Case Note & Summary
The dispute arose from a transaction where the respondent sold a property to the appellant for Rs 10,000 on 4 February 1941, and six days later entered into an agreement for reconveyance within two years, up to 10 February 1943, upon payment of Rs 10,001. The third clause of the agreement stated that time was the essence of the contract and that if the purchasers paid the sum on or before the stipulated date, the vendor would execute a conveyance free from encumbrances created by it. On 26 November 1942, the respondent's solicitor wrote to the appellant expressing readiness and willingness to complete the purchase and sent a draft conveyance for approval, subject to a search for encumbrances. The appellant's solicitors, after seeking inspection of the agreement, on 18 December 1942 denied that there was any concluded or valid agreement for sale. The respondent then filed a suit for specific performance, alternatively for redemption on the footing that the transaction was a mortgage. The trial court dismissed the suit on 16 May 1950, holding that the transaction was an out-and-out sale with an agreement for repurchase and that the right to repurchase was lost because the vendor did not pay the money punctually according to the terms of the contract; the court also held it had no power to afford relief against forfeiture. On appeal, the Calcutta High Court reversed the trial court, holding that the failure to actually tender the consideration did not bar a suit for specific performance because after the appellant's repudiation, tender would have been a useless formality. The appellant then approached the Supreme Court. The Supreme Court examined the correspondence and found that the appellant had completely repudiated the contract to reconvey by denying any valid agreement. It held that in cases of this kind, no question of formal tender of the amount arises; the only question is whether the vendor definitely and unequivocally refused to carry out his part of the contract and intimated that money would be refused if tendered. Reliance was placed on Hunter v. Daniel and Chalikani Venkatarayanim v. Zamindar of Tuni. The Court also rejected the appellant's argument that an offer made by a solicitor was not a proper offer in law, distinguishing Ismail Bhai Rahim v. Adam Osman and observing that a tender made through a solicitor, who is for that purpose an agent, is a proper tender. Accordingly, the Supreme Court dismissed the appeal with costs and affirmed the High Court's decree for specific performance.
Headnote
A) Specific Performance - Agreement for Reconveyance - Formal Tender of Purchase Money Not Required Upon Vendor's Total Repudiation - Not mentioned - The vendor repudiated the agreement for reconveyance by denying any concluded valid agreement, while the purchaser had earlier expressed readiness and willingness and sent a draft conveyance. Court held that after total repudiation, formal tender would be a useless formality, and the purchaser was entitled to a decree for specific performance. Held that the High Court rightly decreed the suit. (Paras 5-6) B) Contract Law - Performance and Tender - Offer Through Solicitor Constitutes Proper Tender - Not mentioned - Appellant contended that an offer made by a solicitor was not a proper offer in law, relying on Ismail Bhai Rahim v. Adam Osman. Court distinguished that case and held that a tender made through a solicitor, acting as agent for that purpose, is a proper tender. Held that the contention had no merit. (Para 6)
Issue of Consideration
Whether a suit for specific performance of an agreement for reconveyance lies without formal tender of the purchase money when the vendor has totally repudiated the contract; and whether an offer made by a solicitor is a proper legal offer.
Final Decision
Appeal dismissed with costs; High Court decree for specific performance affirmed.
Law Points
- In a suit for specific performance of an agreement for reconveyance
- if the vendor has totally repudiated the contract and unequivocally refused to carry out his part
- the purchaser need not make a formal tender of the purchase money
- as the tender would be a useless formality
- a tender made through a solicitor as agent is a proper tender.
