Shri Tarsem Lal Bajaj vs Shri Gulshan Chawla

VALMIKI J. MEHTA, J (ORAL)

This Regular First Appeal under Section 96 of the Code of Civil Procedure, 1908 (CPC) is filed by the plaintiff in the suit impugning the Judgment

of the Trial Court dated 02.11.2016 by which trial court has dismissed the suit for recovery of Rs. 68 lakhs filed by the appellant/plaintiff/buyer against

the respondent/defendant/seller. The amount of Rs.68 lakhs which was claimed was on account of the appellant/plaintiff claiming double the amount

of Rs. 34 lakhs paid by the appellant/plaintiff to the respondent/defendant under the Agreement to Sell dated 13.06.2014. Â

Counsel for the appellant/plaintiff states that appellant/plaintiff confines the relief in the present appeal for the recovery of Rs. 34 lakhs as opposed

to the claim in the suit for double the amount of Rs. 34 lakhs at Rs. 68 lakhs, as this was the amount which was paid by the appellant/plaintiff to the

respondent/defendant under the subject Agreement to Sell dated 13.06.2014. Â

It may be noted that the respondent/defendant did not appear in the trial court and was proceeded exparte. No written statement was filed by the

respondent/defendant and no evidence has been led by the respondent/defendant. The appellant/plaintiff led evidence and proved the Agreement to

Sell as Ex.PW1/1. The receipt dated 12.12.2014 of appearance of the appellant/plaintiff before the sub-Registrar for registration of the Sale Deed was

proved as Ex.PW1/4. The fact that the respondent/defendant was the owner in terms of a Collaboration Agreement entered into by the

respondent/defendant with the owner Smt. Ish Rani has also been deposed to by the appellant/plaintiff.Â

As to the entitlement of a seller of an immovable property to forfeit the amount paid under an Agreement to sell, the law is now well settled that

even if a appellant/plaintiff is guilty of breach of contract, yet, the seller/defendant cannot forfeit the amount paid under an Agreement to sell unless

the seller pleads and proves that loss has been caused to him. Â In the present case, the respondent/defendant is exparte, and therefore, there is no

pleading or evidence that the respondent/defendant has suffered loss on account of the alleged breach of the Agreement to Sell by the

appellant/plaintiff so that the respondent/defendant can forfeit the amount of Rs. 34 lakhs paid under the subject Agreement to Sell dated

13.06.2014/Ex.PW1/1. This aspect that a seller cannot forfeit the amount paid under an Agreement to Sell unless loss is pleaded and proved has been

discussed in detail in the judgment in the case of M.C. Luthra v. Ashok Kumar Khanna 2018 (248) DLT 161. An SLP against the judgment in the

case of M.C. Luthra (supra) has been dismissed by the Supreme Court on 15.05.2018 in S.L.P.(C) No.11702/2018.

Therefore, the law is what is held by the Constitution Bench judgment of the Supreme Court in the case of Fateh Chand v. Balkishan Dass AIR 1963

SC 1405 which has been interpreted in the recent judgment of the Supreme Court in the case of Kailash Nath Associates v. Delhi Development

Authority and Another (2015) 4 SCC 136 which held that a seller cannot forfeit the amount received under an Agreement to Sell, besides a nominal

amount, and such nominal amount can only be forfeited in case the buyer is found guilty of breach of contract. In the present appeal, loss is not

pleaded or proved to be caused to the respondent/defendant.

In view of the aforesaid discussion, this appeal is allowed. The impugned Judgment of the Trial Court dated 02.11.2016 is set aside. Suit of the

appellant/plaintiff is decreed for a sum of Rs. 34 lakhs alongwith pendente lite and future interest till payment @ 6% per annum simple. Parties will

bear their own costs. Decree sheet be prepared. Â