DEVENDRA PRASAD VS SURENDRA PRASAD

BEFORE THE HONBLE PRIVY COUNCIL

In the matter of,

DEVENDRA PRASAD

VERSUS

SURENDRA PRASAD

SUBMISSION TO

THE SUPREME COURT OF INDIA

6th April 2017.

MEMORANDUM FOR THE RESPONDENT

ANJEETA KHUTEY
Roll No. 25, Semester- IV

(COUNSEL FOR THE RESPONDENT)

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 DEVENDRA PRASAD VS SURENDRA PRASAD

TABLE OF CONTENTS

List of Abbreviations..iii

Index of authorities....iv

I Statement of facts.............v

II. Issue raised.vi

III. Summary of arguments........................................................................................................01

IV. Written submission......02

V. Prayer...08

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 DEVENDRA PRASAD VS SURENDRA PRASAD

ABBREVIATIONS

& And

AIR All India Reported

Art. Article

Honble Honourable

SC Supreme Court

v. Versus

Ex. Exhibit

A accused

W witness

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 DEVENDRA PRASAD VS SURENDRA PRASAD

INDEX OF AUTHORITIES

LIST OF CASES

1. Gomathinayagam Pillai and Ors. Vs. Pallaniswami Nadar, AIR 1967 SC 868
2. K.S. Vidyanadam and Ors. v. Vairavan, (1997) 3 SCC 1
3. Govind Prasad Chaturvedi Vs. Hari Dutt Shastri and Anr, (1977) 2 SCC 539
4. Roberts v. Berry ,(1853) 3 De G.M. G. 284
5. Chand Rani vs. Kamal Rani, (1993) 1 SCC 519

STATUTES

1. The Transfer of Property Act 1882

2. The Limitation Act.

BOOKS REFERRED

1. R.K. SINHA, Transfer of Property Act.

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 DEVENDRA PRASAD VS SURENDRA PRASAD

STATEMENT OF FACTS

The appellants constitute a joint Hindu family, and on 23rd June 1923 appellant No. 1
as manager executed a mortgage bond in favour of certain persons to secure the
repayment of Rs. 23,000. Most of the property mortgaged was joint family property,
but some of it was the exclusive property of appellant No. 1. In 1925, in order to
discharge this mortgage, the appellants sold part of the mortgaged property which
belonged to appellant No. 1 to the respondents by registered kobala or sale-deed dated
15th July 1925. The relevant passages of the sale-deed, which was executed by
appellant No. 1, with the other appellants as consenting parties.
The respondents, who were the vendees obtained possession of the property and still
remain in possession. On 15th October 1925 the respondents paid Rs. 10,000 to the
creditors in part discharge of principal and interest, but they made no further payment
prior to the institution of the present suit by the appellants on 16th August 1926, which
arose out of the respondents' application in May 1926, to have mutation of their names
on the Collector's register. Despite the objections of appellant No. 1, the Deputy
Collector, on 14th August, had given the respondents one month within which to pay
up the balance of the creditors' dues. On 14th September following the respondents
paid Rs. 22,131, the final balance due to the creditors, and on 18th September 1926 the
Deputy Collector allowed mutation. In the suit the appellants seek a declaration that
the sale-deed of 15th July 1925 has become cancelled and null and void and that the
respondents have ceased to have any right or title thereunder, and a decree for recovery
of possession of the property.
They also ask for a decree for Rs. 1,600 for interest and compound interest and for
mesne profits. The main question turns on the failure of the respondents to pay the
whole dues of the creditors by 30th December 1925
. This is an appeal against the judgment and decree of the High Court of Judicature at
Patna, dated 13th April 1931, which reversed the judgment and decree of the
Additional Subordinate Judge of Darbhanga dated 16th July 1928.

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 DEVENDRA PRASAD VS SURENDRA PRASAD

ISSUES RAISED

1. WHETHER THE LIMITATION UPON A CONDITION SUBSEQUENT COMES

WITHIN THE SEC.31 OF THE TRANSFER OF PROPERTY ACT 1882.

2. WHETHER TIME IS THE ESSENCE OF CONTRACT OR NOT.

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 DEVENDRA PRASAD VS SURENDRA PRASAD

SUMMARY OF ARGUMENTS

1. NO THE LIMITATION UPON A CONDITION SUBSEQUENT DOES NOT COME

WITHIN THE SEC.31 OF THE TRANSFER OF PROPERTY ACT 1882.

If the contract relates to sale of immovable property, it would normally be presumed that time
was not of the essence of the Contract. Mere incorporation in the written agreement of a clause
imposing penalty in case of default does not by itself evidence an intention to make time of the
essence.

2 NO TIME IS NOT THE ESSENCE OF CONTRACT .

The general rule is that time is not of the essence unless the contract expressly so provides. As a
result, with respect to real estate transactions the modern view is that time is not of the essence
unless the parties have manifested such an intent.

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 DEVENDRA PRASAD VS SURENDRA PRASAD

WRITTEN SUBMISSION

1.NO THE LIMITATION UPON A CONDITION SUBSEQUENT DOES NOT COME

WITHIN THE SEC.31 OF THE TRANSFER OF PROPERTY ACT 1882.

In this case the appellant sold his mortgaged property to the Surendra Prasad who is the
respondent in this appeal with the condition that the respondent would pay the money to the
creditors of the appellant. But appellant further put a limitation on the condition that money
should be paid before 31 Dec. 1925. If owing to the negligence on the part of the aforesaid
vendees the dues of the aforesaid creditors be not satisfied by 30th December 1925 and the
consideration money remain with them, then on expiry of the aforesaid date, this sale-deed shall
stand cancelled null and void under section-31 of The Transfer of property Act 1882.

(1.1)SEC.31 OF THE TRANSFER OF PROPERTY ACT DOES NOT APPLICABLE IN

THE PRESENT SUIT
Sec.31 of the Act1 is that the Condition that transfer shall cease to have effect in case specified
uncertain event happens or does not happen.Subject to the provisions of section 12, on a
transfer of property an interest therein may be created with the condition superadded that it shall
cease to exist in case a specified uncertain event shall happen, or in case a specified uncertain
event shall not happen. Illustration

(a) A transfers a farm to B for his life, with a proviso that, in case B cuts down a certain wood,
the transfer shall cease to have any effect. B cuts down the wood. He loses his life-interest in the
farm.
(b) A transfers a farm to B, provided that, if B shall not go to England within three years after the
date of the transfer, his interest in the farm shall cease. B does not go to England within the term
prescribed. His interest in the farm ceases.

1
The Transfer of Property Act 1882.

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 DEVENDRA PRASAD VS SURENDRA PRASAD

In this section it may be noted that it provides that if the condition will not fulfill then only the
sale deed is become null and void but in this case the appellant further put a limitation on the
condition and this limitation on the condition is not come or covered by the sec.31 of the Act2.
And also earlier the respondent make the payment of Rs. 10,000 to the creditors in part discharge
of principal and interest on 15th October 1925. Hence here the appellant has put a limitation on
the happening or not happening of uncertain event therefore Sec. 31 would not applied in this
case.
In Gomathinayagam Pillai and Ors. Vs. Pallaniswami Nadar3, it was held that If the contract
relates to sale of immovable property, it would normally be presumed that time was not of the
essence of the Contract. Mere incorporation in the written agreement of a clause imposing
penalty in case of default does not by itself evidence an intention to make time of the essence.

On 15th October 1925 the respondents paid Rs. 10,000 to the creditors in part discharge of
principal and interest. This shows the intention of the respondent he wanted to pay money to the
creditors and he would not intent to make fraud with appellant or with the creditors.
The Sec.31 of the Act provides that the sale deed shall cease to exist in case a specified uncertain
event shall happen, or in case a specified uncertain event shall not happen.
But it would not include a limitation upon the uncertain event which was imposed by the
appellant upon the condition which the respondent has duty to perform.
All this shows that the intention of the respondent was good and he wanted to pay the money and
also not intent to make fraud with the appellant.

The respondent had paid the full amount of money to the creditors by application in May 1926,
to have mutation of their names on the Collector's register.
The Deputy Collector, on 14th August, had given the respondents one month within which to
pay up the balance of the creditors' dues. On 14th September following the respondents paid Rs.
22,131, the final balance due to the creditors, and on 18th September 1926 the Deputy Collector
allowed mutation.

2
The Transfer of property Act 1882.
3
AIR 1967 SC 868

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 DEVENDRA PRASAD VS SURENDRA PRASAD

The appellant thereafter filed a suit on 16 August 1926 just after the Deputy Collector, on 14th
August, had given the respondents one month within which to pay up the balance of the
creditors' dues.
The respondent had paid the money to the creditors and the condition of the appellant was to pay
the money to the creditors though the respondent paid the money after the 31 Dec 1925 but he
paid the money prior giving application in May 1926, to have mutation of their names on the
Collector's register. And the collector also approved his application and the Deputy Collector, on
14th August, had given the respondents one month within which to pay up the balance of the
creditors' dues. On 14th September following the respondents paid Rs. 22,131, the final balance
due to the creditors, and on 18th September 1926 the Deputy Collector allowed mutation. So
there is no question of applying Sec.31 of the Act4.

In the K.S. Vidyanadam and Ors. v. Vairavan5, wherein it was held as under: It has been
consistently held by the courts in India, following certain early English decisions, that in the case
of agreement of sale relating to immovable property, time is not of the essence of the contract
unless specifically provided to that effect. The period of limitation prescribed by the Limitation
Act for filing a suit is three years. From these two circumstances, it does not follow that any and
every suit for specific performance of the agreement should be decreed provided it is filed within
the period of limitation notwithstanding the time-limits stipulated in the agreement for doing one
or the other thing by one or the other party. That would amount to saying
that the time-limits prescribed by the parties in the agreement have no significance or value and
that they mean nothing.
Hence it is clear that the time limit prescribed by the appellant in the sale deed have no essence
as in case of sale of the immovable property time is of not the essence and the only thing which
remain and give value to the condition is the fulfillment of condition not that when the condition
is fulfilled.

4
The Transfer of Property Act 1882
5
(1997) 3 SCC 1

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 DEVENDRA PRASAD VS SURENDRA PRASAD

2.TIME IS NOT THE ESSENCE OF CONTRACT

The general rule is that time is not of the essence unless the contract expressly so provides. As a
result, with respect to real estate transactions, the modern view is that time is not of the essence
unless the parties have manifested such an intent.

If the other party to a contract does not perform its obligations on time, you may find yourself
late for a very important date, much like the White Rabbit in Alice in Wonderland. Parties to a
contract are sometimes surprised to learn that missing a contractual deadline does not always
amount to a material breach of the contract. When it comes to many types of contracts -- for
example, construction, real estate sales, loans, or other non-goods contracts -- courts often don't
consider timing to be essential.

They believe that minor deviations from a contract's schedule aren't important enough to warrant
damages or termination of the contract. In some circumstances, however, the parties would beg
to differ. For example, the timing of a loan contract may be very important indeed, if the lender's
failure to fund the loan on time means that you can't buy a house or pursue a lucrative business
opportunity.

In Gomathinayagam Pillai and Ors. Vs. Pallaniswami Nadar6, it was held that If the contract
relates to sale of immovable property, it would normally be presumed that time was not of the
essence of the Contract. Mere incorporation in the written agreement of a clause imposing
penalty in case of default does not by itself evidence an intention to make time of the essence.

6
AIR 1967 SC 868

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 DEVENDRA PRASAD VS SURENDRA PRASAD

In Govind Prasad Chaturvedi Vs. Hari Dutt Shastri and Anr7., (1977) 2 SCC 539, this Court
placing reliance on the law laid down in Gomathinayagam Pillai (supra), reiterated the aforesaid
principle and held as under:
.......It may also be mentioned that the language used in the agreement is not such as to indicate
in unmistakable terms that the time is of the essence of the contract. The intention to treat time as
the essence of the contract may be evidenced by circumstances which are sufficiently strong to
displace the normal presumption that in a contract of sale of land stipulation as to time is not the
essence of the contract.

Apart from the normal presumption that in the case of an agreement of sale of immovable
properly time is not the essence of the contract and the fact that the terms of the agreement do
not unmistakably state that the time was understood to be the essence of the contract neither in
the pleadings nor during the trial the respondents contended that time was of the essence of the
contract.

In the K.S. Vidyanadam and Ors. v. Vairavan8, (1997) 3 SCC 1, wherein it was held as under:
It has been consistently held by the courts in India, following certain early English decisions,
that in the case of agreement of sale relating to immovable property, time is not of the essence of
the contract unless specifically provided to that effect. The period of limitation prescribed by the
Limitation Act for filing a suit is three years.

Roberts v. Berry 9(1853) 3 De G.M. G. 284, there is nothing in the 'express stipulations between
the parties, the nature of the property, or the surrounding circumstances,' which would make it
inequitable to interfere with and modify the legal right. This is what is meant, and all that is
meant, when it is said that in equity time is not of the essence of the contract.

Chand Rani vs. Kamal Rani10 (1993) 1 SCC 519: ....it is clear that in the case of sale of
immovable property there is no presumption as to time being the essence of the contract.

7
(1977) 2 SCC 539
8
(1997) 3 SCC 1
9
(1853) 3 De G.M. G. 284
10
(1993) 1 SCC 519

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 DEVENDRA PRASAD VS SURENDRA PRASAD

Time is not the essence of contract specially, when it is related to sale of immovable property. In
this case the appellant set a time limit for the performance of the act which is considered as
condition subsequent. In case of sale of immovable property this time limit has no essence.

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 DEVENDRA PRASAD VS SURENDRA PRASAD

PRAYER

Therefore, in the light of issues raised, arguments advanced and authorities cited, the Honble
court may be pleased to adjudge and declare that:

(a).The sale deed would not be cancelled.

Or to pass any other order, which this court may deem fit in the interest of Justice, Equity and
Good Conscience.

All of which is most humbly prayed.

Place: India Anjeeta Khutey

Date: 6th April 2017 Council for the Respondent

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