DELHI HIGH COURT
Vipin Sanghi, J.
Grammy Communications Pvt.Ltd. - Appellant
Versus
Emaar MGF Land Ltd. - Resopndent
CS(OS) 2635 of 2010
Decided On : 13-08-2013
Order 12 Rule 6 - Claim for Refund - CPC - 166 (2010) DLT 84, Mahendra Verma v. Suresh T Kailachand - Mechalac Engineers and Manufacturers v. Basic Equipment Corporation, Manu/SC/0043/1976 : (1976) 4 SCC 687 - P.P.A. Impex Pvt. Ltd. v. Mangal Sin Mittal
Fact of the Case:
Plaintiff filed for a decree for the principal amount of Rs. 25,81,517/- claiming refund for deposits made for commercial space in a construction project. Defendant alleged plaintiff's default in payment.
Finding of the Court:
Plaintiff entitled to partial relief as defendant's defence of forfeiture of entire amount deposited by plaintiff was found frivolous and untenable. Defendant directed to deposit only earnest money of Rs. 10,32,607/- and not entitled to retain any amount beyond that.
Issues: Dispute over refund of deposits, defendant's defence of forfeiture, entitlement to interest on the amount, and potential violation of Competition Act, 2002.
Ratio Decidendi: Defendant's defence must not be frivolous or moonshine to justify passing a decree on admission. Documents authored by defendant must be strictly read against them by application of the doctrine of contra proferentem.
Final Decision: Plaintiff entitled to partial decree for Rs. 15,48,910/-. Defendant directed to deposit only earnest money of Rs. 10,32,607/-. Issue of interest left open for consideration after trial. Case referred to Competition Commission for potential violation of Competition Act, 2002.
1. This application has been filed by the plaintiff under Order 12 Rule 6, CPC to claim a decree for the principal amount of Rs. 25,81,517/- apart from costs.
2. The dispute between the parties arises on account of the plaintiff having applied for allotment of commercial space in a construction project of the defendant by the name The Palm Square' at Sector 66, Gurgaon, Haryana. The case of the plaintiff is that the plaintiff had made some deposits as early as on 22.10.2007 and 25.4.2008' in all aggregating to Rs.25,81,517/-. However, the project did not commence. Consequently, vide Ex. P-6 dated 3.9.2008, the plaintiff sought refund of the amount, vide Ex P-8 dated 15.9.2008, the defendant while disputing the claim of the plaintiff regarding status of the project, gave an option to the plaintiff to seek refund and, for that purpose, to contact one Mr. Amar Basra. The claim of the plaintiff is that despite repeated approaches, the amount was not refunded and the plaintiff issued legal notice dated 1.9.2010 to the defendant. Thereafter the present suit cause to be filed.
3. The submission of learned Counsel for the plaintiff is that the parties did not enter into any binding contract. Reliance is also placed on a subsequent communi#31;cation issued by the defendant being Ex. P-12 dated 31.5.2012 which, inter alia, records that total amount of Rs. 25,81,517/- has been paid by the plaintiff, which includes earnest money of Rs. 10,32,607'/-.
4. On the other hand, the defendant has sought to place reliance on several documents filed by it. Ex. D-l is an application made by the plaintiff on 30.1.2008 for allotment of the commercial area. Along with Ex. D-1 which is the 'Advance Registration Application Form for Expression', the Schedule I contains the 'Broad Terms and Conditions for Registration of a Commercial Unit in 'Palm Square".
Whereas the last clause of Ex. D-1, inter alia, states that if the applicant i.e. the plaintiff fails to execute and deliver to the defendant the signed buyers agreement the plaintiffs application shall be treated as cancelled and 'all the sums/monies paid/deposited by me/us with Emaar MGF shall stand forfeited without any notice/reminder', the Broad Terms and Conditions — in Clause 14, states that 'the applicant(s) agrees that out of the amount(s) paid/payable by him/her/them/it towards the sale price, the Company shall treat 10% of the sale price as earnest money to ensure due fulfilment, by the Applicant(s) of all the terms and conditions as contained herein and in the Buyer's Agreement'.
5. The further case of the defendant is that the defendant had made allotment of Unit No. 1108 of 11th floor (Commercial Section) of the Palm Square to the plaintiff on 7.2.2008 vide Ex. D-2. In pursuance of the said agreement, the plaintiff, after a few reminders, had also made further payment of Rs. 8,54,189/- which was acknowledged by the defendant vide Ex. D-6 dated 24.4.2008. The case of the defendant is that the plaintiff has, thereafter, failed to make further payment.
6. The submission of learned Senior Counsel for the defendant is that the defendant is willing to deposit in this the Court the amount of Rs. 15,48,910/- i.e. after retaining 10% HMD of Rs. 10,32,607/- from total amount of Rs. 25,81,5177-deposited by the plaintiff. The defendant has also placed reliance on the final notice dated 1.11.2010 requiring the plaintiff to make the deposit of the outstanding amounts of Rs. 67,11,942/- and the cancellation letter dated 18.1.2011 Ex. D-18, whereby the defendant sought to forfeit the amount of Rs. 25,00,2167- from out of the amount of Rs. 25,81,517/-.
7. Having heard learned Counsel for the parties, I am of the view that the plaintiff is entitled to partial relief in the present application. For the purpose of Order 12 Rule 6, CPC, what is relevant is the defence set up by the defendant. It has to be examined whether the defendant had made an admission of liability in the written statement or t
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