Validating settlement negotiation to resolve refund disputes in contract law.

The Court: There are three applications filed in this suit. IA No. GA/1/2024 and IA No. GA/3/2024 are the applications filed by the plaintiffs. IA No. GA/1/2024 is an application for judgment upon admission under the provisions of Order 12 Rule 6 of the Code of Civil Procedure , 1908 (in short, CPC). IA No.

GA/3/2024 is an application for summary judgment under the provision of Chapter XIIIA of the Original Side Rules of this Court.

IA No. GA/4/2025 is an application by the defendants for extension of time to file the written statement.

After hearing the parties, it appears that the plaintiffs in order to purchase a flat in a complex developed by the defendants made part payments aggregating to Rs.38,46,275/-. The plaintiffs could not pay any further amount. The entire consideration for purchase of the flat was fixed at Rs.63,13,845/-. The agreement provided that in case of default of an installment the buyers (plaintiffs) could regularize such default by paying the installment amount with interest. The plaintiffs were unable to even pay the installment amount with interest to regularize the default. The agreement was ultimately cancelled on 5th August, 2021. It is not in dispute that the defendants after cancelling the agreement of the plaintiffs have sold the said flat to a third party for a consideration money of Rs.68,01,412/-. It also appears from the copy of the sale deed that for the purpose of registration the said flat was valued at Rs. 75,00,000/-.

It is the case of the plaintiffs that after deduction of 3% of the entire consideration from the said sum of Rs.38,46,275/- the balance should have been returned back to the plaintiffs. The plaintiffs say that the total consideration money is Rs.63,13,845/-, 3% thereon will come to Rs.1,89,450/-. After deducting the said sum of Rs.1,89,450/- from Rs.38,00,000/- a principal sum of Rs.36,56,860/- is refundable to the plaintiffs. The plaintiffs also claim interest on such sum of Rs. 36,56,860/- from 1st September, 2022 when according to the plaintiffs the agreement stood terminated till 31st March, 2023 on the said sum of Rs.36,56,860/- @ 18% per annum. The plaintiffs, therefore, have claimed an interest of Rs.3,84,000/- for a period between 1st September, 2022 till 31st March, 2023.

The defendants, however, say that the termination took place on 5th August, 2021. The defendants also say that apart from the 3% of the consideration money the defendants are entitled to other expenses which the defendants had incurred to continue with the construction. The defendants, therefore, are not agreeable to refund the principal sum of RS. 36,56,860/-. After hearing the parties, it appears that the matter can be settled by the parties if the plaintiffs forego the interest of Rs.36,56,860/- for a period between 1st September, 2022 till 31st March, 2023 or for any subsequent period thereto while the defendants agree to refund the said sum of Rs.36,56,860/-.

The matter is adjourned and shall appear on 12th August, 2025 to enable the advocates for taking instructions from their respective clients.