The court affirmed that failure to comply with payment terms in a contract justifies forfeiture of earnest money, and a claim for refund is not valid under such circumstances.

JUDGMENT :

1. Petitioner, through the medium of the present writ petition, filed under Article 226 of the Constitution of India, has prayed for a direction in the name of respondents to release/refund an amount of Rs.3.00 lacs in favour of the petitioner, which amount has been deposited by the petitioner as premium for allotment of Flat of 3BHK (Type-B) 2nd Phase of residential apartment at Shahjar Apartments, Bemina Srinagar, advertised by the respondent-Srinagar Development Authority.

2. The grievance of the petitioner, as projected, is that he had applied for the allotment of the residential flat at the aforementioned Shahjar Apartments, Bemina Srinagar, and respondent No.3-Director Land Management, Srinagar Development Authority, Bemina Bye Pass Srinagar, in terms of Communication No. SDA/DLM/2320-33 dated 13.12.2018, informed the petitioner that his application for allotment of said flat was considered, as such, petitioner was requested to deposit the premium amount, as per the following Payment Schedule:-

1. 15% within 45 days after issuance of letter of intent.

2. 15% after 9 months from the date of issuance of letter of intent.(within 15 days)

3. 15% after 18 months from issuance of letter of intent (within 15 days).

4. 15% after 24 months from the issuance of letter of intent (within 15 days).

5. 20% after 33 months from the issuance of letter of intent (within 15 days).

6. 20% before the execution of documents/handing over of the possession.

3. According to the petitioner, he had deposited Rs.3,00,000/- (Rupees Three Lacs only), as premium, so that the allotment of flat is made in favour of the petitioner, however, despite depositing the said premium amount, respondents failed to allot the flat, therefore, the petitioner repeatedly requested the respondents to refund the said amount, which the respondents failed to do so.

4. To controvert the pleas raised by the petitioner in the writ petition, respondents have filed their objections, wherein it is stated that the present petition is not maintainable, as none of the rights of the petitioners have been violated or infringed. It is stated that the petitioner was issued letters of intent, vide No. SDA 2320-23 dated 13.12.2018, No. SDA/DLM/744-45 dated 29.6.2019, and No. SDA /DLM/1232 dated 22.10.2019, for depositing the premium amount as per the Schedule, however, the petitioner failed to deposit the premium amount, despite the above referred communications. It is further submitted that as the petitioner failed to deposit the premium amount, the earnest money deposited by the petitioner stands forfeited and the petitioner was informed about the same vide public notice bearing No. SDA/DLM/1299 dated 6.11.2019 issued vide No. DIPK:0976/NB/M dated 13.11.2019, which was published in local daily newspaper “Kashmir Images” vide its publication dated 14.11.2019.

5. Learned counsel for the petitioner, while making submissions, argued that since the respondents have failed to allot the flat in favour of the petitioner, it is, therefore, incumbent upon the respondents to refund the premium amount of Rs.3.00 lacs in favour of the petitioner. He further argued that right to hold the property in the shape of the said premium amount has been denied by the respondents, as such, respondents have violated fundamental rights of the petitioner, inasmuch as, the petitioner has been deprived use of the said amount without any justification. Furthermore, learned counsel for the petitioner submitted that the action of the respondents, in not releasing the payment in favour of the petitioner, smacks of not only arbitrariness on behalf of the respondents but also violates the fundamental rights of the petitioner.

6. Learned counsel for the respondents, in order to controvert the arguments of learned counsel for the petitioner, argued that despite several letters of intent issued to the petitioner informing him to deposit the premium of the residential flat as per Payment Schedule, petitioner failed to fulf