1. This is a plaintiff's appeal arising out of a suit for specific performance of a contract for sale of a house and in the alternative for damages. It appears that the defendant wanted to sell a house, and for this purpose Abdul Aziz, a common friend of the parties to the suit, was negotiating with prospective purchasers. Abdul Aziz wrote to the defendant saying that a certain person was offering Rs. 3,600 for the house and was enquiring if the defendant world agree to sell the house. On the 13th of December 1918 the defendant wrote back to Abdul Aziz saying that if the purchaser was willing to pay Rs. 4,000 for the house and the costs of transfer, he would sell the house. Abdul Aziz, thereupon, on the 21st of December 1918 wrote to the defendant saying that one Panna Lal had accepted the terms proposed, by the defendant ana was sending a money-order for Rs. 200 as earnest-money and the defendant was to send a formal receipt. It appears that the defendant received a money-order, for Rs. 200 on Saturday and wrote back saying that as the next day was a Sunday, he would send the receipt on the Monday following by registered, post or under a bearing cover as desired by Abdul Aziz. Matters stopped here for some days. On the 5th of January 1919 the defendant wrote to Abdul Aziz saying that he had received a telegram asking him for the return of Rs. 200 sent as earnest-money and he wanted to know if Panna Lal was going back out of the agreement. Later on he also said that the house really belonged to his wife and she refused to sell it. Ultimately, the defendant refused to execute a sale-deed and then the plaintiff brought the present suit for specific performance of the contract to sell, and, in the alternative for damages.
2. Several pleas were taken in defence and the main plea was that Abdul Aziz had by misrepresentation, induced the defendant to agree to the sale of the house in December 1918, and that it was owing to this misrepresentation that the defendant acted as he did, but that the defendant did not contract with the plaintiff to sell the property. The Trial Court, the learned Subordinate Judge of Agra, came to the conclusion that the defendant had contracted to sell the house but he could not give a decree for specific performance of the contract, because the defendant was not competent to sell the horse which belonged to his wife. He, however, gave a decree for damages and the refund of Rs. 200, the earnest-money already advanced. The defendant went up in appeal and the learned District Judge has confirmed the finding of the Trial Court as to the amount of damages, but has allowed the appeal and dismissed the suit on the ground that there was no completed contract for sale. It is not very easy to understand how the learned District Judge came to this conclusion. Having regard to the correspondence to which we have referred above, there can be no question that there was a proposal by Abdul Aziz that the defendant made an offer to sell the house for Rs. 4,000 and the said offer was accepted by Panna Lal who sent Rs. 200 by money-order as earnest-money. The learned Judge seems to be under the misapprehension that a receipt registered under the Registration Act was required for the Rs. 200 sent by Panna Lal as a condition precedent to the completion of the contract. This was clearly the result of a misreading of the correspondence between Abdul Aziz and the defendant. In the letter which Abdul Aziz wrote to the defendant, he asked the defendant to send a receipt by post under registered cover or bearing and the defendant wrote back in reply saying that he would send, it on Monday following by registered post or bearing. The learned. Judge seems to think that this last letter meant that the receipt was to be registered under the Registration Act and then sent to Abdul Aziz. This was no body's case and the learned Judge seems to have misunderstood the defence and erred, in deciding the case on a point not raised by the parties. In our opinion the judgment of the Trial Court was correct and should not have been disturbed. We are of opinion that the plaintiff is entitled to recover damages for a breach of the contract entered into with him by the defendant and that the measure of such damages is the difference between the market value of the property and the contractual price. The learned. Judge accepts the amount assessed by the Court below as correct. We, therefore, allow the appeal set aside the decree of the lower Appellate Court and restore that of the Court of first instance with costs in this Court and in the Court below.