Case Brief: Raj Kishore(Dead)By Lrs vs Prem Singh And Ors 

NAME OF THE CASE	Raj Kishore(Dead)By Lrs vs Prem Singh And Ors
CITATION	AIR 2011 SC 382(2011) 1 SCC 657(2011) 2 MLJ 490 SC(2011) 1 RCR(civil) 383(2011) 3 Mah LJ (1) SC
DATE OF JUDGMENT	December 10, 2010
APPELLANT	Raj Kishore(deceased) [by his legal authority]
RESPONDENT	Prem Singh
BENCH/JUDGE	T.S. Thakur; Markandey Katju
STATUTES INVOLVED	Transfer of Property Act, 1882Indian Contract Act, 1872Specific Relief Act, 1963
IMPORTANT ARTICLES/SECTIONS	Section 58(c) of  Transfer of Property Act, 1882Section 58(e) of  Transfer of Property Act, 1882Section 16(c) of Specific Relief Act, 1963

Facts of the Case:

The plaintiff in the case(Raj Kishore, now deceased) had executed a sale deed to transfer a property to the defendant, named Prem Singh. Along with this, another agreement was filed between the parties on agreement, in which it was stated that Prem Singh had to return back the property back to Raj Kishore upon repayment of the sum of Rs. 6,000 within the concerned time period, which was fixed as July 6^th of 1981. Prem Singh agreed to the agreement of reconveyance. 

The plaintiff held that the aforesaid transaction had the nature of English mortgage and thereby the sale was conditional on the repayment and re-transfer of the property. However, this agreement of reconveyance was only signed by the buyer of the property(Prem Singh) and not the seller(Raj Kishore). Along with, the agreement was not even obligatory on the part of the buyer to re-transfer the property or re-pay the amount. 

The major issue arose when the seller of the property, Raj Kishore, failed to pay the fixed amount of Rs. 6,000 to the respondent (Prem Singh) within the stipulated time period. The plaintiff/appellant filed a suit stating that the agreed sale deed was void by law and he claimed to continue to be the owner of the said property. He also claimed for the specific performance in the contract on his part, but was rejected by the court on the ground of failing to do within the time period and lack of his readiness and willingness to perform the contract.

The court held that the transaction was unable to fulfil the full criteria to be considered as an English mortgage, taking help from the provision as held under Section 53e of the Transfer of Property Act, 1882. Along with, time being the essence of civil suits, the relief couldn’t be granted if the deadline would lapse. Therefore, the court barred the suit on the ground of limitation. So, the court rejected the suit filed by the plaintiff/appellate, Raj Kishore. The court even rejected the claim of specific performance, of the agreement of reconveyance. Along with, the plaintiff failed to provide evidence for payment of an amount of Rs. 6,000 as re-payment of money. 

Raj Kishore further appealed against the decision of the lower court, before the High Court. However, the High Court upheld the decision of the lower court and dismissed the appeal filed by the appellant. It iterated that there was a time lapse in repayment and therefore relief could not be granted to the party. 

Therefore, the appellant filed a second appeal before the High Court. The second appeal also gave the decision as was held by the lower court and therefore the appeal was further dismissed. 

Now, the appellant had moved the final appeal before the Supreme Court. However, the appellant was then represented by his legal representative as by the time the appellant had passed away. The Supreme Court, as well, dismissed the appeal and upheld the previous decisions of the lower courts. It held that in case of agreement for reconveyance for the immovable properties, time being the key, should have been duly followed. Any time lapse would render the contract to be void in nature. The court stated that it lacks the right to provide relief to the party in this case, unless there was instances of forfeiture of property, fraudulent activities, illegal activities etc. 

Provisions Involved:

1.  Section 58(c) of the Transfer of Property Act, 1882, which dealt with the mortgage of immovable property by conditional sale. 
2. Section 58(e) of the Transfer of Property Act, 1882, deals with conditions to be considered as an English mortgage
3. Section 10 of the Indian Contract Act, 1872, which states the essentials of a valid contract
4. Section 16 of the Specific Relief Act, 196,3 which states about the readiness and willingness to perform a contract
5. Section 20 of the Specific Relief Act, which grants the court the power to grant specific performance, upon its own discretion

Issues involved:

The major issues that were involved in the case was decided by the court. The following issues are:-

1.  Whether the transaction of the property would fall under the category of an English mortgage
2. Whether the agreement for reconveyance was enforceable by law, even though signed by one party
3. Whether a lapse of a specific time period for the performance of the contract would render the contract unenforceable
4. Whether specific performance would apply in the given case, despite the time lapse caused by the appellant party
5. Whether the previous courts were justified in denying the grant of specific performance in the suit

Arguments from the Petitioner's side:

The learned counsel who represented the case on behalf of the petitioner/appellant named Raj Kishore, held that the transaction was not to be considered as a sale and only be held as an English mortgage or mortgage by conditional sale. The agreement of reconveyance acted as an evidence to show that the plaintiff never had the intention for complete sale of the property. 

It was further argued that time was not to be taken as the absolute essence to determine the enforceability of the contract, especially for contracts for immovable property. Thereby, the party granted relief under specific performance, based on the doctrine of equitable principle of law. It was stated that minor delays in following the deadline should not be enough to render the contract invalid. Therefore he pleaded before the court to consider the long-standing possession over the property and the nature of the agreement that they entered into. The agreement for sale deed and the agreement for reconveyance were to be considered as a single document, as a single transaction took place in such a case. On this basis, it could also be interpreted through harmonious construction that the sale was not absolute and was a mere transfer of property. 

Thereby, the appellant party pleaded before the court to grant validity of the sale of reconveyance, even though failed to follow the exact deadline and thereby provide relief to the party. 

Arguments from the Respondent's side:

The learned counsel defending the case on behalf of the respondent side denied the arguments stated by the petitioner's counsel. It held various counterarguments to the arguments put forth by the appellant side. 

The respondent party contested on the major point, which was the main area of contradiction, that the agreement of transaction of property was made through a sale deed and not merely in the form of mortgage, rather more precisely English mortgage. It was not a sale by condition. They claimed the sale deed to be an absolute one, and didn’t contain any condition for purchase. Therefore, they took the recourse under Section 58(c) and section 58(e) of Transfer of Property Act, 1882. 

Another major point that was validly put by them was that time was the essential condition for the agreement of reconveyance. The agreement clearly stated to pay an amount of Rs. 6,000 by July 6, 1981. Failing to follow the procedures within the stipulated tine period would lead to absolute invalidity of the contract. Therefore the right to reconveyance of the plaintiff lapsed. 

Further, the agreement of reconveyance was signed by only one party and therefore was not binding on the parties. It was at the option of the parties to repurchase the property as a kind of privilege provided to the appellant. Therefore, since the appellant didn’t fulfil the obligations within the time, the agreement of reconveyance lapsed. 

The appellant had claimed relief under the doctrine of special performance which was based on equitable principle. The respondent gave a counter argument to this, stating that the agreement was nit formed out of forfeiture of property, fraudulent activities, accident etc. Therefore, the court would lack discretion to provide relief under special performance. 

Alongside, it was argued that, under Section 16(c)  of the Specific Relief Act, the party was to show readiness and willingness to perform the contract. Here, the party lacked the will to pay the amount, nullifying one of the major essentials to prove under doctrine of part performance, a doctrine based on equitable principle. 

Judgment Pronounced:

In this case, the Supreme Court rejected the appeal with no order as to costs and upheld the decisions set by the lower courts. It ruled in favour of the respondent, stating time was essential for the principle of reconveyance. It held the transaction as a sale and thereby stated that no relief could be granted to the appellant party. 

Conclusion:

In conclusion, this decision had set a major precedent in property law. It shaped the Indian jurisprudence, stating the essence of time to fulfil under pthe rinciple of reconveyance. Further, it differentiated the transaction of sale from that of transfer. Therefore, it led in shaping decisions for later judgments as well.