- (1.) THIS is an appeal against the judgment and decree of the former High Court of Bikaner dated 22. 1. 46 presented to the Ijlas-i-Khas of Bikaner and transferred to this High Court under Ordinance XL of 1949 read with Ordinance XIII of 1950.
(2.) THE plaintiff appellant sued the respondent on an allegation that the defendant had agreed to sell 111 bighas and 5 biswas of agricultural land in chak No. 12 P. S. and half share in a shop in Raisinghnagar on nth May, 1943 for a sum of Rs. 18000/- and the plaintiff paid to the defendant Rs. 5000/- as earnest money. THE balance of the purchase money was to be paid on execution of the sale deed within a month. It was stipulated that if the purchaser did not complete the transaction, the earnest money would be forfeited and similarly if the vendor refused to complete the sale, he was to pay Rs. 5000/- as damages. It was alleged that the defendant refused to execute the sale deed and intimated to the plaintiff of his intention by Telegram on 21st June, 1943. THE plaintiff claimed a return of Rs. 5000/- paid by him as earnest money and Rs. 5000/- more as damages for breach of the contract. The defendant admitted execution of the agreement for sale but pleaded that the real purchasers were Ramsingh and Shersingh and the plaintiff was only acting as an agent for them and that the said two gentlemen Ramsingh and Shersingh had intimated to the defendant on 18th June, 1943 that they were not willing to purchase, and the agreement of sale might be cancelled, and it was for that reason that the earnest money was forfeited and the agreement of sale was cancelled. It was also pleaded in the alternative that the agreement of nth May, 1943 was superseded by a subsequent agreement by which Ramsingh and Shersingh became co-vendees with the plaintiff and the latter alone was not entitled to sue. It was further pleaded that the plaintiff was not entitled to any amount by way of damages as he aid not suffer any actual damage. The trial court framed six issues in the case. (1) Whether the plaintiff entered into the contract of sale as an agent for Ramsingh and Shersingh and he obtained agreement in his own name by misrepresentation. (2) Whether the original agree-ment was superseded by a subsequent agreement between the parties and Ramsingh and Shersingh. (3) Whether Ramsingh and Shersingh had intimated that they would not complete the sale. (4) Whether Ramsingh and Shersingh were necessary parties. (5) Whether the earnest money was paid by Ramsingh and Shersingh, and (6) Whether the plaintiff alone was not entitled to sue. The Court found that the plaintiff had entered into the agreement on his own account and not as agent for Ram Singh and Shersingh and that they were not necessary parties to the suit. It was also found that in the agreement itself there was a stipulation that the vendor would - execute the sale in the name of any person point-ted out by the vendee, and Ramsingh and Shersingh were brought into the picture under the aforesaid stipulation and that the intimation by the plaintiff that sale deeds were to be executed of the portion of the property separately in favour of Ram Singh, Sher Singh and the plaintiff did not supersede the agreement of 11. 5. 1943 and it did not make them co-promisees. The Court also found that any intimation by Ramsingh and Shersingh on 18. 6. 1943 that they were not prepared to purchase the land, did not authorise the defendant to refuse to complete the sale in favour of the plaintiff. It was found that the document of 18. 6. 1943 obtained by defendant from Ramsingh on 5th July 1943 was so done after he had committed breach on account of sale. It was found that the plaintiff was always ready and willing to complete the purchase and had obtained the draft of the requisite amount from a Bank for payment to the defendant as stipulated in the agreement. It was found that the defendant had committed breach of a contract and the plaintiff alone was entitled to sue. The Court held that the plaintiff was entitled to the return of Rs. 5000/- paid by him to the defendant as earnest money. On the question of damages the Court was of opinion that the plaintiff had as between himself and Ram Singh and Sher Singh decided to take for himself only 1/3 of the property and therefore, the plaintiff was entitled only to a third of the stipulated damages and allowed him Rs. 1600/- by way of damages. The suit was decreed for Rs. 6600/- with costs, on the amount and dismissed for the rest of the claim with costs. Both parties went in appeal and the appellate Court while maintaining the finding of the trial court and allowing the plaintiff's claim for return of earnest money dismissed his claim for damages on the ground that the stipulation fixing the amount of damages in the case of breach of contract did not entitle the plaintiff to recover any damages unless actual damages or loss suffered by him had been proved by the plaintiff. The defendant's appeal was therefore partly allowed by reducing the decretal amount by Rs. 1600/- and the plaintiff's appeal for enhancement of the amount of damages by Rs. 3400/- was dismissed. The plaintiff after obtaining leave to appeal had filed this appeal to Ijlas-i-Khas of Bikaner and prayed for enhancement of the decree to Rs. 5000/- claimed by him by way of damages according to the agreement. On behalf of the defendant cross objections had been presented with a prayer that even the decree for return of the earnest money be set aside. The case has been transferred to this High Court. The defendant's cross-objections are taken first. It was argued by learned counsel for the plaintiff appellant that the cross-objections were not maintainable as the respondent could not have filed an appeal against the decree of the High Court without obtaining a certificate for leave to appeal, which had not been obtained. There is force in this contention. Order 41, Rule 22 permits any respondent who may not have appealed from any part of the decree, to take cross objections to the decree which he could have taken by way of appeal. It is clear from the language of Rule 22 that the objection can be filed by a person who is entitled under law to file an appeal. It is conceded that the respondent' case did not come under that part of Rule 22 of the proclamation of H. H. the Maharaja of Bikaner, dated 20. 8. 1940 under which he could file an appeal without obtaining a certificate or special leave to appeal. He could only file an appeal if a certificate had been granted. In the circumstances the cross objection are not maintainable. We have however heard learned counsel for the respondent at length on the merits as well and are of opinion that they are without substance. The plea that the plaintiff was acting as an agent for Ramsingh and Shersingh was not at all pressed. The other plea that the original contract with the plaintiff had been superseded was sought to be supported on the evidence that the plaintiff along with Ramsingh and Shersingh met the defendant at Lahore on 31st May, 1943 and intimated to him that the defen-dant was to execute three separate sale-deeds of different portions of the property in lieu of different amounts totalling Rs. 18000/- and for that reason the original contract had been superseded. This contention entirely overlooks stipulation No. 5 in the agreement of sale that the vendor defendant will have no objection to execute sale-deeds in the name of any person stated by the plaintiff. There was no variation of the contract if plaintiff took with him Shersingh and Ramsingh and informed the defendant that they were the persons in whose names the other two sale-deeds were to be executed. The fact that as between the plaintiff and Shersingh and Ramsingh, the latter two were to provide for a certain amount of consideration did not make them co-promisees with the plaintiff as it was an internal arrangement. If according to the defendant the original contract was intended to be superseded a fresh formal document could have been brought into existence to that effect. The alleged refusal by Ramsingh and Shersingh to purchase, did not authorise the defendant to put an end to the contract as the plaintiff was all along ready and willing to pay the full price of the entire property to the defendant and complete the sale. The circumstances in which the document of 18th June, 1943 signed by Ramsingh was brought into existence throw considerable light on the question. This document was got executed by Ramsingh on 5th July, 1943 after the plaintiff had objected to the defendant's refusal to carry out the contract. The explanation on behalf of the defendant that Ramsingh had intimated a disinclination to purchase on the 18th June to the agent of the defendant and the same was got in writing on the 5th July, cannot be accepted and it is quite clear that an ante-dated document was brought into existence by the defendant for the purpose of supporting a plea now raised by the defendant. The cross objections have no force and are dismissed. As to the plaintiff's appeal S. 74 of the Contract Act lays down that when a contract has been broken, and if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation 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. In the present case the amount to be paid by the defendant in case of breach of contract was named as Rs. 5000/- and the plaintiff was entitled to receive from the defendant reasonable compensation not exceeding Rs. 5000/ -. The defendant had taken a plea that the plaintiff did not suffer any damage or loss and therefore an issue should have been struck as to whether the plaintiff had suffered any damages or loss on account of breach of the contract. The trial court seems to have been under an impression that on account of breach of contract by the defendant the plaintiff was entitled to the entire amount stipulated as damages to be paid by the defendant on breach of contract by him and only reduced the amount of claim by taking into consideration that the plaintiff had agreed to retain for himself only a third portion of the property. As discussed above this was an internal agreement between the plaintiff and certain other persons and was not relevant for the purposes of deciding the matter in controversy between the plaintiff and the defendant. The learned Judges of the High Court of Bikaner were not right in dismissing the entire claim of the plaintiff since according to the very language of S. 74 the plaintiff was entitled to reasonable compensation even when the plaintiff failed to prove any actual damage or loss. In cases for damages for breach of contract, an issue as to whether the plaintiff suffered any damages by the alleged breach of contract, is obviously one which requires to be struck as the entire controversy hangs around it. In our opinion it is essential for a right decision of the suit on merits that such an issue should be framed and in exercise of the powers under O. 41, R. 25 the following issue is framed - Whether the plaintiff suffered any damages or loss by breach of the contract by the defendant. The record is sent back to the trial court and the parties will be allowed to adduce additional evidence oral and documentary on the aforesaid issue and the learned District Judge would send the record after giving his finding on the issue. He would send his finding within four months or within such further time as will be extended by this Court. . ;