TaxTMI 
TaxTMI 
2012 (1) TMI 95
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....lty 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 paragraphs of the Trial Court decreeing the suit read as under:- "5. Plaintiff had filed his affidavit by way of evidence. He was cross examined at length by the Ld. Counsel for the defendant. Similarly, defendant had filed his affidavit as evidence who was cross examined at length by Ld. Counsel for the plaintiff. Final arguments were heard. My issue-wise findings are as under:- Issue No.4 i) The agreement to sell Ex.DW1/1 and Ex.DW1/3 are admitted documents. It is the case of both the parties that initially the agreement to sell Ex.DW1/1 w....
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....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 plaintiff and it is the plaintiff who has backed out from his deal. The modes opperendi of deceiving the revenue authorities is clear from the copy of the sale deed filed by the defendant on record and marked as D-2. The said sale deed bears date of its execution on 6.11.2000 and total sale consideration shown in 1.50 Lakhs only. On the other hand the agreement to sell dated 3.10.2000 and 9.11.2000 show the sales consideration at 28.00 Lakhs. In this way the sales transactions are under valued at the time of registration of t....
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....on 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 amount so named or as the case may be, the penalty stipulated for." The section is clearly an attempt to eliminate the sometime elaborate refinements made under the English common law in distinguishing between stipulations providing for payment of liquidated damages and stipulations in the nature of penalty. Under the common law a genuine pre-estimate of damages by mutual agreement is regarded as a stipulation naming liquidated damages and binding between the parties: a stipulation in a contr....
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....itled 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 compensation when in consequence of the breach no legal injury at all has resulted, because compensation for breach of contract can be awarded to make good loss or damage which naturally arose in the usual course of things, or which the parties knew when they made the contract, to be likely to result from the breach. 15. Section 74 declares the law as to liability upon breach of contract where compensation is by agreement of the parties pre-determined, or where there is a stipula....
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.... 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 forfeit the amount of Rs 1000 which was paid as earnest money. We cannot however agree with the High Court that 13 percent of the price may be regarded as reasonable compensation in relation to the value of the contract as a whole, as that in our opinion is assessed on an arbitrary assumption. The plaintiff failed to prove the loss suffered by him in consequence of the breach of the contract committed by the defendant and we are unable to find any principle on which compensat....