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2023 Supreme(P&H) 2121

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
HARKESH MANUJA, J.
Akash Jain & Anr. – Appellants
Versus
Rupinder Singh – Respondent
RSA-1866 of 2018 (O & M)
Decided On : 27-07-2023

Advocates Appeared:
Mr. Anil Shukla, Advocate; For the Appellant

Headnote:(A) Specific Relief Act, 1963 - Section 20 - Agreement to sell - Forfeiture of earnest money - Appellants-plaintiffs filed suit for recovery of earnest money after failing to execute a sale deed - Court found that the appellants were not ready to perform their part of the contract and upheld the forfeiture of earnest money. The execution of the agreement on 08.02.2006 with a target date of 15.06.2006 was significant, as the appellants filed suit two and a half years later without valid explanation for delay or seeking specific performance. (Paras 5, 8, 9, 10)

Facts of the case:
The appellants executed an agreement to sell land, paid Rs.14 lacs as earnest money, and later filed for its recovery claiming the respondent forfeited it unjustly. Respondent contested the suit claiming appellants were not ready to perform their contract obligations.

Findings of Court:
Courts held that the appellants did not prove their readiness and willingness to proceed with the sale; hence, the forfeiture was justified.

Issues: Main issues included the readiness of the appellants to perform the contract and the legitimacy of the forfeiture of earnest money.

Ratio Decidendi: The court ruled that the suit for recovery was not maintainable, given the appellants' failure to establish non-performance by the respondent, and noted that specific performance should have been pursued instead.

Result: Appeal dismissed.

Table of Content
1. formation of the agreement to sell. (Para 1 , 2 , 3)
2. contentions regarding readiness to perform. (Para 4 , 6 , 7)
3. court's analysis of contract performance. (Para 5 , 8 , 9 , 10)
4. dismissal of appeal. (Para 11)

JUDGMENT

Harkesh Manuja, J. (Oral)

By way of present appeal, challenge has been made to the judgments and decrees dated 28.04.2015 and 17.07.2017 passed by the Courts below, whereby, suit for recovery filed at the instance of appellants stands dismissed.

2. Briefly stating the facts of the case are that an agreement to sell came to be executed between the appellants-plaintiffs and the respondent-defendant on 08.02.2006, pertaining to the land situated in village Ghullu Majra, District Patiala with appellants-plaintiffs being the purchasers and the respondent-defendant as the owner. The total amount of sale consideration was Rs.16.60 lacs per acre, out of which, Rs.14 lacs were paid as an earnest money and 15.06.2006 was the last date for the execution of the sale deed.

3. It was further submitted in the plaint that the appellants-plaintiffs visited the office of the Sub-Registrar on the date fixed along with the balance sale consideration, but sale deed could not be executed. Followed by that, the suit for recovery of earnest money with interest was filed with the averments that as per the terms of the agreement, the respondent-defendant could not forfeit the same.

4. On the other hand, the respondent-defendant contested the suit by filing written statement. The execution of the agreement in question besides the receipt of earnest money were admitted, however, it was submitted that the appellants-plaintiffs since were not ready to perform their part of the contract, thus, the earnest money rightly stood forfeited. It was also submtited that the appellants-plaintiffs were making lame excuses about non-availability of electric connection besides pointing out defects in the title of the respondent-defendant.

5. The trial Court vide its judgment and decree dated 28.04.2015 dismissed the suit while holding that the appellants-plaintiffs were not ready and willing to perform their part of the contract and thus, earnest money was rightly forfeited by respondent-defendant in accordance with the terms thereof.

6. Aggrieved of the judgment and decree dated 28.04.2015 passed by the Court of Civil Judge Senior Division, Fatehgarh Sahib, the appellants-plaintiffs filed first appeal, however, the same was also dismissed vide judgment and decree dated 17.07.2017.

7. While assailing the afore-mentioned judgments and decrees, learned counsel for the appellants-plaintiffs submits that the non-performance of agreement in question was primarily on account of fault attributable to the respondent-defendant and thus, he could not have forfeited the earnest money. In addition thereto, reliance has been placed upon a decision of the Hon'ble Supreme Court in the case of Satish Batra v. Sudhir Rawal 2013 (1) SCC 345. Learned counsel also submits that a suit for recovery of earnest money filed on behalf of the purchaser-vendee, in case of default being attributable to the seller was maintainable.

8. I have heard learned counsel for the appellant and gone through the paper-book. I am unable to find much substance in the submissions made on behalf of the appellants-plaintiffs. Though, as per the law laid down in the case of Satish Batra (supra), a suit for recovery filed at the instance of purchaser-vendee could be entertained, however, in the facts and circumstances of the present case, wherein, the appellants-plaintiffs have not been able to establish non-performance or obligations conferred upon the respondent-seller under the agreement to sell by him, a simplicitor suit for recovery was not maintainable. The appellants-plaintiffs never sought possession by way of specific performance seeking enforcement of the agreement to sell dated 08.02.2006 and the only reason mentioned was non-providing of electric connection and moto

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