IMPORTANT POINT
Mere breach of contract does not entitle grant of damages and necessary that unless by breach of contract losses caused, person who guilty of breach cannot claim damages and for such alleged damages forfeit amount received from other party.

Valmiki J. Mehta, J.—This is a suit for specific performance filed by the plaintiff with respect to the property bearing no. 2223, Outram Line, Kingsway Camp, Delhi-110009. The Agreement to Sell of which specific performance is sought is dated 29.6.2004. The total sale consideration was of Rs.79,50,000/- of which the plaintiff paid a sum of Rs.10 lacs to the defendants and which was acknowledged by the defendants on 29.6.2004 by a receipt. Plaintiff in addition to the amount of Rs.10 lacs paid a further sum of Rs.5 lacs to the defendants on 20.8.2004. Plaintiff’s case was that defendants had committed a breach of contract by failing to execute the sale deed in favour of the plaintiff, and therefore, the present suit for specific performance was filed.

2. In the written statement filed by the defendants, receipt of Rs.15 lacs under the agreement to sell has been admitted in para 1 of the preliminary objections in the written statement and which para reads as under:-

“I. That the plaintiff has filed a suit for specific performance in respect of Agreement dated 29th June, 2004, in respect of property no.2223, Outram Lane, Kingsway Camp, Guru Teg Bahadur Nagar, Delhi, against the defendants. It is submitted that in terms of the agreement dated 29th June, 2004 the plaintiff is not entitled to the relief of specific performance and the suit for specific performance is liable to be dismissed. In terms of Section 14 of the Specific Relief Act, a contract cannot be specifically enforced if compensation is an adequate relief. The parties to the agreement dated 29th June,2004 themselves agreed in clause 8 of the agreement that in case the plaintiff does not pay the balance consideration within the agreed period then the earnest money of Rs.10 lakhs shall be forfeited by the defendants and the agreement shall stand cancelled and if the defendants infringe any of the terms and conditions of the agreement then the defendants shall be liable to pay double the amount of earnest money, i.e. Rs.20 lakhs, to the plaintiff. The parties to the present suit themselves agreed that Rs.20 lakhs adequate compensation which the purchaser would be entitled to. In fact, on 20th August, 2004, the parties agreed to extend the time upto the completion of the contract to 30th October, 2004, the plaintiff paid a sum of Rs.5 lakhs to the defendants as further earnest money and it was agreed that the defendants will pay double the amount of Rs.15 lakhs, i.e Rs.30 lakhs, in all, in case the defendants do not perform their part of the contract. Even as per the plaintiff’s own showing, the plaintiff cannot get more than Rs.30 lakhs by way of compensation from the defendants. However, without prejudice to the rights of the defendants that the plaintiff himself did not perform his part of the contract and did not have the necessary funds for the completion of the deal because of this the defendants are entitled to forfeit the sum of Rs.15 lakhs received by them by way of earnest money and the suit for specific performance is liable to be dismissed.” (underlining added)

3. A reading of the aforesaid para shows that in fact the defendants were, on the defendants being held guilty of breach of contract, ready to pay the total amount to the plaintiff i.e Rs.30 lacs instead of Rs. 15 lacs, however, as the facts discussed hereinafter show that the plaintiff is entitled to and suit is to be decreed for the sum of Rs.15 lacs, being the amount received by the defendants under the agreement to sell, with interest at 15% per annum simple.

4. In this suit the following issues were framed on 14.8.2007:-

“1). Whether this suit for specific performance is maintainable in view of clause 8 of the agreement dated 29.6.2004? OPP

2). Whether the plaintiff was ready and willing to perform his part of the agreement? OPP

3). Whether the defendant agreed to extension of time till 15.01.2005 as alleged in the plaint? OPP

4). Whether the defendant committed any breach of the said