MAKKALA NARSIMLU Vs. GUNNALA RAGHUNANDAN RAO

JUDGEMENT

(1.) The principal question raised in this Letters Patent Appeal is about the compensation awarded by our learned brother Sriramulu, j., for failure to perform a contract. The defendant, against whom the compensation was awarded by our learned brother, has preferred this appeal.

(2.) The matter arose thus :- The appellants executed an agreement of sale Ex. A-1 dated 29-3-66 in favour of the respondent agreeing to sell a house for Rs. 20,000. A sum of Rs. 4,000 was paid on that date by way of advance or earnest money. The vendor agreed to get two things done within nine months there from. Once is to get a further sale deed in his favour from whom he had purchased. The second condition was that he would vacate the tenants from the house and give vacant possession to the purchaser within the period of nine months. That was why the parties fixed he period of nine months for performance of the contract. Once the vendor was ready with these two requirements, the purchaser was to pay the balance of Rs. 16,000 and to take a sale deed. However, the vendor was unable to perform either of the two conditions with the result that the agreement could not be performed. The purchaser filed the suit to recover a sum of Rs. 8,000 consisting of Rs. 4,000 towards principal and Rupees 4,000 as liquidated damages with costs and future interest thereon at 6% per annum from date of suit till realisation. This sum of Rs. 4,000 claimed as liquidated damages was mentioned in the agreement of sale Ex. A-1 itself.

(3.) The defence was that the defendant did not commit any breach of agreement and that the plaintiff was not entitled to any damages. The trial Court was very equivocal in its finding about the occurrence of breach of agreement on the part of the defendant. In one place it clearly said thus: