Nizam v. Mustaffa (S. C. 41/80) & Mustaffa v. Nizam (S. C. 53/80) – sllr 1981 volume 1 page 058

In the case between the owner of the “Thai Hotel” business (Plaintiff) and the lessee who operated the business beyond the agreed term (Defendant), the court addressed whether the agreement for operating the hotel required notarial attestation under the Prevention of Frauds Ordinance, Cap. 70, and whether the stipulated damages amount in the agreement was enforceable as a genuine pre-estimate of loss or was a penalty. The findings established that the agreement conferred only a personal licence to operate the business rather than an interest in immovable property, and thus did not require notarial attestation. It was further determined that the damages stipulation for Rs. 1,000 per day was penal and should be adjusted to a reasonable sum. Legal principles regarding the distinction between