Forfeiture of earnest money requires proof of loss under Section 74; clear and unequivocal admissions compel courts to grant judgment under Order XII Rule 6 CPC.

JUDGMENT

Dinesh Kumar Sharma, J. (Oral)

C.R.P. 84/2021& CM APPL.41568/2021 (filed on behalf of petitioner for directions)

1. Present revision petition has been filed challenging the impugned order dated 25.10.2021, whereby an application under Order XII Rule 6 CPC has been dismissed by the learned Trial Court holding inter alia as under:

"10. The present case of the plaintiff is that of seeking refund of the money under the agreement to sell dated 12.08.2012. In the present case the defendant has raised triable issue relating to the matter of possession not taken due to non-arrangement of the balance amount. The defendant has also alleged that the plaintiff does not want to complete the deal. The defendant has not denied the agreement to sale and its Legal Notice but it cannot be said that the defendant has admitted the entire case of the plaintiff unequivocally and absolutely. The defendant has raised plausible defence and the same shall subject to the evidence at the appropriate stage."

2. Petitioner has challenged the impugned order primarily on the ground that the learned Trial Court has not appreciated the pleadings of the parties in proper perspective and has also failed to appreciate the ratio laid down by the Hon'ble Supreme Court of India in Kailash Nath Associates vs. DDA, (2015)4 SCC 136.

3. It has been submitted that in Kailash Nath Associates (supra), it was clarified that the forfeiture of an earnest money necessarily falls under Section 74 of the Contract Act i.e. before forfeiture can take place it must be necessary that loss must be caused to the respondent and the same must be pleaded by the respondent in his pleadings. It has further been submitted that the respondent himself has admitted to have received a sum of Rs.55 lakhs and there is no forfeiture clause in the Agreement to Sell dated 12.08.2012. The impugned order has also been challenged on the ground that the learned Trial Court has also not followed the law laid down in Mohan Buildmart Pvt. Ltd. Vs. Hitesh Kumar, 2019 SCC Online Del 6886. It has further been stated that the learned Trial Court has also committed a material irregularity by not appreciating that even if the issues have been framed and the evidence affidavit of the petitioner has been filed, still this court can pass a decree under Order XII Rule 6 CPC as the framing of the issues and the initiation of the evidence is not a bar in decreeing the suit of the petitioner under Order XII Rule 6 CPC.

4. Reliance has been placed by the learned counsel for the petitioner on the judgment in Mera Baba Infrastructure Pvt. Ltd. vs. Chailu through LRs., bearing CS(OS) No.400/2016. Reliance has also been placed on the judgment of this Court in Versatile Commotrade Pvt. Ltd. vs. Kesar Devi and Ors., 2019 SCC Online Del 8182.

5. Petitioner has stated that the respondent has taken the only defence that the amount given by the petitioner has been forfeited. It has been submitted that this Court in the judgment of Rajbir Singh & Anr. vs. Jaswant Yadav, RFA 404/2018 has held that if the respondent has not pleaded or proved any loss caused to them on account of any alleged breach of the agreement to sell, then the amount paid cannot be forfeited.

6. The impugned order has been challenged on the ground that the learned Trial Court has failed to exercise the jurisdiction vested in it and therefore there is jurisdictional error having been committed and therefore the impugned order is liable to be set aside. Per contra the case of the respondent is that the petitioner had filed a false and frivolous application under Order XII Rule 6 CPC after the lapse of 7 or 8 years of filing