Pramod Kumar Pandey vs Jaishankar Jha And Ors

Ram Prasanna Sharma, J

This appeal is preferred under Section 96 of the Code of Civil Procedure, 1908 against the judgment and decree dated 23-1- 2004/27-1-2004 passed

by the 3rd Additional District Judge, Raipur (CG) in Civil Suit No. 30-B/2002 wherein the said court decreed the suit against the appellant for sum of

Rs.53,900/- with interest @ 6% for returning earnest money paid to the appellant by the respondent on account of one agreement to sell of house

bearing registration No. 40/306, situated at Tillu. Chowk, Sonkarpara, Raipur.

The appellant and the respondent have entered into written agreement on 4-5-1999 for the purchase of house as mentioned above belonging to the

appellant. The date of execution of contract was upto 4-5-2000 i.e., one year from the date of agreement but the respondent did not take any step in

this regard and as per term of the contract. The earnest money was forfeited as per term of the agreement, but the trial Court passed the decree to

return the earnest money against the term of contract and against the law i.e., Sections 74 & 75 of the Indian Contract Act, 1872. It is further case of

the appellant that installation of electric meter and repairs of the house were not part of the contract and even it was not agreed between the parties

orally but the respondent raised such plea which was not tenable.

Learned counsel for the appellant submits that the ground taken by the respondent regarding installation of electric meter and repair of the house

was just to avoid the registration of the sale deed and when sale deed is not executed upto 4-5-2000, forfeiture of the earnest money on behalf of the

appellant was legal. He placed reliance in the matter of Suresh Kumar Wadhwa vs. State of Madhya Pradesh and others, reported in 2017 (16) SCC

757.

From the evidence it is established by the respondent that notice was served on the appellant as per Ex.P/1 dated 17-4-2000 that he is ready and

willing to perform his part of contract. In the said notice, it is clearly mentioned that respondent will make himself available into office of Registrar for

registration as per date fixed by the appellant. True it is that sale deed was to be executed upto 4-5-2000 as per the agreement Ex.P/6, but no intention

was shown by the appellant to execute the sale deed after 4-5-1999 i.e., the date of agreement. In the matter of execution of sale deed as per the

contract, the parties to show their readiness and willingness. From the record of the trial Court, it is established that respondent had shown his

readiness and willingness but the appellant has not shown his readiness and willingness to perform his part of contract. In the present case, earnest

money can be forfeited only when the respondent is not ready and willing to perform his part of contract upto 4-5- 2000 but that is not the case here,

therefore, the trial Court is right that earnest money cannot be forfeited in the facts and circumstances of the case. It is not a case that respondent

was not willing to execute the sale deed on account of installation of electric meter or repairs of the house. Therefore, the finding of the trial Court in

this regard is not liable to be interfered with.

Learned counsel for the appellant would further submit that the respondent was not having sufficient fund to get the house registered in his name

and he has not performed his part of contractual obligation and the condition of forfeiture of advance amount is in-consonance with law.

To deal with the issue, the statement of the appellant before the trial Court is relevant. From his statement it is clear that he never informed the

respondent in writing regarding date of execution of sale deed and his availability for the same/to remain present in the office of the Registrar at any

specific date. His version of readiness (para 3) is only oral version which is not substantiated by any written notice while the intention of the

respondent was shown by written notice, therefore, the trial Court is right in holding that respondent was ready to perform his part of contract before

4-5-2000 and the appellant was not willing to perform his part of the contract, therefore, earnest money cannot be forfeited. From the statement of the

appellant it is also clear that he has sold the house in question after 4-5-2000, therefore, execution of sale deed was not possible in favour of the

respondent.

The trial Court awarded interest @ 18% from 4-5-1999 to the date of filing of the suit i.e., 8-5-2002 and awarded 6% interest from the date of filing

of the suit till realization of the said amount. Finding regarding interest is based on rate of commercial interest prevailing on the date of agreement upto

the date of filing of the suit and 6% interest after the date of filing of the suit is minimum interest that can be awarded as per Section 34 of the CPC

1908 which is also not to be interfered with.

Considering all the facts and the evidence on record, this court is of the opinion that the case law cited by learned counsel for the appellant is

distinguishable from the facts of the present case.

Accordingly, the decree is passed against the appellant and in favour of respondents as under:

(I) The appeal is dismissed with cost.

 (ii) Appellant to bear the cost of respondent through out.

(iii) Pleader's fee., if certified, be calculated as per Schedule or as per certificate whichever is less.

 (iv) A decree be drawn up accordingly.