The court considered whether the transaction between the parties was illegal for contriving section 8 of the Expropriated Properties Act which prohibited the sale of returned expropriated property without the consent of the minister. The court held that it was not illegal for the lease to provide for the option of the respondent to purchase the suit property after the expiry the five year period. The court was satisfied that the transaction was a lease and not a sale which was prohibited by the act. The court accordingly concluded that the transaction wasn’t illegal as argued by the respondent.
The court also considered whether the damages awarded were excessive. The court held that in assessment of the quantum of damages, courts were mainly guided by the value of the subject matter, the inconvenience that the party was put through at the instance of the opposite party and the extent of breach. The court was satisfied that the appellant wrongly sought to benefit from both the lease agreement and the government compensation at the expense of the respondent. The court accordingly concluded that the damages awarded to the respondent were not excessive.