3. He deposed that he was sent to nizambad by d. W. 2 to inform the 1st defendant that he was not giving reply to several letters written to him with respect to the suit contract, and that they said that they were cancelling the contract and refunding to the plaintiff the money paid by him as advance, and that they asked him to intimate the same to d. W. 2, and that they would send a letter to him. The evidence of this witness is at variances with that of d. Ws. 1 and 2. Even d. W. 2 had not stated that he had sent several letters, but said that he sent only one letter in reply to exhibit b - 1. D - 1 only stated that d. W. 2 should cancel the contract, but not that she herself was cancelling the contract and refunding the advance. In fact, they ne er wrote any such letter, nor refunded the amount. D. W. 3 also deposed that he was sent by d - 2 after the plaintiff's telegraphic notice, to inform her about the payment of rs. 10,000 and that she expressed her dissatisfaction as to why it was received by d - 2 when he was not authorised to do so, and that he communicated it to d. 2.

(30) In his cross - examination he stated that he was deputed on both the occasions because he was free, evidently meaning that he could spare time. He stated that d. W. 2 did not give him any letter addressed to d - 1, but simply asked him to enquire d - 1 as to what he should do, which is very artificial and unnatural. He was positive that d - 1 told him that the contract was cancelled and the advance would be returned, and that d. W. 2 might take action to obtain delivery of the land. As already stated d - 1 did not have the contract cancelled at all. The evidence of this witness has not impressed us, nor has it advanced the defendants case to any extent. The 2nd defendant was examined as d. W. 7. He deposed that the plaintiff did not pay rs. 2,000 to him at tenali. He also denied that the plaintiff tendered rs. 8,000 within the time stipulated. He deposed that he did not receive rs. 10,000 from the plaintiff either with the consent or as agent of d - 1, but received it in his individual capacity, because the plaintiff stated that he would obtain the consent of d - 1 and that it might be received on his (plaintiff's) own responsibility but that the plaintiff did not obtain the consent of d - 1 for it. He sent d. W. 3 to nizamabad only after the plaintiff sent the telegraphic notice. He denied that there were any disputes between himself and d - 1 as to the custody of the consideration money, evidently meaning rs. 10,000.

(31) In cross - examination on behalf of the 1st defendant it was elicited from him that the payment of rs. 8,000 was intended to be essence of the contract. In cross - examination on behalf of the plantiff he stated that he had been managing his share of the properties only since 1955, and till then his father was managing them. He came just before the contract (exhibit a - 1) was signed. His father asked him the previous day to come to tenali next day as security had to be furnished by him. He consented to give security. He did not know what the terms were talked of and yet agreed to the contract, exhibit a - 1, and he was present for about half an hour prior to the writing of exhibit a - 1. He did not seriously consider anything about the terms in exhibit a - 1. Simply to oblige his father he signed in exhibit a - 1, without realising that he agreed to give his property as security for the sale consideration. He realised the hardship in not putting the time limit for security, and was repenting for his having signed in exhibit a - 1 agreeing to give security. He stated that without receiving the sum of rs. 2,000, he signed in exhibit a - 1 and gave it to the plaintiff. The sum of rs. 10,000 received from the plaintiff was kept by him in an iron safe in his house for the last three years and three months. He would have it thinking that the plaintiff would obtain the consent of the 1st defendant in a short time, he passed the receipt, exhibit a - 2, in the usual course without mentioning the condition of the responsibility agreed upon by the plaintiff.

(32) He did not write a letter to d - 1 intimating her about the payment of rs. 10,000 because the plaintiff took the responsibility to obtain her consent. He had not stated even in his reply notice, exhbit a - 1o, that rs. 10,000 was received as conditional deposit. He admitted that he did not refund the sum of rs. 10,000 to the plaintiff, as he filed the suit immediately thereafter, nor refunded the money subsequently, nor deposited it into court. He admitted that he could not give any reason why he did not inform d - 1 about the receipt of rs. 10,000 before receiving the notice from the plaintiff. He denied having said that the amount of rs. 10,000 should be paid to him, so that property could be purchased with that money, and the same be given as security. He denied the suggestion that on account of alleged disputes between himself and d - 1 regarding that money, the sale was not completed. The evidence of this witness has not impressed us. He holds the m. A. Degree, and has been attending to cultivation of his properties since 1956 for six years prior to his giving evidence. Notwithstanding the recital in exhibit a - 1 that rs. 2,000 was paid at the time of its execution, he denied it. His evidence that rs. 10,000 was received as conditional deposit is not' at all borne out by exhibit a - 2, apart from its being fantastic. It is impossible to believe that after receiving rs. 10,000, he did not even think it necessary to inform d - 1 about it. Even though he was not present during the negotiations and came just before exhibit a - 1 was written to oblige his father, he deposed that time was intended to be essence of the contract, obviously with a view to avoid it, if possible, as on his own admission he was regretting for having agreed to give his property as security. It is inconceivable that if to his knowledge, time for paying rs. 8,000 was intended to be essence of the contract, he would have received the amount of rs. 10,000, much less passed the receipt without making it clear that it was received without any prejudice to the rights of d - 1. His explanation that it was received as conditional deposit was falsified by his reply notice, exhibit a - 1o. The suggestion that differences arose between himself and d - 1 regarding his furnishing the security, and that it led to d - 1 not executing the sale - deed, seems to be justified on the evidence of d. W. 7. The evidence on behalf of the defendants has not at all rebutted the presumption that stipulation as to time in a contract of sale of land is not of the essence of the contract. On the other hand the subsequent conduct of d - 1 and d - w. 2 in particular the fact that they have not avoided the contract leads to a contrary conclusion. The receipt of rs. 10,000 by defendant - 2 with the consent and knowledge of d. W. 2 unconditionally on behalf of d - 1 establishes that the 1st defendant was not entitled to claim compeasation for loss, if any, occasioned by the non - payment of rs. 8,000 within the stipulated period.

(33) We shall now refer to the evidence on behalf of the plaintiff. The plaintiff, venkatasubbayya, examined himself as p. W. 1. He stated that exhibit a - 1 was executed in his favour with respect to the plaint schedule land, that he paid rs. 2,000 to d - 2 as earnest money, then after d - 2 executed, and that d. W. 2 arranged the sale in his favour. Exhibit a - 1 was written in the fuel depot of his nephew at tenali, and it was attested by d. W. 2 and his brother - in - law p. W. 3. D - 1 was not present at the time of execution of exhibit a - 1, and he saw her for the first time only in court. Lakshmayya (p. W. 3) and rangayya (d. W. 2) went to nizamabad and after obtaining the signature of d - 1, gave it to him. According to the agreement, he (p. W i) had to pay rs. 8,000 by 22nd august, 1958 and the balance of rs. 20,000 within three years thereafter with interest at 5 per cent. There was no term in the contract that the money should be paid only, to d - 1 according to it the amount could be paid to either d - 2 or d. W. 2. When the witness (p. W. 1) tendered rs. 8,000 to d - 1 and d. W 2 within two months and five days of the contract, they said that after the bargain for land was settled, they would send for him (the plaintiff) and the money could then be paid. He was not informed by any one that d - 1 had proposed to purchase land in nizamabad. In january, 1960, p. W. 2 informed his brother - in - law (p. W. 3) that d - 2 and d - w. 2 required money. He then brought rs. 10. 000 and paid to them at the fuel depot. The witness also deposed that he got the land of ac. 10,00 measured as per the terms of the contract in the summer of 1959, that p. W. 2, who wrote exhibit - a 1, measured the land, and that lingarao, brother - in - law of d - 1, was present at that time. Price of land was rising since exhibit a - 1. He made improvements and made it very fertile. Disputes and differences arose between d - 2 and d - 1 as the former intended to retain rs. 10,000 for furnishing security, while d - 1 wanted that amount to be paid to her, and thus d - 1 evaded execution of the sale - deed. He then issued telegraphic notices to d - 1 and d - 2, and received the reply notices, exhibits a - 9 and a - 10. P. W. 1 deposed that time was not intended to be essence of the contract. He stated that he effected improvements to the tune of rs. 5,000 as a result of which the yield rose to 18 to 26 bags, and the price of the land to rs. 5,000 per acre. He said he could not identify his signature in exhibit b - 1, but admitted that all the facts were correct, and we have no reason to doubt that exhibit b - 1 was written by him. He denied that when he paid rs. 10,000 d - 2 or rangayya declined to receive it, stating that the contract was cancelled, or that he assured them that he would persuade to accept the payment. He denied that rangayya told him about exhibit b - 4, or that the contract would be cancelled, and that the land would be taken back. He asserted that the sale transaction was settled only by d. W. 2, and he told him that d - 2 would furnish security. D. W. 2 never told him (p. W. 1) that unless rs. 10,000 was paid as advance, the land would not be delivered. He denied that because he could not raise the entire sum of rs. 10,000 at the time of the contract that 2 1/2 months was granted for paying the balance of rs. 8,000. He was informed by rangayya that land was being purchased by d - 1 at moparru only. He denied that rangayya took any objection for the recital in exhibit a - 1 to that effect, or that thereupon it was scored out in exhibit b - 3. He also denied that he accompanied rangayya to nizamabad to get the signature of d - 1 in exhibit a - 1, or that he paid rs. 2,000 to her hands and delivered exhibit b - 3 to her. As rangayya said that the amount should be paid without fail by 22nd august, 1958, he consented to that condition.

(34) The evidence of this witness that time was not of the essence of the contract, is consistent with the recitals in exhibits a - 1 and the other evidence already considered. But we are unable to accept the evidence of this witness and p. W. 3 that he tendered rs. 8,000 on loth august, 1958 for several reasons. The telegraphic notice itself does not mention that fact. There was no such averment even in the plaint.

(35) Further, it is also inconsistent with exhibit b - 1 that he was not able to raise the money on 1st february, 1959. This appears to be an attempt by the plaintiff to support his claim even in the event of its being found that time was of the essence of the contract. But we are unable to accept that evidence, as p. Ws. 1 and 3 would have taken something in writing to evidence that tender. Likewise, the testimony of this witness and p. W. 2 that the land was measured in 1959 cannot be believed for the main reason that the case put forward in the plaint was that the land was measured in may, 1961. Our disbelieving his evidence on these two points does not detract from our conclusion that time was not intended to be the essence of the contract, or that the contract was not avoided on account of the default in payment of rs. 8,000.

(36) The scribe, g. Sree ramakrishnaiah, was examined as p. W. 2. He stated that he wrote exhibits a - 1 and b - 3 on 6th june, 1958 at the same time, and that they were written under the instructions of d - 2 and his father, d. W. 2, d - 1. Was not present then, and he did not see her. D - 2 and his father acted on behalf of d - 1 when the contract and its counter - part were prepared. The plaintiff then paid rs. 2,000 as earnest money to d - 2 under exhibit a - 1. According to the terms of the contract, rs. 8,000 was to be paid on 22nd august, 1958, and the remaining rs. 20,000 three years thereafter, and the payment of rs. 8,000 before 22nd august, 1958 was not intended to be essence of the contract. The parties did not inform that it was of the essence. He is a document - writer. Usually the penal clause that earnest money would be forfeited, or that contract shall stand cancelled in the event of default of payment, is written in contracts, if time is intended to be the essence of the contract, meaning thereby that in this case no such clause was written, because that was not the intention. D - 2 and d. W. 2 stated that land was to be purchased in moparru, but not at nizamabad. Exhibit b - 3 was written by looking into exhibit a - 1. All the facts mentioned in exhibit a - 1 were not mentioned in exhibit b - 3, as it was not a condition that the money should be paid only if the land was purchased in moparru, that the fact had not been noted in. Exhibit b - 3 - exhibit a - 1 and b - 3 were written in the fuel depot of lakshmayya at tenali, and they were attested in his presence. This witness also deposed that the land was measured in 1959 before the fall of the first rains. In his cross - examination he (p. W. 2) stated that exhibt a - 1, and b - 3 did not mention that money coud be paid to anyone but there was no talk whether the money could be paid to d - 1 or d - 2. He denied that rangayya raised an objection, to his mentioning in exhibit a - 1 that land would be purchased in moparru, or that he and the plaintiff satisfied him that it would be omitted in exhibit b - 3, and need not be scored out in exhibit a - 1. He denied that the plaintiff and rangayya went to nizamabad.

(37) The evidence of this witness is consistent with the recitals in exhibit a - 1, and the other evidence, and corroborated the testimony of the plaintiff. The brother - in - law, of the plaintiff, s. Lakshmayya, is examined as p. W. 3. In 1962, after the execution of exhibit a - 1, he was affected by paralysis, and his eye - sight was also affected. He attested exhibit a - 1. And "b - 3 and corroborated the evidence of the plaintiff and p. W. 2 with regard to their execution. He was present when the bargain was struck. Rangayya settled the transaction. D - 2 was not present at the time of the bargain, or when the contract was written. The plaintiff paid rs. 2,000 to d - 2 as earnest money when exhibit a - 1 was written. Rangayya did not raise any objection to the recital in exhibit a - 1 that land was intended to be purchased at moparru. He stated that the time for payment of rs. 8,000 was not intended to be essence of the contract. He swore that he and d. W. 2 went to nizamabad and obtained the signature of d - 1 on 7th june, 1958 that the plaintiff remained in tenali till he returned from nizamabad, and that he handed over exhibit a - 1 to the plaintiff after obtaining her signature in it. He deposed that in january, 1960, rangayya came to his fuel depot and asked for money, when he sent word to the plaintiff through ramabhadrayya. The plaintiff then brought rs. 10,000 and paid the amount to d - 2 and obtained the receipt, exhibit a - 2 which was executed at the fuel depot.

(38) The witness (p. W. 3) denied that the 1st defendant or her husband did not remark as to why the land was delivered without receiving rs. 10,000 as earnest money, or that the plaintiff paid rs. 2,000 to d - 1 at nizamabad. He deposed that rangayya did not say that rs. 8,000 should be paid without fail within 2 1/2 months for purchasing land, or that without it land could not be purchased. The witness admitted that he has got a share in the business of the plaintiff at manukota, evidently meaning the forest business. That may be the reason, why he attested exhibits a - 1 and b - 3, and also went to nizamabad along with d. W. 2. He denied that when rs. 10,000 was paid d - 2 and rangayya refused to receive it saying that d - 1 and her husband were finding fault for non - payment of rs. 8,000 within the time stipulated, and were also pressing for the contract being cancelled and land being re - delivered. The cross - examination of this witness does not shake his testimony that time was not the essence of the contract, and that rs. 10,000 was not received as conditional deposit.

(39) The learned subordinate judge held that because the land admittedly belonged to the" 1st defendant, and the 2nd defendant joined exhibit a - 1 only because he had to give security, and as the document had to be necessarily taken to nizamabad, it was reasonable to suppose that rs. 2,000 was paid to her at nizamabad, and not to the 2nd defendant at tenali. In doing so, he has ignored the evidence already adverted to, viz - , the recitals in exhibit a - 1, the clear admission of the 1st defendant as well as d. W. 2 that the sale transaction was wholly left to d. W. 2 and that d - 2 enjoyed complete confidence of d - 1 till the payment of rs. 10,000 apart from the relationship between them. The learned judge has also ignored the fact that without the payment of rs. 2,000 the land would not have been delivered to the plaintiff on 6th june, 1958, which is not disputed. His conclusion that the absence of provision for interest shows that time was to be of the essence of the contract, cannot be accepted, as even the existence of a penal clause would not make time the - essence of contract. He was in error in observing that there was no averment in the plaint, that the 1st defendant waived the right to avoid the contract nor an issue regarding the same, and therefore the plaintiff could not be permitted to urge the point. That view is opposed to law as already stated. Nor can we agree that the letter, exhibit b - 1 has the effect of cancelling the contract, or communicating the rescission to the plaintiff, or that the receipt of money by the 2nd defendant on 18th january, 1960 had not got the effect of condoning the delay in payment of rs. 8,000.

(40) For the foregoing reasons, differing from the trial court, we hold that time for payment of rs. 8,000 was not of the essence of the contract. Even though the plaintiff committed a breach in not paying the sum of rs. 8,000, within the stipulated time, he was not disentitled to claim specific performance as not only was the contract not avoided, but the payment of rs. 10,000 long afterwards was accepted by defendant 2 and d. W. 2 under the authority of the 1st defendant. Even otherwise it was ratified by defendant 1 and is binding on her, and it amounts to a waiver of her right to rescind the contract. We further hold that neither before nor after the receipt of rs 10,000 was the contract rescinded by the 1st defendant or by any one on her behalf. We shall now consider points 4 and 5. It is well settled that in a suit for specific performance the plaintiff must show that he was ready and willing to perform his part of the contract from the time the contract was made till the date of the decree. He must aver in his plaint that he was ready and willing to perform his part of the contract, and if the averment is traversed, he must prove the said averments. Law does not require that in order to prove his. Readiness and willingness the plaintiff must show that he had cash ready in his hands, which is, of course, a very clear case of the plaintiff's readiness and willingness. But the same fact can be proved if the plaintiff can show that at all material times he could have raised the said amount and was willing to do so, and perform his part of the contract. Where the plaintiff does not specifically aver in the plaint in general terms his readiness and willingness to perform his part, but only chooses to make a clear, categorical and specific plea and that he was having the necessary funds ready with him at all material times, and was ready and willing to pay the same to the defendant on his executing the conveyance, it would not be open to him to give up that case, and to contend in the alternative, that even if he had not got the cash ready with him, as alleged, he could have raised the same at all material times.

(41) In garikapati veerayya v. Nannapaneni subbayya choudary and others, (1966) 2 an w. R. (sc) 93 : (1966) 2 m. L. J. (s. C.) 92: (1965) 3 s. C. J. 789 the plaintiff only averred that he deposited the entire balance of consideration in the name of his lawyer in the district go - operative bank, and intimated the fact of deposit by registered notice to the defendant, and did not specifically aver. In the plaint his readiness and willingness to perform his part of the contract. The trial court found that the plaintiff did not have the necessary money ready till after the agreement was cancelled by the vendors, and that, in order to gain time and cover his inability to produce the amount, he made unreasonable demands on the vendors, calling upon them to produce satisfactory evidence about the discharge of a prior mortgage. Before the high court, finding of the trial court that the money was not kept ready, was not questioned, but it was argued for the plaintiff - vendee that he was ready and willing to perform the contract, in other words, that he could raise the money. Subba rao, c. J. , (as he then was) and chandra reddy, j. (as he. Then was) held that such a plea could be raised in appeal, and that the plaintiff could prove that he could have raised the said amount at the relevant time. On the other hand, umamaheswaram, j. , agreeing with the trial court, held that since the plaintiff had made a clear, categorical and specific case that he had cash ready, it was not open to him to give up that case and to contend in the alternative that even if he had not got the cash ready with him, he could have raised that amount.

(42) Gajendragadkar, j. (as he then was) speaking on behalf of the supreme court, held that the view taken by umamaheswaram, j. , was correct, and that the trial court was not bound to enquire whether respondent no. 1 could have raised the said amount. It was held that as the plea made by the plaintiff and the evidence led on his behalf unmistakably indicated the case that cash was ready at all material times, it was not open to him to take the alternative contention. It was also held that if the plaintiff had pleaded that he would have been able to raise the necessary amount, the appellant would have had an opportunity to meet that case, but since no such plea was made at the trial, it was not open to him to raise that point for the first time, in appeal, and the high court erred in entertaining that plea at the stage of the appeal.

(43) In gomathinayagami pilial and others v. Palaniswami nadar, (1967) 1 s. C. R. 227 already referred to, at was held by majority following the decision of the privy council in ardeshir h. Mama v. Flora sassoon, (1968) 55 m. L. J. 523: l. R. 55 i. A. 360 : a. I. R. 1938 p. C. 208 that the respondent in a suit for specific performance must plead and prove that he was ready and willing to perform his part of the contract continuously between the date of the contract and the date of hearing the suit. We shall examine the evidence in the light of these principles. In the plaint it was averred that the plaintiff paid rs. 2,000 as earnest money on the date of the contract, rs. 10,000 on 18th january, 1960, and that he made ready the balance of consideration within the time fixed, and was demanding the defendants to fulfil the terms of the contract, but they were putting off the same on. Some pretext or the other, and did not co - operate in fulfilling the terms of the contract, as they were tempted by others who offered to purchase the land at rs. 5,000 per acre if the contract with the plaintiff could be avoided. It was further averred that the plaintiff had always been ready and willing to perform his part of the contract, and the default was on the part of the defendants. In the written statement, the 1st defendant, as already noticed, alleged that the plaintiff having committed the default in paying the sum of rs. 8,000 was not entitled to the equitable relief of specific performance. In para. 5, a general denial of all the allegations in the plaint including the averment that he was ready to pay the balance of the consideration within the time fixed and was demanding fulfilment of the contract, was made. The 2nd defendant simply alleged in his written statement that he cannot be deemed to have admitted any allegations not specifically admitted. It would thus be seen that in addition to alleging that the plaintiff made ready the balance of consideration within the time fixed, which is capable of being understood as his having the cash ready, he expressly averred that he was always ready and willing to perform his part of the contract, that is, he had the required capacity to raise the balance of money at the relevant time and that allegation was traversed, and it has therefore to be proved by the plaintiff, even in the absence of an issue. We shall now examine the evidence adduced on behalf of the plaintiff.

(44) In his chief - examination, the plaintiff denied that he was unable to raise the sum of rs. 8,000 within the specified time. He deposed that he took up forest contracts from 1944 in mahaboobabad and kothagudem. The contracts of coups in forest area taken by him ranged between rs. 19,000 and one lakh. In 1963, when he was giving evidence he took a contract for rs. 95,000. He owned 10 acres of land in chenaravur and davaluru in guntur district, out of which 6 acres were purchased by him in 1950, for rs. 15,000 and the remaining 4 acres were his ancestral lands. He also owned a building and site in tenali, worth rs. 65,000. He constructed the building during 1951 - 54. He also constructed a building at a cost of rs. 30,000 at mahaboobabad in 1962. He further stated that in may or june, 1961, rangayya (d. W. 2) and d - 2, who were acting on behalf of d - 1, sent word that the sale - deed would be executed, and that he might come. The plaintiff deposited the remaining consideration money including interest, i. E. , 21,500 in the andhra bank, tenali. Exbibits a - 3 to a - 5 are the receipts of the andhra bank tenali, to show that the plaintiff deposited rs. 5,000 on 3rd may, 1961, rs. 7,500 on 13th may, 1961, and rs. 9,000 on 13th may, 1961, i,e, in all rs. 21,500 which is the balance of consideration and interest due to the defendants. He also deposed that he purchased rs. 2,400 worth stamps for getting the sale deed engrossed. Exhibit a - 6 a bundle of eight non - judicial stamp papers were purchased by one s. Bhadrayya of boripalem from the sub - treasury office, tenali on 24th may, 1961. The plaintiff deposed that the stamps were indented and purchased by his nephew, ramachandrayya on his behalf.

(45) The plaintiff was cross - examined as to his ability to pay rs. 8,000 on 10th august, 1958, and we have already found, we are not impressed by his evidence that he had rs. 8,000 on that day. We have found that when he (p. W. 1) paid d. 2 and d. W. 2 rs. 10,000 on 18th january, 1960, the contract was not rescinded by the 1st defendant. The only question for consideration, therefore, is whether after that date till the date of hearing the plaintiff was ready and willing to perform his part of the contract.

(46) In his cross - examination, p. W. 1 stated that he was borrowing moneys to the extent of rs. 40,000 for business and repaying the same. He would purchase the i. Forest timber on contract basis in the auction held in november, each year, and the work of cutting the trees commenced in january. He purchased for rs. 50,000 in the auction held in november, 1957. He supplied that amount partly from the cash available with him, and partly from the loans taken from others. His nephew, ramabhadrayya, came to mahboobabad in january, 1960 and informed him of the demand made by rangayya for money, and that four days later, he paid rs. 10,000 to d - 2 at tenali. He had current amount in the andhra bank at tenali. He admitted having withdrawn rs. 10,000 after one month from the deposit of rs. 21,500 after a month, as the amount was not fetching interest. He added that he was always willing and ready to re - deposit that amount. He withdrew rs. 10,000 on 3 1st june, 1961 and invested it in his business. A sum of rs. 11,000 and odd was available in his account by 1st july, 1961. He denied that he deposited rs. 21,500 for the purpose of his business, and not for the payment of sale consideration. He sent word to d - 2 and d. W. 2 after making the deposit and purchasing the stamps. It may be noted that the stamps were purchased on 24th may, 1961, and on that day the entire balance of sale price was in the bank. The plaintiff would have it that d - 2 and d. W. 2 came along with his nephew, gopalakrishnayya, and d - 2 went to nizamabad and brought d - 1 and said that within four days she would come and execute the sale deed, but on account of differences between them, she did not execute the sale - deed, that those differences he said had arisen with respect to the money, evidently meaning rs. 10,000. He stayed at tenali for one week at that time. As he was busy with other work, he got the stamps purchased by his nephew, ramabhadrayya, with the money realised by sale of his paddy. He denied that ramabhadrayya purchased the stamps for his own use. He admitted that there were six partners in the firm which took forest contracts, and that he had 3 annas' share in it. Exhibit b - i itself shows that prior to 1st february, 1959 he had deposited rs. 60,000 lumpsum, and that that year again he deposited rs. 80,000. Nothing has been elicited in cross - examination to shake the testimony of p. W. 1 with regard to the ownership of the lands or the houses or his solvency otherwise. As already stated, even by 1st july, 1961, there was in the bank rs. 11,000 to his credir. We have, therefore no doubt in our minds that e en apart from the fact that he averred and established that by 24th may, 1961, when the sale - deed was promised to be executed, he had made the balance of sale price, ready he had proved his capacity to raise that amount at all material times. Not even a suggestion was made to the plaintiff that he was heavily indebted, or was not in a position to raise the balance of the sale price at the relevant time.

(47) The 1st defendant in her evidence stated that the plaintiff committed breach of the contract, because he did not pay the sum of rs. 8,000 within the time stipulated. It is very significant to note that she did not deny his capacity to pay the balance of the sale price. Even d. W. 2 in his chief - examination had not stated that the plaintiff was not in a position to raise the balance of the sale price after paying them rs. 10,000. His evidence in cross - examination is very revealing. He said, prior to april, 1958, he had no acquaintance with the plaintiff, and that he came to his house in moparru, in april, 1958, when they talked about the sale of the lane he further deposed that he did not enquire about the financial status of the plaintiff.

(48) He had not deposed that the 1st defendant was indebted. He only stated that he did not know his financial means. He had to admit that the plaintiff's house at tenali was worth rs. 40,000. Thus d. W. 2 could not deny the solvency or capacity of the plaintiff to raise the money, or that he was ready and willing to pay the balance of the sale price. Regarding the deposit of the balance of the sale price in the andhra bank, the evidence of d. W. 2 is that he did not know whether the plaintiff deposited any amount in that bank.

(49) The 2nd defendant examined as d. W. 7 did not deny the capacity of the plaintiff to perform his part of the contract after the payment of rs. 10,000. Evidently, to rebut the plaintiff's evidence that defendant 2 brought the 1st defendant from nizamal ad for execution of the sale deed, the 2nd defendant in his cross - examination stated that he did not remember whether he was in those parts or not in may, 1961, and that he did not remember whether defendant 1 came to moparru in may, 1961, that he had no knowledge of the plaintiff purchasing the stamps or depositing the amount in may, 1961, in the bank, and that he did not go to nizamabad and bring d - 1 to tenali. This evidence of the witness is a vain attempt to support their case. He was giving evidence in 1968, and there should not have been any difficulty for. Him to remember whether or not he was in guntur district in his village or tenali in may, 1961. As already seen, there is unimpeachable evidence that the plaintiff purchased stamps of the value of rs. 2,400 and also kept in bank rs. 21,500 ready. The plaintiff's evidence is consistent with the documentary evidence, viz. , stamp papers and the bank deposit receipts and the pass book. We also accept his testimony that the 1st defendant also came from nizamabad for the purpose, but that she declined to execute the sale - deed because of differences with defendant 2 referred to above. We find that not only did the plaintiff keep cash of rs. 21,500 ready from 24th may, 1961 till 1st july, 1961, when evidently the first defendant refused to execute the sale - deed, but even otherwise, he had the capacity to raise that amount at all relevant times till the date of hearing, and is entitled to specific performance.

(50) Sri bhujanga rao, the learned counsel for the 1st respondent, argued on the strength of the decision of the supreme court in garikapati veerayya v. Nannapaneni subbayya chowdary and others, (1966) 2 s. C. J. 789 that on the pleadings the evidence relating to capacity to raise the money ought not to be considered but it does not appeal to us. He averred in the plaint and also deposed that he had always been ready and willing to perform his part of the contract, which would mean that he had the required capacity to raise the money at all relevant times, and also adduced evidence to that effect in addition to proving the deposit of rs. 21,500. Therefore, the evidence relating to readiness and willingness, apart from the fact of deposit in the bank must be considered. The finding of the learned subordinate judge that because on the date of the suit there was to the credit of the plaintiff only rs. 11,000 and odd, the plaintiff was not ready to perform the contract on the date of hearing, is unsustainable.

(51) Sri venkatappayya sastry, the learned counsel for the 2nd defendant, then contended that exhibit a - 1 and exhibit b - 3 did not specify which property of d - 2 had to be given as security, and therefore, it cannot be specifically enforced under section 21 (c). It was submitted that under section 29 of the contract act, since the meaning of that clause in the contract is not certain or capable of being made certain, it is void. He placed reliance on section 93 of the evidence act, and argued that since on its face, the clause is ambiguous and defective evidence cannot be let in, to give the meaning or supply the defects, and also cited some authorities. It is not necessary for us to consider the validity of this contention as sri subbarao, the learned counsel for the appellant stated that he was instructed by his client to say that he does not press for a decree for specific performance in respect of the security clause but will be content with decree only against the 1st defendant. He argued that such a decree could be granted under section 16 of the specific relief act. But sri bhujanga rao stated that section 16 has no application to the present case, as the contracts are not severable. He submitted that registered notices were issued to both the defendants, the suit was instituted against both, and the plaintiff prayed for a decree against both of them in the trial court as well as in appeal, and therefore, the plaintiff cannot be permitted to exercise the option at this stage. Section 16 of the specific relief act, 1877, which is reproduced in identical terms as section 12 (4) of the specific relief act, 1960, is in the following terms : -

"when a part of a contract which, taken by itself, can and ought to be specifically performed, stands on a separate and independent footing from another part of the same contract which cannot or ought not to be specifically performed the court may direct specific performance of the former part."

(52) If a contract consists of several parts which are separate from and independent of one another, and some of which cannot and ought not to be performed, such part or parts as can and ought to be performed may alone be specifically enforced. Such a contract, though nominally, is actually divisible, and when the court enforces a part of the contract, it is really enforcing the entire and complete contract. Of course, the question whether a contract is divisible or indivisible, is one of construction, depending on the nature and terms of each contract.

(53) The question, therefore for consideration, is whether the contract in so far as it relates to the covenant for giving security by d - 2 stands on a separate footing from the covenant of d - 1 to execute the sale deed. As we have already pointed out, the covenant of d - 1 to execute the sale - deed stands on a separate and independent footing from the covenant of d - 2 to furnish security, and can and ought to be specifically enforced, even assuming that the covenant by d - 2 cannot be performed. Exhibit a - 1 expressly recited that the land belongs to the 1st defendant, that she alone was entitled to the sale price, and that the 2nd defendant merely joined it as he was required to give security, and is not entitled to the sale consideration of rs. 30,000. The two covenants are distinct and separate. The 1st defendant alone, the owner of the property, was entitled to receive the entire consideration, and to execute the sale deed. The 2nd defendant joined the agreement only because he agreed to furnish security for the sale price. The two contracts are clearly severable, and therefore there can be no objection to the contract relating to the execution of sale - deed being specifically enforced against the 1st defendant. That the two contracts are severable is also clear from the evidence in the case. The plaintiff deposed that he learnt through d. W. 2 that d. 1 intended to sell her land, and he asked for security, as one chandrayya said that there was some dispute with respect to the land. D. W. 2 told him that d - 2 would furnish his property as security. P. W. 2 deposed that the understanding was that a single document was to be executed by d - 1 and d - 2 including therein the security of d - 2's property, and that such an arrangement was made to avoid stamp for separate security bond.

(54) The 1st defendant in her evidence stated that she was always ready and willing to perform the contract, though her complaint was that it was the plaintiff that committed breach of the contract, and therefore became disentitled. She deposed that she did not know whether there was any dispute with respect to her mother's title to the suit land, and that she thought that she had indisputable title to it. Her father - in - law (d. W. 2) did not tell her that the plaintiff had asked for security, and that the property of d - 2 could be furnished as security. She also made the significant statement that she did not ask d - 2 to give his property as security. The evidence of d. W. 2 is that there was no talk as to which property and what extent of the property of d - 2 was to be furnished as security. In cross - examination he stated that the plaintiff asked for security, as, according to him, d - 1's title to suit land was defective. The scribe had with him the title deeds for the suit land, as he happened to write the contract of sale in respect of a portion of that land. He seemed to have informed the plaintiff that d - 1's title was questionable, and the plaintiff asked for security two days before the contract. The witness said that he would get the security furnished by d - 2. This evidence makes it manifest that the question of security did not crop up at all till after d. W. 2 returned from nizamabad after fixing the price of rs. 3,000 per acre with his daughter - in - law, and on his own responsibility he agreed to prevail upon d - 2 to give security for that amount. That is also perhaps the reason why according to the plaintiff the 1st defendant was willing to execute the sale - deed, provided he did not insist upon the security bond.

(55) The evidence thus establishes that the contract relating to furnishing of security is clearly severable from the contract to execute the sale - deed, and that security was only agreed to be furnished for the satisfaction of the plaintiff. He is now willing to waive it, evidently because he has now no doubts about the 1st defendant's title to the suit property. In these circumstances, section 16 can be invoked, and decree for specific performance of the contract'relating to the'execution of the sale - deed by the 1st defendant granted. The suit is therefore, decreed against the 1st defendant, and is dismissed as against the and defendant.

(56) Since the suit for specific performance is being decreed, there is no question of the plaintiff being entitled to an alternative decree for damages. We have already found that the sum of rs. 10,000 was received by the 2nd defendant on behalf of the 1st defendant.

(57) In the result, the decree of the court below is set aside, the appeal is allowed, and the suit is decreed as follows : (1) the plaintiff shall deposit into court within two months from to - day the balance of the sale price with interest due as per the terms of exhibit a - 1 after giving credit to the sums of rs. 2,000 and rs. 10,000 already paid after giving notice of the same to the 1st defendant. (a) within one month of such notice, the 1st defendant shall execute the sale deed in respect of the suit property as per the terms and conditions of exhibit a - 1. The 1st defendant will execute the sale - deed on the stamp papers, exhibit a - 6, or new stamp papers in lieu thereof to be supplied by the plaintiff, and also register it at the plaintiff's expense. (3) if the 1st defendant commits default in executing the sale - deed, the plaintiff shall have the sale - deed executed in the aforesaid manner through court. (4) the suit as against the 2nd defendant is dismissed. (5) the appellant shall have his costs here and in the court below from the 1st defendant. (6) the 2nd defendant shall bear his costs here as well as in the court below appeal allowed; suit decreed against d - 1.

Kilaru Venkatasubbayya v. Kalluri Padmalayamba And Another

Structured Summary of the Judgment

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant (Plaintiff) / Counsel for Appellant

1st Defendant (and her counsel)

2nd Defendant (and his counsel)

Table of Precedents Cited

Court's Reasoning and Analysis

1. Construction of the Agreement and whether time was "of the essence"

2. Authority to receive payments, acquiescence and waiver

3. Readiness and willingness to perform (plaintiff's capacity)

4. Severability of the security covenant and scope of specific enforcement

5. Credibility findings and ultimate relief

Holding and Implications

Kilaru Venkatasubbayya v. Kalluri Padmalayamba And Another

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