Forfeiture of advance payment justified when buyer fails to perform contractual obligations, as per Specific Relief Act.

1. For the convenience of exposition, this judgment is divided into the following parts:
INDEX
A. FACTUAL MATRIX 2
i. Judgment of the Trial Court 8
B. IMPUGNED JUDGMENT 11
C. SUBMISSIONS ON BEHALF OF THE APPELLANT 15
D. SUBMISSIONS ON BEHALF OF THE RESPONDENT NOS. 1-4 16
E. SUBMISSIONS ON BEHALF OF THE RESPONDENT NOS. 5-7 17
F. ANALYSIS 18
i. Validity of the Forfeiture of Advance Money 19
a. Difference between Earnest Money and Advance Money 19
b. Permissible Extent of Forfeiture 27
ii. Law on the Alternative Relief of Refund of Earnest Money under S.22 of the 1963 Act 35
G. CONCLUSION 42












Leave granted.

2. This appeal arises from the judgment and order passed by the High Court of Karnataka at Bengaluru dated 05/08/2021 in R.F.A. No. 386/2013 (SP) ("impugned judgment") by which the High Court dismissed the appeal preferred by the appellant (original plaintiff) and thereby affirmed the judgment and order dated 24/11/2012 passed by the Court of V Additional City Civil and Sessions Judge at Bengaluru City, dismissing O.S. No. 3559/2008 instituted by the appellant herein for the specific performance of contract.

3. A. FACTUAL MATRIX
The position of the parties before this Court, the High Court and before the Trial Court is tabulated as follows:

For the sake of convenience, the parties shall be referred to in terms of their status before the Trial Court.

4. The dispute arises from a claim for specific performance of the agreement of sale (hereinafter referred to as "ATS") dated 25/07/2007 in respect of the property bearing Site No.307, situated at Kengeri Satellite Town Layout, Kengeri Hobli, Bangalore South Taluk (hereinafter referred to as "suit property"). The defendant no. 1 acquired absolute title over the suit property by way of an unregistered Will dated 12/11/2002 executed by her late mother.

5. The defendant nos. 1-4 executed an ATS dated 25/07/2007 in favor of the plaintiff for the purchase of the Suit Property for total sale consideration of Rs.55,50,000/-. The plaintiff issued two cheques dated 16/07/2007 of the amount of Rs.10,00,000/- each towards part payment of the sale consideration, the receipt of which was duly acknowledged by the defendant no. 1. The said ATS stipulated that the sale transaction shall be completed by payment of the balance sale consideration of Rs.35,50,000/- within four months from the date of the ATS, pursuant to which the sale deed was to be executed. The contents of the said ATS are extracted hereinbelow:
"ADVANCE SALE AGREEMENT
This Advance Sale Agreement is executed on this Twenty fifth day of July, Two Thousand Seven (25-07-2007) - BY -
Smt. R. Poornima, daughter of Late Rathnamma also wife of Sri M. L. Harsha, aged about 32 years, and Sri Lakshmisha, husband of Smt. R. Poornima, aged about 39 years, and the children of Smt. Poornima and Sri M. L. Harsha, 1) Kum. H. R. Anusha, aged about 7 years, 2) Chi. H. Amogham aged about 3 years, both are minors represented by their mother and natural guardian Smt. R. Poornima, all are residing at House No.588, Postal Colony, Visveshwaranagara Layout, Mysore City -
INFAVOUR OF:
Sri K. R. Suresh, aged about 42 years, son of Sri Rudrappa, residing at K. Gollahalli Village, K. Gollahalli Post, Kengeri Hobli, Bangalore South Taluk.
Whereas, the property mentioned in the schedule hereunder i.e. Site bearing No.307, situated at Kengeri Satellite Town Layout, Kengeri Hobli, Bangalore South Taluk, the said property originally belonged to Smt. Rathnamma, the mother of Smt. R. Poornima, which is her self - acquired property. The said site was allotted to her on dated ____ by the Bangalore City Improvement Trust Board, represented by its Chairman, vide allotment letter No. ____ KST / ____ which was allotted, Thereafter Lease - Cum - Sale Deed registered in the office of the Sub-Registrar, Bangalore South Taluk, registered in Book - 1 volume 2414 pages 16 to 19 as Document No.5734/85-86, thereafter the possession certificate No.33.73-74 dated 16/11/1973 was issued, during her life tim