1. The plaintiff has sued for recovery of principal sum of Rs.19 lakhs together with interest @ 24% per annum till the date of institution of the suit of Rs.9,05,753.43 paise, i.e. total Rs.28,05,753.43 paise pleading:

(i) that the plaintiff, a Co-operative Group Housing Society had entered into the Agreement dated 6th December, 1999 with the defendant whereunder the defendant undertook to supply, install and commission fourteen Schindler smart machine room less TM 001 lifts/elevators @ Rs.9,30,000/- per lift for a total price of Rs.1,30,20,000/-at the flats to be constructed for the members of the plaintiff Society at Plot No.9, Sector-22, Dwarka, Phase-I, New Delhi;

(ii) that the aforesaid sum of Rs.19 lakhs was paid as advance by the plaintiff to the defendant under the said Agreement;

(iii) that the plaintiff vide letters dated 1st May, 2003 and 27th May, 2003 asked the defendant to supply the lifts;

(iv) that the defendant vide letter dated 30th July, 2003 notified the plaintiff that the validity of the contract had expired and the price of the lifts had escalated since December, 1999 and it was not possible for the defendant to execute the contract at the agreed prices and further notified the plaintiff that the revised price of the lifts was to be Rs.10,79,000/- per lift;

(v) that the aforesaid revised price was not acceptable to the plaintiff and the plaintiff thus asked for refund of the advance which the defendant failed to refund inspite of legal notice; Hence this suit. The plaintiff has also claimed interest @ 24% per annum from the date of institution of suit.

2. The defendant has contested the suit pleading:

(a) that though as per the Agreement, the entire sum of Rs.19 lakhs was payable by the plaintiff to the defendant by 31st December, 1999 but the plaintiff paid only the first installment of Rs.10 lakhs and paid the balance amount of Rs.9 lakhs on or about 14th March, 2000;

(b) that the suit for recovery of the said amount of Rs.19 lakhs thus should have been filed by 14th March, 2003 and at the time of institution on 23rd July, 2005 the claim therefor was barred by time;

(c) that the sum of Rs.19 lakhs was paid under the Agreement dated 6th December, 1999 by way of earnest money which acted as a commitment on the part of the plaintiff that the plaintiff would honor its obligations under the Agreement failing which the defendant would incur losses; that the defendant on the basis of representations of the plaintiff had to undertake initial preliminary work so as to be ready and prepared to supply elevators of the specifications as per Agreement when intimated by the plaintiff;

(d) no refund of the said sum of Rs.19 lakhs was envisaged under the Agreement and on the contrary the Agreement provided for forfeiture of earnest money by the defendant in the event of default by the plaintiff;

(e) that the plaintiff after inducing the defendant to commit the performance of the Agreement has failed to adhere to the terms thereof;

(f) that the plaintiff failed to place any instructions for installation of the elevators during the validity of the Agreement for a period of three years;

(g) that an Agreement containing reciprocal promises must be fulfilled by both parties to the Agreement and any party failing to perform its part of the obligations mandated under the Agreement cannot seek any remedy against the other;

(h) that the instructions for installation of the elevators were to be tendered within a reasonable time before expiry of the Agreement; the prices of the elevators were kept immune from escalation until 31st December, 2002 and the defendant subjected itself to considerable risk and losses by agreeing to a check on price escalation for nearly three years; the plaintiff however failed to instruct the defendant to install any elevators;

(i) that the plaintiff has concealed that though it had in the year 1999 entered into an agreement for installation of 14 elevators at an agreed price of Rs.9,30,000/