Subba Rao, C.J.This is a Plaintiffs appeal against the decree and judgment of the Court of the Subordinate Judge of Bapatla in O.S. No. 66 of 1949, a suit filed by the Appellants for specific performance of a contract, dated 4th December 1947, executed by the 1st Defendant in favour of the 1st Plaintiff.

2. The undisputed facts may be briefly stated. The plaint schedule property is of the extent of 6 acres. Tins land along with Ors. was originally owned by Upadrashta family. Upadrashta Ramayya.s wile Vcenkata Lakshmamma and Upadrashta Venkatarama Sastri executed a mortgage in respect of (50 acres, including the suit land, in favour of the 2nd Defendant under Ex. B-7, dated 26th March 1928. The mortgagors from time to time sold away the properties to third parties and a balance of 11 acres remained in Venkatarama Sastris hands in the year 1939. In execution of a decree against Venkata-rama Sastri obtained by the 1st Defendant in O. S. No. 213 of 1930, he attached the said extent of 11 acres and brought them to sale. Even those 11 acres were nominally sold in the name of Venkatarama Sastris wife and daughter. They filed claim petitions and they were dismissed.

When they filed suits to set aside the claim orders, they were also dismissed, for default. The said extent was purchased in Court sale in the name of Garikapati Raghavayya. Exhibit B-l, dated 7th December 1942, is the sale certificate. Under Ex. B-2, dated 29th October 1945, Garikapati Raghavayya sold the plaint schedule property to the 1st Defendant for a sum of Rs. 2,445. Tire sale-deed contains a recital that the vendor would be liable for any loss that might be sustained by the vendee, if any defeet was noticed in the title of Venkatarama Sastri, or if any decision was passed at a future date that any alienations effected by him prior to the attachment would be binding on the auction purchaser. Raghavayya also sold 1 acre and odd out of the 11 acres purchased by him in Court sale under Ex. A-4, dated 24th June 1944, to Upadrashta Venkayya and Ors. . On the same date, the mortgagee executed, Ex. A-12 in favour of the purchasers releasing the, said extent from the mortgage. It is recited therein that, as regards the amount due to him under the Firtgage deed, he shall recover the same from the property other than the property released thereunder. Exhibit A-4 was attested by the 1st Defendant. Venkatarama Sastri also filed affidavits in the claim suits to the effect that the mortgage was subsisting.

It is in evidence, though there is no positive proof, that Venkatarama Saslri also filed contradictory statements stating in some other connection that the mortgage was discharged. On 4th December 1917, the 1st Defendant executed the contract of sale Kx, A-1, in favour of the 1st Plaintiff, agreeing to sell the plaint schedule extent of 6 acres for a sum of Rs. 11,400. Exhibit A-l recites that Rs. 1,500 was paid to the 1st Defendant as an advance on the dale of Ex. A-l and the property was put in. possession of the 1st Plaintiff. It also contains a statement that, if; in respect of the said property any dispute arises from anyone, the vendor shall settle it at his own expense. The balance of the amount was agreed lo be paid within a month of the contract and in default it would carry interest at the rate of Re. 0-8-4 per cent, per mensem. Exhibit A-l was written by D.W. 2 and attested by P.W. 4. The endorsement on Ex. A-l shows that, on 14th January 1948, the 1st Plaintiff paid a sum of Rs. 2,000 and, on 2nd February 1948, a sum of Rs. 1,000 to Veerayya towards the consideration amount.

3. From 2nd February 1948, till 16th September 1948, there is no documentary evidence to show any progress in the matter of the implementation of the contract. On 16th September 1948, the 1st Plaintiff entered into a contract of sale Ex. A-14 in favour of the 2nd Plaintiff agreeing lo sell the plaint schedule property to him. On 3rd October 1948, the 1st Defendant gave a wire to 1st Plaintiff informing him that, if the balance of the amount was not paid on or before 4th October 1918, lie would file a suit for specific performance. On 1.3th October 1948, the 1st Plaintiff issued a notice Ex. A-2 to the 1st Defendant. Therein, he asked the 1st Defendant to show him the documents of title and also vouchers to prove that the mortgage was discharged.

The 1st Defendant was also informed that the 1st Plaintiff was ready and willing to perform his part of the contract and that, if, within. 15 days of, the receipt of the notice the 1st Defendant did not show the 1st Plaintiff the documents of title and the vouchers showing the discharge of the mortgage, he would not be liable to pay interest from that date. On 22nd October 1948, the 1st Defendant sent a reply to the 1st Plaintiff wherein he called upon him to fulfil the agreement wilhin a week by paying the balance of the purchase money and takes a conveyance and intimating that otherwise the contract would stand rescinded. On 10th November 1948, the 1st Defendant issued a notice Ex. B-5 to the 1st Plaintiff wherein he reminded him of the previous letter and informed him that, as he did not comply with the r requirements of the notice within the time given, the agreement became cancelled.

Exhibit A-3, dated 24th November 1948, is the reply notice issued by the 1st Plaintiff lo the 1st Defendant, wherein he again reiterated his complaint Majjainst the conduct of the 1st Defendant. He point-ed out that the 1st Defendant failed to show the sale certificate and also the vouchers to show that the mortgage was discharged. He also informed him that the balance of the consideration of Rs. 7,290-7-6 had been deposited in the Guntur District Central Bank, lie called upon him to execute a sale-deed and receive the money. Exhibit A-13, dated 24th November 1948, is the receipt for Rs. 7,290-7-6 given by the District Co-operative Bank, Tenali, to B. Ramamurthi on behalf of the 1st Plaintiff.

The 1st Defendant again issued a notice Ex. B-6, dated 26th December 1948, to the 1st Plaintiff, wherein he informed him that, on 4th December 1917, he agreed only lo sell him the plaint schedule property without personal liability and without warranty of title and that, as the terms insisted on by the 1st Plaintiff, viz., to show title deeds and to prove that the encumbrances have been discharged were illegal, the agreement had become cancelled. The 1st and the 2nd Plaintiffs filed Section 66 of 1949 on the file of the Court of the Subordinate Judge for specific performance of the contract to sell.

4. The 1st Defendant reiterated his defence to the- suit, which was disclosed in the notice issued by him. The 2nd Defendant mortgagee filed a written statement wherein he did not admit that the mortgage was discharged but he only pleaded that he was not a necessary party and that the amount duo to him could not be ascertained in that suit.

5. The learned Subordinate Judge held, on the evidence, that the 1st Plaintiff was not ready and willing to perform his part of the contract, inasmuch as he had no money till the 2nd Plaintiff supplied him with cash and that the recession of the contract was valid. In the result, he dismissed the suit. Hence, the appeal.

6. The learned Counsel for the Appellants contended that the 1st Plaintiff had cash on hand to pay the 1st Defendant and that, in any view, he was in a position to meet the demand by raising the amount by sale or otherwise, as he had as a matter of fact done on 16th September 1948. lie further argued that his client was well within his rights before plunging into an irrevocable sale transaction, to demand and get satisfaction from the 1st Defendant about die proof of his title & the fact of discharge of the mortgage over the property agreed to be conveyed, whereas on the side of the Defendants at first it was suggested, though not seriously pressed, that though the 1st Plaintiff was within Ins rights in asking for proof of title and the discharge of the mortgage, the 1st Defendant had the right to fix unilaterally a time-limit and to rescind the contract on the ground that the time-limit was exceeded.

But Mr. Bhimasankaram finally did not take up this extreme position but submitted that, though time was not the essence of the contract, as the 1st Plaintiff, by making untenable demands, was responsible for unreasonable delay in performing his part of the contract the 1st Defendant, the other party to the contract, was entitled to fix time and make it the essence of the contract and to rescind the contract as, within the time so fixed, the 1st Plaintiff did not complete his part of the contract. Before I consider the evidence, it will be convenient at this stage to notice some of the leading decisions to ascertain the principle underlying the proposition that the other party to the contract under certain circumstances has a right to make time the essence of the contract.

7. The loading case on the subject is that of Stickney v. Keeble, 1915 AC 386 (A). There, the Law-Lords ruled that where in a contract for sale of land, the time fixed for completion is not made of the essence of the contract, but the vendor has been guilty of unnecessary delay, the purchaser may servo upon the vendor a notice limiting a time at the expiration of which he would treat the contract as at an end. Lord Parker of Waddington has .stated the principles underlying the said proposition succinctly in his speech. His Lordship, alter pointing out that, in a contract for the sale and purchase of real estate, the time fixed by the parties for completion has at law always been regarded as essential, stated the principle as follows:

In such cases, however, equity having a concurrent jurisdiction did not look upon, the stipulation as to time in precisely the same light. Where it could do so without injustice to the contracting parties, it decreed specific performance, notwithstanding failure to observe the time fixed by the contract for completion and as an incident of specific performance relieved the party in default by restraining proceedings at law based on such failure.

This is really all that is meant by and involved in the maxim that in equity the time fixed for completion is not of the essence of the contract, but this maxim never had any application to cases in which the stipulation as to time could not be disregarded without injustice to the parties, when for example the parties, for reasons best known to themselves had stipulated that the time fixed should be essential, or where there was .something in the nature of the property or the surrounding circumstances which would render it inequitable to treat it as a non-essential term of the contract.

It should be observed, too, that it was only for the purposes of granting specific performance that equity in this class of case interfered with I ho remedy at law.

8. At p. 418, Lord Parker proceeds to say:

Although the vendors conduct may not, under the circumstances, be alone sufficient to disentitle him to specific performance, yet, if he has been guilty of unnecessary delay, and the purchaser has served him with a notice limiting a time at the expiration of which he will treat the contract at an end, equity "will not, after the expiration of such time, provided it is a reasonable time, enforce specific performance or restrain an action at law.

Lord Parmoor states the law in similar terms at p. 423:

The question is whether the Respondents committed default in the performance of their contract at a later date by failure to comply with the notice of 30th January 1912, and thereby became liable to repay the deposit. The answer to this question depends on whether the Respondents had been guilty of delay when the notice was given and whether the time fixed in the notice for completion was in itself reasonable.

A neat summary of the above-said proposition is found in Sugden on Vendors (14th edn., p. 268), where the learned author says:

Where time is not made of the essence of a contract by the contract itself, although a day for performance is named, of course, neither party can strictly make it so after the contract; but if either party is guilty of delay, a distinct written notice by the other that he shall consider the contract at an end if it be not completed within a reasonable time to be named, would be treated in equity as binding on the party to whom it is given; but a reasonable time must be allowed.

9. The Judicial Committee in Jamshed Khoda-ram Irani v. Burjorji Dhunjibhai, ILR 40 Bom 289: ALU 1915 PC 83(B), also considered this aspect. There, by an agreement, dated 8th July 1911, the Defendant agreed to sell his interest in certain land, which he held on lease from the Secretary of State for India to the Plaintiff for Rs. 85,000. There was a clause to the effect that, if the purchaser did not pay the amount within the fixed period, he should forfeit his right to the earnest moneys and the vendor should be at liberty to resell the property. On 3rd October 1911, requisition as to title were made by the Appellant. The Respondent did not comply with the requisitions but on 6th October 1911, he asserted a right to put an end to the contract on the ground that the time was of its essence and claimed to be entitled to the deposit of Rs. 4,000 as the Appellant had failed to complete his purchase within the time fixed.

The Plaintiff, who agreed to purchase the property, filed the suit for specific performance. The judicial Committee held that time was mot of the essence of the contract. Viscount Haldane, who delivered the judgment, pointed out that Section 55 of the Indian Contract Act did not lay down any principle, which differed from those that obtained in England as regards contracts for the sale of land by which enmity 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 that it should lake place within a reasonable time. At p. 298 (of 1LR Bom): (at p. 85 of AIR), their Lordships observed:

Prima facie, equity treats the importance of such time limits as being subordinate to the main purpose of the parties and it will enjoin specific performance notwithstanding that from the point of view of a Court of Law, the contract has not been literally performed by the Plaintiff as regards the time-limit specified. This is merely an illustration of die general principle of disregarding the letter for the substance which Courts of equity apply, when, for instance, they decree specific performance with compensation for a non-essential deficiency in subject-matter. But equity will not assist where there has been undue delay on the part of one party to the contract and the other has given him reasonable notice that he must complete within a definite time. Nor will it exercise its jurisdiction when the character of the property or other circumstances would render such exercise likely to result in injustice............. Equity will further infer an intention that time should be of the essence from what has passed between the parties prior to the signing of the contract.........but in such a case, the intention must appear from what has passed prior to the contract, the construction of which cannot be affected in the contemplation of equity by what takes place after it has once been entered into.

It is unnecessary to multiply cases. It would be enough if the summary of the law, as stated in Halsburys Laws of England, second edn., vol. 31, is extracted. At p. 403, the learned author says:

Even though time has nut been originally of the essence of the contract, it may be made so by notice given by one party, provided that the other party has been guilty of such delay as can be regarded as gross, vexatious or unnecessary. Snob notice must be clear and unequivocal." At p. 405, it is stated:

Such delay as has been under consideration does not, however, bar a claim to specific performance if the Plaintiff has been in substantial possession of the benefits under the contract, and is merely claiming the completion of the legal estate, or, if the delay is due to negotiations between the parties on the question in dispute, nor can the benefit of delay be claimed by the party causing it by reason of improper objections taken by him.

10. From the aforesaid consideration of the cases and the text-books, the law may be summarised. Though the parties to a contract may fix a time-limit for the performance of the contract, equity looks at the substance rather than the form and, by the application of an equitable canon of construction, holds that, though a time-limit is fixed, the parties intended that it should be performed within a reasonable time. The interpretation has now become crystallised into the maxim that time is not the essence of the contract. But equity will not allow this construction to cause prejudice to the other party, for if it does so, it defeats its own purpose. If the parties agree in specific terms that time should be the essence of the contract, or the nature of the property and the surrounding circumstances clearly indicate that it was their intention, this liberal interpretation is never given effect to. There is Anr. limitation to the said maxim. This can be invoked only in the exercise of equity jurisdiction, such as a suit for specific performance, the same principles have been applied in England even alter the passing of the Judicature Act of 187:5. The decided Indian cases applied the same maxim to similar situations in India.

If there be an unreasonable delay on the part of one of the contracting parties and the other party gives a notice fixing a reasonable time for the performance of the contract and rescinds the contract on the ground that it was not performed within the time so prescribed, Courts of equity or Courts exercising equity jurisdiction do not help the person in default. It is because the term, as interpreted in equity,, viz., that the contract should be performed within a reasonable time, has been broken. This may also be because equity will not help a person to the prejudice of the other. It is also said that, if there is unreasonable delay, the other party must give notice and make time the essence of the contract. It is commonplace that a party to a contract cannot unilaterally fix a term. If time is not the essence of tho contract, one of the parties cannot say that time is the essence of the contract. To illustrate, a time-limit is fixed under the contract for the sale of a land. Time, in such cases, is not the essence of the contract. A week or ten days thereafter, one of the parties cannot fix the time-limit and make it an essence of the contract, so as to enable him to put an end to the contract on the ground that the contract was not performed within the time so fixed.

But, if there is unreasonable delay in the performance of the contract, though time is not the essence of the contract, the terms interpreted in equity is broken, in which case the other party is given liberty to bring that fact to the notice of the other side and to give him a reasonable time within which to perform the contract. This is called loosely by cases that the other party has made time the essence of the contract but, in the ultimate analysis, it is for the Court to ascertain from the facts of each case whether there is unreasonable delay on the part of the party, which enables the other to give him notice fixing the time within which the contract was to be performed.

The Court will consider ah the material circumstances, such as the terms of the contract, the nature of the property, the conduct of both parties, die prejudice caused to the one or the other and similar other circumstances in coming to the conclusion whether there was unreasonable delay in the performance of the contract. It will also consider whether the time fixed by the other party is also reasonable having regard to the circumstances of each case. To put it differently, though the other party to the contract has the right or liberty to issue a notice fixing the time-limit, it is for the Court to say on the evidence whether the time fixed is reasonable, having regard to all the circumstances. With this background, I shall now proceed to consider the evidence. Before doing so, some of the broad features, as disclosed in the narration of facts given by me, may be recapitulated.

11. The contract was entered into on 4th December 1947. The consideration amount was Rs. 11,400. Out of that amount, Rs. 4,500 was paid by 2nd February 1948. The 1st Plaintiff was put in possession of the property and the 1st Defendant was getting interest on the balance of the amount due to him. Though a months time was fixed for the performance of the contract, neither of the parties adhered to it, Indeed, the delivery of possession and the stipulation for the payment of interest indicate that they did not intend that the contract should be performed within one month. But till 1st October 1948, when a telegram was issued demanding performance, there is nothing on record to disclose that the 1st Defendant insisted upon the payment of the balance immediately and that the 1st Plaintiff was putting obstacles in the way.

On 16th September 1948, i.e., 15 days prior to the telegram, the 1st Plaintiff entered into an agreement to sell the property to the 2nd Plaintiff and got the money ready. Disputes arose between the parties only after the issue of Ex. B-3. The 1st Plaintiff demanded that the title-deeds should be shown to him and that the discharge of the mortgage should be proved. What is more reasonable and more prudent than for an intending purchaser to ask the vendor, before parting with thousands of rupees and taking a conveyance, to show him the title-deeds and also to establish that the mortgage on the property, was discharged It cannot be denied that the intending purchaser is within his rights and is legally entitled to make such a demand. In order to prove title to the property, the vendor must prove that the mortgage has been cleared off, for the purchaser is entitled to a good and marketable title. He cannot be compelled to accept a title without investigation.

If authority is required, it is found in Madurai Chetty v. Babu Saheb, 52 Ind Cas 971 : AIU 1020 Mad 859 (C). There one Ellanimal entered into an agreement to sell her house to Oosman Sail and Co., for consideration.

One of the conditions was that the sale was .subject to good title. Before the date asked for the completion of the .sale, the purchasers discovered that the vendors grandson, in whose favour the vendor has created an estate in remainder, had, prior to the date of the agreement created mortgages on the house. On the vendors requiring the purchasers to complete the purchase, the latter replied that they deferred performance pending an enquiry into the mortgages. Thereupon, the vendor rescinded the contract. The learned Judges held that the vendor was not justified in rescinding the contract, or in calling on the purchasers to complete the contract within a stated time without: further investigation. In dealing with the question raised, the learned Judges observed at p. 974 (of Ind Cas): (at p. 861 of AIR):

If the title is found to be doubted so as to require investigation he cannot be compelled either to rescind the contract or to accept without investigation the doubtful title. He may, it is well settled in England, sue for specific performance of the contract and ask for an enquiry into the title by the result of which he will be bound.

This authority clearly shows that a purchaser is entitled to ask for information to satisfy him on the question of title as well as on the question of discharge of the mortgages. Instead of giving the information asked for, or, getting a release deed from the mortgagee or any voucher or hitter from lulu indicating that the mortgage was satisfied the 1st Defendant took the attitude that the 1st Plaintiff was not entitled to ask for any particulars, or, for evidence of the discharge of the mortgage. If there; is nothing more on the record, it is a clear case where specific performance should be ordered. Particularly as the 1st Plaintiff is not now insisting upon the discharge of the mortgage. But, it is said that the 1st Plaintiff had knowledge of the existence of the mortgage and that he also waived his right to demand proof of the discharge of the mortgage: or particulars in regard to the vendors title.

12. In the written statement, the case of the, 1st Defendant is stated thus:

The root of title of this Defendant is thus the Court-auction-purchase, of Raghavayya. Raghavayya had no warranty of title, being a Court auction purchaser. For that reason, in the, sale-deed, which he executed in favour of this Defendant, no covenant of title was incorporated. These facts were fully disclosed to the Plaintiff at the lime of the contract of sale itself and he entered into the contract without insisting upon any further proof of a marketable title .......... The Plaintiff must be deemed both expressly and impliedly to have waived his right to further enquiry into the title and to have undertaken to such title as this Defendant had, protecting himself by the usual covenants.

In regard to the mortgage, it is stated:

These facts were also within the knowledge of the Plaintiff and there was absolutely no question of this Defendant paying up the entire mortgage or of producing any evidence in respect of its discharge.

The sale was in fact subject to any contingent claims in connection with the disputed mortgage and there was to be no obligation on the part of this Defendant to meet any such claim. At the most, while this Defendant might be called" upon to meet any claim, which the 2nd Defendant might be able successfully to set up under that mortgage as and when such claim materialises, this Defendant could not be called upon to produce any evidence in regard to the discharge of that mortgage.

13. In regard to title, there is no allegation that the 1st Plaintiff agreed not to ask for proof of the marketable title. What is stated is that he did not insist upon any further proof of the marketable title and, therefore, he must be decreed to have waived his right for further enquiry. Nor is there any recital that there is an express undertaking by the 1st Plaintiff to waive his right to ask for particulars, or, for vouchers to evidence the discharge of the mortgage. Indeed, the specific case is that it was purchased subject to the mortgage. The averments in the written statement in regard to title as well as the mortgage are not supported by Ex. A-I. In regard to title, there is a clear covenant in Ex. A-l to the effect that, if in respect of the property any dispute arises from anyone, the 1st Defendant shall settle it at his own expense. Exhibit B-2, the sale-deed, executed by Haghavayya in favour of the 1st Defendant also contains a covenant for title. It reads:

I shall be liable for any loss that may be sustained by you if any defect is noticed in the title of Upadrashta Venkatarama Sastry or if any decision is passed at a future date that any alienations effected by him prior to the attachment would be binding on the auction-purchaser.

Nor does Ex. A-1 disclose that the property was intended to be purchased subject to. the mortgage. The allegations in the written statement that in Ragha vayyas sale-deed there is no covenant of title and that the agreement to sell was subject to the mortgage are not, therefore, correct statements of facts.

14. In the evidence, an attempt is made to establish that there was an express oral agreement on the part of the 1st Plaintiff waiving his right. D.W. 1 is the 1st Defendant. In the chief examination, he says that, at the time of Ex. A-l, they did not say that they wanted to investigate his title to the property. Mere silence in the circumstances cannot amount to waiver on the part of the 1st Plaintiff. He admits that the 2nd Defendant was making contradictory .statements as regards the discharge of the mortgage and that he has no document to show that the mortgage was discharged. lie also admits that the encumbrance certificate showed the existence of the mortgage. In cross-examination he states that he did not tell the 1st Plaintiff about the Court sale and his purchase and about the discharge of the mortgage, though he adds that he told Venkatappayya and that he assured the 1st Plaintiff that he knew all about the property.

This evidence obviously is interested and, even if accepted, would not advance his case, for, according to him, he did not tell anything to the 1st Plaintiff and there is nothing in the evidence to show that the 1st Plaintiff waived his right. D.W. 2 is the writer of Ex. A-l. He says in chief-examination that the 1st Plaintiff asked whether there were any disputes about the land and that Venkatappayya said he knew all about the land and there was no such dispute and even if there should be any, the clause about the 1st Defendants liability for such disputes would be sufficient. This evidence also does not support the case of waiver. P.W. 4 is the said Vonkatappayya, who brought about the transaction.

He clearly says in his evidence that the 1st Defendant had not brought any document at the time of the agreement but said he would bring and show them at the time of the sale-deed, that the 1st Plaintiff asked about the mortgage and the 1st Defendant said it was discharged and he would show those documents also at the time of the sale-deed and that it was not true that he told the 1st Plaintiff that he knew all about the property and there was no need to see documents. In cross-examination, he further adds that, about the mortgage the 1st Defendant said that he would show documents to prove discharge and that he further said that he would get a document from the 2nd Defendant releasing the land from his mortgage. There is nothing in his cross-examination to discredit this witness. He is a respectable witness, who even according to the 1st Defendant, took part in settling his affairs. His evidence also is consistent with probabilities. I have no hesitation to accept his evidence in preference to that of the interested testimony of the 1st Defendant.

15. P.W. 5 supports the version given by Venkatappayya. He says that lie did not know the particulars of the mortgage but the 1st Defendant said that he would get him a release. This evidence is consistent with probabilities. F. W. 5 is not a close relative of the 1st Defendant and there is no reason why he should enter into an agreement so detrimental to his interests. If it was a fact that lie waived his right to a clear title and to get other particulars from the vendor, such a condition would have found a place in the agreement itself. Indeed, 1. W. 3, Anr. purchaser from Raghavuyyu, got a release deed Exhibit A-12 from the mortgagee. The existence of this claim of the mortgagee was, therefore, well known to all the parties.

It is unlikely that the 1st Plaintiff would have been so fool-hardy as to have agreed to purchase property without proof of its discharge. I would, therefore, hold on the evidence that it has not been established that the 1st Plaintiff agreed to waive his right to ask for a good title or to ask for vouchers or other evidence to prove discharge; of the mortgage. He was certainly within his rights when he demanded proof of title and evidence of discharge of the mortgage. 1st Defendant was not justified in refusing the demand in giving a notice fixing a short time of one week for performing the contract. I am, therefore, clearly of opinion, that the learned Subordinate Judge was wrong in holding that the 1st Defendant was justified in rescinding the contract.

16. Then, there remains the question whether the 1st Plaintiff was ready and willing to perform his part of the contract. The learned Judge held that he was not in a position to pay the amount till, as a matter of fact, he sold the property to the 2nd Plaintiff and till he received the consideration from him. It is a settled principle of law that a party to a contract in a suit for specific performance must establish that he has been ready and willing to perform his part of the contract. But that does not mean that the vendee must show that, throughout the period from the date of the contract up to the date of the plaint, he has got the specific amount representing the consideration either in the bank or in his house. It will be enough if he shows that he has been in a position to perform his part of the contract. If the vendee is a man of property, he can raise money by mortgage or sale. If he is a man of business, he can command credit. He may also show that he is in a position to borrow from Ors. . It will be an obvious case if he establishes that he has the specific amount throughout on hand.

17. The first Plaintiffs evidence discloses that he has land, that he has dealings with Venkateswara Rice Mill, that he was trading along with P.W. 2, and that he was running an oil mill in partnership with P. W. 2. His evidence is supported by the oral and documentary evidence adduced in the case. Exhibits A-5 and A-6 are the bills given to the 1st Plaintiff for the supply of paddy to the mills. Exhibits A-7(a) and A-7(b) are the entries in the day book showing the amounts paid by the mill to the 1st Plaintiff in respect of the said bills. Exhibit A-8 is the cash chitta of the mill and Exhibit A-9 is the-ledger. These documents show that the Plaintiff had transactions with the mill and that he was supplying paddy and receiving money from the mill.

Exhibits A-10 and A-ll are account books of P. W. 2 for the years 1947 and 1948. These documents show that the Plaintiff invested a sum of Rs. 16,000 in the mill and that he withdrew also large sums. The learned Judge scrutinized the accounts of the oil mill and also the Venkateswara Rice Mill and, came to the conclusion that by 10th February, 1948, the 1st Plaintiff might have had Rs. 3,000 in his hands and that, for the balance of Rs. 4,000, there was nothing to show that he had that money. The 1st Plaintiff, in his evidence, explains how he had other moneys also on hand, lie says that he sold his paddy, cart, bullocks and hay to Ors. and realised the balance. The learned Judge does not accept the evidence. But, in my view, the approach of the learned Judge is not correct.

18. In a case where the question is whether the consideration of a particular document is paid or not, it may be relevant to enquire whether on the date when the amount was paid, the buyer had that money on hand. But where the question is whether he was in a position to pay as in the present case, the enquiry should be whether he could, if he wanted, raise the money he required. The Judge found that he had Rs. 3,000 on hand. It is also admitted that he made ready the balance by 24th November, 1948. Can it be said that the 1st Plaintiff, who was a man of property and a businessman with dealings with third parties like P. W. 2 and oil mills could not; have raised the sum of Rs. 4,000 if he urgently required it P. W. 2, who supplied him with money at a later stage, might certainly have supplied him-even at an earlier stage. Even otherwise, on the evidence I am satisfied that the 1st Plaintiff was substantial enough to make ready the necessary amount if the occasion arose. I hold that the 1st Plaintiff was ready and willing to perform his part of the contract.

19. In the result, the decree of the lower Court is set aside and the appeal is allowed with costs throughout.

Umamaheswaram, J.

20. I have carefully perused the judgment prepared by My Lord, the Chief Justice;, and with great respect, I do not agree with his conclusion on fact and law. I shall therefore set out the material facts for a proper determination of the several questions arising for decision in the appeal.

21. Plaintiffs are the Appellants. They filed a suit for the specific performance of an agreement of sale entered into by the 1st Defendant in favour of the 1st Plaintiff on 4th December, 1.947. The 1st Defendant purchased the suit properly under Exhibit B-2 from Garikapati Raghavayya, the Court action purchaser, in O. S. No. 2.1.3 of 1930 on the file of the District Munsiis Court, Bapalla. The suit property originally belonged to Upadrashta Veukatarama Sastry and his brothers widow of jadavali Agraharam. Venkataraina Sastry owed money to the 1st Defendant and lie instituted (). S. No. 21:1 of 1950 on the IE of the District Munsis Court, Bapatla and obtained a decree, lie also got the properties of Venkataraina Sastry attached before judgment in 1930.

Veukatarama Sastry had created a simple mortgage, marked as Exhibit I. 7, on 20:h March, 1928, in favour of the 2nd dclendant J or a sum of Ks. 10,000 on the security of the suit lands and other lands measuring, in all, over ae. 094)0, Subsequent to the attachment before judgment, lie executed a further simple mortgage, marked as Exhibit B-8, on 12th April, 1931, for his. 2,000 in favour of the 2nd Defendant. In execution of the money decree in O. S. No. 231 of 1930, ae. 11,00 and odd including the suit properties, were sold and purchased by Gari-kapti Raghavayya on behalf of the decree-holder therein, i.e., the 1st Defendant herein, on 2nd February, 1942, the claim petition filed by Venkatarama Sastrys wife, Kamcswaramma, in E: A. No. 515 of 1939 having been dismissed on 31st July, 1939 (Vide Exhibit B-9).

The sale in favour of the auction-purchaser was ultimately confirmed on 7th. December, 1942 tod Raghavayya obtained possession through Court on 20th December, 1942. The troubles of the decree-holder, first Defendant, who purchased the property in the name of Raghavayya were not at an end, as Venkatarama Sastry got suits filed by his wife and daughter to set aside the orders passed on their claim petitions. P. W. 4, Goginoui Venkatappayya, was requested to intervene and settle the disputes between the first Defendant and Veukatarama Sastry and, in pursuance of his mediation, Ac. 1 00 and odd was conveyed under Exhibit A-4 in favour of Venkatarama Sastrys nephew and ac. 4-00 and odd re-conveyed to Venkataraina Sastry, with tho result that the first Defendant became the owner of the suit property measuring about ac. 6-00 and odd.

22. The first Defendant who belonged to a different village, i.e., Gudipudi Agraharam, was anxious to dispose of this property which he purchased in Court auction, and sought the heir) of P. W. 4. The contract of sale, Exhibit A-l, was entered into with the first Plaintiff at the instance of P. W. 4. Reference was pointedly made therein to the rights of the first Defendant acquired under the Court sale. The lands with the crop thereon were delivered to the first Plaintiff. The agreement specifically provided that the land was agreed to be sold without reference to measurements. There was also a specific covenant that, if in respect of the property, and disputes should arise from any one, the seller should settle them at his own expense.

An advance of Rs. 1,500 was paid on the day of agreement and the balance of Rs. 9,900 was agreed to be paid within a month and that, if the balance was not paid within that period, it should carry interest at 6 1/4 per cent, per annum. The first Plaintiff paid a sum of Rs. 2,000 on 14th January, 1948 and a sum of Rs. 1,000 on 2nd February, 1948, as is evidenced by Exhibits A-l and A-l-b. As the 1st Plaintiff did not pay the balance of sale consideration and obtain a conveyance from the 1st Defendant, the 1st Defendant dispatched a telegram, original of Exhibit 13-3, on 1st October, 1948, in the following terms:,.

Balance of sale price due to me under contract of sale, dated 4th December, 1947, in your favour by me has not been paid though demanded; willing ready to perform contract by in pay amount duo to me before 4th October, 1948, otherwise suit for specific performance.

The first Plaintiff who must have received the telegram, however, sent a registered notice, through a lawyer, to the first Defendant on 1.3lh October, 1948, marked as Exhibit A-2. He stated therein that the first Defendant did not show him the documents of title and produce the vouchers, evidencing the discharge of the mortgage and that he was ready and willing to fulfill his part of the agreement. In the notice, he also stated that he would not be liable to pay interest on the balance of the sale consideration, if the first Defendant did not complete the sale by producing the documents of title and vouchers showing the discharge of the mortgage. To this notice, the 1st Defendant sent a reply on 22nd October 1948, marked as Exhibit B-4. He stated therein that the sale certificate was shown to the first Plaintiff, that it was only after fully satisfying himself about the title and the mortgage that he entered into the contract and took possession of the suit properties and paid him, in all, a sum of Rs. 4,500.

He also stated, in unequivocal terms, that if the first Plaintiff should insist upon vouchers being produced to show that the mortgage was discharged, and insisted upon that unreasonable or impossible condition being performed, he would rescind the contract and return the advance to him. He also gave a weeks time for the payment of the balance of sale consideration and made time the essence of the contract. On 16th November, 1948, the first Defendant sent a further notice marked as Exhibit B-5, referring to his earlier notice Exhibit B-4, dated 22nd October, 1948, stating that as the first Plaintiff did not complete the contract within the time specified therein, the contract was no longer enforceable and that lie should deliver back possession of the land to him. Though, the notice was dispatched on 16th November, 1948, the first Plaintiff received it only on 20th November, 1948.

Meanwhile, ho purchased stamp papers for Rs. 840 and sent a reply, dated 24th November, 1948, stating that the first Defendant had no right to rescind the contract. He stated therein that the first Defendant was hound to convey the property free of encumbrance, and that he was the defaulter. He further stated that the first Defendant approached him and represented to him that he might purchase the stamps for executing the sale deed, that he accordingly purchased the stamp papers and that he deposited the balance: of sale consideration of Rs. 7,279-6-0 in tin; Guntur District Central Dank and that a proper sale deed might he executed in favour of Mareddi Subbaroddi, the second Plaintiff Symala Venkalareddy who purchased the land from him. The first Defendant, sent Exhibit B-6, dated 27th December, 1.948, in reply thereto.

23. The present soil for specific performance was instituted on 22nd April, 1949. The first Plaintiff prayed that as he assigned his rights under the suit contract in favour of the second Plaintiff, the decree for specific performance might be passed in favour of the second Plaintiff, lie also impleaded the mortgagee from Venkatarama Sastry, as the second etc- Defendant, and prayed that the amount due to him under the decree might be determined in this suit and that the amount due to him might be paid out of the sale consideration due by him to the first Defendant.

24. The first Defendant filed a written statement contending that the first Plaintiff was fully aware of his title and the mortgage in favour of the second Defendant, that the sale certificate was shown to him, that as he had not the necessary money to fulfill the terms of the contract, he insisted upon vouchers evidencing the discharge of the mortgage, that the demand was only a ruse to gain time and to cover up his default in fulfilling the contract, that he waived his rights regarding the further enquiry into the title, that the specific clause in the contract that he would settle all disputes at his own expense, was introduced to cover or meet any claim by the mortgagee, that. ho was entitled to make lime the essence of the contract under Ex. B-4, that he was entitled to rescind the contract and that no decree for specific performance should be passed in favour of the Plaintiffs.

25. The Subordinate, judge of Bapatla, in an elaborate and careful judgment, held that the first Plaintiff did not have the necessary money till 23rd November, 1948, to perform his part of the contract and that "in order to cover up this, he made unreasonable demands in Exhibits A-2 and A-3and that the first Defendant validly rescinded the contract and that the first Plaintiff was not entitled to a decree for specific performance. As the Plaintiffs, filed a memo, before him stating that they would take the properly without insisting on the first Defendant satisfying them about the discharge of the mortgage, he held that it was unnecessary to decide issue 3 as to whether the second Defendant, the mortgagee-, was a necessary party to the suit or not. He held that if the contract was enforceable, a decree for specific performance might be passed in favour of the second Plaintiff. In the result, he dismissed the suit with costs of the Defendants.

26. The questions that arise for consideration in the appeal are as follows:

1. Whether the first Plaintiff was ready and willing to perform the terms of the agreement of sale

2. Whether, in the circumstances of the case, the first Plaintiff was entitled to demand the production of the title deeds and the vouchers evidencing v. the discharge of the mortgage

3. Whether the demand was only a ruse in order to enable him to gain time to make up the balance of the sale consideration

4. Whether under Exhibit B-4 time was made the essence of the contract and the time granted by the first Defendant was not reasonable in the circumstances of the case

5. Whether the first Defendant was not entitled to rescind the contract by reason of the first Plaintiff making unreasonable or impossible demands relating to the discharge of the mortgage and

6. Whether, having regard to the undue delay and the particular facts of the case, the Plaintiffs are entitled to the discretionary relief of specific performance

27. I shall first deal with these questions in serialim. In order to obtain specific performance of a contract, the Plaintiff must first allege and then, if the matter is traversed and proved that he has performed all the conditions which under the contract he is bound to perform and that he has been ready and willing at all times, from the time of the contract down to the date of the suit to perform his part of the contract, Lord Blamesburgh in delivering the judgment of the Judicial Committee in Ardeshir Mama v. Flora Sassoon, ILR 52 Bom 597: AIR 1928 PC 208 (D) that though the matter of specific relief is governed in India by the terms of the Specific Belief Act, nevertheless as the Act is founded on the English law, it is permissible, on matters with which the Act does not deal specifically, to refer to the English Law. At page 619 (of ILR Bom): (at p. 216 of AIR) he observed as follows:

He had in that suit to allege, and if the fact was traversed he was required to prove a continuous readiness and willingness from the date of the contract to the time of the hearing, to perform tire contract on his part. Failure to make good that averment brought with it the inevitable dismissal of the suit.

In the present case, the Plaintiff alleged in his notices as also in paragraph 6 of the plaint that he "kept the balance of the sale price all along ready and as the first Defendant appeared to throw doubts even on this fact, the first Plaintiff deposited the balance of consideration money together with interest at the contract rate" on 24th November, 1948, in the District Co-operative Bank, Tenali. To the same effect, he deposed in the witness box. The first question therefore is, whether the first Plaintiff has established this fact and whether his oral evidence should be accepted

28. The case of the Plaintiff was not that he had the financial capacity to raise the money at any time and that it was not necessary for him to keep the money with him always and that he was in readiness to complete the contract. His .specific case was that he had the cash in readiness throughout. The first Defendant denied that he had the money ready and that he was delaying the completion of the sale as ho was unable to find the money. It is on those pleadings that the parties went to trial and evidence was adduced as to whether the Plaintiff had money in readiness or not. The Subordinate Judge discussed this question in paragraph 9 of the judgment and arrived at the finding that, till the second Plaintiff paid the money on 23rd November, 1948, under the contract entered into with him.

Exhibit A-14, the first Plaintiff did not have the necessary cash to perform his part of the contract and I agree with that conclusion.

29. As already stated, the contract was entered into on 4th December, 1947, for a sum of Rs. 11,400. An advance of only Rs. 1,500 was paid on that day. The first Plaintiff wanted one months time to pay the balance amount of Rs. 9,900 mid in the agreement it was provided that it was not so paid, it should carry interest at the rate of 6 1/4 per cent. per annum. It is therefore, clear that at the time of the contract, the first Plaintiff was not in a position to pay the entire amount and required time for payment. On 14th January, 1948, i.e., alter the expiry of the time stipulated in the contract, he paid Rs. 2,000 as evidenced by Exhibit A- 1(a). In his evidence, he deposed that by selling the crirps standing on the lands delivered to him under the agreement of sale Exhibit A-l, lie realised Us. 1,200 and borrowed the balance for making up the amount under Exhibit A-l(a). On 2nd February, 1918, he paid a further sum of Rs. 1,000 as evidenced by Exhibit A-l(b). He still required a further sum of Rs. 6,900 to complete the sale.

To prove that he had that amount ready, he examined P. W. 1, the Manager of a rice mill in Nidubrole. Exhibits A-5 and AG are the two bills given to the first Plaintiff for the supply of paddy to the mill. Exhibit A-5, dated 281 h January 1918, and A-6, dated 3rd February, 1928, were for Rs. 674-14-0 and Rs. 644-14-0 respectively. The accounts of the mill were produced and marked as Exhibits A-7 to A-9 and they show that, on the date of Exhibit A-2, dated 13th October, 1918, he owed to the mill Rs. 1,400 under the kutha and not that the mill owed any amount to him. On l.llh January, 1919, the katha shows that he still owed Rs. 287-6-0. I there-lore agree with the Subordinate Judge that the account books of the mill do not support the first Plaintiff that any money was duo to him from the mill or that ho could uiilise it for paying the, balance under the contract, Exhibit A I.

30. The first Plaintiff further examined P.W. 2 who produced his account books Exhibits A-10 and A-ll. Exhibit A-10 shows that the first Plaintiff invested over Rs. 16,000 in that milk The two entries relied on by the first Plaintiff, Exhibits A-10(a) and A-ll(a) show that he withdrew a sum of Rs. 3,000 on 17th December, 1917 and Anr. sum of Rs. 3,000 on 10th February, 1948. The first withdrawal was before the two endorsements of payments Exhibits A-l(a) and A-l(b). So it may be, that this sun) was utilised for making the two payments endorsed on Exhibit A-l.

The accounts therefore show that the first Plaintiff withdrew a sum of Rs. 3,000 on 10th February, 1948 and there was a balance of Rs. 900 due to him and it may therefore be taken that he had Rs. 3,900 available in February, 1948. He deposed that he sold paddy in February, 1948 and got Rs. 750, sold a bullock cart for Rs. 100 in that month and sold hemp and fodder in March and got Rs. 500; but he has not produced any documentary or oral evidence in support of this case. Excepting his ipse dixit there is no other corroboration and, in my view, the Subordinate Judge acted rightly in rejecting his oral testimony. The Subordinate Judge has pointed out in paragraphs 7 and 8 that the Plaintiff is not a reliable witness and that his evidence cannot be accepted.

31. I also agree with the Subordinate Judge that after the first Plaintiff received the sum of Rs. 6,500 on 23rd November, 1948, from the second Plaintiff, lie deposited in tire Co-operative Bunk on 24th November, 1948. Exhibit A-14 shows that the second Plaintiff paid a sum of Rs. 6,500 into the hands of the first Plaintiff on 23rd November, 1948. The bank deposit was on the next day. The case of the first Plaintiff that he utilised the sum paid by the second Plaintiff for lending to third parties & that lie did not deposit it in the bank, is not worthy of credence. The Subordinate Judge is right in holding that:

The explanation is too ridiculous to be believed for a moment. If he had his own money, there is nothing to prevent him from depositing it into the bank much earlier. He had already received the 1st Defendants notice in the first week of November, even according to his own version i.e., Exhibit B-4. Then he received Exhibit B-5 on 20th of November; but he wafts till a day after the payment by the 2nd Plaintiff, to put the money into the bank and then sends notice.

So there can be no doubt that till the second Plaintiff paid the amount on 23rd November, 1948, he was not in a position to completely fulfill the terms of the contract Exhibit A-l and that the averment that ho had the money ready throughout is false.

32. I do not agree with the learned Chief Justice that the approach of the Subordinate Judge on this aspect was not correct and that it is sufficient if the first Plaintiff establishes that he was in a position to borrow from Ors. . The position taken up by the first Plaintiff in the notices, the plaint and in the evidence, as already set out, was that he had the money in readiness throughout and not that he was in a position to raise the mono), if so required. So the Subordinate Judge acted rightly in deciding the question that was put in issue before him, viz., whether the first Plaintiff was in possession of the necessary funds for completing the sale and I agree with his conclusion. It is not open to the learned advocate for the Appellants to contend, for the first time in appeal, that it was sufficient for his client to aver and prove that he was in a position to raise the necessary funds for performing the contract. In my opinion, the argument cannot be entertained, in the absence of any pleading or evidence to that effect.

33. Even assuming that the first Plaintiff is en-tilled to put forward this now case, I am not satisfied that he has established that he was in a position to raise the large sum required to be paid under the contract. The fact that he advanced Rs. 16,000 for the mill business as evidenced by Exhibit A-10 does not per se show that he was so wealthy or commanded so much credit that he was in a position to raise the large sum of money required to be paid under Exhibit A-l at a moments notice. Though what was mentioned in the notice Exhibit A-2 was not pursued in the evidence, it is probable that this transaction which was arranged by P. W. 4 was for the benefit of the first Plaintiff P. W.,2 and P. W. 4 as stated in Exhibit B-4 and that as disputes had arisen between them, the first Plaintiff had to find somebody to help him with money in the transaction and that till the amount was received from the second Plaintiff under the agreement Exhibit A-14, he was not in a position to find the money.

34. I have already set out how the first Defendant belonging to Gudipudi Agarharam was anxious to dispose of the properties situated in the village of Jadavalli and Komali which he purchased in execution of the money decree against Upadrashta Venkatarama Sastry in the name of Garikapati Raghavayya and how P.W. 4 who acted as the arbitrator in the disputes between the first Defendant and Venkatarama Sastry, interested himself in arranging the contract of sale with, the first Plaintiff. There is no doubt that P. W. 4 was aware of the mortgage affected by Venkatarama Sastry in favour of the second Defendant. As spoken to by him, the .second Defendant had asked the first Defendant, to receive Rs. 3,000 and give up (lie entire lands purchased in court auction and that as Venkatarama Sastry was not able to find the sum, the arrangement fell through.

P.W. 1 further admitted that lie knew about: the execution of Exhibit A I, the sale deed in respect of AC. 1-00 and odd in favour of Venkatarama Sastrys nephew as also the relinquishment deed Exhibit A-12 obtained from the mortgagee, the second Defendant. From the evidence of the first Defendant D. W. 1, it appears that ae. 60-00 and odd were mortgaged under Exhibit 15-7, that. Venkatarama Sastry had sold some of the properties and paid some amounts to the mortgagee and that it was not known as to what was the balance due in icier the mortgage. In some of the sale deeds, Venkatarama Sastry had stated that the mortgage was only nominal.

In one of the proceedings, the second Defendant himself swore to an affidavit stating that the mortgage was entirely discharged. In the claim suits filed by the wife and daughter of Venkatarama Sastry, only one sheet of the mortgage deed of 1928 was filed. The second sheet of mortgage deed containing the schedules was not filed therein. Excepting the ac. 11-00 of land brought to sale in execution of the money decree, all the other ac. 49-00 had been sold by Venkatarama Sastry. In pursuance of the compromise entered into with Venkatarama Sastry, ac. 4-18 were reconvened to Venkatarama Sastry -with the result that only the suit property, consisting of ac. 6-00 and odd, was left to the first Defendant. At that stage, it was not clear as to whether the mortgage was nominal, whether the mortgage amount was completely paid off and as to what would be the proportionate liability due to be paid under the mortgage in respect of the suit properties.

P.W. 4 who arranged the contract of sale with the first Plaintiff, knew every detail about this property. Is it likely that under those circumstances, the first Defendant would have agreed to "show by document that it (mortgage) was discharged" as spoken to by P. Ws. 4 and and 5 In the agreement of sale, it was stated that the property was purchased in Court auction. There is no specific provision that the first Defendant should discharge the mortgage and produce documents evidencing the discharge or obtain a release from the mortgage. On the other hand, it was provided that the first Defendant should settle at his own expense, any disputes that might arise in respect of the suit property. That clause indicates, beyond doubt, that the parties to the contract who knew about the existence of the mortgage and the conflicting statements made by the mortgagor and the mortgagee as to the nature and character of the document, as also its discharge, did not wish to admit that there was any liability due under the mortgage.

But, if ultimately the properties were to be proceeded against for the mortgage liability or any disputes should be raised by the mortgagee, the seller, i.e., the first Defendant, was to hold himself responsible. D. W. 2 the writer of Exhibit A-l, clearly stated that at the time of the agreement, the sale certificate was produced by the 1st Defendant and that the cause in Exhibit A-l providing that the 1st Defendant should settle all disputes was specifically introduced to cover or meet that contingency, viz., any attack from the mortgagee. D. W. 2 is an independent and respectable witness who had invested 15s. 20,000 in business and owns ac: 8-00 of wet land. Nothing was suggested or elicited in the course of his cross-examination and I accept his evidence that the sale certificate was produced at the time of the contract of sale and that the clause in Exhibit A-l. was specifically introduced to meet any dispute that might be raised by the mortgagee. The 1st Defendant who Was examined as D. W. .1 has also deposed to the same effect.

35. In support of the Plaintiffs ease P. W. 4 was examined, lie stated that the 1st Defendant did not bring with him any document and that he promised to show the documents of title at the time of the execution of the sale deed. He also deposed that the-. 1st Plaintiff asked the 1st Defendant about the mortgage and he replied that it was discharged and that "he would show those documents also at the time of the sale deed." In the course of the cross-examination, he admitted the part played by him in bringing about the compromise between Venkatarama Sastry and the 1st Defendant, that he knew about the filing of the mortgage bond into Court, that he was requested by the 1st Defendant to find a purchaser, that he told Plaintiffs 1 and 2 or 3 Ors. and that he knew that the 1st Defendant was entitled to the property. He also admitted that it was agreed that the entire balance amount should be paid to the 1st Defendant and that there was no term to pay anything to the mortgagee.

Having regard to the probabilities and the surrounding circumstances, I am inclined to think that he is not speaking the truth and I reject his evidence. The 1st Plaintiff was examined as P. W. 5 to prove his case. I am not prepared to accept his interested testimony. That he is not speaking truth on several matters is clear from his denial of the receipt of the telegram, Exhibit B-3, his false case in regard to the payment of Rs. 40 in March, 1948 and the false story set up by him that the 1st Defendant met him and requested him to purchase stamp papers for completing the sale in November, 1948. The Subordinate judge has discussed the conduct of the 1st Plaintiff in paragraphs 7 to 9 and arrived at the conclusion that he is not a reliable witness. I agree with that conclusion.

36. The probabilities are all in favour of the 1st Defendants case. If the 1st Plaintiff was apprehensive that the properties were subject to a huge mortgage liability, he would have made a specific provision in Exhibit A-l for the retention of the necessary amount with him for repayment of the mortgage. He would not have taken delivery on the date of the contract and paid substantial sums of money, viz., Rs. 1,500 on 4th December, 1047, Rs. 2,000 on 14th January, 1948 and Rs. 1,000-on 2nd February, 1948. He would not have rest content with the 1st Defendants word of mouth that he would discharge the mortgage or produce a document evidencing discharge or obtain a release deed from the mortgagee. 1st Plaintiff who entered into the contract of sale at the instance of P. W. 4 who knew every detail about the property, must have satisfied himself about the nature and title of the property and the encumbrance thereon. Curiously, the 1st Plaintiff did not demand the production of the title deeds or any document evidencing the discharge of the mortgage till 13th October, 1948, when he issued the notice Exhibit A-2.

As already stated by me, that, notice was issued only after tine 1st Defendant sent the telegram Exhibit B-3 on 1st October, 1948, demanding the 1st Plaintiff to complete the contract Exhibit A-l. It is significant to note that the 1st Plaintiff did not refer to this telegram at all even though he must have received it. In spite of the fact that reference was made to this telegram specifically in Exhibit B-4, the Plaintiff did not deny receipt of the telegram in his reply Exhibit A-3 or even in the plaint. It is probable, as pointed out by the Subordinate Judge that as he was not in possession of the necessary funds he wanted to gain time and called upon the 1st Defendant to produce documents evidencing the discharge of the mortgage contrary to the terms of the understanding or agreement arrived at between them, at the time of the execution of Exhibit A-l. This unreasonable or impossible demand was merely a ruse to delay the completion of the sale deed and to enable him to obtain money from the 2nd Plaintiff in pursuance of the contract entered into with him under Exhibit A-14.

To keep up the show he impleaded the mortgagee as the 2nd Defendant and ultimately filed a memo, before the Subordinate Judge that he would take the property without insisting on the 1st Defendant satisfying him about the discharge of the mortgage. This memo, is proof positive that he was and is really not apprehensive that the mortgagee would claim any amount from him. The express covenant contained in Exhibit A-l sufficiently protected his interests. Even though no document of discharge or release deed was produced by the 1st Defendant, according to the 1st Plaintiff, he purchased stamp papers of the value of Rs. 840 in November, 1948 and deposited the balance of the sale consideration in the bank. This conduct of the 1st Plaintiff also convinces me that after ho entered into a profitable contract, Exhibit A-l4, with the, 2nd Plaintiff and received money from him, ho was no longer really serious in pressing that the mortgage should be discharged.

37. The learned advocate for the Appellant relied Oft- Exhibits A-4 and A-12 to show that the; nephew of Venkatarama Sastry to whom Ac. 1-00 and odd was conveyed by the court auction purchaser Raghavayya insisted upon a release deed being executed by the 2nd Defendant and that the 1st Defendant knew about it. Assuming that the 1st Defendant knew about the execution of the release deed, it does not follow that the 1st Plaintiff insisted upon a similar document being obtained by the 1st Defendant. The property was sold free of mortgage. In the absence of a contract to the contrary, under Section55 (5) of the Transfer of Property Act, the buyer is bound to pay or tender at the time of completing the sale, the purchase money to the seller or such person as he directs, provided that where the property is sold free from encumbrances *n the property existing at the date of the sale deed and shall pay the amount so retained to the persons entitled thereto.

If, as held by me, it was understood between the parties that as per the covenant in Exhibit A-l, the seller should settle the dispute as and when raised, the buyer was bound to pay the entire sale consideration. If there was no such understanding or agreement, the only right of the buyer was to retain sufficient money out of the sale consideration to pay oil the mortgage. He was not entitled to insist upon the seller discharging the mortgage or obtaining a release deed as a condition precedent to his performing the contract and before the payment of the sale consideration. The condition imposed by the 1st Plaintiff is therefore, in my opinion, not in accordance with the terms of their understanding or the agreement of sale or even in accordance with the provision of the Transfer of Property Act.

38. The Appellants advocate referred us to the provisions of Section 55 (1) (b) of the Transfer of Property Act which recite that the seller was bound to produce to the buyer on his request for examination, all documents of title relating to the property which are in the sellers possession or power. According to the evidence of the 1st Defendant, which I accept, the sale certificate was produced by the Defendant at the time of the execution of Exhibit A-l. The demand to produce a document evidencing discharge or mortgage or a release deed from the mortgagee does not fall within the provisions of Section 55 (1) (b). The 1st Defendant was only a purchaser from the court auction-purchaser. The mortgage documents were not in his possession or power. There was no voucher with him evidencing the discharge of the mortgage.

There was no document of release obtained by him from the mortgagee. He was therefore not bound to produce any such documents according to the demand of the 1st Plaintiff. The 1st Plaintiff) was therefore not entitled to postpone the payment of the sale consideration or insist upon the production of these; documents, as a condition precedent to the payment of the balance of the sale consideration. The decision in P. S. Rathna Bai v. Mrs. Barrass, 1943 1 Mad 461: AIR 1943 Mad 593 (E) referred to by the Subordinate Judge in paragraph 10 is an authority in support of die view that the buyer is not entitled to insist unreasonably upon the seller producing documents which are not in his possession or power.

39. The learned advocate for the Appellant relied on the decisions reported in Mohamed Ali Sherif v. Buddaraju Venkatapatiraju, 39 Mad LJ 449: AIR 1920 Mad 634 (F) and M. Mahamood Mamuna Lebbai Vs. National Bank of India Ltd., (G) in support of the proposition that mere knowledge on the part of a vendee of a defect in the title of the vendor would not, by itself, defeat the vendees right on the basis of a covenant implied by Section 55, Clause (2). Those decisions have really no application to the facts of the present case. The 1st Defendant does not deny his liability to discharge the mortgage, if the mortgagee establishes that the mortgage was true, valid and binding and that it was not completely discharged and that any amount was recoverable in respect of the suit property. His case is that the express covenant was introduced for that purpose only. He does not contend that inasmuch for the 1st Plaintiff had knowledge of the mortgage, he alone should discharge the mortgage.

His case is that there was an understanding or agreement that the mortgage liability was not intended to be paid off immediately in the circumstances set out already and that as and when a claim is made by the mortgagee and established, the 1st Defendant should settle it. It was certainly open to the 1st Plaintiff who was aware of all the details of the mortgage to enter into such an agreement and be satisfied with the express covenant contained in the contract of sale Exhibit A-1. There was really no defect of title, the 1st Defendant being entitled to the suit properties by reason of his purchase from the court auction purchaser, Raghavayya. The encumbrance was disclosed and known to the 1st Plaintiff and" he agreed to purchase it with his eyes full open and with knowledge of the mortgage, and on the understanding that the 1st Defendant would discharge the mortgage as and when a claim was made and established.

As pointed out by me already, the document of title, viz., tire sale certificate Exhibit B-.l standing in the name of the 1st Defendants benamidar Raghavayya was produced and shown to the 1st Plaintiff at the time of the execution of Exhibit A-1. Having agreed as aforesaid and waived his right to insist upon the discharge of the mortgage and conveyance of a title freed from the mortgage, it was certainly not open to the 1st Plaintiff to go behind the understanding or agreement and insist upon the production of the title deeds and vouchers evidencing the discharge of the .mortgage. The 1st Defendant clearly set out all the circumstances and contended in paragraphs 3 (b) and (e) of his written statement that

the Plaintiff must be deemed both expressly and impliedly to have waived his right to further enquiry into die title and to have undertaken to have such title as this Defendant had protecting himself by the usual covenants.

and that these facts were also, within the knowledge of the Plaintiff and that there was no immediate obligation on the part of the 1st Defendant to pay off the mortgage and that the insistence by the 1st Plaintiff upon the production of vouchers evidencing the discharge of the mortgage was merely a ruse to cover up his default. 1 do not agree with the learned Chief Justice as to his construction of the averments in the written statement. I agree with the finding of the Subordinate Judge that the 1st Plaintiff was not entitled to insist upon the production of the title deeds and vouchers evidencing discharge of the mortgage and that his object in so insisting for the first time in October, 1948, under Exhibit A-2, was only a ruse to gain lime to raise money so as to enable him to perform the terms of the contract Exhibit A-1.

40. The learned advocate for the Appellants referred to a Bench decision of the Madras High Court in 52 Ind Cas 971 : (A1K 1920 Mad 859) (C). That decision also has no application to the facts of this case. One of the conditions of sale was that it was subject to good title and before the date fixed for the completion of the sale the purchasers discovered that the vendors grandson in whose favour the vendor had created an estate in remainder had,, prior to the date of the agreement, created mortgages on the house. So the purchaser was rightly held to be entitled to, insist upon the discharge of the mortgage. In the present case, the parties knew about the existence of the mortgage and made a specific provision in the agreement of sale that the 1st Defendant should settle the disputes at his own cost. The parties to the contract knew the interest best and made the necessary provision to safeguard their mutual interests. So without reference to the particular facts of the case, it is not right to assume that every vendor who parts with large sums of money would insist upon the mortgage being dischargee and a good and marketable title being conveyed. The above discussion answers points Nos. 2 and 3.

41. The next question that arises for consideration is, whether, having regard to the fact that the contract of sale related to immovable property, time was not of the essence of the contract, and whether it was open to the 1st Plaintiff to indefinitely postpone payment of the sale consideration, leaving the 1st Defendant at his mercy and sweet will. In the present case, the contract of sale provided that the contract should be completed within one month and that if the amount was not so paid it should carry interest at 61/4 per cent, per annum. Section 55 of the Indian Contract Act which governs the present case runs in the following terms:

When a party to a contract promises to do a certain thing at or before a specified time, or certain things as or before specified time and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee, if the intention of the parties was that time should be of the essence of the contract.

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 thing at or before the specified time; but the promisee is entitled to compensation from the promisor for any loss occasioned to him by such failure ....

In the leading case of the Privy Council in ILR 40 Bom 289: AIR 1915 PC 83 , the scope and effect of Section 55 of the Indian Contract Act was considered and Viscount Haldane held as follows:

Their Lordships do not think that this section lays down any principle which differs from those which obtain under the law of England as regards contracts to sell land. Under that law equity, which governs the right of the parties in cases of specific performance of contracts to sell real estate, looks not at tire letter but at the substance of the agreement in order to ascertain whether the parties notwithstanding that they named as specific time within which completion was to take place, really and in substance intended more than that it should take place within a reasonable time.

After referring to a passage from the judgment of Lord Claims in Tilley v. Thomas, (1867) 3 Ch A 61 (II), their Lordships added the following observations:

The special jurisdiction of equity to disregard the letter of the contract in ascertaining what the parties to the contract are to be taken as having really and in substance intended as regards the time of its performance may be excluded by any plainly expressed stipulation. But to have this effect the language of the stipulation must show that the intention was to make the rights of the parties depend on the observance of the time limits prescribed in a fashion which is unmistakable. The language will have this effect if it plainly excludes -the notion that these time limits were of merely .secondary importance in the bargain, and that to disregard them would be to disregard nothing that lay at its foundation. Prima facie, equity treats the importance of such time limits as being subordinate to the main purpose of the parties, and it will enjoin specific performance notwithstanding that from the point of view of a Court of Law the contract has not been literally performed by the Plaintiff as regards the time limit specified. This is merely an illustration of the general principle of disregarding the letter for the substance which Courts of Equity apply, when, for instance, they decree specific performance with compensation for a non-essential deficiency in subject-matter.

But equity will not assist where there has been undue delay on the part of one party to the contract, .and the other has given him reasonable notice, that he must complete within a definite time. Nor .will it exerctee its jurisdiction when the character of the property or other circumstances would render such exercise likely to result in injustice. In such cases, the circumstances themselves, apart from any question of expressed intention, exclude the jurisdiction.

Applying the observations of that decision to the facts of the present case, the 1st Plaintiff was bound to perform the terms of (he contract and pay the sale consideration within a reasonable time. The contract was entered into on 4th December, 1947. Though two payments were made on I 1th January, 1948 and 2nd February, 19-18, the .1st Plaintiff did not pay the balance of the sale consideration for several months. The 1st Defendant therefore called upon him by means of a telegram dated 1st October, 1948, under Exhibit B-3, that he should pay the amount on or before 4th October, 1948. Without acknowledging receipt of this telegram and even referring to it, the 1st Plaintiff gave a notice to the 1st Defendant on 13th October, 1948, under Exhibit A-2, insisting upon the production of the title deeds and vouchers showing the discharge of the mortgage and falsely alleging that he was ready and willing to pay the balance of the sale consideration. It is in reply to this notice that the 1st Defendant sent Exhibit B-4 dated 2nd October, 1948.

42. The short question for consideration is, as to whether the 1st Defendant was entitled to make time the essence of the contract by staling that unless the Plaintiff, within a week of the receipt of the notice, paid the balance of the sale consideration, he would rescind the contract. In my opinion, the 1st Defendant who waited for several months was I entitled to give notice that the 1st Plaintiff should complete the contract within a definite time. I am satisfied, on the facts of this ease, that there was undue delay on the part of the 1st Plaintiff in not paying the balance of the sale consideration and " that the 1st Defendant was entitled to insist upon the 1st Plaintiff completing the contract within a definite time. The notice Exhibit B-4 given by him is quite reasonable and the time fixed under it is equally reasonable. To the same effect is the decision of the House of Lords in 1915 AG 386 (A). The head note sums up the law in clear terms and is as follows:

Where in a contract for the sale of land the time fixed for completion not made of the essence of the contract, but the vendor has been guilty of unnecessary delay, the purchaser may serve upon the vendor a notice limiting a time at the expiration of which he will treat the contract as at an end, and in determining the reasonableness of the time so limited the Court will consider not merely what remains to be done at the date of the notice, but all the circumstances of the case, including the previous delay of the vendor and the attitude of the purchaser in relation thereto.

Lord Parmoor held at page 423 that Joyce J., rightly accepted as correctly expressing the general law, the following passage from Sugden on Vendors (14th edition, Page 268):

Where time is not made of the essence of a contract by the contract itself, although a day for performance is named, of course neither party can strictly make it so after the contract; but if either party is guilty of delay a distinct written notice by the other, that he shall consider the contract at an end if it be not completed within a reasonable time to be named, would be treated in equity as binding on the party to whom it is given; but a reasonable time must be allowed.

The law is summed up in similar terms. Vide the passages in Vol. I, Williams on Vendor and Purchaser at pages 40 and 508..... Fry on Specific performance para. 1092, Halsbury, Hailsham edition, Vol. 7, paragraph 272 and Volume 31 paragraph 472 and Pollock and Mulla on Indian Contract Act (6th edition) page 325.

43. During the course of the arguments, a question was raised as to how, by the volition of one of the parties, time might be made the essence of the contract when it was not of the essence of the original contract. In paragraph 1092 of Frys Treatise on Specific Performance of Contracts, it is stated that in default of obedience to a notice issued at the instance of a party fixing a reasonable time within which the contract should bo performed by the other, the Court will not enforce specific performance but will leave the parties to their strict legal rights. In Hanburys Modern Equity (3rd edition) all the cases bearing on this matter are nearly summed up and the following passages at page 98 may be usefully quoted:

Even if there was no original stipulation making time of the essence, this result may be produced engrailing time by notice. Suppose, for example, a day be mentioned for convenience and the vendor is in default as in Re Bayley and Shoesmiths contract, (1918) 87 LT Ch 626 (I), Compton v. Bagley, (1892) 1 Ch 313 (J) and 1915 AC 386 (A), to say T have waited long enough", complete in X days, or return my deposit.

I am not prepared to accept the suggestion that the eminent Law Lords or the learned authors who were steeped in equity loosely used the words that time might be made the essence of the contract by giving notice. In Moulvi Mohammad Ikramull Iluq v. Wilkie, 11 Cal WN 946 (K), Lord Macnaughten in his characteristic style sums up the law as follows:

Time was not made of the essence of the contract by the terms of the written agreement. But it is clear that in die contemplation of both parties the buildings were to be completed without unseasonable delay and it cannot be disputed that, in case of undue delay on the part of but the other parties to the contract might have made time the essence of the contract by giving notice that they would not hold themselves bound to complete unless the buildings were finished within a specified time assuming the time specified to be such as the Court would hold to be reasonable under the circumstances.

It depends on the circumstances of each case to decide as to what time is reasonable. I may however point out that in Smith v. Batsford, (1897) 76 LT 179 (L), it was held that a notice by the vendor requiring the purchaser to complete the contract in 10 days was held quite reasonable.

44. Applying those principles to the facts of the present case, the question is, whether the period of one week fixed under Exhibit 15-4 is reasonable or not. I have no doubt that having regard to the conduct of the 1st Plaintiff and the surrounding circumstances, the period fixed is quite reasonable and the 1st Defendant was entitled to treat the contract as lescinded, when the amount was not paid within the period fixed there under. I do not wish to add any words of my own in regard to the reasoning underlying the principles as so ably enunciated by the learned Law Lords and the authors referred to above. So on point No. 4, I agree with the Subordinate Judge that the contract was rightly rescinded as the 1st Plaintiff did not perform the contract within the reasonable period fixed under Exhibit B-4.

45. In considering points Nos. 2 and 3, I have arrived at the conclusion that the demand made by the 1st Plaintiff -under Exhibit A-2 was contrary to the terms of the original under standing and was consequently unreasonable. The 1st Defendant was therefore right in intimating to the 1st Plaintiff under Exhibit B-4 that, it he insisted upon the production of the vouchers evidencing the discharge of the mortgage and thereby impliedly repudiated the contract, he was prepared to return the advance amount, accepting the repudiation and rescind the contract. So my conclusion on point No. 5 is that the 1st Defendant was also entitled to rescind the contract by reason of the unreasonable and impossible demands made by the 1st Plaintiff to obtain vouchers evidencing the discharge of the mortgage, the nature and character of which was known to them fully.

The decision of the Privy Council reported in Bindeshri Prasad v. Mahant Jairam Gir, ILR 9 All 705 (M), is in point. In that a case the purchaser withheld payment of the purchase money beyond the time fixed, insisting on a right to compel the vendor to give an absolute warranty of title. He also sued for specific performance of the contract, requiring a guarantee from the vendor. It was held that as the Plaintiff insisted upon having that which he had no right to have and delayed performing his part of the contract, viz., the payment of the purchase money, he was not entitled to have specific performance. . I follow that decision and hold that the 1st Plaintiff is not entitled to a decree for specific performance.

46. On point No. 6, I hold that having regard to the conduct of the 1st Defendant, the discretionary relief of specific performance ought not to be, in any event, granted. In my opinion, the undue delay in the payment of the sale consideration and the unreasonable demand of the 1st Plaintiff referred to supra disentitle the Plaintiffs from obtaining the equitable and discretionary relief of specific performance.

47. In the result, I confirm the judgment and decree of the Subordinate Judge and dismiss the appeal with costs.

(Since there was a difference of opinion the appeal was posted before-Chandra Reddy J.).

Chandra Reddy, J.

48. This appeal which has been brought by the Plaintiffs against the decree and judgment of the Subordinate Judge, Bapatla, dismissing O. S. No. 66/49 for the specific performance of an agreement of sale, dated 4th December, 1947, has been posted before me on account of difference of opinion between the two learned Judges that heard it originally. The essential facts giving rise to this appeal may be recapitulated.

49. A contract was entered into between the 1st Plaintiff and the 1st Defendant for sale of ac. 6-0 of wet land for a sum of Rs. 11,400. This property forming part of 60 ac. originally belonged to one Upadrashta Venkatarama Sastry and his brothers widow. The whole extent was mortgaged on 26th March, 1928, in favour of 2nd Defendant for a sum of Rs. 10,000. A second mortgage was created in favour of the same person in the year 1931, for Rs. 2,000 over the same properties. The mortgagors went on selling the mortgaged properties in bits from time to time till only ac. 11-0 were left.

50. These eleven acres were brought to sale in execution of a. decree in O. S. No. 231 of 1930 obtained by the1st Defendant against the Upadrashta family. They were purchased in Court auction by ono Raghavayya on 2nd February, 1942, bonami for the 1st Defendant. Since the judgment-debtors (mortgagors) began to create trouble, after the sale, the auction-purchaser conveyed about 4 acres of land to the members of the judgment-debtors family, in order to purchase peace. Out of the balance, Anr. extent of ac. 1-0 and odd was sold to one Upadrashta Venkayya and Ors. under Exhibit A-4, dated 24th June, 1944 and it was attested by the 1st Defendant. The 2nd Defendant executed a document, Exhibit A-12, releasing this property from mortgage on receipt of Rs. 500. It was recited in this document that as regards the balance of the amount due to the mortgagee he would recover the same from the property other than that involved in that document. Some time later, the auction-purchaser executed Exhibit B-2 conveying the remaining ac. 6-0 of land to the 1st Defendant. It is this property that was agreed to be sold by the 1st Defendant to the 1st Plaintiff.

51. On the date of the agreement, a sum of Rs. 1,500 was paid by way of advance. It was agreed that the balance of amount should be paid within a month there from, and a sale deed obtained from the vendor and if it was not paid within the stipulated time that amount was to carry interest at Rs. 0-8-4 per mensem. It was provided in the document that "if in respect of this property any disputes arise from any one, I shall settle them at my own expense." Subsequently, two sums of Rs. 2,000 and Rs. 1,000 were paid on 14th January, 1948 and on 2nd February, 1948, respectively. Nothing, was heard of this transaction till 1st October, 1948, when a telegram, copy of which is Exhibit B-3, was sent by the 1st Defendant to the 1st Plaintiff in the following words:

Balance of sale price due to me under contract of sale, dated 4th December, 1947, in your favour by me has not been paid though demanded; willing and ready to perform contract by me, pay amount due to me before 4th October, 1948, otherwise suit for specific performance.

On 13th of October, 1948, the 1st Plaintiff issued a registered notice, Exhibit A-2, through his lawyer to the .1st Defendant calling upon him to produce documents of title and vouchers evidencing discharge of the mortgage and to complete the transaction within fifteen days after complying with his demand. It was stated therein that the 1st Plaintiff was willing to perform his part of the contract.

52. In reply, Exhibit B-4 was sent by the 1st Defendant repudiating his liability to adduce evidence of good title or of discharge of mortgage alleging that 1st Plaintiff entered into the agreement with full knowledge of all the. circumstances attending his acquisition of the property and after looting into the sale certificate, and denying the existenco of any encumbrance over the properly, The first Plaintiff was further told that he should pay the balance of the sale consideration with interest that had accrued there under within a week of the receipt of that notice and in case he failed to do so and would insist on the production of documents other than the sale certificate, the 1st Defendant would cancel the contract, refund the amounts so far paid and take back the land together with profits of the previous years. This was followed up by Anr. letter, Exhibit B-5, which inter alia informed the; 1st Plaintiff that the contract was terminated as the demand made under Exhibit B-4 was not complied with.

53. To this, the 1st Plaintiff sent a reply, Exhibit A-3 calling upon the 1st Defendant to execute a sale deed either in favour of the former or in favour of two persons mentioned therein and receive the balance of sale consideration and stating that the 1st Defendant was the defaulter and had no right to rescind the contract. It was also recited therein that as proof of the vendees readiness to perform his part of the contract a sum of Rs. 7,290-7-6 was deposited in the Cuntur District Central Bank. Meanwhile, stamp papers of the value of Rs. 840 (on 17th November, 1948), were purchased by the 1st Plaintiff. This led to the issue of Exhibit B-6 by the 1st Defendant through his lawyer. It was alleged therein that what was agreed to be sold under Exhibit A-l was only such right as passed to the vendor under the Court sale without any personal covenant or warranty of title and consequently the 1st Plaintiff was not entitled to ask either for documents of title or proof of discharge of - the mortgage and that the suit agreement stood cancelled.

54. Thereupon, the Plaintiffs filed the suit giving rise to this appeal impleading the mortgagee as j the 2nd Defendant. The main prayer in the Plaintiff was that the 1st Defendant should be directed to execute a sale deed for the property either in favour of 2nd Plaintiff to whom the rights under Exhibit A-l were assigned on 16th September, 1948, under Exhibit A-14 or alternatively in favour of the 1st Plaintiff.

55. It was resisted by the 1st Defendant mainly on the defence that the Plaintiffs were not entitled to sue for specific performance as the 1st Plaintiff failed to perform his part of the contract. It was further pleaded that an unreasonable demand for production of vouchers as regards the discharge of the mortgage was made by tire 1st Plaintiff merely to gain time, as he was not ready with the money-required to fulfill the terms of the contract.

56. The 2nd Defendant filed a separate written statement contending that he* was not a necessary party to the suit and that the mortgage over the suit property was still subsisting.

57. The subordinate Judge of Bapatla who tried the suit found that the 1st Plaintiff did not have the necessary money to perform his part of the contract, and in order to cover up this he made an. unreasonable demand for the production of vouchers showing discharge of the mortgage, that the rescission of the contract by the 1st Defendant was valid. In this view, he held that the Plaintiffs-could not ask for specific performance of the suit contract. In the result, he dismissed the suit with costs. The aggrieved Plaintiffs have preferred this appeal.

58. This appeal was first heard by a Bench consisting of the Chief Justice and Mr. Justice Uma-maheswaram. They differed in their conclusions on all the points and also about the result of the appeal. The learned Chief Justice came to the conclusion that the 1st Plaintiff was well within his rights in making a requisition as to the title to the property and was ready and willing to perform his-part of the contract and consequently entitled to-have the agreement in question specifically enforced. The other learned Judge concurred in the trial Courts opinion that the demand by the 1st Plaintiff for the production of documents was unreasonable and contrary to the terms of the original understanding, that the 1st Plaintiff was not ready and willing to perform his part of the contract, that the lst Defendant had a right to make time of the-essence of the contract under Exhibit B-4 and he-had validly put an-end to the contract in default of the performance of it by the 1st Plaintiff within that time fixed.

59. I will now deal with the various points, raised by the learned Counsel on both sides.

60. It was first urged by Mr. Ramachandrai Rao that the Appellant was within his rights in requiring tire vendor to adduce a good title free of all encumbrances both under the terms of the agreement and by virtue of Section 55 of the Transfer of Property Act and this did not entitle the 1st Defendant, to repudiate the contract for the reasons stated in. Exhibits B-4 and B-5. It was contended by him that1 the agreement itself contained a warranty of title embodied in the clause If in respect of this property any disputes arise from any one, I shall settle them at my own expense" and even otherwise Section 55-of the Transfer of Property Act gave him such a right.

61. On the other hand, the position taken up. by the Respondents is that the clause relied on, related to a persona} covenant in substitution of proof of discharge of mortgage and did not amount to a warranty of title and that, secondly, Section 55 of the T. P. Act is inapplicable to an agreement of sale of land. According to him this section has application only to completed sales.

62. It will be convenient lo dispose of first the argument relating to the applicability of S. 55 of the T. P. Act.

63. To appreciate the contention of the parties, it is necessary to refer to the relevant provisions of law. Section 55 of. the Transfer of Property Act enacts thus:

In the absence of a contract to the contrary the buyer and seller of Immovable property respectively are subject to the liabilities and have the rights mentioned in the rules next following or such of them as are applicable lo the properly sold:

1. The seller is bound.

(a) ......

(b) to produce to the buyer on his request for examination all documents relating to the property which arc in sellers possession or power.

(g) to pay all public charges and rent accrued due in respect of the property up to date of the sale, the interest on all encumbrances on such property due on such date, and, except where the property is sold subject to encumbrances, to discharge all encumbrances on the property then existing.

(2) The seller shall be deemed to contract with the buyer that the interest which the seller professes to the buyer subsists and that he has power to transfer the same.

64. There seems to be nothing in the language of this section to warrant the restrictions sought to be placed on this section by the counsel for the Respondents. It looks to me that the import of the section is wide enough to include contracts for sale of properties and is not restricted to conveyances. In fact, Sub-section (2) makes it abundantly clear that it has reference to contracts for sale as much as to completed transactions.

65. This view gains support from the decided cases. In Arunachala Aiyar and Two Ors. Vs. T. Ramasami Aiyar and Others, (N), a Bench of the Madras High Court remarked that the covenants embodied in Section 55 (2) arc as much to be attached to conveyances as to the contracts of sale. Thus it was assumed that Section 55 (2) governs agreements of sale. In Panchapakcsa Aiyar v. Arunachala Mudaliar, 1932 Mad WN 122 (O), it was laid down by Justice Madhavan Nair and Justice Jackson that the expression buyer and seller in Section 55, Transfer of Property Act, cannot mean only those who have actually completed a sale but include those in the course of transacting a sale. To the same effect is the ruling of Justice Devadoss in Kathamuthu Pillai Vs. Subramaniam Chettiar, (P). The opinion expressed in Adikesavulu Naidu v. Gurunatha Chetty. ILR 40 Mad 338 : (AIR 1918 Mad 1315) (FB) (Q-R) is in accordance with the rule stated in the above cases. A passage from the judgment of Mr. Justice Abdur Rahim at page 350 (of ILR 40 Mad 338 ): (at p. 1319 of AIB) is apposite:

It is argued that this applies only to cases where there has been a completed sale and that no such presumption will be made where the transaction is still in the executory stage. But, 1 find nothing in the language of the section, nor can I perceive any reason which would justify such a distinction. What the Legislature intended apparently was that subject to any special1 stipulations to the contrary certain stipulations would be presumed in every transaction of sale of the immovable property and a warranty of title on the part of the seller is one of those stipulations. It is not easy to understand how the Legislature could import a stipulation of this nature in a transaction of sale without implying at the same time that it should be taken as having formed part of the contract which became perfected in the sale.

If I may say with respect, these observations embody the correct statement of I5v and the reasons in support of the proposition are convincing and forcible. This opinion was shared by the Lahore High Court in Sri Ram v. Kidari Prashad, AIR 1925 Lah 481 (S). There, Section 55 (2) of the Transfer of Property Act was applied to a contract of sale of Immovable property.

66. The pronouncement of the Privy Council in Srinivasadas Bavri v. Meher Bai, ILR 41 T Jom 300: (AIR 1916 PC 5) (T), seems to accord with this doctrine. It is true there is no reference to S. 55 in the judgment of their Lordships, but it is seen from the arguments of the counsel on both sides as reported at pages 305 to 307 that this section was called in aid in the case. This case arose out of an agreement of sale. The purchaser repudiated the agreement and asked for the refund of the advance paid by him on the ground that the vendor had not made out a good title. The Privy Council held that the purchaser had a right to call upon the vendor to deduce marketable title free from all reasonable doubts. This decision could not have been reached if Section 55 (2) of the Transfer of Property Act would not apply to contracts for sale of property.

67. Mr. Bhimasankaram, the learned Counsel for the Respondents, relied on the opinion expressed in the "Transfer of Property Act by D. F. Mulla at page 300 (3rd edition) that the rulings of the Madras and Lahore High Courts which have taken this view are incorrect. The basis of the opinion seems to be certain observations of Rankin, Chief Justice, in Jyoti Prosad Singh Deo Vs. H.V. Low and Co. Ltd., (U). There is no discussion on this aspect in that case and it is merely observed there:

From other provisions of this Sub-section it seems to me though this has been disputed in Adi-kesavalu Naidu v. Gurunath Chetty (Q-R) that this clause contemplates a completed sale and corresponds to the covenant for title in an English conveyance.

At the same time, it was stated by the learned Judge that in India a contract for sale of immovable property implied some warranty as to title by the seller and according to the learned Judge this follows from Clause (a) of Sub-section (1) which cast an obligation on the seller to disclose to the buyer any material defect in the property or in the sellers title thereto of which the seller is and the buyer is not .aware and the buyer could not with ordinary care discover. With deference to the learned Judge, I am unable to subscribe to the view and I fail to see how any distinction could be drawn between Sub-section (2) and Sub-section (1) of that section.

68. To substantiate this distinction, reliance is placed by Mr. Bhimasankaram also on a passage in the Transfer of Property Act by Chitaley and Annajirao (AIK Commentaries) Vol. II, p. 871:

Some of these rights and liabilities refer to a stage after the contract of sale is entered into and before the completion thereof by the execution of a conveyance; and some refer to both, in other words, this section deals with the rights and liabilities of parties to a contract of sale as well as those of the parties to a completed conveyance. Para. I, els. (a), (b), (e), (d) and (g), para. 4J el. (a), para. 5, Clause (a) belong to the first class; para. 1, cis. (e) and (1), para. 2, para. 4, el. (b), para. 5, els. (e) and (d) and para. 6, Clause (a) belong to the second class and para. 5,Clause (b) belongs to the third class.

It seems to me that there is no warrant for the assumption that Sub-section (2) does not apply to an agreement for sale. The observations in 1L11 40 Mad 338: (AIR 1918 Mad 1315) (Q-R), cited above contains an answer to the argument that Sub-section (2) does not deal with the rights and liabilities of a buyer and seller in the course of the same transaction. This is also made clear in 39 Mad LJ 449: (AIR 1920 Mad 634) (F) and M. Mahamood Mamuna Lebbai Vs. National Bank of India Ltd., (G). See also Thammineni Paparao and Others Vs. Dhavala Polinaidu and Another, (V). The decision of the Allahabad High Court in Muhammad Siddiq and Others Vs. Muhammad Nuh (W), is in agreement with this view.

It was stated therein that it would be incorrect to hold that the covenant for title implied u/s 55 (2) of the Transfer of Property Act should be presumed only with regard to contracts of sale and not deeds of sale. I express my respectful accord with this view and hold that the statutory covenant for title embodied in Section 55 (2) of the Transfer of Property Act is implied in every contract of sale of immovable property. Even on the basis of the remarks of Rankin, C. J., in Jyoti Prosad Singh Deo Vs. H.V. Low and Co. Ltd., (U), an agreement of sale implied a warranty as to title by the seller. Therefore, even if there is no express clause embodying such a warranty, the covenant of title could be imported into a contract of sale of immovable property.

69. Now I will examine the relative contentions based on the clause mentioned above, whether ill embodies a warranty of title as contended for by Mr. Ramachandra Rao or a clause introduced to substitute proof of clear title and of discharge of the mortgage, as argued by Mr. Bhimasankaram. Before doing so, it is useful to refer to some of the authorities bearing on the topic.

70. At the outset, a passage from Fry on "Specific Performance of Contracts" (4th cdn.), at p. 565, may be extracted:

The Court will not direct an inquiry where, though the contract be one of sale, the vendor only sells such interest as he has: such a contract is, of course, perfectly valid, but, being in restraint of the purchasers implied right to a good title, it must be made clear and unambiguous to the purchaser.

71. I will proceed to examine a few of the decided "cases which have been placed before me and which have a bearing on this topic. In 39 Mad LJ 449: (AIR 1920 Mad 634) (F), already cited, the property which was purchased from the widow of a Hindu was sold to the Plaintiff. In the sale-deed, it was stated that the right, title and interest of the vendor in the land was intended to be sold. There were also specific recitals relating to the previous deeds of sale of this land including the one by the widow. Subsequently, reversionary, of the widow obtained a decree setting aside the sale by her and took possession of the properties sold, to the Plaintiff. This led the vendee to file a suit claiming damages on the ground that the consideration for the sale had failed. The High Court of Madras decreed the suit negativing the defence that what was sold was only such right, title and interest which the vendor had and the recitals in the document amounted to a contract to the contrary.

72. In dealing with the argument that there was a contract to the contrary, the learned Judges cited with approval the observations Knight Bruce, the Vice-Chancellor in Seaton v. Mapp, (1846) 63 ER 859 at g. 862 (X).

When a vendor sells property under stipulations which are against common right and place the purchaser in a position less advantageous than that in which otherwise he would be, it is incumbent on the vendor to express himself with reasonable clearness; if he used expression reasonably capable of misconstruction, if he used ambiguous words, the purchaser may generally construe them in the manner most advantageous to himself.

The learned Judges also extracted the following passages from the judgment in Page v. Midland Railway Co., (1894) 1 Ch 11 at p. 20 (Y):

If a vendor does not intend that his covenant of title shall extend to defects disclosed to the purchaser where on the face of the deed or aliunde the vendor must take care not to word his covenant so as in terms to cover such defects, or he must insert some clause in the deed clearly by explaining and controlling his covenant. This is in accordance with the ordinary rules of construction and fair dealing.

.... There is no authority for not giving effect to the dear and express words of a vendors covenant for title simply because a defect covered by them was disclosed by a recital in the conveyance.

73. These remarks are very appropriate in the present enquiry. 39 MadLJ 449: (AIR 1920 Mad 634) (F) was followed by Somayya, J., in M. Mahamood Mamuna Lebbai Vs. National Bank of India Ltd., (G). What was conveyed in that case was the right, title and interest of the vendor as purchased by him in Court auction. It was later discovered that there was an encumbrance on this property. The purchaser had therefore to discharge the same and sue the vendor for the recovery of the amount paid by him. The suit was defended on the plea that there was a contract to exclude warranty of title as could be inferred from the statement that what was sold unto the vendee was only the right, title and interest as acquired by the vendor in Court auction. The learned Judge decided that, since the property was not sold subject to encumbrances, the vendor was under an obligation to discharge the encumbrances existing on the property. If the covenant of good title is to be excluded it must be expressed in clear and unambiguous terms in the document itself.

74. A view similar to this was expressed by Justice Chandrasekhara Aiyar in Thammineni Paparao and Others Vs. Dhavala Polinaidu and Another, (V). It was remarked there that the covenant for title which is implied, in every agreement to sell immovable property should be deemed to have been incorporated in the deed of sale and it is therefore not permissible to adduce oral evidence to contradict this as it falls within the mischief of Section 92 of the Evidence Act. In other words, there should be a clear recital in the document itself amounting to a contract to the contrary.

75. What emerges from these authorities is that it is open to the purchaser to contract himself out of the statutory rights conferred on him by Section 55(2) of the Transfer of Property Act; but this should be expressed in clear and definite terms in the document itself and it is not permissible to let in oral evidence to show that there was an agreement excluding covenants for title, and that the mere knowledge on the part of the vendee of a defect in title to the property to be sold would not by itself defeat the purchasers right based on the statutory covenant.

76. Bearing these principles in mind, the term of Ex. A-l in question has to be interpreted. On the language of the clause, it is difficult to say that it has any bearing on any arrangement as pleaded by the Respondents. Giving the plain meaning to these words, it does not look to me that this gives the indication that this is what was contemplated by the parties concerned". If it was so intended, it is difficult to account for the omission to state it clearly and precisely. As pointed out above, the consensus of judicial opinion is that such an agreement being in restraint of legal rights, it should be expressed in clear words. The utmost that could be said in favour of this contention is that the clause is vague and indefinite.

77. Now let me see it there could be support for this proposition either in the pleadings or in the correspondence that followed the suit agreement or the oral evidence even if it is permissible to travel beyond the document to make, out such a contract.

78. The correspondence that preceded the institution of the suit also docs not lend any support to the alleged arrangement. The position taken up by the first Defendant in Ex. B-4 was that the vendee entered into the contract in, question only after satisfying himself about the rights of the vendor in the property and there were no enforceable mortgages subsisting on the suit properly. A definite stand was taken then that the mortgage was discharged. It may be stated here that there was no basis for the first Defendant to make this assertion in the absence of any adjudication by a Court and in the light of the recitals in Ex. A-12 and the conflicting statements of the second Defendant. This was reiterated in Ex. B-5. In Ex. B-6 it was categorically stated that what was contracted to be sold under Ex. A-l was only the right possessed by the vendor as per the terms of the sale certificate without any personal liability and without warranty of title.

79. Nor does the written statement of the first Defendant bear out such an agreement. It is stated in para. 3 (b) that the usual covenant of title which this Defendant was prepared to give and to which a specific reference was made in the contract for sale was regarded by the first Plaintiff as amply sufficient to protect his interests. So, even in the written statement, a contract to the contrary now sought to be set up is not pleaded. The written statement proceeds more on the assumption that there "was no agreement for the production of documents of title or vouchers concerning the mortgage and that the Plaintiff entered into the contract knowing fully well that the auction purchaser did not guarantee good title to the first Defendant and without insisting on proof of a marketable title and not on the basis of any specific agreement.

80. Even the oral evidence let in for the first Defendant does not help him. D. W. 2 said that at the time of the execution of Ex. A-l the first Plaintiff asked whether there were any disputes about the land and P.W. 4 said that he knew all about the land and there were no such disputes and even it there should be any, the clause about the first Defendants liability for such disputes would be sufficient. He also deposed that it was understood that tire mortgage existing on the property was completely discharged. To the same effect is the evidence of the first Defendant himself as regards the mortgage. The case of the first Defendant in chief-examination was that there was no talk about the mortgage.

In cross-examination it was stated by him that in view of the indemnity clause inserted in the agreement P.W. 4 told the first Plaintiff that the vendor need not show any more documents. Even this cannot mean that the clause in question related to the discharge of the mortgage. So, there is nothing definite about it, even in the oral evidence. On this evidence, it is difficult to gather that this term was intended to serve as a substitution for proof of discharge of the encumbrances existing on the property especially having regard to the statement that the mortgage debt was understood to have been wiped out and there was no talk about the mortgage.

81. In this situation, it is futile to contend that the clause in question constituted a contract to the contrary. On the other hand, there seems to be force in the contention of the Appellant that the clause embodies a warranty of title.

82. Construing a phrase free of obstruction arising from agnates or king or neighbours or Ors. in 39 Mad LJ 449: (AIR 1920 Mad 634) (F), the learned Judges remarked that it was the usual covenant for title used in the deeds of sale in Telugu districts. It looks to me that the effect of the language used in the present case is similar to the one in 39 Mad Lj 449: (AIR 1920 Mad 634) (P).

83. On this discussion, it follows that the clause referred to above cannot amount to a contract to the contrary within the ambit of S. 55 of the Transfer of Properly Act.

84. This leads me to the point whether there is evidence aliunde to prove such a contract, assuming it is not hit at by Section 92 of the Evidence Act. I will now scrutinise the evidence from this angle. D.W. 1 does not speak to any such agreement; on the other hand, he says that P.W. 4 said that he knew all about the property, that there was no need to examine documents, that the first Plaintiff did not say that he wanted further to investigate the witness title to the property and that the first Plaintiff did not ask him to show any mortgage bond or other documents. No, doubt, in cross-examination, he said that P.W. 4 got it written that the vendor would be liable if any disputes arise about the property and that in view of that term he told the first Plaintiff that no more documents need be shown. But a reference to the sentences preceding and following this would indicate that this refers only to a warranty of title. So even accepting the evidence of D.Y v. 1 and 2 as to what transpired at the time of making the contract as correct it is not sufficient to prove a waiver or abandonment of right of inquiry into title. In this deposition emphasis is laid on silence rather than on any specific agreement in this regard.

85. Next reliance was placed on the statements made by the first Plaintiff in cross-examination

In Ex. A-1, it is not stated that he should show me documents. That is why there is the indemnity clause.

Whatever might be the meaning attached to these two sentences, torn from their context it is difficult to construe in the way the counsel for the Respondent, wants me to do, having regard to the next sentence, namely, that should be before the execution of the sale-deed, and also the evidence preceding it, That apart, this does, not help the Respondents because it does not specify the documents. Further, I have already referred to the attitude adopted by the first Defendant, in the letters preceding the suit. One would expect a reference to be made in those letters if really any such agreement was reached between the parties.

86. In the written statement, it was pleaded that the first Plaintiff must be deemed to have expressly and impliedly waived his right to further inquiry into the title and to have undertaken, to take such title as the first Defendant had, protecting himself by the usual covenants. So even here, the waiver is based not on any definite arrangement. It follows that there is no evidence to establish the first Defendants- case that the first Plaintiff precluded himself from calling upon the first Defendant to deduce a marketable title or to prove discharge of the encumbrances existing on the property. In this view, it is needless to consider whether the first Defendant undertook at the time of the contract to deduce marketable title by producing relevant documents before die completion of the sale. Nor is it necessary to go into the defence evidence that the nature of title of the first Defendant was disclosed to the first Plaintiff as more knowledge of such defects docs not defeat the purchasers statutory rights, in the absence of a stipulation as already pointed out.

87. It was alternatively contended by Mr. Bhimasankaram that having taken possession of the property on the date of the agreement and made payments towards the transaction he precluded himself from asking for further enquiry into title, and reliance was placed upon Ghousi Ali Begam v. Rustumji, ILR 13 Mad 158 (Z), where it was held that the acts of the purchaser amounted to waiver of his right to demand proof of the vendors title.

88. The principles of that case have no application to the present case. In a suit by the vendor for specific performance of a contract for sale of a house, the defence of the vendee was that the vendor had not furnished him with good title within the time specified by him in a notice issued by him. This defence was negatived and the suit was decreed mainly on the ground that the conduct of the purchaser amounted to waiver of his rights to demand proof of the Plaintiffs title. The acts which were relied on as indicating that the vendee waived all objections were his taking possession of the property, paying portions of the balance of the purchase money subsequent to the agreement, executing repairs on the house, letting it to a tenant and also his seeking to obtain a sale-deed from the Plaintiff and attempting to raise loans on the mortgage of the house.

It was also found that by the time the vendor tendered a conveyance to the vendee any possible objection to title disappeared as the former had already obtained a conveyance and there was really no cloud on her title. It may be incidentally noted that it is observed in the judgment that a covenant for title should be read into an agreement of sale in die absence of an express contract to exclude its operation. In the present case, the possession was given under the terms of the document and It could not be said that the subsequent conduct of the vendee namely payment of two sums of money towards balance of price was such as would amount to a waiver of his right to require a good title. Even otherwise, this case cannot fall under tire rule stated in ILR 13 Mad 158 (Z). In Mullas Transfer of Property Act (3rd edn.) it is stated that such implied waiver cannot refer to an encumbrance removable by the seller, am in agreement with this statement of law. There-tore live argument founded on ILR 13 Mad 158 (Z) has to be repelled.

89. It was then argued on the basis of 1943-1 Mad LJ 461: (AIR 1943 Mad 593) (E), that the first Defendant could not be required to produce the documents which were not within Iris possession. An examination of the facts of the last mentioned case will show that the ratio decided of that ruling cannot govern die case on hand. In that case, the vendee called upon the vendor to obtain a probate of a registered Will bequeathing the property in question to the vendor. The learned Judge who heard die case canto to the conclusion that this requisition was unreasonable in that it would put tho vendor to expense and such a thing was never contemplated between the parties when they entered into the contract. Such is not the case here. There are observations in that decision which are far from being helpful to the Respondents.

A seller of property free of encumbrances is bound to have the encumbrances cleared, and, if they had been already cleared, to produce the relevant documents and hand them over to the purchaser.

Moreover the rulings in 52 Ind Cas 971 : (AIR 1920 Mad 859) (C), ILR 41 Bom 300: (AIR 1916 PC 5) (T) and Hirachand Amersey Vs. Jayagopal Gangabishan, (Z-l), which will be referred to presently have the effect of negativing the contention of the Respondents.

90. It was next urged on behalf of the Respondents that the statutory covenants upon which the purchaser could rely do not extend to the discharge of a mortgage, the existence of which is not a defect in title, that since the first Defendant does not repudiate his liability to discharge the mortgage, if any such is proved to exist, the vendee could enforce it as and when he sustains damages by reason of the failure of the vendor to discharge it, and this could not be agitated in a suit for specific performance. It was further submitted that the only demand, if at all, the first Plaintiff could make, was for the discharge of the encumbrances existing on the property and not to ask for proof of discharge.

91. I do not think I can give effect to these arguments either. The answers to these arguments can be found in the eases noticed hereunder.

92. 52 Ind Cas 971 : (AIR 1920 Mad 859) (C), is very useful in the context of this case. In that case, in a suit for specific performance the controversy between the parties arose on account of the subsistence of a mortgage on die property agreed to be sold, the appeals arose out of two suits on the Original Side of the Madras High Court, one filed by the purchaser for specific performance of a contract and Anr. by the seller for rescission of the same in the following circumstances. One Ellammal created a was vested remainder in a house standing in her name under an unregistered document, dated 10th March 1916, in favour of her maternal grandson, Balasundara Chetty, with the recital that the donor had produced to give the donees mother Rs. 2,000. Some months later, i.e., 17th November 1.916, she and her husband contracted to sell the house to Muhammad Oosman Sait and Co., for Rs. 500.

It contained a stipulation that the sale was subject to good title and if the title was defective the earnest money was to be refunded and the buyer should areturn the title deeds. Shortly thereafter, the vendor got Balasundara Chetty to endorse on the gift-deed .a release of all his rights under it by paying him a sum of money paid by the purchaser in two installments subsequent to the arrangement. On 16th December 1917, the vendors called upon the vendees to complete the transaction within a week in default of which the deposit would be forfeited. In reply, the purchaser who discovered about the mortgage required the vendors to take steps to set aside the [mortgage before the transaction could, be put through. This the vendors declined to do on the .ground that it was unnecessary and assured the vendors about their title, offered indemnity and called upon the purchaser to pay the balance of purchase money within a particular time. In the correspondence that followed, the purchasers insisted on having an inquiry into the encumbrances before doing it.

Wallis, C. J. and Ayling, J., who heard the appeal confirmed the judgment of the trial Court deccreing the purchasers suit and dismissing the sellers suit. It was decided by the learned Judges that a buyer is entitled to a clear title and if it was found to be doubtful so as to require investigation, he could not be forced to choose between rescinding the contract and accepting it without any investigation. It was further stated that the vendors were not entitled to call upon die vendees to complete the contract within the specified time, and without further investigation, and to cancel the contract on the purchasers failure to do so, and that the vendees had the right to sue for specific performance and ask for an inquiry into title as die purchaser had a right to insist upon a good and marketable title. It is seen from the report that the vendors promised to indemnify the vendee, but this did not avail the former.

93. A ruling of the Privy Council in ILR 41 Bom 300: (AIR 1916 PC 5) (T), already referred to is also relevant in this connection. A property contracted to be sold was mortgaged by the previous owners to two persons Damodar Sundardoss and Gordhanadas Sundardoss. As proof of discharge of the mortgage, A certified copy of the release-deed, executed by Gordhanadas reciting payment of the money due under the mortgage and the redemption and also the death, of Damodardoss in 1901 leaving behind him Gordhanadas Sundardoss as his heir and legal representative was produced. The purchasers asked for evidence of the facts mentioned in the release-deed. But the vendors declined to furnish evidence on the ground that the recitals in the release-deed were sufficient proof of those facts.

The purchasers then cancelled the contract and asked for return of the earnest money. On refusal by the vendors to do so, the purchasers commenced the action on the Original Side of the Bombay High Court. The suit was dismissed by the trial Judge which was confirmed in appeal. On further appeal to the Privy Council, their Lordships held that the purchaser was entitled to ask for evidence that Gordhanadas was the sole heir and legal representative of Damodardas and by their refusal to supply such evidence the vendors failed to deduce a marketable title. It was observed by their Lordships that in order to make out a title to the property the sellers should establish that the mortgage had been cleared off.

94. Following ILR 41 Bom 300: (AIR 1916 PC 5) (T), a Bench of die High Court of Bombay in Hirachand Amersey Vs. Jayagopal Gangabishan, (Z-l), observed that a demand by the purchaser for satisfactory evidence of the discharge of the mortgages on the property agreed to be sold was reasonable and on the failure of the vendors to comply with this the purchaser could rescind the contract and claim a refund of the earnest money.

95. These rulings show that in order to make out a good title to the property the vendors must show that tho property is free from all encumbrances, that the vendee could not be expected to take a title with a cloud thereon, or compelled either to accept a doubtful title without investigation or rescind the contract. He could file a suit for specific performance and ask for an inquiry into the title by the result of which he would be bound. They also establish that the existence of a mortgage over a property would make the title thereto incomplete, and that knowledge on the part of the purchaser of defects in title of the vendor does not take away his rights to the statutory covenants unless there is a specific provision to cover such defects also. The non-repudiation of liability to discharge mortgages by the vendor cannot furnish a valid ground for not meeting the demand for inquiry into title.

96. Dealing with 52 Ind Cas 971 : (AIR 1920 Mad 859) (C), Mr. Justice Umamaheswaram, referred to the fact that before the date fixed for the completion of the sale the purchasers discovered that the vendors grandson had created a mortgage on the house and demanded satisfaction in respect thereof. That seems to have been one of the grounds of distinction drawn between that case and the present one. It is true in the instant case the requisition by the 1st Plaintiff to the 1st Defendant to prove discharge of the mortgage and deduce a marketable title was long after the time fixed for completion of die contract. But whether he could do it or not depends upon whether time was made the essence of contract under Ex. A-l. The law on the subject is enacted in Section 55 of the Indian Contract Act.

97. Considering the scope of the section, the Privy Council in ILR 40 Bom 289: (AIR 1915 PC S3) (B), stated as follows:

Their Lordships do not think that this section lays down any principle which differs from those which obtain under the Law of England us regards contracts to sell land- Under that Law, equity, which governs the rights of the parties in cases of specific performance of contracts to sell real estate, looks not at the letter but at the substance of the agreement in order to ascertain whether the parties, notwithstanding that they named a specific time within which completion was to take place, really and in substance intended more than that it should take place within a reasonable time.

Another passage which is very appropriate in the same judgment is this:

Prima facie, equity treats the importance of such time-limits as being subordinate to the main purpose of the parties and it will enjoin specific performance notwithstanding that from the point of view of a Court of Law the contract has not been literally performed by the Plaintiff as regards the time-limit specified. This is merely an illustration of the general-principle of disregarding the letter for the substance which Courts of equity apply when, for instance, they decree specific performance with compensation for a non-essential deficiency in subject-matter. The effect of the passages quoted above is that in a contract of sale of immovable property time will not be regarded as of the essence unless it is shown that the parties intended that their right should depend upon the observance of time as the essence of the contract.

98. I agree with Mr. Justice Umamaheswaram, that it is open to one of the parties to make time of the essence of the contract by calling upon the other party who has been guilty of unreasonable delay to perform the contract within a slated time by giving him reasonable notice. This position is made clear by the following observations in ILR 40 Bom 289: (AIR 1915 PC 83) (B):

But equity will not assist whore there has been undue delay on the part of one party to the contract and the other has given him reasonable notice that lie must complete within a definite time.

It is conceded by Mr. Raiuachaudra Rao that if the demand of the Appellant for the vouchers, etc., was not reasonable, the position taken up by the 1st Defendant would have been unassailable. Similarly, Mr. Bhimasankaram stated that if the Appellant had u right to call for a title free of; encumbrances, his client could not fix a weeks time for the completion of the sale without complying with the Appellants demand.

99. But, in the instant case, prior to Ex. B-4 which was in reply to the demand made by the 1st Plaintiff on 1st Defendant for evidence of good title and of the discharge) of the mortgage, there is nothing to indicate that parties stipulated that: time should be of the essence of tire contract. For one thing, there is provision for payment of interest in case the balance of sale price was not paid within the time stipulated and the conveyance taken. Tins is more in consonance with the view that the parties did not contemplate that time should be of the essence of contract. Secondly, even as late as 1st October 1948, the 1st Defendant intimated the 1st Plaintiff that in case the latter failed to pay him the amount before 4th October 1948, he would sue for specific performance of the contract, thereby showing that he would abide by the agreement despite the lapse of time fixed for the performance of the contract. The requisition as to title was made by the 1st Plaintiff before the 1st Defendant issued Ex. B-4 fixing a weeks time for the performance of it.

100. The right of the 1st Plaintiff to ask for satisfactory evidence of discharge of the mortgage is not lost by reason of his not having done it within the time prescribed for the completion of the sale. In ILR 40 Bom 289: (AIR 1915 PC 83) (B), the requisitions were made after the time fixed for the performance of the contract. The following observations of their Lordships arc pertinent in this context:

If these requisitions were made in time, their Lordships are of opinion that they were proper and that they were not adequately answered. If time was not of the essence of the contract it is clear that they were legitimately made, however the matter might stand as to one or other of them if the time were of the essence.

There are therefore no reasons for holding that the doctrine underlying 52 Ind Cas 971 : (AIR 1920 Mad! 859) (C), is inapplicable to this case. There is not much substance either in the argument that the 1st Plaintiff could only ask for discharge of the mortgage or that: before he could require the vendor to pay off the mortgage debt, he should know whether the mortgage was subsisting or not. It is only if the 1st Defendant failed to prove the discharge of the mortgage, the 1st Plaintiff could adopt the course indicated in Section 55 (1) (g) of the Transfer of Property Act. This contention would have had force if, in reply to Ex. A-2 the vendor had stated that the purchaser could retain so much money as was necessary to discharge the mortgage or that he would pay it off with the sale price. He did not even say that the purchaser would be indemnified against any possible loss due to his default and there was no cause for any apprehension on that score. On the other hand,, he first asserted that there was no subsisting mortgage and worse still, he next said that what was agreed. to be sold was only such right as was purchased at the Court auction.

101. It was lastly contended that if really the 1st Plaintiff had any doubts about the title to the properly or of the discharge of the mortgage he would not have offered to take conveyance without insisting on the production of the vouchers or other documents of title, as soon from Ex, A-3. The learned Counsel argues that the attitude of the 1st Plaintiff as disclosed in Ex. A-3 establishes beyond doubt that the latter was actuated by mala fides in issuing; Ex. A-2 on 13th October 1948, on receipt of the telegram, Ex. B-3 and that the demand contained in Ex. A-3 was an unreasonable, one. In my opinion, this contention lacks substance. The fact that the 1st Plaintiff offered to take conveyance of property without further investigation into title cannot, by itself, lead to the inference that the earlier demand was an unreasonable one. After all, the 1st Plaintiff wanted to be satisfied that the encumbrance existing on the suit property was discharged. His subsequent willingness to take a sale-deed without adhering to the earlier demand does not disclose lack of bona fides or that his previous stand was unsupportable.

102. The principle that a purchaser could elect either to be released from an agreement which became voidable on account of the conduct of the vendor or to perform it and ask for compensation is enunciated in Besant v. Richards, (1930) 48 ER 203 (Z2). If the 1st Plaintiff was within his rights in calling upon the 1st Defendant to satisfy him that the property agreed to be purchased by him was free from encumbrances, the 1st Defendant was not entitled to call upon the 1st Plaintiff to pay the balance of sale-price and take a conveyance without complying with the requisition or without even telling him that he should be compensated for any loss that might be sustained by him consequent upon his failure to pay off the mortgage debt, if any, out-Standing and later on put an end to the contract on the ground that the vendee did not perform his part of the contract.

103. There remains the point whether the 1st Plaintiff was ready and willing to perform his part of the contract at the relevant time. Tire trial Court held that the Plaintiff had not established that he had ready money with him to enable him to perform his obligations under the contract and therefore disentitled himself to sue for specified performance of the agreement. According to the lower Court, out of a sum of Rs. 6,900 that remained to be paid, he had only about Rs. 3,000 which he had withdrawn under Ext. A-ll (b) on 10th August, 1948 and he required Anr. Rs. 4,000 to make up the balance of the purchase money and the evidence of the Plaintiff that he had the whole amount necessary for the purpose was not acceptable as it lacked corroboration. In considering this aspect of the matter, the learned Judge failed to give effect to the fact noticed by him, namely, that even after the two withdrawals on 17th December, 1947 and 10th February, 1948 there was still a balance of Rs. 900.due to the 1st Plaintiff as seen under Exhibit A- 10(a). in the opinion of the learned Judge, the purchaser could not ask for specific performance unless he proved his continuous readiness and willingness up to the date of the suit and that it was not sufficient to say that he was ready to perform his part of the contract on the date ho was willing to take a conveyance from the vendor without further enquiry.

104. In support of this view, reliance was placed by the learned Judge on 1LR 52 Bom 597: (AIR 1928 PC 208 ) (D); Parul Bala Ghosh Vs. Saroj Kumar Goswami and Others, (Z3). I do not think any of these rulings has any application to the present case.

105. In ILR 52 Bom 597: (AIR 1928 PC 208 ) (D), the Privy Council ruled that the Plaintiff was not entitled to ask for a decree for damages since ho gave a notice subsequent to the institution of the suit to the Defendants solicitor abandoning his claim for specific performance. In Parul Bala Ghosh Vs. Saroj Kumar Goswami and Others, (Z3), the purchaser could not succeed in his suit for specific performance as the terms of the contract set out by him in the plaint were different from the contract as proved. He disputed the terms of the contract in the Courts below and he offered to perform the contract as proved only in the High Court when it was thought to be too late.

Similarly in Narinjan v. Muhammad Yunus, AIR, 1932 Lah 265 (Z4), the Plaintiff, the intending pur-- -chaser, was. held to be disentitled to specific performance as he insisted on the inclusion of a bit of land which did not form part of the original agreement. The learned Judges stated that the Plaintiff should prove that he was ready and willing to perform the contract as it really was and not in the way he thought the contract to be. Another case relied on by the Respondent is a ruling of the Privy Council in ILR 9 AH 705 (M), the Plaintiff, the intending purchaser, was held to be disentitled to specific performance as he insisted on the inclusion of a bit of land which did not form part of the original agreement. The learned Judges stated that the Plaintiff should prove that he was ready and willing to perform the contract as it really was and not in the way he thought the contract to be.

Another case relied on by the Respondent is a ruling of the Privy Council in 9 All 705 (M). That, again, is inapplicable to this case as the purchaser insisted on the seller giving a warranty of title both before suit and in the plaint to which he was not entitled. It was only at a very late stage that he offered to perform the contract as proved. Their Lordships refrained from going into the evidence bearing on the demand of the purchaser for covenant for title.

106. It is thus seen that none of these cases furnishes any basis for the doctrine that a person who sues for specific performance should establish that he was always ready with money to pay the vendor.; All that is necessary for tire purchaser to show is that he was ready and willing to fulfill the terms of the agreement, (107) This is made clear by the pronouncement of the Privy Council in Bank of India v. F. A. II. Chinoy, AIR 1950 PC 90 at p. 96 (Z5). The position is summed up by their Lordships in the following words:

It is true that the 1st Plaintiff stated that he was buying for himself, that he had not sufficient money to meet the price and that no definite arrangements had been made for finding it at the time of .repudiation, But in order to prove, himself to be ready and willing a purchaser has not necessarily to produce the money or to vouch a concluded scheme for financing the transaction.

Their Lordships also concurred with the following, statement in the judgment of Chagla, A. C. J.:

In my opinion, on the evidence already on record it was sufficient, for the Court to come to the conclusion that Plaintiff was ready and willing to perform his part of the contract. It was not necessary for him to work out actual figures and satisfy the Court what specific amount a bank would have-advanced on the mortgage of Iris property and the pledge of these shares. I do not think that any jury if the matter was left to the jury in England would have come to the conclusion that a man in the position in which the Plaintiff was, was not ready and willing to pay tire purchase price of the shares-which he had bought from Defendants 1 and 2.

108. These passages clearly indicate that the purchaser need not establish that he had the required money with him or arrangements have been made for financing the transaction. What is required of him is to show that he was ready and willing to fulfill his terms of the agreement. The trial Court had not considered that aspect, of the matter. In the view the trial Court had taken, it had not considered whether the Plaintiff was in a position to get the necessary funds. The trial Court had not adverted to the evidence bearing on this point but only discussed the evidence of the Plaintiff from the standpoint mentioned above.

109. Justice Umamaheswaram, who agreed with this conclusion of the trial Court, thought that only -a sum of Rs. 3,900 was available with 1st Plaintiff from February, 1948 and that he still required about Rs. 3,000 to make up the balance and it was only on 23rd. November, 1948, when the 2nd Plaintiff paid him Rs. 6,500 ho could make the; deposit into the Bank. So the 1st Plaintiff could not be said to be ready and willing to perform his part of the contract. The learned Judge also remarked that it was not open to the Appellant to put forward a ease in the -appeal that he was in a position, to raise the necessary amount especially in the absence of pleading issue or any evidence bearing on this.

110. I am of the opinion, differing from the learned Judge, that the Appellant is not precluded from showing from the evidence on record that he was in a position to raise the wherewithal for implementing the contract. The averments in the plaint and the issue raised are wide enough to cover this plea. The account books of the rice mill and of the partnership between the 1st Plaintiff and P. W. 3 seem to have been filed only to probation the 1st Plaintiffs case that he had the balance of purchase money. To evidence furnished by these accounts throws light more on his capacity to raise the funds required for the purpose.

So, there is no obstacle in the way of considering the question as to the capacity of the 1st Plaintiff to get the funds needed to implement the contract. As I have already remarked, it is not necessary to consider whether the Plaintiff had the balance of sale-price in readiness. Therefore, what is to be decided is whether the Plaintiff was in a position to raise or find money to complete the transaction. It is true that the 1st Plaintiff put forward a case that he had ready with him throughout the relevant period. But, I am relieved of the necessity to express any opinion on this version of the 1st Plaintiff for the reasons already stated. I would, there-fore, examine the evidence to see if the Plaintiff was in a position to raise the necessary funds to meet the balance of sale price.

111. As pointed out earlier, the balance of sale consideration to be paid to the 1st Defendant was only Rs. 6,900. The 1st Plaintiff had withdrawn Rs. 3,000 from the firm of P.W. 2 under Exhibit A-ll (b), even after this withdrawal, there was still Rs. 900 to his credit in that katha and what remained to make up the balance of sale-price was only about Rs. 3,000. It is in evidence that the 1st Plaintiff had invested a sum of Rs. 16,000 in the oil business and it is from this that he made withdrawals under Exhibits A-ll (a) and A-ll(b). He had also dealings with Venkateswara Rice Mill of Nidubrolu. It appears from the evidence of P. W. 1 that this rice mill used to borrow money from the 1st Plaintiff and on occasions the latter could get money from the mill.

It is also admitted that he possessed ten acres of land. In addition, he had already entered into a contract to assign his rights under Exhibit A-10 to the 2nd Plaintiff for a sum of Rs. 13,200. In this state of affairs, it was quite easy for the 1st Plaintiff to make up the balance of the sale-price. The evidence on record does not leave me in doubt as the capacity of the 1st Plaintiff to get tire money needed for the purpose. Having regard to his financial position, he could command credit in the market or raise money by mortgages, and was in a position to implement the contract. To use the words of Mr. Chagla, C. J., it is difficult to come to the conclusion that a man, in the position in which the Plaintiff was, was not ready and willing to pay the purchase price. Under these circumstances, it must be found that the Plaintiff was ready and willing to perform his part of the contract.

112. It was lastly urged by the counsel for the Respondents that as there are no averments in the plaint that the 1st Plaintiff was always ready and willing to perform his part of the contract, the Plaintiffs should be non-suited. According to the learned Counsel, it should be specifically pleaded that the purchaser was continuously ready and willing to perform the contract. I am unable to accede to this argument either. In my opinion, the recitals in paragraphs 6 to 8 of the plaint are sufficient to show that he was ready and willing to perform his part of the contract. It is enough if it is made clear that he was continuously ready and willing to fulfill the terms of the contract. The judgment of the Bench of the Madras High Court in Arjuna Mudahar v. Lakshmi Animal, 1948-2 Mad LJ 271: (AIR 1949 Mad 265 ) (Z6), is an authority for the proposition that it need not be stated in so many words. There, it was decided, that the averment that the Plaintiff had no objection to perform the contract in accordance with the decision of a Court was sufficient. This argument also fails and there is no obstacle in the way of the 1st Plaintiff getting the relief asked for.

113. For these reasons, I hold, agreeing with my Lord the Chief Justice, that the 1st Plaintiff is entitled to have the suit agreement specifically enforced.

114. FINAL JUDGMENT: In this case, in view of the opinion expressed by Chandra Reddy, J., we set aside the decree of the trial Court and allow the appeal with costs throughout,

115. ORDER: By our order, dated 10th February, 1955 we passed a decree in appeal. Two months time from to-day is granted for the execution of the sale deed. The stamp papers filed by the 1st Appellant (Exhibit A-15) may be returned to him.