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2018 Supreme(Del) 50
IN THE HIGH COURT OF DELHI AT NEW DELHI
MANMOHAN, J.
Krishan Kumar Wadhwa & Ors. - Plaintiffs
Versus
Arjun Som Dutt & Ors. - Defendants
CS(OS) 3316 of 2015 & IA Nos. 23298 of 2015, 15617 of 2017 & 420 of 2018
Decided On : 22-02-2018
Advocate Appeared:
For the Plaintiffs : Mr. Jayant Mehta, Mr. Samar Bansal, Ms. Sheya Singh, Mr. Sajal Jain
For the Defendants : Mr. Sanjeev Mahajan, Mr. Munindra Dvivedi, Ms. Tanya Chanda, Mr. Dhruv Mohan
The main legal point established in the judgment is the entitlement of a party to obtain a speedy judgment to the extent the relief is admitted by the defendant, as per Order 12 Rule 6 CPC.
Headnote:
Order 12 Rule 6 - Recovery of Advance Sale Consideration - Code of Civil Procedure - 2(a), 3 - Uttam Singh Duggal & Co. Ltd. Vs. United Bank of India & Ors., (2000) 7 SCC 120 - Ashoka Estate Pvt. Ltd. & Ors. Vs. Dewan Chand Builders Pvt. Ltd. and Ors. 2009 (113) DRJ 193 - Indian Oil Corporation Ltd. Vs. International Building & Company (Pvt.) Ltd., 93 (2001) DLT 566 (DB) - The court allowed the application and decreed the suit partially against the defendants for Rs. 7,03,12,500, with the payment to be made by the defendants on or before 2nd July, 2018. The court declined the prayer for interest at this stage, stating that the issue of interest shall be considered at the stage of final disposal of the suit after considering the evidence led.
Fact of the Case:
The plaintiffs filed an application for recovery of advance sale consideration of Rs. 7,50,00,000 along with interest, as per an Agreement to Sell for a property in New Delhi. The defendants claimed a set off for interest on the unpaid sale consideration.
Finding of the Court:
The court found that the Agreement to Sell was admitted and valid, and the remaining 75% of the advance amount was to be refunded to the plaintiffs. The court also ruled that the defendants would have to prove set off under Order 8 Rule 6 CPC before retaining any part of the admitted sum.
Issues: The main issues were the entitlement of the plaintiffs to the refund of the advance sale consideration and the defendants' claim for set off for interest on the unpaid sale consideration.
Ratio Decidendi: The court relied on the provisions of Order 12 Rule 6 CPC and previous case law to determine the entitlement of the plaintiffs to the refund and the validity of the defendants' claim for set off.
Final Decision: The court partially decreed the suit against the defendants for Rs. 7,03,12,500, with the payment to be made by the defendants on or before 2nd July, 2018. The court declined the prayer for interest at this stage, stating that the issue of interest shall be considered at the stage of final disposal of the suit after considering the evidence led.
Manmohan, J.
IA No. 6255/2017 (Under Order 12, Rule 6, CPC)
1. Present application has been filed by the plaintiffs under Order 12 Rule 6 of Code of Civil Procedure for recovery of Rs. 7,50,00,000/- (Rupees Seven Crore and Fifty Lakhs only) out of the advance sale consideration of Rs. 10,00,00,000/- (Rupees ten crores only) paid to defendant nos. 1 to 4 along with interest @ 15% per annum.
2. Learned counsel for the plaintiffs states that on 3rd January, 2012, the defendant nos. 1 to 4 had entered into an Agreement to Sell for property bearing No. B-8, Maharani Bagh, New Delhi.
3. Since learned counsel for the plaintiffs places heavy reliance on Clause 2(a) and 3 of the said Agreement to Sell, the same are re-produced here-in-below :-
“2. (a) That out of the total consideration of Rs.65,00,07,000/- (Rs. Sixty Five Crores Seven Thousand Only), the Vendees have paid to the Vendors a sum of Rs.10,00,00,000/- (Rs. Ten Crores Only), (i.e. Rs.2,50,00,000/- as earnest money and Rs.7,50,00,000/- as part sale consideration), at the time of execution of this Agreement to Sell in the following manner:-
Rs.83,33,333/- vide cheque No.671011, dt. 03.01.2012
Rs.83,33,333/- vide cheque No.671526, dt. 03.01.2012
Rs.83,33,334/- vide cheque No.672007, dt. 03.01.2012
All favouring Ms. Roop Talwar;
Rs.1,25,00,000/- vide cheque No.671008, dt. 03.01.2012
Rs.1,25,00,000/- vide cheque No.671527, dt. 03.01.2012
Rs.1,25,00,000/- vide cheque No.672008, dt. 03.01.2012
All favouring Shri Vivan Som Dutt;
Rs.62,50,000/- vide cheque No.671012, dt. 03.01.2012
Rs.62,50,000/- vide cheque No.671530, dt. 03.01.2012
Rs.62,50,000/- vide cheque No.672011, dt. 03.01.2012
All favouring Shri Arjun Som Dutt;
Rs.62,50,000/- vide cheque No.671013, dt. 03.01.2012
Rs.62,50,000/- vide cheque No.671531, dt. 03.01.2012
Rs.62,50,000/- vide cheque No.672012, dt. 03.01.2012
All favouring Ms. Pritha Som Dutt;
all drawn on Bank of Mahrashtra N.D.S.E.-I, Branch, New Delhi,
The receipt of which the Vendors hereby admit and acknowledge.
xxx xxx xxx
3. That time of payment of the balance sale consideration is the essence of this agreement for sale and it is upon this assurance and undertaking of the Vendees, the Vendors have agreed to sell the said property to the Vendees. In the event the Vendees fail to make the balance payment within the stipulated period, despite the Vendors being ready, willing and having complied terms of this agreement, the Vendors shall forfeit a sum of Rs.2,50,00,000/- (Rs. Two Crores Fifty Lacs Only), paid under this Agreement and the balance shall be refunded immediately by way of demand drafts to the Vendees. The Vendees shall upon such refund have no objection and claim to the said property and the Vendors shall be free to sell the said property to any other prospective buyer(s) without any let or hindrance from the Vendees.”
4. Learned counsel for the plaintiffs points out that defendant no.1 had terminated the Agreement to Sell on 29th May, 2013 and had forwarded three cheques totalling to Rs. 1,40,62,500/- (Rupees One Crore forty lakh sixty two thousand and five hundred only). The said cheques were returned by the plaintiffs to the defendant no.1 by way of a communication dated 7th June, 2013. Only one out of the three cheques amounting to Rs. 46,87,500/- (Rupees forty six lakh eighty seven thousand and five hundred only) was encashed and kept in a separate interest bearing ‘no lien account’ by plaintiff no.1.
5. On 22nd August, 2013, defendant no. 3 asked the plaintiffs to make the payment of balance sale consideration as all the compulsory requirements stood fulfilled.
6. In any event, on 22nd October, 2015, the Agreement to Sell in question was terminated by the plaintiffs.
7. Learned counsel for the plaintiffs on demurrer states that as the Agreement to Sell in question is an admitted document and the defendants are entitled to only forfeit 25% of the amount in accordance with Clause 3 of the Agreement to Sell dated 3rd January, 2012 being Rs. 2,50,00,000/- (Rupees two
