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TMI Blog2012 (1) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant. - RFA No. 664/2003 - - - Dated:- 13-1-2012 - Valmiki J. Mehta, J Atul Kumar, proxy counsel for the Appellant Valmiki J. Mehta, J 1. Proxy counsel appearing for the counsel for the appellant states that the appellant has taken back the brief. 2. The impugned judgment and decree dated 29.3.2003 is a judgment and decree in favour of the respondent/plaintiff for an amount which was paid under an Agreement to Sell. The impugned judgment and decree directs refund of the amount paid inasmuch as it is found that the appellant/defendant was guilty of breach of contract in not having obtained the permission from the Income Tax Authorities viz. the income tax clearance certificate. 3. Some of the relevant paragrap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iv) Admittedly, the deal was for 28.00 Lakhs. As per the provisions of Income Tax Act contained in Section 230A nad 269UC, specific permission from the Income Tax Authority was required to finalise the deal. It is not the case of any of the party that this permission was ever applied for by them. Since, the permission was neither applied nor obtained, the sale deed could not have been executed on the date fixed in the agreement because of the prohibitory clause in the Income Tax Act. The agreement as such was not capable of performance on the date fixed for finalisation of the sale deed. v) The case of defendant is that he had got the sale deed of the property executed in his name only with a view to transfer better title to the plai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there cannot be forfeiture of amount under the Agreement to Sell unless loss is pleaded and proved. The relevant paras of the judgment read as under:- 8. The claim made by the plaintiff to forfeit the amount of Rs 24,000 may be adjusted in the light of Section 74 of the Indian Contract Act, which in its material part provides:- "When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has, subject to the limit of the penalty stipulated, jurisdiction to award such compensation as it deems reasonable having regard to all the circumstances of the case. Jurisdiction of the Court to award compensation in case of breach of contract is unqualified except as to the maximum stipulated; but compensation has to be reasonable, and that imposes upon the Court duty to award compensation according to settled principles. The section undoubtedly says that the aggrieved party is entitled to receive compensation from the party who has broken the contract, whether or not actual damage or loss is proved to have been caused by the breach. Thereby it merely dispenses with proof of "actual loss or damage"; it does not justify the award of com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s entitled from the defendant on breach of the contract. Such compensation has to be ascertained having regard to the conditions existing on the date of the breach. 16. There is no evidence that any loss was suffered by the plaintiff in consequence of the default by the defendant, save as to the loss suffered by him by being kept out of possession of the property. There is no evidence that the property had depreciated in value since the date of the contract provided; nor was there evidence that any other special damage had resulted. The contact provided for forfeiture of Rs 25,000 consisting of Rs, 1039 paid as earnest money and Rs 24,000 paid as part of the purchase price. The defendant has conceded that the plaintiff was entitled to f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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