It appears to me that the Courts in India are bound to apply the express provision of law embodied in Section 73, Contract Act, to the exclusion of any rule of English Common law; the more so when, as in this particular instance, it is regarded by English authorities themselves as anomalous and exceptional justified only by the peculiar conditions of English titles and conveyancing. There is nothing in Section 73 to restrict its application to contracts relating to movable property only; nor does it lay down any different measure of damages in respect of a breach of a contract relating to movable property as distinguished from those affecting immovable property. It only lays down a general rule that when a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, of which the parties knew, when they made the contract, to be likely to result from the breach of it. The wording is comprehensive enough to include contracts respecting immovable property. As observed in Ranchhod v. Manmohandas (1908) 32 Bom 165 it imposes no exception on the ordinary law as to damages; whatever the subject-matter of the contract may be. It must therefore follow that in cases of breach of contract for sale of an immovable property by reason of the vendor's inability to make out a good title, the damages must be assessed on the principle stated in Section 73, Contract Act.
The next question is whether, applying Section 73, Contract Act, the vendee is entitled to claim damages for the loss of his bargain. In the present case it is found that the vendee was aware of the vendor's defective title on the day of the contract of sale. On the assurance of the vendor that he would convey a sound title within eight days, the vendee advanced him Rs. 125 as earnest money out of the purchase money settled. The fact that the vendee was aware of the vendor's defective title cannot affect the validity of the contract which was to be performed not on the day on which admittedly the vendor had no title, but on some other day on which he expected to acquire a marketable title. The contract of sale which involved representation by the vendor that he would perform his part of the contract on a particular day created expectations in the mind of the vendee that he would get marketable title. The vendor was therefore bound in law either to fulfil his promise or compensate the promisee for the loss of the right he expected to acquire. That loss would obviously be estimated on the basis of the difference between the contract price and the market price on the day of the breach, as has been done by the Court below. As the vendor himself had agreed to pay the damages to the extent of Rs. 400 which has been found not to exceed the difference between the contract price and the market price at the date of the breach he was bound to reimburse the vendee by payment of, that stipulated amount. I affirm the lower appellate Court's decree and dismiss this appeal with costs.
IN THE HIGH COURT OF NAGPUR
Decided On: 19.06.1933
Appellants: Sakharam Tukaram Kunbi
Vs.
Respondent: Jairam Januji
Vs.
Respondent: Jairam Januji
Niyogi, A.J.C.
Citation: AIR1933Nag263
