JUDGMENT :

R.F. Nariman, J.

Leave granted.

2. The facts of the present case show that there was an authorisation letter dated 08.03.1978 of the respondent to a certain power of attorney holder namely, Harnam Singh, to sell the property in question. Paragraph 6 of this authorisation letter reads as follows:

“Purchaser should be warned that his earnest money will stand as forfeited in my favour if he does not come forth to pay the balance amount to have the sale deed registered, inspite of my part being complete. Of course if I do not come forth before (sub) registrar to have balance amount and to have sale deed registered, the purchaser will have the right to have his earnest money back with equal amount as damages or to have sale deed registered under specific performance and relief act in his own, or his nominee's name.”

3. On 05.06.1978, in pursuance of this authorisation letter, an agreement to sell the said property was arrived at in a sum of Rs. 3,25,000/- out of which earnest money of Rs. 32,500/- was deposited along with the agreement. The agreement to sell also contained para 6, in which it was stated as under:

“Should the bargain fail to materialize action will be taken in accordance with 6 or the seller's sale order dated 08.03.1978, i.e. :-

(a) should the purchaser fail to come forth for payment of balance amount and registration of the sale deed, inspite of the seller's part being complete, the earnest money will stand as forfeited in favour of the seller who would be at liberty to retain the house or to sell it to any body else he likes;

(b) should the seller back out from the deal, he will have to refund the earnest money with an equal amount as penalty for non fulfilment of the contract in accordance with para 6 of the sale order.”

4. Some correspondence ensued between the parties, after which it was clear to the appellant that the respondent was going to resile from the agreement. Therefore, by a notice dated 11.01.1979, the appellant called upon the respondent to specifically perform the aforesaid agreement to sell. In February 1979, the respondent refused to do so, as a result of which the appellant filed a suit for specific performance dated 13.06.1979. The Trial Court framed three issues and found that the agreement to sell stood proved and that the appellant was ready and willing to perform his part of the agreement. However, on a construction of Section 23 of Specific Relief Act, 1963 in the facts of the case namely, that since paragraph 6 of the authorisation letter specifically contained the words “or to have sale deed registered under specific performance” and the said words being absent in paragraph 6 of the agreement to sell dated 05.06.1978, it would be clear that this omission would indicate that specific performance could not, therefore, be granted. The First Appellate Court arrived at the same result on all counts and, therefore, dismissed the appeal. The High Court in second appeal also arrived at the same conclusion, and relied upon a judgment in Dadarao and Anr. Vs. Ramrao & Ors., 1999 (8) SCC 416; and following the aforesaid judgment, therefore, held that Section 23 of Specific Relief Act would bar specific performance in the facts of the present case.

5. The appellant has argued before us that Dadarao's case (supra) is itself not to be considered as a precedent in the light of subsequent judgments of this Court. He further went on to state that except for misconstruing Section 23 of the Specific relief Act, all findings were otherwise in his favour, namely that the agreement had been proved and that he was ready and willing to perform his part of the agreement. He, therefore, asked us to apply the later judgments of this Court, which on a proper construction of Section 23 state that if there is any omission to mention that specific performance of contract can be obtained, such omission would not be taken to mean that a suit for specific performance cannot be filed, provided a sum was not named in the