Hon'ble Judges/Coram:
J.C. Shah, K.N. Wanchoo and R.S. Bachawat

JUDGMENT

J.C. Shah, J.

1. This appeal with special leave is filed against the judgment of the High Court of Judicature at Madras reversing the decree of the Subordinate Judge, Ramnathapuram in original suit No. 30 of 1959. Gomathinayagam Pillai and his son Chinnathambia Pillai - hereinafter collectively referred to as appellants 1 & 2 - were owners of a plot of land Survey No. 1155/2-3 in village Periyakulam, District Ramnathapuram. In March 1959 Palaniappa Pillai son of the first appellant was standing trial in a Criminal Court for the offence of murder and the first appellant was in need of funds to defend him. On March 5, 1959 appellants 1 & 2 agreed verbally to sell S. No. 1155/2-3 to Palaniswami Nadar - respondent in this appeal - for Rs. 15,106/- and received Rs. 1006/- in part payment of the price. No time was fixed for completion of the sale. A receipt Ext. A-1 was executed by appellants 1 & 2 reciting that the land was agreed to be sold by appellants 1 & 2 to the respondent and that Rs. 1006/- were received as "advance amount." On March 31, 1959 Palaniappa Pillai was convicted of the offence of murder and sentenced to imprisonment for life. On April 4, 1959 appellants 1 & 2 received Rs. 2,000/- from the respondent and executed a writing stipulating that the sale deed will be executed on or before April 15, 1959. It was recited in that writing that appellants 1 & 2 had agreed to sell on March 5, 1959 and had received Rs. 1006/- on that date, and Rs. 2,000/- on April 4, 1959 and it was further recited that appellants 1 & 2 "shall settle the aforesaid sale within 2nd Chittiral, Vikhari (15th April 1959) in favour of" the respondent "that the amount shall be paid as per the particulars of the receipt of sale consideration; that even though" appellants 1 & 2 "are prepared to settle the sale accordingly, if" the respondent "raises any objection whatever to settle the sale, he shall lose the advance amount of Rs. 3006/-(Rupees Three thousand and six only); and that, even though" the respondent "is prepared to settle the sale, if" appellants 1 & 2 "raise any objection whatever to settle the sale, they shall add a sum of Rs. 3000/- to the aforesaid advance amount of Rs. 3006/- and pay in all, a sum of Rs. 6006/-(Rupees six thousand and six only) to" the respondent. The agreement clearly incorporated a default clause imposing penalty upon the party failing to carry out the terms of the contract. But the sale deed was not executed on or before April 15, 1959. Different reasons were given by the parties for not completing the sale by the date stipulated. It was the case of the respondent that appellants 1 & 2 wanted to consult a lawyer and to ascertain whether it was necessary to secure attestation by the first appellant's son Palaniappa and his daughters because the property originally belonged to Ulagammal, wife of the first appellant. It was the case of appellants 1 & 2 that they were full owners of the land agreed to be sold and that the children of the first appellant were not interested in the land and the respondent set up false excuses and neglected to take the sale deed as stipulated. On April 15, 1959, another agreement was executed. It was recited in the agreement :

"As certain unforeseen circumstances have arisen to settle the sale on this day as has been fixed as per the Agreement executed on 4th April 1959 by us three Individuals, we have decided to