RFA No.467/02

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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RFA No. 467/2002

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November 03, 2011

SH. RAMESH KUMAR NASA

..... Appellant

Through:

Mr. Alok Chhabra, Advocate with Mr. S.S.

Paul, Advocate.

VERSUS

SH. SUDHIR KUMAR RAWAL

..... Respondent

Through:

None.

CORAM:

HON’BLE MR. JUSTICE VALMIKI J.MEHTA

1.

Whether the Reporters of local papers may be

allowed to see the judgment?

2.

To be referred to the Reporter or not?

3.

Whether the judgment should be reported in the Digest?

VALMIKI J. MEHTA, J (ORAL)

1.

No one appeared for the respondent on 31.10.2011 when the

counsel for the appellant, as a courtesy, stated that he will inform the

respondent and his counsel. Learned counsel for the appellant has placed on

record a letter dated 31.10.2011 which was sent by courier both to the

respondent as also his Advocate. No one appears for the respondent

although it is 12.45 P.M. I have therefore heard the counsel for the appellant

and am proceeding to dispose of the appeal after perusing the record.

2.

The facts of the case are that the respondent/plaintiff filed a suit

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RFA No.467/02

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against the appellant/defendant for recovery of Rs.1,18,000/- alongwith

interest on the ground that the appellant/defendant had committed breach

of contract being the agreement to sell dated 9.7.1996 whereby double

storey house built on 84 square yards of plot bearing No.A-5/139, Paschim

Vihar, New Delhi was to be sold to the respondent/plaintiff. It was alleged by

the respondent/plaintiff in the plaint that the appellant/defendant committed

a default and therefore it was claimed that the appellant/defendant was

liable to pay double the amount of earnest money and which amount was

claimed in the suit. It may be clarified that it is undisputed that the advance

price which the appellant/defendant had received under the agreement to

sell was already refunded back to the respondent/plaintiff in the month of

January, 1997 and the suit therefore claimed he half of double the amount of

earnest money as damages.

3.

Learned counsel for the appellant has argued that the

pleading/plaint of the respondent/plaintiff did not plead a case of the

respondent/plaintiff having suffered a loss on account of the prices of the

property

increasing

on

account

of

breach

caused

by

the

appellant/defendant/seller. It is argued on behalf of the appellant/defendant

that damages equal to earnest money paid cannot be claimed merely

because there is a breach of contract, because a breach simplicitor is not

actionable unless loss is in fact pleaded and proved. It is argued that clauses

in the contract of payment of double the amount of earnest money are

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violative of provision of Section 74 of the Contract Act, 1872 and the claim

for such damages merely because there was a clause in the contract is

therefore illegal and does not lie. Reliance is placed upon a judgment of this

Court in the case of Dilip Kumar Bhargava Vs. Urmila Devi Sharma &

Ors. RFA No.129/2011 decided on 31.3.2011.

4.

In the decision in the case of Dilip Kumar Bhargava (supra) I

have relied upon Constitution Bench decision of the Supreme Court in the

case of Fateh Chand Vs. Balkishan Dass, (1964) 1 SCR 515; AIR 1963

SC 1405 and as per which if there is a breach of contract by the buyer of a

property, the seller of the property is not entitled to forfeit the amount paid

unless loss is pleaded and proved. I have also in Dilip Kumar Bhargava’s

case relied upon the decisions in the cases of Maula Bux Vs. UOI, 1969 (2)

SCC 554 and Union of India Vs. Raman Iron Foundry (1974) 2 SCC

231. Paras 3 to 8 of this judgment are relevant and the same read as under:-

“3.

Learned counsel for the appellant relies upon the Constitution

Bench decision of the Supreme Court in the case of Fateh Chand Vs

Balkishan Dass, (1964) 1 SCR 515; AIR 1963 SC 1405