The main legal point established in the judgment is that a seller cannot forfeit the advance price and/or earnest moneys received under an agreement to sell unless a loss is pleaded and proved.

Valmiki J. Mehta, J.

C.M. Appl. No. 8376/2019 (for exemption)

1. Exemption allowed, subject to just exceptions.

C.M. stands disposed of.

RFA No. 157/2019 and C.M. Appl. No. 8375/2019 (for stay)

2. (i). This Regular First Appeal under Section 96 of the Code of Civil Procedure, 1908 (CPC) is filed by the defendant no. 1 in the suit impugning the Judgment of the trial court dated 27.10.2018 by which the trial court while dismissing the suit for specific performance filed by the respondent/plaintiff, has passed a money decree in favour of the respondent/plaintiff/buyer for a sum of Rs. 15,00,000/-, as the appellant/defendant no. 1/seller had received this amount from the respondent/plaintiff/buyer under the subject Agreement to Sell dated 08.12.2008. The total sale consideration under the Agreement to Sell was Rs. 17,00,000/- out of which the respondent/plaintiff had admittedly paid to the appellant/defendant no. 1 a sum of Rs. 15,00,000/-. In terms of the Agreement to Sell, the respondent/plaintiff was to purchase two shops bearing nos. G-4 and G-89 of the property bearing Municipal No. 182, Ward No. IV, situated at Katra Mashru, Dariba Kalan, Delhi. It is noted that the defendant no. 1/seller did not lead any evidence in the suit and evidence was only led by defendant no. 4 as a bonafide purchaser without notice of the subject Agreement to Sell. In terms of the impugned judgment, the trial court while declining the relief of specific performance held that in exercise of powers under Order VII Rule 7 CPC, a money decree has to be passed in favour of the respondent/plaintiff/buyer for a sum of Rs. 15,00,000/- received by the appellant/defendant no. 1/seller and the appellant/defendant no. 1/seller cannot be allowed to forfeit the amount of Rs. 15,00,000/-. The relevant observations of the trial court in the impugned judgment read as under:-

“This Court does not deems fit to order Specific Performance of the Contract i.e. Agreement to Sell dated 8.12.2008 for various reasons, as adumbrated above, including the reasons that defendants No.2 to 4 are the bonafide purchasers of the suit property but the conduct of defendant No. 1 was also not above the board. The defendant No. 1 has not at all issued even the single notice/written notice to the Plaintiff that she is repudiating the contract dated 8.12.2008 as the Plaintiff has failed to adhere to the contract dated for payment of balance amount on the stipulated date i.e. 10.1.2009. The defendant No. 1 has accepted substantial consideration amount i.e. about 88% of the consideration amount yet defendant No. 1 has not even issued the single Notice before sale of the suit property to defendants No. 2 and 3. The defendant No. 1 has also not entered into the witness box. In the facts and circumstances of the present case, the defendant No. 1 cannot be allowed to forfeit the amount of Rs. 15,00,000/- which was paid by Plaintiff to defendant No.1. Although, the Plaintiff has not claimed any relief for refund of money or compensation or damages as alternative relief but looking into the conduct of defendant No. 1, the defendant No. 1 cannot be allowed to forfeit the amount of Rs. 15,00,000/- and this court in exercise of power under Order 7 Rule 7 CPC can always grant a lesser relief or an appropriate relief as arising from the facts and circumstances of the case. Accordingly, the Plaintiff is entitled to refund sum of Rs. 15,00,000/- alongwith pendentelite and future interest @9% per annum till its realization.”

2(ii). The trial court has held that the respondent/plaintiff has not proved her financial capacity to pay the balance sale consideration of Rs. 2,00,000/- though the FDR Ex. D4W1/P1 was proved, but the trial court strangely held that the FDR was not proved even though the same was admitted by D4W1. The trial court has not given a specific or categorical finding that the respondent/plaintiff can be held guilty of breach of contract. Specific performance was only declined to the re