J.R. MIDHA, J.

1. Vide sale agreement dated 20th September, 2005, Rajinder Prashad Rathi as attorney of Seetha Lath (hereinafter referred to as „the Seller?) agreed to sell the first floor without terrace rights of property bearing No.6549, Ward No.XVI, plot No.172, measuring about 1125 sq.ft. covered area, Khasra No.453/152 in Block 9-B, Gali No.1-2, Dev Nagar, Karol Bagh, New Delhi (hereinafter referred to as „the suit property?) to Parmanand Kansotia (hereinafter referred to as „the Purchaser?) for a total sale consideration of `15,65,000/-. The Purchaser paid a sum of `3,00,000/- to the Seller at the time of the sale agreement and agreed to pay the balance sale consideration on or before 21st November, 2005.

2. On 2nd November, 2006, the Purchaser instituted a suit for specific performance, permanent injunction and recovery bearing Suit No.182/2006 against the Seller on the following averments:-

(i) At the time of the execution of the sale agreement dated 20th September, 2005, the suit property was not complete, furnished, decorated and renovated and it was agreed that the Purchaser shall spend his own funds for renovation, furnishing, decoration and construction with modern fittings and shall deduct/adjust the said amount from the sale consideration.

(ii) The Seller handed over the vacant and peaceful possession of the suit property to the Purchaser at the time of the sale agreement on 20th September, 2005 with liberty to renovate, furnish, decorate and construct with modern fittings.

(iii) The Purchaser spent a sum of `4,00,000/- towards the renovation, furnishing, decoration and construction with modern fittings and adjusted the said amount against the sale consideration.

(iv) In the middle week of November, 2005, the Purchaser approached the Seller to execute the sale deed and receive the balance sale consideration of `8,65,000/- but the Seller sought time to execute the sale deed. Despite repeated requests and reminders, the Seller did not execute the sale deed in favour of the Purchaser.

(v) In February, 2006, the Purchaser made cash payment of `2,00,000/- to the Seller for which Purchaser did not issue a receipt.

(vi) In June, 2006, the Purchaser again approached the Seller for execution of the sale deed against the payment of balance sale consideration of `6,65,000/-.

(vii) On 2nd July, 2006, the Seller visited the Purchaser and demanded further payment of `2,00,000/-. The Purchaser again offered to pay the balance sale consideration of `6,65,000/-. However, the Seller threatened the Purchaser with dire consequences.

(viii) On 29th October, 2006, the Seller again visited the Purchaser and threatened his wife and minor child to vacate the suit property. The Purchaser made a complaint with police on 30th October, 2006.

(ix) The Purchaser is ready and willing to make the payment of `6,65,000/- towards the balance sale consideration.

3. The Seller raised the following defence in his written statement:-

3.1 The Purchaser committed the breach of the sale agreement dated 20th September, 2005 by failing to make the payment of balance sale consideration of `12,65,000/- on or before 21st November, 2005 and, therefore, the earnest money of `3,00,000/- has been forfeited by the Seller.

3.2 The Purchaser has encroached upon the suit property. The Seller came to know of the encroachment on 17th March, 2006 at about 2:30pm whereupon he lodged a complaint with the police on 22nd July, 2006 in respect of which DD No.15B was recorded on 4th August, 2006.

3.3 There was no agreement for renovation, furnishing, decoration and construction with modern fittings in the suit property between the parties.

3.4 The Seller never agreed for any amount to be spent by the Purchaser for renovation, furnishing, decoration and construction with modern fittings by the Purchaser or for deduction/adjustment of the same from the sale consideration.

3.5 The Seller had agreed to hand over the vacant and peaceful possession of the suit property