The court clarified that damages under Sections 73 and 74 of the Indian Contract Act require proof of actual loss, and compensation can be sought independently of specific performance.

JUDGMENT :

1. The issue involved in both these appeals is “whether both the Courts below were justified in awarding an amount of Rs.6,01,000/- along with interest @ 12% p.a. to the plaintiff on account of liquidated damages? Whether both the Courts below have considered “the parameters prescribed under Sections 73, 74 of Indian Contract Act while awarding that sum?”

2. This amount is awarded by the Court of Civil Judge Senior Division at Malshiras as per judgment dated 28 April 2010 passed in Spl. Civil Suit No.46/2004. This was confirmed by the Court of District Judge No.1 Malshiras in RCA No.50/2012 on 14 June 2018. These directions were given in a Suit for grant of damages filed by the purchaser of an agricultural land situated at Village Malkhambi, Tal. Malshiras, Dist.Solapur. This direction was given to Defendant Nos.1 to 3 (who are the legal representatives of one Vishnu Devaba Sabale who was owner/vendor). In pursuance to an agreement dated 8 May 2000, said Vishnu could not execute sale deed in favour of Narayan (though executed in favour of one Satyabhama – mother of Narayan-plaintiff) and that is why Narayan filed a Suit for liquidated damages on the basis of a term in that agreement (to pay double the amount of earnest money of Rs.3 lakhs).

Pendency of two second appeals

3. Initially, second appeal No.246/2018 was filed by all the three defendants (through their power of attorney Ramchandra-appellant No.1). Prior to disposal, there was some dispute amongst them and hence appellant No.3 Popat was transposed as respondent No.3.

Subsequently, he filed separate Second Appeal No.249/2024.

4. Accordingly, I have heard Mr.Machhindra Patil learned Advocate and Mr. Kalpesh Patil for the appellants in both appeals and learned Advocate Shri Deshmukh assisted by learned advocate Shri Bansode for Respondent No.1/original plaintiff. Both the sides have consented for disposal of both the appeals at an admission stage. Respondent Nos.2a and 2b are few legal heirs of deceased respondent No.2/defendant No.4-Satyabhama. They were not represented in these appeals through any Advocate. She is the mother of plaintiff-Narayan. She filed written-statement pleading certain facts about sale deed in her favour. She has pleaded about separation with her son Narayan. She has not opposed decreeing the suit. She has neither given any evidence nor cross examined the witnesses. Even her legal representatives were brought on record before the trial court has not given any evidence. Atleast it is not shown from the record.

5. Second appeal No. 246/2019 was argued before me and draft substantial question of law were also tendered before me. At that time second appeal remain to be disposed of. Again this appeal was assigned to me. In the mean time new second appeal was filed as mentioned above. On the basis of earlier draft, I have framed the following substantial questions of law :-

(1) Whether both the Courts below were justified in awarding “damages of Rs.6,00,000/- (being double the amount of earnest money) from the defendants” in favour of the plaintiff without considering “the principles laid down in Section 73 and 74 of Indian Contract Act?”

(2) Whether both the Courts below were justified in awarding interest for a period prior to filing of Suit?

(3) What order and decree?

6. Prior to deciding those questions, it will be relevant to see the pleadings and evidence which are relevant.

Pleadings and evidence

7. There were two documents executed on 8 May 2000. It is in respect of land bearing Gut No.89 1 Hectre 41 Are situated at Village Malkhabi. The owner is Vishnu Devaba Sabale. He agreed to sale this land to the plaintiff-Narayan. The two documents are as follows:-

a) an agreement recording the terms of sale dated 8 May2000.

b) receipt for payment of Rs.3 lakhs being part consideration of same date.

The terms are as follows:-

a) The total consideration is Rs.9,80,000/-.

b) Earnest money agreed is Rs.3 lakhs and paid also.

c) time for payment of remaining consider