A party seeking the return of advance money must establish that they did not improperly decline to accept delivery, and the terms of the contract regarding earnest money must be clear to justify forfeiture.

JUDGMENT

This regular first appeal has been filed under Section 96 read with Order XLI Rule 1 of the Code of Civil Procedure, 1908 , challenging the decree and judgment dated 30.07.2013 in O.S. No.80/2012 on the files of the Sub Court, Pathanamthitta. The appellant herein is the defendant and the respondent herein is the plaintiff.

2. Heard the learned counsel for appellant and the learned counsel appearing for the respondent, in detail. Perused the verdict under challenge, the records of the trial court and the decisions placed by both sides.

3. Parties in this appeal shall be referred with reference to their status before the trial court.

4. The plaintiff filed suit seeking return of advance money to the tune of Rs.3 Lakh with 12% interest, contending that the defendant has improperly declined to perform his part of contract inspite of willingness of the plaintiff to execute the sale deed in terms of an agreement executed between them on 02.09.2011, whereby it was agreed between the parties to sell the plaint schedule property for a total sale consideration of Rs.11,20,000/-.

5. The defendant resisted the suit by admitting the execution of the agreement. The contention raised by the defendant is that, the agreement could not be executed because of the laches of the plaintiff, though the defendant was ready to execute the sale deed on or before 02.02.2012 as agreed upon by the plaintiff and the defendant.

6. The trial court, on appreciation of rival pleadings, raised necessary issues and tried the matter. PWs 1 and 2 were examined and Exts.A1 to A6 were marked on the side of the plaintiff. DWs 1 to 5 were examined and Exts.B1 to B9 were marked on the side of the defendant.

7. Finally, the trial court found that, even though the plaintiff had been ready and willing to execute the sale deed as agreed upon, the reluctance on the part of the defendant resulted in non-execution of the sale deed and accordingly the suit was decreed as under: 1. The defendant is directed to repay the advance amount of Rs.3 lakh to the plaintiff with interest at the rate of 6% from the date of suit till its realisation from defendant and his asset.

2. By this decree a charge is created on the property attached before judgment.

3. The plaintiff is also entitled for the cost of the suit.

8. The sum and substance of the argument tendered by the learned counsel for the defendant is that, in this matter, though the suit to get back the advance sale consideration has been filed within three years from the date of agreement, the plaintiff did not file suit to get performance of the contract and the same would show that the plaintiff was not ready and willing to execute the sale deed. It is pointed out by the learned counsel for the defendant that, in the agreement for sale marked as Ext.A1, it has been provided specifically that if there was failure on the part of the plaintiff to execute the sale deed, then the advance amount is to be forfeited. The learned counsel for the defendant placed decision of the Apex Court reported in [2012 KHC 4620 : 2012 (4) KHC SN 20] Satish Batra v. Sudhir Rawal , when the Apex Court dealt with a case, where the facts of the case reads as under:

The clause, therefore, stipulates that if the purchaser fails to fulfil the conditions mentioned in the agreement, the transaction shall stand cancelled and earnest money will be forfeited. On the other hand, if the seller fails to complete the transaction, the purchaser would get double the amount of earnest money. Indisputedly the purchaser failed to perform his part of the contract, then the question is whether the seller can forfeit the entire earnest money. When we examine the clauses in the instant case, it is amply clear that the clause extracted hereinabove was included in the contract at the moment at which the contract was entered into. It represents the guarantee that the contract would be fulfilled. In other words, 'earnest' is given to bind the contract, which is a part of the pu