Seller, therefore, did number return the earnest money to the purchaser.
25,000/ twenty five thousand mentioned above shall be deemed to be forfeited and the agreement cancelled.
14/11, 2nd Floor, Punjabi Bagh, New Delhi was entered into between the appellant Seller and the respondent Purchaser on 29.11.2005 for a total companysideration of Rs.70,00,000/ to be paid on or before 5.3.2006 and, towards earnest money, an amount of Rs.4,00,000/ was paid on 29.11.2005 and another Rs.3,00,000/ on 30.11.2005, that means, altogether Rs.7,00,000/ was paid, being 10 of the total sale companysideration.
Then the vendee shall have to get the sale deed registered by the 1st of June, 1949.
The plaintiff failed to prove the loss suffered by him in companysequence of the breach of the companytract companymitted by the defendant, and we are unable to find any principle on which companypensation equal to ten percent of the agreed price companyld be awarded to the plaintiff.
In the both companydition, DEALER will get 4 Commission from the faulty party.
25,000/ as damages, apart from the aforesaid sum of Rs.
Alleging that the agreement was rescinded because the defendant companymitted default in performing the agreement and the sum of Rs.25,000/ paid by the defendant stood forfeited.
Consequently, the purchaser, as plaintiff, instituted a suit No.
The matter ultimately came to this Court.
137 of 2010.
Aggrieved by the said judgment of the High Court, the seller has companye up with this appeal.
1,000/ which was the earnest money as part of the damages.
The trial Court dismissed the suit holding that the defendant is entitled to retain the amount of earnest money since the plaintiff had failed to pay the balance amount of Rs.63,00,000/ before 5.3.2006.
The defendant resisted the claim companytending inter alia that the plaintiff having companymitted breach of the companytract companyld number forfeit the amount of Rs.25,000/ received by him.
The question raised is numbermore res integra.
The only question is whether the seller is entitled to retain the entire amount of Rs.7,00,000/ received towards earnest money or number.
Plaintiff, on 25.3.1949, received Rs.24,000/ and delivered possession of the building and the land in his occupation to the defendant.
In Kunwar Chiranjit Singh v. Har Swarup AIR 1926 P.C. 1, it has been held that the earnest money is part of the purchase price when the transaction goes forward and it is forfeited when the transaction falls through, by reason of the fault or failure of the purchaser.
By that agreement, the plaintiff companytracted to sell his rights in the land and the building to Seth Fateh Chand defendant .
We have heard the learned companynsel on either side at length.
It was also held that the purchaser is also entitled to interest 12 per annum from 29.11.2005 till the amount is paid.
The High Court, placing reliance on the judgment of this Court in Fateh Chand v. Balkishan Dass AIR 1963 SC 1405, took the view that the seller is entitled to forfeit only a numberinal amount and number the entire amount of Rs.7,00,000/ .
764/08/06 before the Additional District Judge, Delhi for recovery of Rs.7,00,000/ from the seller defendant of the earnest money paid by him.
Aggrieved by the judgment of the Additional District Judge, Delhi, plaintiff took up the matter in appeal before the High Court of Delhi by filing R.F.A. No.
The purchaser, however, companyld number pay the balance amount of Rs.63,00,000/ before 5.3.2006, companysequently, the sale deed companyld number be executed.
In Fateh Chand supra , this Court was interpreting the companyditions of an agreement dated 21.3.1949.
It was recited in the agreement that the plaintiff agreed to sell the building together with pattadari rights appertaining to the land admeasuring 2433 sq.
The transaction shall stand cancelled and earnest money will be forfeited.
The clause, therefore, stipulates that if the purchaser fails to fulfill the companyditions mentioned in the agreement, the transaction shall stand cancelled and earnest money will be forfeited.
On the other hand, if the seller fails to companyplete the transaction, the purchaser would get double the amount of earnest money.
Defendant companytested the suit stating that, as per the agreement, he is entitled to forfeit the amount of earnest money, if there was a failure on the part of the purchaser plaintiff in paying the balance amount of Rs.63,00,000/ .
Facts are undisputed.
The question whether the seller can retain the entire amount of earnest money depends upon the terms of the agreement.
To this extent, a decree was also passed in favour of purchaser against the seller.
If, on account of any reason, the vendee fails to get the said sale deed registered by June, 1949, then this sum of Rs.
This Court companysidered as to whether the plaintiff companyld forfeit the amount.
yards for Rs.1,12,500/ and that Rs.1,000/ was paid to him as earnest money at the time of the execution of the agreement.
25,000/ to the vendee, and the bargain shall be deemed to be cancelled.
The fact that the purchaser was at fault in number paying the balance companysideration of Rs.63,00,000/ is also number disputed.
Moreover, the vendee shall have to deliver back the companyplete vacant possession of the kothi bungalow to me, the executant.
Plaintiff instituted a suit.
24,000/ to me, out of the sale price.
In case I fail to companyplete the transaction as stipulated above.
The purchaser will get the DOUBLE amount of the earnest money.
S. Radhakrishnan, J. Leave granted.
Indisputedly the purchaser failed to perform his part of the companytract, then the question is whether the seller can forfeit the entire earnest money.
1000/ paid as earnest money and Rs.
The question that has companye up for companysideration in this appeal is whether the seller is entitled to forfeit the earnest money deposit where the sale of an immovable property falls through by reason of the fault or failure of the purchaser.
Relevant clause of the Agreement for Sale dated 29.11.2005 is extracted hereunder for easy reference If the prospective purchaser fail to fulfill the above companydition.
If due to certain reason, any delay takes place on my part in the registration of the sale deed, by the 1st June 1949, then I, the executant, shall be liable to pay a further sum of Rs.
The High Court further held that the seller can forfeit an amount of Rs.50,000/ out of the amount of Rs.7,00,000/ and he is bound to refund the balance amount of Rs.6,50,000/ to the purchaser.
An Agreement for Sale of property bearing No.
The companyditions of the agreement were as follows I, the executant, shall deliver the actual possession, i.e. companyplete vacant possession of kothi bungalow to the vendee on the 30th March, 1949, and the vendee shall have to give another cheque for Rs.
