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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
ANIL KSHETARPAL
Bhoop Singh – Appellant
Versus
Vijender Singh – Respondent
JUDGMENT :
Anil Kshetarpal, J.
I. Facts of the case:-
1. The defendant assails the correctness of the judgments passed by the courts below while partly decreeing the plaintiff's suit for recovery of Rs.1,05,00,000/- but refusing to pass a decree for the specific performance of the agreement to sell in favour of the plaintiffs.
2. Execution of the agreement to sell on 15.02.2012 with respect to 29 kanals 3 marlas land on receipt of Rs.50,00,000/- out of total sale consideration of Rs.2,83,65,000/- is admitted between the parties. From a bare perusal of the agreement to sell, it is evident that possession of the property was delivered to the proposed purchasers and it was agreed that upto 26.03.2012, on payment of 1,20,00,000/- sale deed of half share of 29 kanals 3 marlas land would be executed in favour of the proposed purchasers or their nominees whereas sale deed of the remaining part shall be executed on receipt of the balance sale consideration on 15.05.2012. It was provided that if the proposed purchasers fail to make the remaining payment, the earnest money shall stand forfeited.
3. It is further an admitted fact that Rs.22,00,000/- was paid on 13.03.2012 by the proposed purchaser
The court upheld the enforceability of earnest money forfeiture under specific contractual terms, emphasizing the necessity for proof of damages in default situations.
Forfeiture of earnest money is impermissible without proof of actual loss by the seller due to breach of contract.
(1) Agreement to Sell – Unless plaintiff specifically seeks refund of earnest money at the time of filing of suit or by way of amendment, no such relief can be granted to him – Prayer clause is a sin....
A plaintiff seeking specific performance must demonstrate readiness and willingness to perform the contract, which was not established in this case.
The main legal point established in the judgment is that the failure of one party to perform its obligations under a reciprocal contract precludes that party from claiming performance of the reciproc....
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