Concealment of material facts and failure to perform contractual obligations negate a party's right to forfeit earnest money in breach of contract claims.

JUDGMENT

Amit Bansal, J. The present suit has been filed on behalf of JMD Buildcon seeking recovery Rs.6,00,00,000/- along with pendente lite and future interest @18% per annum.

2. In the plaint, it has been pleaded that:

(i) The plaintiff is a partnership firm duly registered with the Registrar of firms.

(ii) The plaintiff is in the real estate business. It raises construction of apartments and also deals in sale and purchase of properties.

(iii) Defendant is the owner of the property bearing no. D-972, New Friends Colony, New Delhi admeasuring 492 square yards, consisting of ground floor and first floor (suit property).

(iv) Defendant approached the plaintiff for sale of the suit property in late 2012 and brought to the plaintiff's notice that the suit property has been mortgaged with Cholamandalam Finance and Investment Company Limited (hereinafter referred to as `Cholamandalam') and due to the heavy interest being paid, the defendant is facing financial hardships. The Defendant stated that the money received from the plaintiff as sale consideration will be used for redeeming the mortgage.

(v) An Agreement to Sell dated 21st November, 2012 was entered into by the plaintiff and the defendant for a total sale consideration of Rs.19,30,00,000/-. Earnest money of Rs.1,93,00,000/- was deposited by the plaintiff with the defendant in the following manner:

a) Rs.80,00,000/- vide cheque bearing no.613876 dated 21st November, 2012.

b) Rs.5,50,000/- vide cheque bearing no.613877 dated 21st November, 2012.

c) Rs.1,07,50,000/- in cash on 21st November, 2012.

(vi) In addition, Rs.7,00,000/- was paid by the plaintiff to the defendant vide cheque bearing no.613878 on 5th December, 2012.

(vii) The plaintiff, on request of the defendant, made a payment of Rs.32,00,000/- on 21st/22nd March, 2013 directly to Cholamandalam as a part payment towards redeeming the mortgaged suit property.

(viii) Time was never the essence of the contract.

(ix) The plaintiff requested the defendant to supply the true copies of the title documents along with the chain of documents in respect of the suit property, which request was not acceded to despite repeated efforts.

(x) Vide notification dated 4th December, 2012 the circle rate of the property was changed from Rs.2,15,000/- per square meter to Rs.6,45,000/- per square meter.

(xi) The payments made to the defendant were not used to redeem the mortgaged suit property. The plaintiff discovered that the loan by Cholamandalam to the defendant was recalled prior to entering into the aforesaid Agreement to Sell and Cholamandalam had already initiated recovery proceedings against the defendant.

(xii) The arbitration proceedings pending before the Arbitrator in Chennai were concealed by the defendant from the plaintiff and hence, on account of acts of omission by the defendant, the plaintiff did not adhere to the schedule of payment, although it was ready and willing to perform its obligations.

(xiii) The plaintiff received a legal notice dated 9th May, 2013 by the defendant, terminating the Agreement to Sell dated 21st November, 2012 and forfeiting the earnest money deposited of Rs.1,93,00,000/-, while asking the plaintiff to collect the further amount of Rs.39,00,000/- paid by the plaintiff.

(xiv) The plaintiff, in its reply dated 21st May, 2013 to the aforesaid legal notice by the defendant, raised a claim of total Rs.6 crores.

(xv) A legal notice dated 6th April, 2015 was sent by the plaintiff to the defendant, remindi