RAJ KISHORE (DEAD) BY LRS.versusPREM SINGH & ORS.

                [2010] 14 (ADDL.) S.C.R. 1019


               RAJ KISHORE (DEAD) BY LRS.                             A
                                v.
                      PREM SINGH & ORS.
                (Civil Appeal No. 7471 of 2003)
                     DECEMBER 10, 2010
                                                                      B
      [MARKANDEY KATJU AND T.S. THAKUR, JJ.]

      Transfer of Property Act, 1882:

      s.58 - Mortgage by conditional sale - Held: For                 c
 transaction to constitute mortgage by conditional sale, it is
 necessary that the condition is embodied in the document that
 purports to effect the sale - Mortgage.

        s. 58(e) - Mortgage - Essential conditions for a
   transaction to constitute an English mortgage - Held: What         D
   is important in terms of the requirement of s.58(e) is not that
 . the purchaser has agreed or bound him:;elf to transfer the
   property by a particular date but that the seller has bound
   himself to pay the amount by a certain date - In the instant
   case, sale-deed did not contain any stipulation binding the        E
   sef/er to pay an amount on a certain date - Agreement for
   re-conveyance was signed by purchaser only- Seller was not
   a signatory to the said agreement - The seller cannot,
   therefore, be said to have bound himself to re-pay the
- mortgage money on future date - The transaction was, thus,          F
   not in the nature of English Mortgage.
      Contract: Agreement for re-conveyance - Held: In a case
 where the parties enter into a transaction of sale and also
 execute an agreement for re-conveyance of the property sold,
 time stipulated for re-conveyance is the essence of the              G
 contract - In the instant case, the plaintiff-seller had failed to
 prove that he had tendered the stipulated amount to the
 purchaser within the date stipulated in the agreement for re-
                               1019                                   H
    1020 SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.

A   conveyance - Any claim for re-conveyance made in default
    of the said stipulation must fail for the right of re-conveyance
    cannot be saved from forfeiture in the case of default.
        Specific Relief Act, 1963: s.16(c) - Specific performance
   - Held: In a suit for specific performance, it is absolutely
B necessary for the plaintiff to assert that he/she was always
  ·ready and willing to perform the essential terms of the contract
   sought to be enforced against the defendant- s.16(c) makes
   that requirement mandatory - In the instant case, there was
   no averment as to the readiness and willingness of the
C plaintiff to perform his part of the contract - In the absence of
   such an averment, amendment of the plaint to incorporate a
   prayer for specific performance of the agreement for re-
   conveyance would not have advanced the case of the plaintiff.
        The plaintiff had executed a sale deed in favour of
0
    defendant no.1 on 6th, July 1974 in respect of the suit
    land for Rs.6000/-. He filed a suit for declaration that the
    sale deed executed by him was void and ineffective and
    that he continued to be in cultivating possession of the
    land as owner thereof. The plaintiff's case was that the
E   transfer of the suit land was only by way of security for
    the repayment of Rs. 6000/- which was taken only as a
    loan and an agreement was executed between the parties
    on 6th July, 1974 itself that the return of the loan amount
    by 6th July, 1981 would result in transfer back of the suit
F   land. The trial court dismissed the suit. The plaintiff filed
    appeal before the first appellate court. During the
    pendency of the appeal, the plaintiff filed an application
    for permission to amend the plaint to add an alternative
    prayer to the effect that in case the sale-deed in favour
G   of defendant no.1 was held to be validly executed, the
    plaintiff may be given a decree for specific performance
    by execution of a sale-deed for the transfer of the suit
    property in his favour. The first appellate court heard the
    appeal and the application for amendment together and
H   dismissed both.
 RAJ KISHORE (DEAD) BY LRS. v. PREM SINGH & 1021
                    ORS.

     The High Court held that the dism.issal of the               A
application for amendment by the first appellate court was
not correct as the proposed amendment would not have
made any material difference. On merits, the High Court
took the view that whenever a sale-deed is accompanied
by a document for re-conveyance of the property sold,             B
the transaction between the parties would amount to a
mortgage, subject to the condition that the mortgagee
must get the property re-conveyed within the period
stipulated for that purpose. The High Court relied upon
revenue records for the year 1980-81 and on that basis            c
held that the finding of the courts below that the property
was not held jointly by the plaintiff and defendant no.2
was perverse and restrained defendant no.1 from
interfering with the possession of the plaintiff till such time
he obtained a decree for partition from the revenue court         D
concerned. The instant appeal was filed challenging the
order of the High Court

    Dismissing the appeal, the Court

      HELD: 1.1. A bare reading of Section 58 of Transfer         E
of Property Act, 1882 would show that for a transaction
to constitute mortgage by conditional sale, it is necessary
that the condition is embodied in the document that
purports to effect the sale. That requirement is stipulated
by the proviso which admits of no exceptions. The High            F
Court overlooked the proviso to Section 58(c) according
to which the condition regarding payment of the
mortgage money as a condition for transfer of the
property to the seller must be embodied in the sale-deed
itself. That was not so in the instant case. The sale-deed        G
executed by the plaintiff in the instant case did not
embody any condition like the one referred to in clause
(c) of Section 58. The broad statement of law made by the
High Court to the effect that every sale accompanied by
an agreement for re-conveyance of the property would
                                                                  H
    1022 SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.


A constitute a mortgage by conditional sale was, therefore,
  not correct. [Paras 12, 13] [1030-H; 1031-A-D]

        K. Simrathmul/ v. Nanjalingiah Gowder AIR 1963 SC
    1182 - relied on.
B        1.2. For a transaction to constitute an English
    mortgage the following essential conditions must be
    satisfied: (1) The mortgagor must bind himself to re-pay
    the mortgage money on a certain date; (2) The property
    mortgaged should be transferred absolutely to the
C   mortgagee; (3) Such absolute transfer should be made
    subject to proviso that the mortgagee shall re-convey the
    property to the mortgagor upon payment by him of the
    mortgage money on the date the mortgagor binds himself
    to pay the same. It is only in cases where all the three
D   requirements are satisfied that the transaction
    constitutes an English mortgage and not otherwise. The
    case at hand does not satisfy all the three requirements.
    In particular, the first requirement where under the
    mortgagor binds himself to re-pay the mortgage money
E   on a certain date is not satisfied. That is so because the
    sale-deed executed by the plaintiffs-appellants does not
    contain any such stipulation binding the seller to pay the
    amount of Rs.6,000/- on a certain date. As a matter of fact,
    the sale-deed does not even remotely suggest that the
F   transaction is in the nature of a mortgage or that there is
    any understanding or agreement between the parties
    whereunder the property sold has to be re-transferred to
    the seller. The only other document which could possibly
    contain such a stipulation binding the mortgagor to
G   return the mortgage money is the agreement for re-
    conveyance. Significantly, this document was signed
    only by the purchaser and not by the seller. The
    document signed by purchaser is described as an
    agreement for re-conveyance. There is no doubt ~
    stipulation that the purchaser has agreed to re-transfer
H
 RAJ KISHORE (DEAD) BY LRS. v. PREM SINGH & 1023
                    ORS.

the property to the seller in case the plaintiff returns the      A
sum of Rs.6,000/- by 6th July, 1981, yet there is nothing
in the document to suggest that the seller had bound
himself to abide by that stipulation. What is important in
terms of the requirement of Section 58(e) is not that the
purchaser has agreed or bound himself to transfer the             B
property by a particular date but that seller has bound
himself to pay the amount by a certain date. Since the
seller is not a signatory to the agreement of re-
conveyance, it is difficult to see how he can be said to
have bound himself to re-pay the mortgage money by the            C
6th July, 1981. The transaction was therefore, not in the
nature of an English Mortgage and the suit was not a suit
for redemption of such a mortgage. [Paras 16, 17] [1032-
E-H; 1033-A-G]

     1.3. It is incorrect to say that the stipulation of a date   D
for payment of money as a condition for re-conveyance
of the property is a clog on equity of redemption. The suit
filed by the appellants did not proceed on the basis that
the transaction between the parties tantamounted. to a
mortgage nor did the plaintiff pray for a decree for              E
redemption from the court. The suit was one for
declaration to the effect that the sale-deed executed by
him was void and the plaintiffs continued to be owner
and in occupation. The contention that the transaction
between the parties was in the nature of a mortgage or            F
that the suit was in substance one for redemption is
accordingly rejected. [Para 17] [1033-G-H; 1034-A-B]

    2. In a suit for specific performance, it is absolutely
necessary for the plaintiff to assert that he/she was
always ready and willing to perform the essential terms           G
of the contract sought to be enforced against the
defendant. Section 16(c) of the Specific Relief Act 1963
makes that requirement mandatory. There was no
averment as to the readiness and willingness of the
                                                                  H
   1024 SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.


A plaintiff to perform his part of the contract. In the absence
  of such an averment, amendment of the plaint to
  incorporate a prayer for specific performance of the
  agreement for re-conveyance would not have advanced
  the case of the plaintiff or the appellants who have
8 succeeded     him. Therefore, the view of the High Court
  that even if the prayer was allowed to be incorporated by
  amendment, since there was no averment in the plaint to
  the effect that the plaintiff was ready and willing to
  perform his part of the contract, any such amendment
C would be of little value was correct. [Para 18] (1034-C-G]

       Chunchun Jha v. Ebadat Ali AIR 1954 SC 345;
  Bismillah Begum (Smt) Dead by Lrs. v. Rahmtullah Khan
  (Dead) by Lrs. (1998) 2 SCC 226; Gauri Shankar Prasad and
  Ors. v. Brahma Nand Singh (2008) 8 SCC 287; Caltex (India)
D Ltd. v. Bhagwan Devi Marodia AIR 1969 SC 405 - relied on.

       3. In a case where the parties have entered into a
  transaction of sale and also executed an agreement for
  re-conveyance of the property sold, time stipulated for re-
E conveyance is the essence of the contract. The courts
  below have concurrently held that the plaintiff had failed
  to prove that he had tendered the amount of Rs.6,000/-
  to the purchaser within the date stipulated in the
  agreement for re-conveyance. That being a finding of fact,
  any claim for re-conveyance made in default of the said
F stipulation must fail for the right of re-conveyance cannot
  in the case of default be saved from forfeiture. The
  general principle of law that equity grants relief against
  penalty in a money bond and also against the penal
  sums made payable on breach of bonds has an
G exception to it. The exception was recognized by the
  Federal Court in Shanmugam Pillai case where, by a
  majority, the Court held that if under an agreement an
  option to a vendor is reserved for re-purchasing the
  property sold by him, the option is in the nature of a
H
 RAJ Kl SHORE (DEAD) BY LRS. v. PREM SINGH & 1025
                     ORS.

concession or a privilege and may be exercised in                   A
fulfillment of the conditions on the fulfillment of which it
is made exercisable. In the instant case there is no
allegation of fraud, accident or surprise to call for
intervention of equity so as to save the plaintiffs right of
re-conveyance of the property against forfeiture. [Paras            B
19, 21, 22] [1034-H; 1035-A-C; 1036-C-F; 1037-B-C]

     Ardeshir H. Mama v. Flora Sassoon AIR 1928 PC 208
- relied on.

    Davis v. Thomas (1830) 39 ER 195; Shanmugam Pillai              C
v. Annalakshmi Ammal AIR 1950 FC 38 - referred to.

                      Case Law Reference:
    AIR 1963 SC 1182           relied on          Para 13
                                                                    D'
    AIR 1954 SC 345            relied on          Para 19
    (1998) 2 sec 226           relied on          Para 19
    (2008) 8 sec 287           relied on          Para 19
    AIR 1950 FC 38             referred to        Paras 19, 21      E

    AIR 1969 SC 405            relied on          Para 19
    AIR 1928 PC 208            relied on          Para 20
     (1830) 39 ER 195          referred to        Para 21           F
    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
7471 of 2003.

    From the Judgment & Order qated 25.02.2003 of the H.igh
Court of Madhya Pradesh, Bench at Gwalior in Second Appeal          G
No. 230 of 1995.

      Sushil Kumar Jain, Puneet Jain, Trishna (for Pratibha Jain)
for the Appellant.
                                                                    H
    1026 SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.


A        Shiv Sagar Tiwari for the Respondents.

         The Judgment of the Court was delivered by

       T.S. THAKUR, J. 1. This appeal by special appeal arises
  out of a judgment and order dated 25th February, 2003, passed
B by the High Court of Madhya Pradesh at Jabalpur, Gwalior
  Bench, whereby Second Appeal No.230 of 1995 filed by the
  appellants-plaintiffs was allowed but only in part and to the
  extent of granting a decree for injunction restraining the
  defendants-respondents from interfering with the possession of
C the appellants over the suit property till such time the said
  property is partitioned between them through the competent
  Revenue Court concerned. The facts necessary for disposal of
  this appeal may be briefly stated as under:

D         2. Late Shri Raj Kishore the predecessor-in-interest of the
    plaintiffs-appellants herein owned jointly with his brother
    defendant-respondent no.2 Shri Jugal Kishore agricultural land
    situate in different survey numbers of village Morasa, Tehsil
    Kurwai in the State of Madhya Pradesh. In terms of a sale-deed
E   executed and registered on 6th July, 1974 by Shri Raj Kish ore
    an extent of 14 bighas and 15 biswas of the land
    aforementioned from out of survey nos. 436, 439/1 and 441 was
    transferred to the defendant-respondent no.1 for a sum of
    Rs.6,000/- only. The plaintiffs case is that the transfer was only
    by way of security for the repayment of Rs.6,000/- which
F   according to the plaintiff was taken only as a loan. The plaintiffs
    further case is that return of the loan amount by the 6th July,
    1981 would result in the land in question being transferred back
    to the plaintiff to which. effect an agreement was also executed
    between the parties to the transaction on the 6th July, 1974
G   itself. The plaintiff alleged that the possession of the land in
    question continued with him and defendant no.2 as agreed. It
    was also agreed between the parties thc.t defendant no.1 shall
    not get the disputed land mutated in their name till 6th July,
    1981, the date by which the plaintiff could repay the amount of
H   loan and secure the return of their land.
 RAJ KISHORE (DEAD) BY LRS. v. PREM SINGH & 1027
            ORS. [T.S. THAKUR, J.]

     3. The plaintiff further alleged that contrary to the         A
agreement between the parties defendant no.1 got a mutation
regarding the land in question attested in his favour although
he had no right to do so in view of the specific stipulation
contained in the agreement between the parties forbidding any
such mutation. The plaintiff asserted that they had approached     B
defendant no.1 several times to receive back the sum of            '


Rs.6,000/- borrowed from him and to get the land in question
transferred back to them, but the said defendant had refused
to do the needful. The plaintiff in that backdrop prayed for a
decree for declaration to the effect that the sale-deed executed   c
by him in favour of defendant no.1 was void and ineffective and
that he continued to be in cultivating possession of the land as
owner thereof.

     4. Defendant-respondent no.1 contested the suit by filing
a written statement in which he denied the assertion that the D
sale-deed in question was executed by way of security for
repayment of any loan. It was also alleged that the defendant
was in possession of the land in question ever since the
execution of the sale-deed and that a mutation based on the
sale-deed had been attested in his favour. Defendant no.1 E
further alleged that he had made improvements over the land ,
and that a suit for declaration simplicitor was not maintainable
as the plaintiff was out of the possession of the land in question.

      5. On the pleadings of the parties the Trial Court of Civil F
Judge First Class, Kurwai, District Vidisha, framed as many
as eight issues for determination and recorded evidence
adduced by the parties before it. The Trial Court eventually held
that the sale-deed in question was not executed as security for
any loan as alleged by the plaintiff nor was the execution of G
agreement dated 6th July, 1974 proved. The Trial Court further ,
held that defendant no.1 had not forcibly occupied the land in
question during the pendency of the suit as alleged by the
plaintiff.

    6. Aggrieved by the dismissal of the suit the plaintiff        H
    1028 SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.


A   appealed to the District Judge, Vidisha, M.P. During the
    pendency of the said appeal the plaintiff filed an application for
    permission to amend the plaint to add an alternative prayer to
    the effect that in case the sale-deed in favour of defendant no.1
    was held to be validly executed, the plaintiff be given a decree
s   for specific performance by execution of a sale-deed for the
    transfer of the suit property in his favour. This application was
    allowed by the Trial Court but in revision the same was set
    aside and the amendment application directed to be
    considered along with the main appeal.
c      7. The First Appellate Court accordingly heard the appeal
  and the application for amendment together and by its judgment
  and order dated 19th July, 1995 dismissed both. The First
  Appellate Court held that the prayer for amendment of the plaint
  to seek a decree for the transfer of the land in question in favour
D of the plaintiffs-appellant was time barred and that the
  amendment would in any case alter the nature of the suit.

       8. On the merits of the case the First Appellate Court held
  that there was no stipulation in the sale-deed that the land
E transferred thereby shall be retransferred to the Vendor by
  executing a sale-deed in his favour. In so far as agreement
  (marked Ex.D1) for retransfer of the land in question to the
  plaintiff was concerned, the First Appellate Court held that while
  the execution of the agreement was proved there was no
F mention in the same about the sale-deed in question being by
  way of security for repayment of the loan. The First Appellate
  Court observed:

         "It is clear from the above analysis that the alleged sale
         deed of Ex.D-1 and agreement Ex.P-1 for which dispute
G        has been raised and evidence adduced is actually a Sale
         deed. This Sale deed was not written for the security of
         loan. Similarly it is also clear that agreement of Ex.P-1 was
         written by the Defendant No.1 but writing of Sale deed
         Ex.D-1 for Security on the basis of this agreement is not
H        proved and the Appellants/Plaintiffs do not have eligibility
 RAJ KISHORE (DEAD) BY LRS. v. PREM SINGH & 1029 ·
            ORS. [T.S. THAKUR, J.]

    of any relief from Defendant No.1 on the basis of this             A
    agreement. Hence, the judgment and decree passed by
    the lower court is not erroneous."

     9. Aggrieved by the judgment aforementioned the plaintiffs-
appellants filed second appeal No.230 of 1995 before the High          B
Court of Madhya Pradesh, Gwalior Bench. The High Court held
that the dismissal of the application for amendment by the First
Appellate Court on the ground that the prayer sought to be
incorporated by the amendment was barred by limitation was
not correct. All the same the proposed amendment would make            C
no material difference unless the plaintiff also pleaded that he
was ready to perform his part of the contract so as to entitle
him to any relief based on the agreement executed between
the parties. The dismissal of the application was on that ground
upheld.
                                                                       D.
      10. On the merits of the case the High Court took the view
that whenever a sale-deed was accompanied by a document
for re-conveyance of the property sold the transaction between
the parties would amount to a mortgage, subject to .the
condition that the mortgagee must get the property re-conveyed         E ·.
within the period stipulated for that purpose. The High Court
further held that there was no cogent evidence on record to
prove that defendant no.1 was in possession of the suit land
on the date of the filing of tile suit. Even in Ex.D-2 relied upon
by the defendant, the property was recorded jointly in the names       F
of the plaintiff and defendant no.2 in the revenue records for
the year 1980-81. The High Court on that basis held that the
finding of the Courts below that the property was not held jointly
by the plaintiff and defendant no.2 was perverse. The appeal
was accordingly allowed in part and defendant no.1 restrained          G
from interfering with the possession of the plaintiff till such time
he obtained a decree for partition from the revenue court
concerned. The present appeal assails the above judgment
and order of the High Court as noticed earlier. Raj Kishore the
plaintiff in the suit having passed away during the pendency of        H
    1030 SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.


A   this appeal, his legal representatives were brought on record
    on 5th November 2008.

       11. We have heard learned counsel for the parties at
  length. As seen above, the High Court has, while dealing with
8 the substantial question of law framed by it for determination,
  held that whenever conveyance of any property is accompanied
  by a document for re-conveyance of the same to the seller the
  transaction would amount to a mortgage. That proposition of
  law is not in our opinion correctly stated. Although the High
  Court has not elaborated as to what kind of mortgage an
C agreement for re-conveyance would bring about, it is obvious
  that the High Court meant to say that the transaction would
  constitute a mortgage by conditional sale. Mortgage by
  conditional sale is described by Section 58 as under:

D       "58 (c) Mortgage by conditional sale.-Where, the
        mortgagor ostensibly_ sells the mortgaged property-

             on condition that on default of payment of the
        mortgage-money on a certain date the sale shall become
        absolute, or
E
              on condition that on such payment being made the
        sale shall become void, or

             on condition that on such payment being made the
F       buyer shall transfer the property to the seller,

              the transaction is called a mortgage by conditional
        sale and the mortgagee a mortgagee by conditional sale:

               Provided that no such transaction shall be deemed
G        to be a mortgage, unless the condition is embodied in the
       · document which effects or purports to effect the sale."

       12. A bare reading of the above would show that for a
  transadion to constitute mortgage by conditional sale it is
H necessary that the condition is embodied in the document that
 RAJ KISHORE (DEAD) BY LRS. v. PREM SINGH & 1031
            ORS. [T.S. THAKUR, J.]

purports to effect the sale. That requirement is stipulated by the    A
proviso which admits of no exceptions.

     13. The High Court it is manifest from the judgment under
appeal overlooked the proviso according to which the condition
regarding payment of the mortgage money as a condition for B
transfer of the property to the seller must be embodied in the
sale-deed itself. That is not so in the instant case. The sale-
deed executed by the plaintiff in the instant case does not
embody any condition like the one referred to in clause (c) of
Section 58 extracted above. The broad statement of law made
by the High Court to the effect that every sale accompanied by C
an agreement for re-conveyance of the property will constitute
a mortgage by conditional sale is not, therefore, correct. That
is also the view taken by this Court in K. Simrathmufl v.
Nanjalingiah Gowder Al R 1963 SC 1182 where the plaintiff had
borrowed a certain amount from the defendant and in lieu D
thereof executed a deed of conveyance of certain land together
with the house standing thereon in favour of the defendant.
Another deed of re-conveyance was executed by the defendant
on the same date by which the defendant-purchaser of the
property agreed to re-convey the house provided the exercise E ·.
of the right of demanding re-conveyance took place within two
years and rent payable by the plaintiff is not in arrears for more
than six months at any time. On the breach of the second
 condition stipulated by the agreement for re-conveyance the
defendant-purchaser refused to re-convey. In a suit for specific F
 performance the plaintiff sought to invoke the equitable
jurisdiction of the Court to give him relief against the forfeiture
clause. This Court held that the sale-deed and the deed of
conveyance and rent were no doubt parts of the same
transaction yet the transaction did not constitute a mortgage by G
conditional sale. This Court observed:

     "The sale deed the deed of reconveyance Ext. A-1 and the
     rent note Ext. 8-1 were undoubtedly parts of the same
     transaction. The plea of the plaintiff that the sale deed Ext.
                                                                      H
        1032 SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.

•
    A       A-1 constituted a transaction of mortgage by conditional
            sale is inadmissible, because the sale deed and the
            covenant for reconveyance are contained in separate
            documents".

              14. The finding of the High Court as to the legal effect of
    8
        the transaction of sale followed by an agreement for re-transfer
        of the property is not, therefore, legally sound.

            15. Mr. Jain learne9 counsel for the appellants all the same
        argued that the transaction in question was in the nature of an
    c   English Mortgage as defined under Section 58(e) of the
        Transfer of Property Act, 1882 which reads as under:

            "58 (e) English mortgage.- Where the mortgagor binds
            himself to repay the mortgage-money on a certain date,
    D       and transfers the mortgaged property absolutely to the
            mortgagee, but subject to a proviso that he will re-transfer
            it to the mortgagor upon payment of the mortgage-money
            as agreed, the transaction is called an English mortgage."

           16. A plain reading of the above would show that for a
    E transaction to constitute an English mortgage the following
      essential conditions must be satisfied:

              (1)   The Mortgagor must bind himself to re-pay the
                    mortgage money on a certain date.
    F
              (2)   The property mortgaged should be transferred
                    absolutely to the Mortgagee.

              (3)   Such absolute transfer should be made subject to
                    proviso that the Mortgagee shall re-convey the
    G               property to the Mortgagor upon payment by him of
                    the mortgage money on the date the Mortgagor
                    binds himself to pay the same.

             17. It is only in cases where all the three requirements
        indicated above are satisfied that the transaction constitutes
    H
 RAJ KISHORE (DEAD) BY LRS. v. PREM SINGH & 1033
            ORS. [T.S. THAKUR, J.]

an English mortgage and not otherwise. The case at hand does A
not satisfy all the three requirements mentioned above. In
particular the first requirement where under the Mortgagor binds
himself to re-pay the mortgage money on a certain date is not
satisfied in the instant case. We say so because the sale-deed
executed by the plaintiffs-appellants does not contain any such · B
stipulation binding the seller to pay the amount of Rs.6,000/- .
on a certain date. As a matter of fact, the sale-deed does not ·
even remotely suggest that the transaction is in the nature of a
mortgage or that there is any understanding or agreement
between the parties whereunder the property sold has to be re- · c
transferred to the seller. The only other document which could
possibly contain such a stipulation binding the Mortgagor to
return the mortgage money is the agreement for re-conveyance.
Significantly, this document is signed only by Prem Singh the
purchaser and not by the seller. The document signed by Prem D
Singh is described as an agreement for re-conveyance. There
is no doubt a stipulation that Prem Singh has agreed to re-
transfer the property to the seller in case the plaintiff Raj Kishore
returns the sum of Rs.6,000/- by 6th July, 1981 yet there is
nothing in the document to suggest that the seller had bound
himself to abide by that stipulation. What is important in terms
of the requirement of Section 58 (e) is not that the purchaser
has agreed or bound himself to transfer the property by a
particular date but that seller has bound himself to pay the
amount by a certain date. Since the seller is not a signatory to
the agreement of re-conveyance it is difficuit to see how he can F
be said to have bound himself to re-pay the mortgage money
by the 6th July, 1981. We have, therefore, no difficulty in
rejecting the contention urged on behalf of the appellants that
the transaction was in the nature of an English Mortgage and
the suit was in essence a suit for redemption of such a G ·
mortgage. We have also in that view no difficulty in repelling
the contention urged by Mr. Jain that the stipulation of a date
for payment of money as a condition for re-conveyance of the
property is a clog on equity of redemption. We cannot overlook
the fact that the suit filed by the appellants did not proceed on H
    1034 SUPREME COURT REPORTS (2010] 14 (ADDL.) S.C.R.


A the basis that the transaction between the parties tantamounted
  to a mortgage nor did the plaintiff pray for a decree for
  redemption from the Court. The suit was, as noticed earlier, one
  for declaration to the effect that the sale-deed executed by him
  was void and the plaintiffs continued to be owner and in
B occupation. The contention that the transaction between the
  parties was in reality one in the nature of a mortgage or that
  the suit was in substance one for redemption has not, therefore,
  impressed us and is accordingly rejected.

           18. The only other question that arises for consideration
C   is whether the plaintiff could rely upon the agreement for re-
    conveyance and pray for a decree for specific performance
    thereof. The plaintiff had, in that regard, sought an amendment
    which was declined by the Courts below. The first appellate
    Court was of the view that even if the relief sought to be
D   incorporated by amendment was allowed to be incorporated
    the same would be time-barred. The High Court was on the
    contrary of the view that even if the prayer was allowed to be
    incorporated by amendment since there was no averment ii"!
    the plaint to the effect that the plaintiff was ready and willing to
E   perform his part of the contract any such amendment would be
    of little value. The High Court was. in our opinion, correct in the
    view taken by it. In a suit for specific performance it is absolutely
    necessary for the plaintiff to assert that he/she was always
    ready and willing to perform the essential terms of the contract
F   sought to be enforced against the defendant. Section 16(c) of
    the Specific Relief Act 1963 makes that requirement
    mandatory. There is, in the present case, no averment as to
    the readiness and willingness of the plaintiff to perform his part
    of the contract. In the absence of such an averment, amendment
G   of the plaint to incorporate a prayer for specific performance
    of the agreement for re-conveyance would not have advanced
    the case of the plaintiff or the appellants who have succeeded
    him.

         19. More importantly, in a case where the parties have
H
 RAJ KISHORE (DEAD) BY LRS. v. PREM SINGH & 1035
            ORS. [T.S. THAKUR, J.]

entered into a transaction of sale and also executed an · A
agreement for re-conveyance of the property sold, time
stipulated for re-conveyance is the essence of the contract. The
law on the subject is fairly well-settled by the decisions of this
Court in Chunchun Jha v. Ebadat Ali (AIR 1954 SC 345),
Bismillah Begum (Smt) Dead by Lrs. v. Rahmtullah Khan B
(Dead) by Lrs. (1998) 2 SCC 226 and Gauri Shankar Prasad
and Ors. v. Brahma Nand Singh (2008) 8 SCC 287. Relying
upon the decision of Federal Court in Shanmugam Pilla/ v.
Annalakshmi Ammal AIR 1950 FC 38, this Court in Caltex
(India) Ltd. v. Bhagwan Devi Marodia AIR 1969 SC 405, held          c
that in contracts relating to re-conveyance of property time is
always the essence of the contr3ct. This Court observed:

    "At common law stipulation as to time in a contract giving
    an option for renewal of a lease of land were considered
    to be of the essence of the contract even if they were not      D
    expressed to be so and were construed as conditions
    precedent. Equity followed the common law rule in respect
    of such contracts and did not regard the stipulation as to
    time as not of the essence of the bargain"
                                                                    E
     20. This Court also held that the principle stated by the
Federal Court in Ardeshir H. Mama v. Flora Sassoon AIR 1928
PC 208 to the effect that time is not normally the essence of
the contract in contracts relating to immovable property did not
apply to contracts for re-conveyance of the immovable property.     F
This Court observed:

    'The above passage refers both to options for renewal and
    options to repurchase where, in regard to immovable
    property, as a matter of law time becomes the essence
    of the contract. Therefore in regard to contracts of            G
    reconveyance relating to immovable property the principle
    laid down in A.H. Mama v. Flora Sassoon - that time is
    not normally the essence of the contract in contracts
    relating to immovable property - does not apply. It is in
    fact, so observed in Caltex (India) Ltd. case. In view of t~e   H
    1036 SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.


A        abovesaid decision of this Court relating to contract of
         reconveyance, and inasmuch as the amount was not paid
         within the stipulated time, the said option in favour of the
         plaintiff must be deemed to have "lapsed". For the
         aforesaid reasons, the appeal fails and is dismissed. No
B        costs."

                                                   (emphasis added)

         21. The Courts below have concurrently held that the
    plaintiff had failed to prove that he had tendered the amount of
C   Rs.6,000/- to the purchaser within the date stipulated in the
    agreement for re-conveyance. That being a finding of fact any
    claim for re-conveyance made in default of the said stipulation
    must fail for the right of re-conveyance cannot in the case of
    default be saved from forfeiture. The general principle of law
D   that equity grants relief against penalty in a money bond and
    also against the penal sums made payable on breach of bonds
    has an exception to it. The exception was recognized by the
    Federal Court in Shanmugam Pillai case (supra) where by a
    majority the Court held that if under an agreement an option to
E   a vendor is reserved for repurchasing the property sold by him,
    the option is in the nature of a concession or a privilege and
    may be exercised in fulfillment of the conditions on the fulfillment
    of which it is made exercisable. If the original vendor fails to
    act punctually according to the terms of the contract, the right
F   to repurchase will be lost and cannot be specifically enforced.
    Refusal to enforce the terms for failure to abide by the
    conditions does not amount to enforcement of a penalty and
    the Court has no power to afford relief against the forfeiture
    arising as a result of breach of such a condition. The Court
G   followed the principle set out in Davis v. Thomas (1830) 39
    ER 195. The above principle was recognized to be correct in
    K. Simrathmull case (supra). This Court also quoted with
    approval the following passage from Halsbury's Laws of
    England Vol.14, Ill Edn., page 622, paragraph 1151:

H              "Where under a contract, conveyance, or will a
 RAJ KISHORE (DEAD) BY LRS. v. PREM SINGH & 1037
            ORS. [T.S. THAKUR, J.]

    beneficial right is to arise upon the performance by the         A
    beneficiary of some act in a stated manner, or at a stated
    time, the act must be performed accordingly in order to
    obtain the enjoyment of the right, and in the absence of
    fraud, accident or surprise, equity will not relieve against
    a breach of the terms".      ·                                   B

      22. In the present case there is no allegation of fraud,
accident or surprise to call for intervention of equity so as to
save the plaintiffs right of re-conveyance of the property against
forfeiture.
                                                                     c
     23. In the result this appeal fails and is hereby dismissed
but in the circumstances without any order as to costs.

D.G.                                         Appeal dismissed.