Case: Nathulal Vs. Phoolchand

1. Nathulal-appellant in this appeal-was the owner of a Ginning Factory constructed on a plot of agricultural land bearing Khasra No. 259/1. The land stood entered in the revenue records in the name of Chittarmal-brother of Nathulal. On February 26, 1951, Nathulal agreed to sell to Phoolchand the land and the Ginning Factory for Rs. 43,011. He received in part payment Rs. 22,011 and put Phoolchand in possession of the property. Phoolchand agreed to pay the balance on or before May 7, 1951. The terms of the agreement were reduced to writing in counter-part and were duly sinned by the parties.2. On the plea that Phoolchand had failed to pay on the due date the balance of price, Nathulal rescinded the contract on October 8, 1951 and commenced an action in May, 1954 in the Court of the District Judge, Nimar, for a decree for possession of the land and the factory and for mesne profits from the date of delivery till possession was restored to him, alleging that Phoolchand was a trespasser because he had contrary to the express terms of the agreement made default in payment of the balance of the purchase price on or before May, 7, 1951. Phoolchand contended that Nathulal had failed to get the name of Chittarmal "deleted" from the revenue record according to the terms of the agreement, that he Phoolchand was ready and willing to pay the balance of Rs. 21,000, that he had sent a telegram on May 7, 1951, offering to pay the balance against execution of the sale deed, that the agreement had been unlawfully altered by Nathulal after execution by adding a clause by which the possession of Phoolchand in default of payment of money on or before May 7, 1951, was declared unlawful.3. The Trial Court decreed the suit holding that Phoolchand committed breach of contract in that he failed to pay the balance due by him on or before the due date. In appeal the High Court of Madhya Pradesh reversed the decree. The High Court declared that Nathulal was entitled to the balance of the consideration as also "mesne profits" at the rate of Rs. 1,500 per annum from May 7, 1951 till the date on which Rs. 21,000 were deposited by Phoolchand within two months of the passing of the decree. Subject to this direction Phoolchand was allowed to retain possession of the entire property i. e. land Khasra No. 259/1 including the Ginning Factory and structures standing on the land. It was directed that if Phoolchand, committed default Nathulal may claim possession of the entire property with mesne profits at the rate of Rs. 3,000 per annum from the date he was out of possession and till the date on which possession was delivered. The cross-objections filed by Nathulal relating to mesne profits were disposed of in the light of the directions given in the decree. With certificate granted by the High Court this appeal has been preferred by Nathulal.4. In the view of the Trial Court Phoolchand was unable to procure the amount of Rs. 21,000 which he had agreed to pay on or before May 7, 1951 and on that account he had committed breach of the contract. The High Court held that Nathulal was not guilty of breach of contract, for Phoolchand had arranged with a Bank to borrow upto Rs. 75,000, when needed by him, and Phoolchand had on that account sufficient resources at his disposal to enable him to pay the amount due. The Trial Court and the High Court have held that Phoolchand failed to pay the amount on or before May 7, 1951. They have also held that he had not made the tender as pleaded by him.

Court's reasoning:
4. In the view of the Trial Court Phoolchand was unable to procure the amount of Rs. 21,000 which he had agreed to pay on or before May 7, 1951 and on that account he had committed breach of the contract. The High Court held that Nathulal was not guilty of breach of contract, for Phoolchand had arranged with a Bank to borrow upto Rs. 75,000, when needed by him, and Phoolchand had on that account sufficient resources at his disposal to enable him to pay the amount due. The Trial Court and the High Court have held that Phoolchand failed to pay the amount on or before May 7, 1951. They have also held that he had not made the tender as pleaded by him.The argument raised by counsel for Nathulal, that by virtue of S. 70 (8) of the Madhya Bharat Land Revenue and Tenancy Act, the plea of part performance is not available to a person put in possession of the property under a contract ofsale, has, in our judgment, no force. Section 70 (8)sale under this section shall be deemed to be valid until the sale deed effecting such a sale has been registered in accordance with the law of registration in force for the timethis clause only requires that not only the conditions prescribed by Section 70, but registration of sale deed in accordance with the law of registration for the time being in force is a condition required to be complied with before a sale is deemed valid. There is no sale in the present case, and Phoolchand is not relying upon any sale. He is relying upon a contract of sale and equity which he may set up to defend his possession against the claim made by Nathulal. To the making of such a claim, relying upon the doctrine of part performance in Section 53A of the Transfer of Property Act, there is nothing in Section 70 (8) of the Madhya Bharat Land Revenue and Tenancy Act 66 of 1950 which may operate as ais in this case a contract to transfer for consideration immovable property by writing signed by Nathulal from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty. In part performance of the contract, Phoolchand has taken possession of the property and he had in pursuance thereof paid an amount of Rs. 22,011. The argument raised by counsel for Nathulal that the act done in pursuance of the contract must be independent of the terms of the contract cannot be accepted. The first three conditions, for the defence of part performance to be effectively set up by Phoolchand exist.Nathulal had expressly undertaken to have the revenue records rectified by securing the deletion of Chittarmals name, and it was an implied condition of the contract that Nathulal will secure the sanction of the Collector to the transfer under Section 70 (4) of the Madhya Bharat Land Revenue and Tenancy Act 66 of 1950. The first condition was not fulfilled till October 6, 1952 and the second condition was never fulfilled. We are unable to agree with Mr. Shroff that the repeal of the Madhya Bharat Act 66 of 1950 by the Madhya Pradesh Land Revenue Code, 1959, has retrospective operation.11. In considering whether a person is willing to perform his part of the contract the sequence in which the obligations under a contract are to be performed must be taken intovirtue of Section 4 of the Transfer of Property Act the chapters and sections of the Transfer of Property Act which relate contracts are to be taken as part of the Indian Contract Act, 1872. If, therefore, under the terms of the contract the obligations of the parties have to be performed in a certain sequence, one of the parties to the contract cannot require compliance with the obligations by the other party without in the first instance performing his own part of the contract which in the sequence of obligations is performable by him earlier.