Full Judgment Text
2022:DHC:2106
$~4
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ C.R.P. 84/2021
AMRIT PAL SINGH ..... Petitioner
Through: Mr. Praveen Suri with Ms. Komal
Chhibber, Advocates.
versus
KAWALJEET SINGH ..... Respondent
Through: Mr. Vishal Chaudhary with
Mr. Aman Yadav, Advocates.
% Date of Decision: 25th May, 2022.
CORAM:
HON'BLE MR. JUSTICE DINESH KUMAR SHARMA
J U D G M E N T
DINESH KUMAR SHARMA, J. (Oral)
C.R.P. 84/2021& CM APPL.41568/2021 (filed on behalf of petitioner for
directions)
1. Present revision petition has been filed challenging the impugned
order dated 25.10.2021, whereby an application under Order XII Rule 6
CPC has been dismissed by the learned Trial Court holding inter alia as
under:-
“10. The present case of the plaintiff is that of seeking refund
of the money under the agreement to sell dated 12.08.2012. In
the present case the defendant has raised triable issue relating
to the matter of possession not taken due to non-arrangement of
the balance amount. The defendant has also alleged that the
plaintiff does not want to complete the deal. The defendant has
not denied the agreement to sale and its Legal Notice but it
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cannot be said that the defendant has admitted the entire case
of the plaintiff unequivocally and absolutely. The defendant has
raised plausible defence and the same shall subject to the
evidence at the appropriate stage.”
2. Petitioner has challenged the impugned order primarily on the ground
that the learned Trial Court has not appreciated the pleadings of the parties
in proper perspective and has also failed to appreciate the ratio laid down by
the Hon’ble Supreme Court of India in Kailash Nath Associates vs. DDA:
(2015) 4 SCC 136.
3. It has been submitted that in Kailash Nath Associates (supra), it was
clarified that the forfeiture of an earnest money necessarily falls under
Section 74 of the Contract Act i.e. before forfeiture can take place it must be
necessary that loss must be caused to the respondent and the same must be
pleaded by the respondent in his pleadings. It has further been submitted
that the respondent himself has admitted to have received a sum of Rs.55
lakhs and there is no forfeiture clause in the Agreement to Sell dated
12.08.2012. The impugned order has also been challenged on the ground
that the learned Trial Court has also not followed the law laid down in
Mohan Buildmart Pvt. Ltd. Vs. Hitesh Kumar: 2019 SCC Online Del 6886.
It has further been stated that the learned Trial Court has also committed a
material irregularity by not appreciating that even if the issues have been
framed and the evidence affidavit of the petitioner has been filed, still this
court can pass a decree under Order XII Rule 6 CPC as the framing of the
issues and the initiation of the evidence is not a bar in decreeing the suit of
the petitioner under Order XII Rule 6 CPC.
4. Reliance has been placed by the learned counsel for the petitioner on
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the judgment in Mera Baba Infrastructure Pvt. Ltd. vs. Chailu through
LRs. bearing CS(OS) No.400/2016. Reliance has also been placed on the
judgment of this Court in Versatile Commotrade Pvt. Ltd. vs. Kesar Devi
and Ors .: 2019 SCC Online Del 8182.
5. Petitioner has stated that the respondent has taken the only defence
that the amount given by the petitioner has been forfeited. It has been
submitted that this Court in the judgment of Rajbir Singh & Anr. vs.
Jaswant Yadav, RFA 404/2018 has held that if the respondent has not
pleaded or proved any loss caused to them on account of any alleged breach
of the agreement to sell, then the amount paid cannot be forfeited.
6. The impugned order has been challenged on the ground that the
learned Trial Court has failed to exercise the jurisdiction vested in it and
therefore there is jurisdictional error having been committed and therefore
the impugned order is liable to be set aside. Per contra the case of the
respondent is that the petitioner had filed a false and frivolous application
under Order XII Rule 6 CPC after the lapse of 7 or 8 years of filing of the
suit and the application has rightly been dismissed by the learned Trial
Court. It has been submitted that the suit is liable to be dismissed under
Order VII Rule 11 CPC. The case of the respondent is that in fact Sh. Inder
Pal Singh Chadha s/o. S. Onkar Singh Chadha, Director of Sukhmani
Solutions Pvt. Ltd. was the owner of property bearing No.102, area
measuring 133.3 sq. Yards with all its roof/terrace rights and structure
situated at Chand Nagar, New Delhi. Respondent purchased the upper
ground floor of the aforesaid property from Sh. Inder Pal Singh Chadha for a
total consideration amount of Rs.77 lakhs vide Agreement to Sell dated
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07.03.2012. In the month of August, 2012, the petitioner agreed to purchase
the same property from the respondent for a total consideration amount of
Rs.87 lakhs and the respondent also agreed to sell the same. The Agreement
to Sell dated 12.08.2012 was executed and it was agreed that the petitioner
shall pay the amount in the following manner:-
(i) Rs.20,00,000/- will be paid on 13.08.2012
(ii)Rs. 10,00,000/- on second lenter
(iii) Rs.20,00,000/- after second lenter
(iv) Rest of 32,00,000/- on completion or in April 2013.
7. Respondent has stated that the petitioner has filed a receipt Ex-
PW1/4 dated 20.02.2013 , whereby a sum of Rs.20 lakhs has been received
by Sh. Inder Pal Singh Chadha. The plea of the respondent is that the
petitioner has paid a sum of Rs.30 lakhs to S. Inder Pal Singh and has
merely paid a sum of Rs.25 lakhs to the respondent.
8. Further case of the respondent is that the floor was ready for
possession and was ready to be handed over in the month of April 2013.
But the petitioner was unable to pay the remaining sum of Rs.32 lakhs
despite repeated requests of the respondent. It has been stated that in fact
since the price of the property had declined, the petitioner was not interested
in buying the property. Respondent had also served a notice dated
17.09.2014 calling upon the petitioner to pay the remaining balance amount
and asking him to execute the documents. It has been stated that for this
reason, the petitioner is entitled to recovery of the earnest money.
9. Respondent has placed reliance upon the judgment in Satish Batra vs.
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Sudhir Rawal in Civil Appeal No.7588/2012 arising out of SLP (Civil)
No.4605/2012. It has been submitted that in view of the judgment in Satish
Batra (supra), the seller/respondent was entitled to forfeit the amount.
10. Respondent has also argued that it is a settled preposition that in order
to exercise jurisdiction under Order XII Rule 6 CPC unequivocal and
unqualified admission in the written statement should be taken as a whole
and not in part. The plea of the respondent is that unless the admission is
clear, unambiguous and unconditional, the discretion of the Court should not
be exercised to deny the valuable right of a respondent to contest the claim.
11. I have heard Mr. Praveen Suri, learned counsel for the petitioner and
Mr. Vishal Chaudhary, learned counsel for the respondent.
12. It is an admitted case that an Agreement to Sell dated 12.08.2012 was
executed between the parties which is reproduced herein as under:-
“AGREEMENT TO SELL (BAYANA)
This Deed of Agreement for Earnest money (Bayana) is
hereby executed on 12/08/2012 at Delhi between Sh. Kawaljeet
Singh S/O Shri Amarjeet Singh R/O plot no.-72, Phase-VI,
Mohali, Punjab.
AND
Shri Amri Pal Singh S/O Shri Sohan Singh R/O 24/41A, Tilak
Nagar, New Delhi – 110018.
Whereas the Party No.1 is the owner and in possession of
Built up property, bearing Plot No.-102, Chand Nagar, Tilak
Nagar, New Deilhi-110018 area measuring 133Sq. Yds./Sq.
Upper Ground Floor, Three Side Corner With Lift, With Car
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Parking, Tilak Nagar, New Delhi-110018
And whereas the Party No.1 has agreed to sell the
aforesaid property duly described above a sum of
Rs.87,00,000/- (Rupees Eighty Seven Lakh Only). The Party
No.2 has agreed to purchase the same the Party No.1 with
following terms and conditions:
(1) That the Party No.1 has received a sum of Rs.5,00,000 as
a Bayana amount from the Party No.2 on Dated
12/08/2012 in presence of the Marginal Witnesses. Part
Payment sum of Rs.20,00,000 (Rupees Twenty Lakh Only)
will be paid on 13/08/12 and Rs.10,00,000 (Rupees Ten
nd
Lakh Only) will be paid on 2 lenter and Rs.20,00,000
th
(Rupees Twenty Lakh Onlu) will be paid after 5 lenter.
Rest Rs.32,00,000 (Rupees Thirty Two Lakh Only) will be
paid on the completion or in April 2013. There is one
Month relaxation plus minus in construction.
(2) That the said property is free from all sorts of
encumbrances.
(3) That the First Party will be responsible all previous
documents and if any previous will be found in short or
wrong or duplicate then the First Party shall be
responsible of the said short paper/wrong
paper/duplicate paper and First Party shall be bounded
to complete the all previous documents to the Second
Party/Purchaser at the time of execution of the property
documents.
In witnesses whereof the both parties has signed on this
Agreement to Sell (Bayana) on the day, month and years first
above written.
Witnesses.
First Party Seller
Second Party Purchaser”
13. Initially a notice dated 17.09.2014 was served by the respondent to
the petitioner wherein in para 6 and 7 it was stated as under:-
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“6. That on 13.08.2012, you the noticee also paid Rs.
20,00,000/- ((Twenty Lacs) to my client.
7. That thereafter you the noticee paid Rs. 30,00,000/- in two
installments of Rs.10,00,000/- and Rs. 20,00,000/- to S. Inder
Pal Singh Chadha. In this way you the noticee paid Rs.
55,00,000/- (Fifty Five lacs) and Rs. 32,00,000/- is remaining
against you.”
14. Respondent called upon the petitioner to pay the remaining sum of
Rs.32 lakhs within three months. It was further stated that if the petitioner
failed to pay the remaining balance of Rs.32 lakhs within three months and
that even Bayana and part payment of Rs.55 lakhs shall be forfeited and the
Agreement to Sell dated 12.08.2012 shall automatically stand cancelled.
15. This notice was duly replied by the petitioner vide communication
dated 11.10.2014 whereby the petitioner asked for the copy of the title
documents, copy of the sanction plan and copy of the documents pertaining
to the installation of the lift along with licence of operation of the lift and
photographs showing the car parking place in the building. Petitioner further
stated that in case the documents are not supplied, he would be entitled to
receive back Rs.55 lakhs along with interest @18% per annum. Respondent
sent a rejoinder vide communication dated 05.11.2014 further calling upon
to pay the remaining sum of Rs.32 lakhs and also to supply a copy of the
title documents and sanction plan.
16. The petitioner thereafter filed the suit for recovery of Rs.71,50,000/-
against the respondent bearing CS(OS) No.4041/2014 praying for a decree
in the sum of Rs.71,50,000/- to be passed in favour of the petitioner and
against the respondent with cost and interest @12% per annum both
pendente lite and future till realization of the whole decretal amount.
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Respondent filed a written statement. In the written statement, a plea was
taken that out of Rs.55 lakhs, 30 lakhs was paid to Sh. Inder Pal Singh. It
was further stated that the floor was ready for possession and it was the
petitioner who failed to take possession of the same and also failed to pay
back the sum of Rs.32 lakhs despite notice dated 17.09.2014.
17. While the matter rested , an application under Order XII Rule 6 CPC
was filed by the petitioner on 19.10.2020 whereby it was stated that since
there was a categorical admission on the part of the respondent to have
received a sum of Rs.55 lakhs and since there was no forfeiture clause in the
Agreement to Sell dated 12.08.2012, a decree is liable to be passed under
Order XII Rule 6 CPC. However, this application did not find favour of the
learned Trial Court and the same was dismissed.
18. Order XII Rule 6 CPC reads as under:-
“(1) Where admissions of fact have been made either in the
pleading or otherwise, whether orally or in writing, the Court may
at any stage of the suit, either on the application of any party or of
its own motion and without waiting for the determination of any
other question between the parties, make such order or give such
judgment as it may think fit, having regard to such admissions.
(2) Whenever a judgment is pronounced under sub-rule (1), a
decree shall be drawn up in accordance with the judgment and the
decree shall bear the date on which the judgment was
pronounced.”
19. It is a settled preposition that the intention of the legislature behind
enacting Order XII Rule 6 CPC is to ensure expeditious trial as laid down in
the judgment in Charanjit Kaur Nagi vs. Govt. of NCT of Delhi & Ors.
(2005) 11 SCC 279.
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20. It is to be kept in mind that the purpose of Order XII Rule 6 CPC is to
confer upon the plaintiff a right to speedy judgment. The Courts have to
ensure that in an appropriate case, a party on the admission of other party
can press for judgment as a matter of legal right. The Courts should not
allow a dishonest litigant to prolong the trial on the flimsy ground. The
scope of Order XII Rule 6 was also discussed in detail by this Court in
Vinay Kumar Aggarwal vs. Radha Rani Aggarwal : 2018 SCC Online Del
6534, wherein, it was inter alia held as under:-
| “20. Due to the pendency of the present appeal, the Plaintiff has | |
|---|---|
| not executed the decree as yet. |
| 21. The legal position on Order XII Rule 6 is well settled. Trial is | |
| not compulsory in every suit. If from the documents and | |
| pleadings, it is clear that there is no need for a trial and that the | |
| case of a party stands admitted, the court can pronounce | |
| judgement, as held by a Division Bench of this Court in Seema | |
| Thakur v. Union of India (dated 29th February 2016 in RFA(OS) | |
| 97/2015), where it was stated that: |
| "16. The Court a facial reading of the provision show - has | |
| discretion, depending upon the facts of a case whether or | |
| not to decree a suit under Order XII Rule 6 CPC. If the | |
| admissions render a trial unnecessary, a Court is entitled to | |
| pass a decree without requiring further trial....." |
| 22. This position was upheld by this Court in Baljit Kaur Kalra | |
| (supra). |
| 20. Further it is also a settled position that the admission need | |
| not be in the pleadings of the same case but can be in any other | |
| form, including in unconnected proceedings. This is supported by | |
| the findings of the Supreme Court in Nagindas Ramdas (supra) | |
| wherein it was categorically held as under: |
"27. From a conspectus of the cases cited at the bar, the
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| principle that emerges is, that if at the time of the passing of the | |
|---|---|
| decree, there was some material before the Court, on the basis of | |
| which, the Court could be prima facie satisfied, about the | |
| existence of a statutory ground for eviction, it will be presumed | |
| that the Court was so satisfied and the decree for eviction though | |
| apparently passed on the basis of a compromise, would be valid. | |
| Such material may take the shape either of evidence recorded or | |
| produced in the case, or, it may partly or wholly be in the shape | |
| of an express or implied admission made in the compromise | |
| agreement itself. Admissions, if true and clear, are by far the best | |
| proof of the facts admitted. Admissions in pleadings or judicial | |
| admissions, admissible under Section 58 of the Evidence Act, | |
| made by the parties or their agents at or before the hearing of the | |
| case, stand on a higher footing than evidentiary admissions. The | |
| former class of admissions are fully binding on the party that | |
| makes them and constitute a waiver of proof. They by themselves | |
| can be made the foundation of the rights of the parties. On the | |
| other hand, evidentiary admissions which are receivable at the | |
| trial as evidence, are by themselves not conclusive. The can be | |
| shown to be wrong." |
| 24. There has also been a clear attempt to delay the proceedings | |
| before the Trial court. It is a settled position that Order XII Rule | |
| 6 can be invoked at any time, either on an application or suo | |
| moto by the Court. A Division Bench of this Court in Parivar | |
| Seva Sansthan v. Dr. (Mrs.) Veena Kalra AIR 2000 Del 349 has | |
| also upheld this position and held as under: |
9. Bare perusal of the above rule shows, that it confers very
wide powers on the court, to pronounce judgment on
admission at any stage of the proceedings. The admission
may have been made either in pleadings, or otherwise. The
admission may have been made orally or in writing. The
court can act on such admission, either on an application of
any party or on its own motion without determining the
other questions. This provision is discretionary, which has
to be exercised on well established principles. Admission
must be clear and unequivocal; it must be taken as a whole
and it is not permissible to rely on a part of the admission
ignoring the other part; even a constructive admission
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firmly made can be made the basis. Any plea raised against
the contents of the documents only for delaying trial being
barred by the section 91 and 92 of Evidence Act or other
statutory provisions, can be ignored. These principles are
well settled by catena of decisions. Reference in this regard
be made to the decisions in Dudh Nath Pandey (dead by
L.R's) Vs. Suresh Chandra Bhattasali (dead by L.R's)
(1986)3 SCC 360: AIR 1986 SC 1509; Atma Ram
Properties Pvt. Ltd. vs Air India 65 (1997) DLT 533; Surjit
Sachdev Vs. Kazakhstan Investment Services Pvt. Ltd. 1997
2 AD (Del) 518; Abdul Hamid Vs. Charanjit Lal & Ors.
1998 2 DLT 476 and Lakshmikant Shreekant Vs. M N
Dastur & Co. 71 (1998) DLT 564.
10. The use of the expression "any stage" in the said rule
itself shows that the legislature's intent is to give it widest
possible meaning. Thus, merely because issues are framed
cannot by itself deter the court to pass the judgment on
admission under order 12 rule 6, CPC...
21. In Mera Baba Infrastructure Pvt. Ltd. (supra), while a suit for
recovery was pending and issues had been framed, an application under
Order XII Rule 6 CPC was filed. The petitioner in that case had contended
(i) that there was no clause in the agreement to sell entitling the defendant to
forfeit the monies received as advance from the plaintiff ; (ii) that the
defendant has not made any counter-claim for any loss or compensation
suffered on account of breach of the agreement to sell, even if any by the
plaintiff; (iii) that the plaintiff in accordance with the dicta of the Supreme
Court in Kailash Nath Associates vs. Delhi Development Authority & Anr.
(2015) 4 SCC 136 is entitled to a decree for refund forthwith with interest at
such rate as may be awarded by the Court. In Mera Baba Infrastructure
Pvt. Ltd. (supra), this Court noted that in the written statement there was no
plea of any loss suffered by the LRs and there was only a plea of forfeiture
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of earnest money on breach by the plaintiff.
22. Reliance was placed upon the judgments in Poorna Radiology
Services Pvt. Ltd. v. Philips Electronics India Ltd.: 2007 SCC Online Del
1163 (copy para 17), Lalit Kumar Bagla v. Karam Chand Thapar & Bros.
(CS) Ltd. , 204 (2013) DLT 392 and Mahendra Verma v. Suresh T.
Kilachand , 2010 SCC Online Del 1522 to emphaisze that without a
Counterclaim for recovery of compensation for loss alleged to be suffered,
mere plea in the written statement of the defendant for breach of agreement
to sell by the plaintiff having suffered a loss is of no avail.
23. The Court after taking the same into account and despite the issues
having been framed, allowed the application under Order XII Rule 6 CPC
and passed a decree in favour of the petitioner along with interest pendente
lite @6% per annum and future interest @ 9% per annum.
24. In the judgment of this Court in Versatile Commotrade Pvt. Ltd. vs
Kesar Devi and Ors. : 2019 SCC Online Del 8182, this Court relied upon the
judgments in Kailash Nath Associates v. Delhi Development Authority &
Anr , 2015 4 SSC 136 and Mahanagar Telephone Nigam Ltd. vs. Tata
Communications Ltd. Civil Appeal No.1766 of 2019, decided on 27th
February 2019 and inter alia held as under:-
| “9. The ratio of the aforesaid judgment thus makes it clear that | |
| forfeiture of the amount received under the Agreement to Sell is | |
| subject to loss being caused and appropriation thereof in | |
| pursuance to Section 74 of the Indian Contract Act. As noted | |
| above in absence of any pleadings raising the ground or | |
| contention of loss being caused along with necessary details in the | |
| written statement, the Defendants cannot appropriate the amount | |
| received under the Agreement to Sell as liquidated damages.” |
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25. Respondent has relied upon the judgment of the Supreme Court in
Satish Batra (supra). The question which came up for consideration before
the Supreme Court is that whether the seller was 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.
26. If we go through the facts of this case as noted by the Supreme Court,
the petitioner had instituted a suit for recovery of Rs.7,00,000/- from the
seller defendant on the earnest money paid by him. The respondent had
contested the suit stating that as per the agreement he was 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 lakhs. The Trial
Court dismissed the suit holding that the respondent seller is entitled to
retain the amount of earnest money since the plaintiff had failed to pay the
balance amount of Rs.63 lakhs. This Court in this case placing reliance on
the judgment in Fateh Chand vs. Balkishan Dass: AIR 1963 SC 1405, inter
alia , held that 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. Aggrieved by this, seller invoked the
jurisdiction of the Supreme Court wherein the Supreme Court noted the
relevant clause of the Agreement to Sell dated 29.11.2005 and extracted the
same:
“e) If the prospective purchaser fail to fulfill the above
condition, the truncation shall stand cancelled and earnest
money will be forfeited. In case I fail to complete the transaction
as stipulated above, The purchaser will get the double amount of
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the earnest money. In the both condition, DEALER will get 4%
Commission from the faulty party.”
27. It is pertinent to mention that in the case before Supreme Court there
was a forfeiture clause, whereas it is an admitted position that in the present
case there is no forfeiture clause in the Agreement to Sell dated 12.08.2012.
It is also an admitted case that a sum of Rs.55 lakhs has been paid by the
petitioner. The only plea taken by the respondent is that out of Rs.55 lakhs,
a sum of Rs.30 lakhs has been paid by the petitioner to one Sh. Inder Pal
Singh Chadha. However, it is an admitted fact that payment has been made
under the Agreement to Sell dated 12.08.2012 and even if the payment has
been made to Sh. Inder Pal Singh Chadha that was being paid to the
respondent and the same might have been received by Sh. Inder Pal Singh
Chadha on his behalf, thus the petitioner cannot be asked to file separate
proceedings for recovery of this amount from Sh. Inder Pal Singh Chadha.
28. It is also an admitted case that an application under Order 1 Rule 10
CPC was filed by the respondent for impleading Sh. Inder Pal Singh
Chadha, which was dismissed by the learned Trial Court vide order dated
11.10.2018. On this point, learned counsel for the respondent submits that
now he has filed CM(M) which is under scrutiny. However, I consider that
filing of CM(M) should not make any difference as this Court is of the view
that money was paid by the petitioner to the respondent under the
Agreement to Sell dated 12.08.2012.
29. In the present case the plea of the petitioner is that he had paid Rs.55
lakhs against the Agreement to Sell dated 12.08.2012. The receipt of Rs.55
lakhs has duly been admitted by the respondent/defendant. The admission is
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clearly reflected even in the notice sent by him dated 17.09.2014. It is also
an admitted fact that there is no forfeiture clause in the Agreement to Sell
dated 12.08.2012. It is also a matter of record that the defendant had not
filed any counter-claim. This Court considers that these admissions are
unequivocal and unambiguous and confers a jurisdiction on the Court to
pass a judgment on admission while exercising the powers under Order XII
Rule 6 CPC.
30. In view of the discussion hereinabove, the impugned order is liable to
be set aside. Thus a decree of Rs.55 lakhs is passed in favour of the
petitioner and against the respondent along with interest @6% per annum
pendente lite and future interest @ 9% per annum.
31. The revision Petition along with the pending application stands
disposed of.
DINESH KUMAR SHARMA, J
May 25, 2022
st
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