The judgment established the principles of liquidated damages and reasonable compensation under the Indian Contract Act, 1872, and emphasized the importance of genuine triable issues in determining the grant of leave to defend a suit.

JUDGMENT

1. This commercial division summary suit is instituted to recover a sum of Rs.1 Crore along with further interest at the rate of 18% p.a. from the date of the suit till payment and/or realization based on a negotiable instrument.

2. The material averments in the plaint can be summarized as under:

(a) Defendant no.1 is the proprietor of defendant no.2 - firm. Pursuant to the representation made by defendant no.1, the plaintiff agreed to purchase a Flat bearing No.901, in a building, Kamla Vihar, situated at Parekh Lane, Kandivali (W), Mumbai, then being redeveloped by defendant no.1 for a consideration of Rs.1,70,00,000/-. As instructed by defendant no.1, the plaintiff credited a sum of Rs.1 Crore by RTGS in the account of defendant no.2 and transferred a sum of Rs.46,00,000/- in the account of Jayant Mehta HUF. A further amount of Rs.22,80,000/- was also paid by the plaintiff by 30th April, 2015. Moreover, a sum of Rs.1,20,000/- was deposited with the authorities by way of TDS on 4th May, 2015. Accordingly, the entire consideration of Rs.1,70,00,000/- was parted with by the plaintiff.

(b) Under the terms of agreement, between the parties, the defendants had agreed to deliver possession of Flat No.901 by the end of December, 2015. In the event of default, the defendants had agreed to refund the said amount along with suitable compensation.

(c) The defendants committed default. After rigorous pursuation, the defendant No. 1 eventually expressed his inability to handover the possession of Flat No.901 and instead offered to convey another flat bearing No.104 admeasuring 700 sq. ft. carpet area, in another ongoing project Samaj Darshan and also pay compensation. As Flat No.104 was not comparable in size, amenities and location advantage, which Flat No.901 would have had, the defendants agreed to pay a compensation of Rs.1 Crore in addition to transfer of Flat No.104, the value of which was stated to be around Rs.1,44,00,000/-. Thus, on 29th July, 2016 a registered Agreement for Sale of Flat No.104, Samaj Darshan, came to be executed in favour of the plaintiff, wherein the consideration was shown at Rs.1,44,00,000/-.

(d) In addition, to evidence the transaction between the parties, according to the plaintiff, on 23rd August, 2016, the defendants issued a letter acknowledging the receipt of the consideration of Rs.1,70,00,000/- from the plaintiff, the value of Flat No.104, which was conveyed to the defendants was only Rs.1,44,00,000/- and also the liability to pay a compensation of Rs.1 Crore for the delay in delivery of Flat No.901, as initially agreed. It was further agreed that, in the event the defendants executed an instrument to transfer Flat No.901 in favour of the plaintiff by 25th October, 2016, the plaintiff would re-convey Flat No.104, Samaj Darshan in favour of the defendants and then the post-dated cheque, drawn for Rs.1 Crore, towards compensation, would stand cancelled and the plaintiff would return the said cheque.

(d) The defendants failed to transfer Flat No.901 in favour of the plaintiff by the stipulated date. Instead, the defendants executed a registered Agreement for Sale in respect of Flat No.901 in favour of another transferee. Hence, the plaintiff presented the cheque for encashment. It was returned unencashed with the remarks 'payment stopped by drower'. As the defendants failed to pay the amount covered by the cheque despite service of the demand notice, the plaintiff was constrained to institute this suit.

3. The defendants entered appearance upon service of writ of summons. Thereupon the plaintiff took out the Summons for Judgment.

4. An affidavit-in-reply is filed by defendant no.1 seeking an unconditional leave to defend the suit. The suit was stated to be misconceived. Maintainability of the suit under the provisions of Order XXXVII was sought to be assailed. It was contended that the plaintiff is guilty of suppression of material facts and has approached the Court with a case which does not reveal the