The judgment established the application of S.55, T.P. Act and S.73, Contract Act in determining the entitlement to claim damages for breach of a contract relating to immoveable property and the right to re-sell the property to mitigate the loss.

Niyogi, A J C—This is a defendant's appeal against the decree of the District Judge, Jubbulpore, which affirmed the original Court's decree granting damages for breach of contract to sell immoveable property. The plaintiff alleged that the defendant Motilal had offered to purchase two houses out of their estate which was then under the management of the Court of Wards for Rupees 9,000; and that on 24th October 1930 the Court of Wards, acting on their behalf, accepted the offer, whereon the defendant paid Rs. 100 as earnest money. Subsequently, on 6th December 1930, he resiled from the agreement and failed to perform it by payment of the, price and accepting a conveyance which the Court of Wards was prepared to execute in his favour, even when expressly asked to do so by a notice served on him on 2nd January 1931. The Court of Wards thereon sold the houses on 28th October 1931 to one Ratilal of Bombay for Rs. 8,000 after giving due intimation to the defendant of its intention to re sell the houses by a formal notice delivered on 18th April 1931.

2. The Court of Wards, representing the plaintiffs, instituted the suit out of which this appeal arises claiming damages estimated on the difference between the agreed and re-sale prices, with interest. The claim was laid for Rs. 1,693. The defendant contended that the contract of sale was subject to the proviso that the vendors demolished a Dehar (grave) and obtained an agreement from the trustees of an adjoining temple that they would not object to the removal by the defendant of a projecting cornice. The other pleas raised by the defendant are not material for the decision of this case and need not be reiterated. Both the Courts below found the defendant's contentions disproved and decreed the plaintiffs' suit to the extent of Rs. 900 only, which was the difference between the contract price of Rs. 9,000 and Rs. 8,000 realised by re-sale, plus Rs. 100 already paid by the defendant as earnest money. On behalf, of the appellant it was urged in limine that the plaintiffs' suit was not tenable in the absence of proof of sanction by a competent authority to file it. A similar objection was raised as to the sale and the re-sale. The plea was raised for the first time in this Court, but as it went to the root of the case the respondents were asked to produce necessary documents in this connation. They have produced the documents which prove beyond doubt that the suit and the sale were duly authorised, and I am satisfied that there has been no illegality as alleged by the appellant. The appellant's preliminary contention must therefore fail.

3. It is contended that the grave and the projecting cornice detracted from the utility of the houses and that they therefore constituted not only material defect in the property but also defect in the title so as to justify the defendant to rescind the contract of sale. Reliance is placed on Nawal Kishore v. Sarju Ram Sahu, 1932 ILR(All) 516 Nursing Dass v. Chuttoo Lal, 1923 ILR(Cal) 641 Harilal Dalsukhram v. Mulchand, 1928 30 BLR 1149 Adikesavan Naidu v. Gurunatha Chetti, 1918 AIR(Mad) 1315. All the cited cases were those in which compensation was awarded on account of defect of title and not material defect in the property. Apart from these cases it may be conceded that the material defect in the property may include defect in title, as was held in Hali Essa Sulleman v. Dayabhai Parmanandas,1896 20 ILR(Bom) 522. The legislature accepted the view and gave effect to it by inserting the words ''or in the seller's title thereto'' in sub-Cl. 1(a), S.55, T.P. Act. But this will not make any difference if the buyer is aware of such a defect. It is virtually admitted in the present case that the defendant was aware of the defect, if at all it was one, in the property which he contracted to purchase. Any suggestion of non-disclosure of this defect is refuted by the very nature of the plea raised by the defendant to the effect that the plaintiffs had stip