# Jagdish Mani Tripathi v. Brij Bhushan Tewari & Ors

- **Citation:** (2021) 11 ILRA 839
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-08-17
- **Case number:** Second Appeal No. 895 of 1994
- **Bench:** J.J. Munir
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/jagdish-mani-tripathi-v-brij-bhushan-tewari-ors-46637
- **Pages:** 13

## Headnote

A. Civil Law - Indian Contract Act,1872 -
Section 55 - Time whether of essence -
Determination of - Section 55 of the Contract
Act makes it dependent upon the intention of
parties whether time is of the essence -
intention has to be gathered from the terms of
the contract, not just going by the letter of it,
but by construing the contract as a whole -
Court has to look to the pith and substance and
decide as to whether time was or was not
essential to the subsistence of the contract -
consideration of surrounding circumstances
may also be relevant in certain cases. (Para 15)

B. Civil Law - Indian Contract Act,1872 -
Section 55 - provisions of Section 55 of the
Contract Act about time being essence of the
contract, making it voidable upon breach,
would apply to a decree of Court founded on
compromise in the same manner as any other
contract (Para 35)

Allowed. (E-5)

Cases Relied on :

## Text

_Characters 0–39,919 of 49,246. This is a partial read: ask again with offset=39919 for what follows._

11 All. Jagdish Mani Tripathi Vs. Brij Bhushan Tewari & Ors.
839
----------
(2021)11ILR A839
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 17.08.2021

BEFORE

THE HON'BLE J.J. MUNIR, J.

Second Appeal No. 895 of 1994

Jagdish Mani Tripathi ...Appellant
Versus
Brij Bhushan Tewari & Ors. ...Respondents

Counsel for the Appellant:
Sri Dinesh Dwivedi, Sri Ashok Pandey, Sri G.M.
Tripathi, Sri Gambhir Tripathi, Sri Hausihla
Prasad Mishra, Sri V.P.Tripathi

Counsel for the Respondents:
Sri U.S.M. Tripathi, Sri B.P.Tiwari, Sri Pahaloo,
Sri Ram Suphal Shukla, Sri Manvendra Kumar

A. Civil Law - Indian Contract Act,1872 -
Section 55 - Time whether of essence -
Determination of - Section 55 of the Contract
Act makes it dependent upon the intention of
parties whether time is of the essence -
intention has to be gathered from the terms of
the contract, not just going by the letter of it,
but by construing the contract as a whole -
Court has to look to the pith and substance and
decide as to whether time was or was not
essential to the subsistence of the contract -
consideration of surrounding circumstances
may also be relevant in certain cases. (Para 15)

B. Civil Law - Indian Contract Act,1872 -
Section 55 - provisions of Section 55 of the
Contract Act about time being essence of the
contract, making it voidable upon breach,
would apply to a decree of Court founded on
compromise in the same manner as any other
contract (Para 35)

Allowed. (E-5)

Cases Relied on :

1. Tandra Venkata Subrahmanayam Vs Vegesana
Viswanadharaju & anr. AIR 1968 AP 190

2. Nagoo & anr. Vs P.T. Shiv Dularey Dixit & ors. AIR
1955 All 665

3. Hansraj Sangechi & ors. Vs Jogeshar Prasad & anr.
AIR 1925 Pat 691

4. Habib Mian & anr. Vs Mukhtar Ahmad & anr.AIR
1969 All 296 (FB)

5. Smt. Periyakkal & ors. Vs Smt. Dakshyani (1983) 2
SCC 127

(Delivered by Hon'ble J.J. Munir, J.)

This is a plaintiff's second appeal, arising
from a suit for cancellation of sale deed.

2. The facts giving rise to this appeal,
according to the plaintiff's case, are these :

The plaintiff Jagdish Mani Tripathi's
father, Shiv Pujan Mani, was twice married.
Jagdish Mani Tripathi was begotten of Shiv
Pujan Mani's first wife. Jagdish Mani is the sole
survivor and heir of Shiv Pujan. Shiv Pujan's
first wife and Jagdish Mani's mother passed
away and after her death, Shiv Pujan married
Smt. Kailash Pati, who did not bear him any
child. After Shiv Pujan's death, Kailash Pati
would not inherit any estate in his agricultural
holdings, and it all went to Jagdish Mani. But,
after
Shiv
Pujan's
death,
Kailash
Pati's
disposition towards Jagdish Mani turned hostile
and unfriendly. It is Jagdish Mani's case that
fuelled by the hostility of a step relationship
between parties, Smt. Kailash Pati, in conspiracy
with members of her native family, devised
various ways to harm him. She left her
matrimonial home and went back to her parents'
place. She sued Jagdish Mani for maintenance
before the Court of the Munsif, Court No. 2,
Deoria, instituting Original Suit No. 1154 of
1967 for the purpose. The suit aforesaid was
decreed in favour of Smt. Kailash Pati. With the
840 INDIAN LAW REPORTS ALLAHABAD SERIES
assistance of one Virendra Mishra and others
from her parents' family, she levied execution of
the decree passed in Original Suit No. 1154 of
1967. The execution entailed attachment of
Khasra No. 430, admeasuring 34 decimals and
Khasra No. 457, admeasuring 58 decimals,
situate at Village Basdila, Tappa Dhatura,
Parghana Silhat, Teshil and District Deoria. The
attached property was then brought to sale and
Smt. Kailash Pati purchased that property herself
in the auction sale. The facts about the
institution of the suit last mentioned, the decree
passed therein and the result of the execution is
not in issue between parties.

3. The attachment and sale were both
objected to by Jagdish Mani Tripathi, but his
objections did not succeed. The auction sale was
held and proceedings for delivery of possession
to the auction purchaser were concluded. Jagdish
Mani challenged the entire proceedings of the
auction sale as materially irregular, asking them
to be set aside through Original Suit No. 404 of
1980, that he instituted before the Court of
Munsif, Court No. 8, Deoria. In the said suit, on
14.10.1983,
a
compromise
was
recorded
between Jagdish Mani, the plaintiff of the suit
and Smt. Kailash Pati, the defendant there. In
terms of the said compromise, a decree was
passed, embodying the following terms :

(I) That Smt. Kailash Pati is being
entitled to receive from Jagdish Mani a sum of
Rs. 8,000/- and in consideration thereof, the land
comprising Plot Nos. 430 and 475 that she had
purchased in the auction sale, would not be sold,
encumbered or given away to any third party on
a crop-share arrangement.

(II) That Smt. Kailash Pati's name
would continue to be recorded over the Plot Nos.
430 and 475 for satisfaction's sake.

(III) That out of a sum of Rs. 8,000/-, a
sum of Rs. 3,000/- have been received by Smt.
Kailash Pati on the date of compromise, and the
balance of Rs. 5,000/- would be paid by Jagdish
Mani Tripathi to Smt. Kailash Pati up to
14.12.1983. If the balance sum of Rs. 5,000/-
was not paid up to 14.12.1983, the compromise
would be treated as cancelled.

(IV) That Jagdish Mani Tripathi would
remain in possession of the plots/fields.

(V) That Jagdish Mani Tripathi would
till the fields comprising the two plots and
harvest crops, where for, he would take half of
the required seeds and manure from Smt.
Kailash Pati and in return, deliver up to her half
the produce of the fields.

(VI) Once on 14.12.1983, Jagdish
Mani pays the balance sum of Rs. 5,000/- in
terms of the compromise to Smt. Kailash Pati,
she would have no further right to execute the
decree passed in Original Suit No. 1154 of 1967.
Upon Smt. Kailash Pati's death, Jagdish Mani
would perform her last rites and Shradh; and
further Jagdish and his sons would take the land
in dispute as heirs of Smt. Kailash Pati.

4. It is Jagdish Mani's case that Smt.
Kailash Pati was paid the balance sum of Rs.
5000/- within the period of time before
14.10.1983 by the plaintiff, after calling her over
to Village Basdila. However, for the reason that
the compromise had fostered a beginning of
good relations between parties, Jagdish Mani did
not ask Smt. Kailash Pati for issuing him a
receipt/written
acknowledgement;
he
was
desirous that the relationship between his
stepmother and himself may remain cordial.
However, Smt. Kailash Pati's blood relations,
particularly, Virendra Mishra, defendant no. 2 to
the suit and a respondent to this appeal was not
happy about these good relations. Virendra
Mishra was Smt. Kailash Pati's nephew
(brother's son). He was on the lookout of an
opportunity to wean her away from the new-
11 All. Jagdish Mani Tripathi Vs. Brij Bhushan Tewari & Ors.
841
found bonds with her stepson, so as to reclaim
the lands that Smt. Kailash Pati had given back
to Jagdish Mani in compromise. Virendra
Mishra took away Smt. Kailash Pati back to her
kin, whereafter he said that the sum of Rs.
5000/- that Smt. Kailash Pati had received from
Jagdish Mani without a receipt, she would not
acknowledge. It is pleaded that after the sum of
Rs. 5,000/- was paid within the period of time
stipulated in the compromise, Smt. Kailash Pati
had forsaken her dominion over the lands
comprising the suit property. Jagdish Mani, on
coming to know the aforesaid stand that
Virendra Mishra had caused Smt. Kailash Pati to
take, deposited the sum of Rs. 5,000/- to her
credit in the bank. All his efforts to cajole Smt.
Kailash Pati's conscience failed, and she sailed
along with Virendra Mishra and her other
kinsmen. She never came back to stay with her
husband's family, including Jagdish Mani. She
died in the month of April, 1985.

5. The news about her death was never
conveyed by Virendra Mishra to Jagdish Mani.
Jagdish Mani, upon coming to know of Smt.
Kailash Pati's death, undertook her Shradh and
the onerous ceremonies that it involves. In the
meantime, Jagdish Mani came to know that
Virendra Mishra, entering into a conspiracy with
Smt. Kailash Pati, had caused her to execute a
registered sale deed of the suit property in
favour of a relative-defendant no. 1, Braj
Bhooshan Tiwari vide registered sale deed dated
14.03.1985. Jagdish Mani's possession of the
suit property was threatened by the defendants,
which led him to institute the suit seeking
cancellation of the registered sale deed dated
14.03.1985, executed by the late Smt. Kailash
Pati in favour of Braj Bhooshan Tiwari,
defendant-respondent no. 1. The suit was filed
arraying Braj Bhooshan Tiwari as defendant no.
1 and Virendra Mishra as defendant no. 2. The
suit aforesaid was instituted before the learned
Munsif on 26.08.1985. The suit was contested
by Braj Bhooshan Tiwari, who filed a written
statement dated 22.07.1986, traversing the plaint
allegations. The Trial Court framed the
following issues (translated from Hindi to
English vernacular) :

1. Whether the sale deed dated
14.03.1985 was liable to be cancelled on the
grounds detailed in paragraph 15 of the plaint?

2. Whether the suit is undervalued?

3. Whether defendant no. 1 is a bona
fide purchaser? If yes, its effect.

4. To what relief is the plaintiff
entitled?

6. The parties went to trial and the learned
Munsif held on Issue no. 1 in favour of the
plaintiff and on Issue no. 4 against the
defendant. He decreed the suit by his judgment
and decree of September the 21st, 1987. Braj
Bhooshan Tiwari, the defendant, appealed the
decree to the learned District Judge vide Civil
Appeal No. 270 of 1987. The appeal came up for
determination before the learned IIIrd Additional
District Judge, Deoria on 29.09.1987. He
allowed the defendant's appeal, set aside the
Trial Court's decree, reversed the same and
dismissed the suit.

7. Jagdish Mani has put in issue the Lower
Appellate Court's judgment and decree by means
of the present appeal. He seeks restoration of the
Trial Court's decree invoking this Court's
jurisdiction under Section 100 of the Code of
Civil Procedure, 19081.

8. This appeal was admitted to hearing
vide order dated 18.10.1994, on what was
indicated by the Court to be substantial
questions of law carried in Grounds (a) and (b)
set out in the memorandum of appeal. This
Court, in the order dated 22.01.2020, extracted
the substantial questions of law carried in
842 INDIAN LAW REPORTS ALLAHABAD SERIES
Ground Nos. (a) and (b) and framed an
additional question before commencement of
hearing on the said date. These figure in the
order dated 22.01.2020. It was later on found by
the Court, on a closer examination of the record,
that what was described as Ground (a) and (b) in
the Court's order dated 18.10.1994, referred to
questions formulated in the memorandum of
appeal as (a) and (b). Thus, bearing in mind the
requirements of sub Section (4) of Section 100
CPC., the Court formally proceeded to frame
those questions vide order dated 03.09.2020 and
heard the appeal on Questions (a) and (b),
besides the question that was formulated on
22.01.2020, and judgment was reserved. The
appeal was posted for further hearing on
27.08.2020 and judgment was reserved again on
19.02.2021. The appeal has, therefore, been
heard on the following substantial questions of
law that would be denoted by letters (a), (b) and
(c). These read:

(a) Whether the court below has
completely misconstrued the provisions of
section 55 of the Indian Contract Act, 1872 as to
whether the time was the essence of the contract
and whether the contract was voidable at the
option of the promisee or not?

(b) Whether even if the condition in
the agreement dated 14.10.1983 to the effect that
the contract will be deemed to be cancelled if the
appellant does not deposit Rs. 5000/- by
04.12.1983, is taken to imply that the time was
the essence of the contract, the contract would
become voidable at the option of the promisee
and not void?

(c) Whether the provisions of Section
55 of the Indian Contract Act that provide that
time should be of the essence, and about which
Section 55 mandates that breach of the condition
as to time renders the contract voidable, would
apply to a decree of Court founded on
compromise?

9. It must be recorded here that the
respondents did not turn up at the hearing of the
appeal and it was heard ex-parte.

10. Heard Mr. Haushila Prasad Mishra,
learned
Counsel
for
the
appellant.
The
respondents have not answered the appeal.

11. The substantial question of law marked
(a) has been formulated to examine whether
Jagdish Mani's obligation to pay the balance of
Rs. 5,000/- to Smt. Kailash Pati on 14.12.1983,
in terms of the compromise decree dated
14.10.1983, carries a term that makes time the
essence of contract; and if it does, would its
breach make the contract underlying the
compromise decree dated 14.10.1983 voidable at
the instance of Smt. Kailash Pati?

12. It is submitted by Mr. Mishra, learned
Counsel for the appellant, that the effect of
provision of Section 55 of the Indian Contract
Act, 18722 is not to make breach of every
obligation to be performed at the covenanted
time a ground to avoid the contract. It makes the
breach of a term in the contract to do a certain
thing or act before or at a particular time, a
ground to avoid the contract, if on a construction
of the true import of the contract, time is,
expressly or by necessary implication, found to
be of the essence. He submits that whether in a
given case, time is of the essence, is a matter
that has to be judged on the terms of the relevant
contract, viewed in the entirety of the
circumstances under which the parties have
entered into it.

13. In support of the submission about this
principle of law, Mr. Mishra placed reliance on
the decision of the Andhra Pradesh High Court
in Tandra Venkata Subrahmanayam v.
Vegesana Viswanadharaju & Another3. He
has drawn the attention of this Court to the
holding in Paragraph No. 7 of the report, which
reads :
11 All. Jagdish Mani Tripathi Vs. Brij Bhushan Tewari & Ors.
843

7. In regard to the first contention, it
cannot be in doubt that time can be made the
essence of the contract by subsequent notice
given by anyone of the parties to the contract,
even though Section 55 of the Indian Contract
Act does not provide for such a notice. It is of
course necessary that if the notice wants time to
be made essence of the contract it must
expressly or by necessary implication say so.
Any such notice ought to fix a reasonably long
time requiring the other side to perform his part
of the contract. The question whether the time
prescribed in the notice is or is not of the
essence of the contract would naturally depend
upon the facts and circumstances of each case
the mere fact that the notice gave a certain time
to perform the contract would not necessarily
lead to the conclusion that the time prescribed
was the essence of the contract. In all such cases,
the Court has to look to the pith and substance of
the notice and not at the letter of the notice and
decide as to whether time was or was not
essential to the subsistence of the contract. The
real intention of the party who gives notice must
be clear from the notice itself. It may in certain
cases be necessary to rely upon surrounding
circumstances. Nevertheless one has to largely
look to the notice itself.

14. Canvassing his case on this score, Mr.
Mishra says that the terms of the compromise do
not show that stipulation of the date, by which the
balance of Rs. 5,000/- was covenanted to be paid
by Jagdish Mani to Smt. Kailash Pati, made time
the essence. The stipulation of the date, according
to the learned Counsel for the appellant, was a
clause to ensure that Smt. Kailash Pati was paid
the balance of Rs. 5,000/- that was consideration
for the compromise. The further stipulation in the
compromise that is the event the balance of Rs.
5,000/- was not paid to Smt. Kailash Pati by
14.12.1983, the compromise would be treated as
cancelled, is not decisive about time being of the
essence. According to the learned Counsel for the
appellant, a contract has to be read as a whole and
in the circumstances in which it has been made. It
is submitted by Mr. Mishra that a stipulation as to
the time, or so to speak, a date by which the
balance of Rs. 5,000/- had to be paid to Smt.
Kailash Pati, is no more than a clause in terrorem.

15. This Court has considered the
submissions advanced by learned Counsel for the
appellant and perused the record. It is true that
Section 55 of the Contract Act makes it dependent
upon the intention of parties whether time is of the
essence. That intention has to be gathered from the
terms of the contract, not just going by the letter of
it, but by construing the contract as a whole. The
consideration of surrounding circumstances may
also be relevant in certain cases. Here, there are
circumstances attending the contract that make it
imperative to look beyond the four corners of it.
The
most
important
circumstance
is
the
relationship between parties in the transaction and
the ensuing litigation that has given rise to the
compromise decree. Jagdish Mani and Smt.
Kailash Pati stand in the relationship of a stepson
and stepmother. Admittedly, Jagdish Mani's father
had married Smt. Kailash Pati after his first wife
and Jagdish Mani's mother passed away. Smt.
Kailash Pati remained issueless. She was somehow
advised to claim maintenance from Jadgish Mani,
which she did by a suit and succeeded in it. In
execution of the decree passed in the maintenance
suit, she brought the agricultural holdings left to
Jagdish Mani by his father to sale and purchased
these in the auction sale, though herself the decree
holder. Jagdish Mani's endeavours to get the sale
set aside on the execution side failed, and he
brought Suit No. 404 of 1980 to set aside the
auction sale. It was in this suit that the compromise
subject matter of the present appeal was entered
into between parties.

16. The terms of the compromise have to
be considered in the background of the
relationship between parties and the course of
proceedings that have led to it. It has figured in
the plaintiff's evidence that Jagdish Mani was
844 INDIAN LAW REPORTS ALLAHABAD SERIES
inclined to take care of his stepmother, but she
went away to her native family after her
husband's death and sued Jagdish Mani for
maintenance. The transaction that has led to the
compromise is not one that is commercial or
mercantile between two strangers. It is not exfacie based on a motivation to purchase
agricultural land for Smt. Kailash Pati's need or
to acquire that land for the purpose of
agriculture. The motivation for Smt. Kailash Pati
to make a move was to secure maintenance for
herself, after her husband's death and that is
what she wanted. This is more than evident from
the fact that she sued for maintenance and
secured a personal decree against Jagdish Mani
to pay her maintenance. It was Jagdish Mani's
failure to satisfy the decree that led her to levy
of execution. That execution brought about an
auction sale, where she purchased the suit
property as an auction purchaser. The suit
property or the agricultural land, thus, came to
her not because she intended to buy or acquire
that land, but, in due course of proceedings, for
the enforcement of her maintenance decree. She
wanted maintenance; not lands to do farming.

17. The next positive circumstance that
points to Smt. Kailash Pati's intent vis-à-vis
acquisition of the suit property is evident from
the fact that she entered into a compromise in a
suit brought by Jagdish Mani to set aside the
auction sale as irregular, after it had already
been confirmed in the execution proceedings.
The way the law stands, it is but reasonable to
expect that she would have been advised about
the possible feeble chances of success for
Jagdish Mani in his suit to set aside a confirmed
auction sale. Still, she entered into a compromise
with Jagish Mani.

18. The terms of the compromise read as a
whole indicate that the motivation and the object
for Smt. Kailash Pati was to secure maintenance
for herself as means for sustenance. A careful
look at the terms of the compromise show that
she bargained a sum of Rs. 8,000/- for herself
from Jagdish Mani to serve as some kind of
corpus or contingency fund, or a lump sum that
she intended to apply for some use best known
to her. It then shows that she incorporated a term
that would provide her with half the harvest of
the fields, wherein she would invest half the
inputs comprising the seeds and manure. This
provision was made either to keep her granary
well-supplied or again, to secure some money
for herself from proceeds of sale of the crop
coming to her share. This term also shows that
she did not intend to dissociate with Jagdish
Mani or her deceased husband's family; rather
she made provision for a strong foothold for
herself in her deceased husband's family, where
her stepson would also be in touch with her.

19. There is then a clear provision in the
compromise that once Jadgish Mani paid her the
balance sum of Rs. 5,000/- on 14.12.1983, Smt.
Kailash Pati would have no further right to
execute the decree passed in her maintenance
suit. There is then that term in the agreement,
which shows that upon Smt. Kailash Pati's
death, Jagdish Mani would perform her last rites
and Shradh. The suit property would be
inherited by Jagdish Mani and his sons as Smt.
Kailash Pati's heirs, after she passed away. The
aforesaid terms in the compromise do not show
that Smt. Kailash Pati had any intention to own
the land and deal with it. She wanted to own the
land so as to continue her association with her
deceased husband's family and her stepson, and
also to secure out of it, some lump sum money
and a regular share in the crop. She covenanted
that the land would remain hers during her
lifetime, despite Jagdish Mani paying her the
balance sum of Rs. 5,000/- on 14.12.1983, and
the suit property would pass on to Jagdish Mani
and his sons as her heirs, upon her decease.

20. In view of all these telltale terms, the
background in which the lis has arisen and the
relationship between parties, it is difficult to
11 All. Jagdish Mani Tripathi Vs. Brij Bhushan Tewari & Ors.
845
hold that Smt. Kailash Pati would have intended
time to be the essence of the contract. In fact,
read as a whole, the compromise, by stipulating
the date by or on which the balance of Rs.
5,000/- had to be paid by Jagdish Mani, does not
make time the essence. The essence is that
Jagdish Mani would pay the balance to keep his
association alive with Smt. Kailash Pati, provide
her with her share in the crop by cultivating the
land comprising the suit property and when life
had ebbed out, render the spiritual duties of a
son by performing her last rites. She even
covenanted with Jagdish Mani to perform her
Shradh to benefit her in the afterlife.

21. In the face of these terms carried in the
compromise, to read, construe or understand it
as a mere embodiment of adjustments of rights
in a suit, a commercial transaction or a contract
affecting disposition of property, where time is
of the essence, would be doing great violence to
what both parties intended. The two Courts of
fact below have disbelieved the plaintiff's oral
testimony that he paid the entire sum of Rs.
5,000/- to Smt. Kailash Pati at home, well before
14.10.1983. The sum of Rs. 1,000/- was
+deposited with the Trial Court on 14.12.1983
and a further sum of Rs. 4,000/- on 11.07.1984.
It has surprisingly not figured in judgments of
both the Courts below whether this sum of
money was withdrawn by Smt. Kailash Pati or
not. That fact, though important, this Court does
not wish to determine it with the onerous
consequences of the remand, or even remitting
that issue, inasmuch as the cause can be
determined on wider principle.

22. It must be remarked here that where
time is of the essence, the contract is voidable at
the option of the promisee, and not void. The
Trial Court, in holding Smt. Kailash Pati to be
without authority to execute the impugned sale
deed, was of opinion that the breach of the
condition about time, though of essence, made
the compromise voidable, and since no steps
were taken by Smt. Kailash Pati to get the
compromise avoided, it was still valid and
binding on parties. The added reason for the
Trial Court to think that the compromise was
still valid and not avoided, was the fact that Smt.
Kailash Pati was not proven to have refunded
the sum of Rs. 3,000/- that she had admittedly
received in terms of the compromise decree
before she executed the impugned sale deed. In
the opinion of the Trial Court, it was a step
necessary to avoid the compromise.

23. The term in the compromise which
says that Smt. Kailash Pati would have no
further right to execute the decree passed in
Original Suit No. 1154 of 1967, shows that all
proceedings of the auction sale, through which
she had got the suit property, stood set aside.
This reasoning was adopted by the Trial Court
because it thought that the execution of the
decree in the maintenance suit being already
concluded, a term in the compromise decree that
said that Smt. Kailash Pati would have no
further right to execute the decree, showed that
all proceedings of the auction sale stood
rescinded.

24. The Lower Appellate Court reversed
the finding of the Trial Court that the
compromise
being
voidable
for
nonperformance of one of the covenants under it by
Jagdish Mani, it could not be held void unless
steps were taken to avoid it. The Lower
Appellate Court, like the Trial Court, proceeded
on the premise that payment of the balance of
Rs. 5,000/- on or before 14.12.1983 was a part
of the covenant that made time the essence.
About this issue, both the Courts below are ad
idem, and it is about this conclusion of the
Courts below that this Court is unable to agree,
for reasons already indicated. The findings of
the Lower Appellate Court in reversing the Trial
Court may be well-founded, if the premise that
time is of the essence as held by both the Courts
below were accepted. But, that is not so. The
846 INDIAN LAW REPORTS ALLAHABAD SERIES
Lower Appellate Court has reasoned differently
to conclude that time is of essence. It has gone
by the principle that wherever a decree is passed
on the basis of compromise and one party does
not fulfill his/her obligations under it, that party
cannot take advantage of the decree.

25. The Lower Appellate Court, in support
of its reasoning, has relied on the decision of a
Division Bench of this Court in Nagoo &
Another v. P.T. Shiv Dularey Dixit & Others4
and further on a decision of the Patna High
Court in Hansraj Sangechi & Others v.
Jogeshar Prasad & Another5. The principles
in Nagoo (supra) were laid down in the context
of a suit for sale on a mortgage that was brought
by the mortgagee after a compromise decree
passed in an earlier suit by the mortgagor had
led to a violation of terms about repayment of
the mortgage debt in two installments on
stipulated dates. The compromise decree passed
in the earlier suit carried a term that in case of
default of payment of the installments by the
mortgager, his suit shall stand dismissed. The
first of the two installments was paid on
schedule, but the mortgager defaulted in making
good the second installment. He deposited it a
month after the scheduled date in Court. The
mortgagee then sued on the original mortgage
for the entire mortgage debt and not the abated
sum settled through the compromise. The
mortgagor contended that the compromise
decree passed in his suit was still in force and
the delay in remitting the second installment did
not lead to the dismissal of the suit. It was held
in Nagoo on two of the three points urged that
are relevant, thus :

5. In this special appeal three points
have been urged before us. It has been urged
that the defendants, having paid one of the two
instalments, it could not be said that the default
clause of the compromise came into operation.
In our opinion this contention has no force. The
clause in the compromise that "in case of
default
of
payment
of
the
instalments
mentioned above the plaintiffs' suit shall be
deemed to be dismissed" clearly meant that if
the defendants failed to pay either of the
instalments within the time stipulated the
plaintiffs' suit shall be deemed to be dismissed.
The word ''instalments' in the context meant
either of the two instalments. If the meaning
were as alleged by the appellants it would lead
to a very strange result. The defendants could
claim not to pay the second instalment at all
after paying the first and yet say that the suit
could not be deemed to be dismissed. We do
not think that this could have been the intention
of the parties.

6. The next point urged is that, even
though the previous suit would be deemed to
have been dismissed because of the nonpayment of one of the instalments, nevertheless
the amount due under the mortgage was settled
between the parties to be a sum on Rs. 700 and
that the plaintiff was bound by that settlement.
Learned counsel has urged that the amount thus
settled is res judicata between the parties in the
present case. He has relied upon several
decisions, viz. Maina Bibi v. Chaudhri Vakil
Ahmad[I.L.R. 47 Alld. 250.] ,Raghunath Singh
v. Sheo Pratapsingh[1929 A.L.J.R. 761.]
,Secretary of State for India v. Ateendranath
Das [I.L.R. 63 Cal. 550.] and has referred to
Spencer Bower on Res Judicata at pp. 23 and
24. In Maina Bibi v. Chaudhri Vakil Ahmad
[I.L.R. 47 Alld. 250.] and Raghunath Singh v.
Sheo Pratap Singh [1929 A.L.J.R. 761.] it was
held that, even though a redemption suit was
ultimately dismissed because the mortgage
money was not paid by the mortgagor within
the time allowed by the Court, yet the decisions
on several issues decided by the Court in the
suit were binding in a subsequent suit between
the parties, where the same questions were
agitated afresh. In the Secretary of State for
India in Council v. Ateendranath Das [I.L.R. 63
Cal. 550.] it was held that
11 All. Jagdish Mani Tripathi Vs. Brij Bhushan Tewari & Ors.
847

"a decree passed by consent is as
effective a bar to a subsequent suit as one passed
on contest, not only with reference to the
conclusions arrived at in the previous suit, but
also with regard to every step in the process of
reasoning on which the said conclusions are
founded."

7. There can be no doubt about these
propositions. A judgment by consent or by
default raises an estoppel just in the same way as
a judgment after the Court has exercised a
judicial discretion in the matter. The basis of the
estoppel is that, when parties have once litigated
a matter, it is but fair that litigation should come
to an end. And, if they agree upon a result, or
upon a verdict or upon a judgment, or upon a
verdict and judgment, as the case may be, an
estoppel is raised as to all the matters in respect
of which an estoppel would have been raised by
judgment if the lease had been fought out to the
bitter end. The same proposition has been laid
down in Spencer Bower on Res judicata:

"Any judgment or order which in other
respects answers to the description of res
judicata is none the less so because it was made
in pursuance of the consent and agreement of the
parties."

8. The case of a compromise falling
through, however, by reason of the default of
one of the parties in not carrying out its terms, is
quite a different matter. In the case of a
compromise the presumption is that it is arrived
at because there has been a give and take
between the parties. All the terms of a
compromise are presumably to be taken together
and unless the contrary is expressed in the
compromise itself or necessarily implied in the
circumstances of a particular case an individual
term of the compromise cannot be, picked out by
one party and the other party cannot be said to
be bound by it in spite of the fact that the
compromise, as a whole, he fallen through by
default of the very party who wishes to take
advantage of its terms. .......

26. In Hansraj Sangechi (supra) it was
held :

2. It is contended that the learned
District Judge by the order of the 19th
September, and also by his order of the 13th
September, allowed an extension of the time and
that he had power so to order an extension, and
therefore, the depositing of the decretal amount
on the 22nd September fulfilled all the
requirements of the agreement and the sale
should have been set aside. In the order sheet
there is no order for extension of time; there are
orders that an inquiry should be made whether
the amount had been deposited or not, and, when
the appellant brought the money into Court and
asked leave to deposit it, the learned District
Judge allowed the deposit, but he did not express
that by that deposit the terms of the agreement
would be held to have been fulfilled. The
question is whether the learned District Judge
would in any case have jurisdiction to allow an
extension of time having in view the terms of the
agreement reached between the parties and
whether time was of the essence of the contract.
Several cases have been put before us in which it
has been held that, where there has been a
consent between the parties, the Court has power
to grant relief against forfeiture and to extend
the time for this purpose.

3. But the present case is not a case of
relief against forfeiture. In the case of Kandarpa
Nag v. Banwari Lal Nag [[1920] 33 C.L.J. 244 :
60 I.C. 864.] Mookerjee, Acting C.J., laid down,
after considering the case-law on the subject the
principle which governs cases like the present
one. From the cases he examined he laid down
the principle that time is of the essence of the
agreement, when, in the course of proceedings
by the judgment-debtor to set aside an execution
sale, a compromise is made among the decree-
848 INDIAN LAW REPORTS ALLAHABAD SERIES
holder,
judgment-debtor
and
execution
purchaser that on payment of the judgment debt
within a prescribed period, the sale shall stand
cancelled, while upon failure to make such
payment the sale shall stand confirmed. He said:

"in such cases as the parties intended
in the first conception of the agreement to make
time the essence of the contract, the Court would
not be competent to extend the time except by
consent of all the parties concerned."

27. The decision in Nagoo lays down a
general principle that wherever an essential term
of a compromise decree under which a party
claims advantage is violated, that party cannot
take advantage of the terms of compromise,
which must be held to be rescinded. The
compromise decree involved in Nagoo, as
already said, was based on a statutory suit by the
mortgagor, under Section 33 of the United
Provinces Agriculturists Relief Act, 1934
brought for a declaration of the sum of money
due to the mortgagee. The compromise on which
the decree had followed had been settled at an
abated figure of Rs. 700/- besides counsel fee,
and it was expressed in the compromise to be
payable in two installments on scheduled dates.
The first was paid and in the second, there was a
default. It was later on deposited in Court. In the
mortgagee's suit, the compromise decree was
held to have been rescinded, owing to the
mortgager's default in keeping schedule. It was
held on the first point that non-payment of one
of the two installments would lead to a very
strange result, as the defendant could claim not
to pay the second installment at all after paying
the first, and yet hold on to the decree. In
substance, therefore, the Court held payment of
the second installment strictly on schedule as an
essential term of the compromise. The Court
also opined that all the terms of the compromise
are to be wholesomely adhered to, unless a
contrary intent expressed in the compromise
itself appears or one that is a necessary
implication in the circumstances of a particular
case. It is here where the general proposition that
breach of any of the terms of the compromise
decree leads to its rescission has to be
differentially applied, depending on what is the
nature of the lis, background of parties, the
nature and purpose of the settlement.

28. Nagoo was a decision rendered in the
context of a mortgage suit or a money claim.
The purpose of the suit was to recover the
mortgage debt. The purpose of the compromise
decree earlier passed in the mortgager's suit was
also to ensure timely payment of the mortgage
debt in two installments and on schedule. In that
context, there was nothing to derogate from the
general principle that breach of conditions of a
compromise decree must lead to its rescission.
Further, Nagoo clearly acknowledges that there
could be cases where the terms of the
compromise could expressly admit of a different
intention or it may be implied from the
circumstances of a particular case. That different
intention could be about one or the other term
being adhered to differently or not strictly,
depending on the circumstances of a particular
case. The principle in Nagoo would, therefore,
not apply to the present case, where, for reasons
indicated, this Court has remarked that time was
not of the essence of the contract embodied in
the compromise decree. For the same reason, the
decision of the Patna High Court in Hansraj
Sangechi also is not attracted to the question
involved here.

29. In this Court's opinion, on a proper
construction of the terms of the compromise,
time is not of the essence. And once time was
not of the essence, the contract underlying the
compromise decree must be held to be not
voidable at the promisee's option.

30. The former part of substantial question
of law (a) is answered in the affirmative, in the
manner that time is held not to be of the essence;
11 All. Jagdish Mani Tripathi Vs. Brij Bhushan Tewari & Ors.
849
and the latter part of it is answered in the
negative, by holding that time being not of
essence, the contract was not voidable at the
option of the promisee.

31. In view of the answer to substantial
question of law (a), substantial question of law
(b) need not be answered.

32. Now, so far as substantial question of
law (c) is concerned, the fact to be examined is
whether the rule about time being essence of the
contract, would apply to a decree of Court
founded on compromise. In substance, here, this
Court is required to examine whether the rule
regarding time being essence of the contract
would apply differently to a decree of Court
founded on compromise; different from the way
it applies to a case where the question arises in
an action based on a contract inter partes without
the decree of a Court being involved. This
question has been examined in some measure
while answering substantial question of law (a).
The decision of the Division Bench in Nagoo,
which comes close on facts to the principle that
has bearing on this question, makes allowance
for a contrary intention about one or the other
term being not strictly followed, if that
allowance is "expressed in the contract itself or
necessarily implied in the circumstances", to
borrow the words of the Division Bench. A
stipulation as to time in a compromise on which
a decree has followed cannot always be regarded
as one that makes it of the essence.

33. There is a line of authority which does
say that in a compromise arrived at during the
course of execution proceedings, time is of the
essence and the Court cannot extend that time
stipulated in the compromise decree.