Delhi High Court
Versatile Commotrade Private Limited vs Balraj on 9 January, 2019
Equivalent citations: AIRONLINE 2019 DEL 1666
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 9th January, 2019.
+ CS(COMM) 982/2016 & IA No.15264/2017 (of defendant u/O
XXXVII R-3(5) CPC)
VERSATILE COMMOTRADE PRIVATE LIMITED ...Plaintiff
Through: Mr. Aman Prasad and Mr. Nikhilesh
Krishnan, Advs.
Versus
BALRAJ ..... Defendant
Through: Mr. Kuldeep Sehrawat, Adv.
AND
+ CS(COMM) 983/2016 & IA No.15267/2017 (of defendant u/O
XXXVII R-3(5) CPC)
VERSATILE COMMOTRADE PRIVATE LIMITED .....Plaintiff
Through: Mr. Aman Prasad and Mr. Nikhilesh
Krishnan, Advs.
Versus
RATTAN SINGH ..... Defendant
Through: Mr. Kuldeep Sehrawat, Adv.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. Both suits, under Order XXXVII of the Code of Civil Procedure, 1908
(CPC), are ripe for hearing arguments on the applications of the defendant
therein for leave to defend.
2. When the suits are called out, none appears for the plaintiff in the
suits; the counsel for the defendant in both the suits states that no reply to the
applications for leave to defend has been received as yet. However, as per
CS(COMM) 982/2016 & CS(COMM) 983/2016 Page 1 of 19
the office notation, replies have been filed. Upon the same being put to
counsel for the defendant in both the suits, he states that time be given for
filing rejoinder.
3. The application for leave to defend has to stand on its own legs and
without disclosing as to what plea in the reply to the application for leave to
defend needs rejoinder, time for filing rejoinder cannot be mechanically
granted, particularly when these are commercial suits and are listed today for
arguments on the applications for leave to defend.
4. The counsel for the defendant in the two suits then states that the two
suits are identical in nature and besides the said two suits, five other suits of
the same nature are pending in Dwarka Courts. It is further stated that an
attempt was made in mediation to settle the suits, but without any success.
5. The suits cannot be kept pending in this fashion.
6. The counsel for the defendant in both the suits states that the
defendant in each of the suits as well as the defendants in the suits pending in
Dwarka Courts, are part of the same family and owners of agricultural land
and had entered into separate agreements with the plaintiff for sale of their
respective share in the said land to the plaintiff and the plaintiff has filed the
suits including these two suits, to recover the amount paid under the
agreements to sell, even though the plaintiff itself is in breach of the
agreements to sell.
7. On the aforesaid submissions, the leave to defend applications in law
do not disclose any ground for grant of leave to defend and the counsel for
the defendants has been asked to argue. He however keeps on seeking
adjournment.
CS(COMM) 982/2016 & CS(COMM) 983/2016 Page 2 of 19
8. At this stage, Mr. Aman Prasad, Advocate for the plaintiff appears but
instead of being keen on arguing his case, also seeks adjournment, to make
another attempt to settle.
9. Once mediation has already failed, desire to make settlement is but an
excuse for seeking adjournment.
10. The counsel for the defendant in both the suits has again been given an
opportunity to argue. He only states, that it is the plea of the defendant in
both the suits that the defendant has expended the monies received in
advance from the plaintiff under the agreement to sell and thus is not in a
position to refund the same.
11. I have enquired from the counsel for the defendant in both the suits,
whether the defendants have instituted any suit for recovery of any loss
which may have been suffered by the defendants on account of breach
alleged by the plaintiff of the agreement to sell with the respective defendant.
12. The counsel for the defendants replies in the negative.
13. The counsel for the plaintiff has not made any arguments.
14. The files have been gone into.
15. The plaintiff has instituted each of the suits for recovery of
Rs.1,66,87,500/- with pendente lite and future interest, pleading (i) that the
defendant in each of the suits had offered to sell to the plaintiff his 1/3 rd
share i.e. 22 bighas and 5 biswas in agricultural land measuring 66 bighas
and 15 biswas comprised in Khata Khatoni No.111/88 min Mustatil/Khasra
Nos.148/1 (6-15), 5//135/1 (4-11), 22/2 (1-11), 23/2 (3-8), 24/2 (3-3), 27 (0-
5), 6//2 (2-11), 3 (4-16), 4 (4-16), 5/1 (2-8), 7 (4-12), 8 (4-16), 9/1 (1-12),
CS(COMM) 982/2016 & CS(COMM) 983/2016 Page 3 of 19
26(0-5), 12//2/2(2-5), 3(6-6), 4(4-16), 5/1 (4-3), 7(3-16), situated in the
revenue estate of Village Khera Dabar, Tehsil Najafgarh, New Delhi; (ii) that
the sale consideration was agreed to be Rs.16,68,75,000/-; (iii) that the
defendant in each of the suits had represented that he would obtain „No
Objection Certificate‟ (NOC) from the Competent Authority for transfer of
the land to the plaintiff, the land being agricultural, governed by the
provisions of the Delhi Lands (Restrictions on Transfer) Act, 1972, and shall
furnish the said NOC to the plaintiff; (iv) that believing the representations
of the defendants to be true, the plaintiff entered into an agreement to sell
dated 12th April, 2013 with each of the defendants; (v) that the plaintiff paid
advance/part sale consideration of Rs.1,66,87,500/- to each of the defendant;
(vi) that the balance sale consideration was agreed to be paid by the plaintiff
to each of the defendant on or before 12th July, 2013, at the time of execution
and registration of Sale Deed in favour of the plaintiff; (vii) that as per the
agreements to sell the necessary pre-condition for execution and registration
of Sale Deed by the defendant and payment of balance sale consideration by
the plaintiff was the defendants obtaining NOC and providing the same to
the plaintiff; (viii) that each of the defendant was required to apply for and
obtain the NOC before the date of payment of balance sale consideration i.e.
by 12th July, 2013; (ix) that despite expiry of the above date of sale,
defendant neither obtained NOC nor furnished the same to the plaintiff and
thus the occasion for the plaintiff to pay the balance sale consideration did
not arise; (x) that as the plaintiff was still interested in purchasing the land,
the plaintiff approached the defendants in the second week of July, 2013 and
has thereafter from time to time enquired about the NOC; (xi) that instead of
furnishing the NOC, the defendants got served a legal notice dated 17 th
CS(COMM) 982/2016 & CS(COMM) 983/2016 Page 4 of 19
August, 2013 claiming that NOC had been obtained within time and it was
the plaintiff who was in breach and that the defendants had also gone to the
office of the Sub-Registrar on 12th July, 2013 for execution of the Sale Deed,
but the plaintiff did not appear; (xii) that the plaintiff sent a reply dated 30th
August, 2013 to the defendants denying that the defendants at any time
informed the plaintiff of the receipt of NOC; and, (xiii) that the defendants
along with rejoinder dated 9th September, 2013 to the aforesaid reply, for the
first time furnished copy of the NOC dated 13th August, 2013 but which was
valid till 12th September, 2013, not leaving enough time for payment of the
balance sale consideration and execution of the Sale Deed. The plaintiff has
thus instituted these suits under Order XXXVII of CPC for recovery of the
advance sale consideration paid of Rs.1,66,87,500/- to each of the defendant.
16. Though the plaintiff had notices as far back as on 17th August, 2013 of
the stand of the defendants, but these suits were instituted only on 11th July,
2016 and re-filed on 28th July, 2016 and 29th July, 2016 and came up before
this Court first on 1st August, 2016, when summons for appearance and
thereafter on the defendants entering appearance, summons for judgment
were issued and in response to which leave to defend applications have been
filed.
17. The defendants have sought leave to defend pleading, (a) that the suits
are not maintainable under Order XXXVII of the CPC because the
defendants have not taken any debt from the plaintiff and the suit is for
refund of earnest money paid by the plaintiff to the defendants under the
agreement to sell of immoveable property; (b) that the only remedy available
to the plaintiff was of suing for specific performance of the agreement to
CS(COMM) 982/2016 & CS(COMM) 983/2016 Page 5 of 19
sell; (c) that there is no provision in the agreements to sell for refund of the
monies paid thereunder; (d) that as per term of the agreement to sell, the
defendants are entitled to forfeit the earnest money in case the plaintiff
breaches or backs out from the agreement to sell and the agreement does not
give any right to the plaintiff to file a suit as the present suits are, for
recovery back of the amounts paid; (e) that the plaintiff has no explanation as
to why the plaintiff remained silent for almost three years; (f) that the
plaintiff was trying to take benefit of its own wrong and trying to "catch any
prospective buyer of the land under the agreement for higher rates"; (g) that
the defendants have already invested monies received under the agreement to
sell and have paid earnest money for purchase of another piece of land and
the "defendants will lose money under that agreement if timely payment is
not made"; (h) that the defendants vide their notice dated 17 th August, 2013
called upon the plaintiff to comply with the agreement to sell; (i) that the
plaintiff, in its reply dated 30th August, 2013 did not demand refund of the
amounts paid; (j) that the plaintiff, after remaining silent for over three years,
for the first time vide legal notice dated 4 th July, 2016 sought refund of the
amounts paid; (k) that the plaintiff, at no point of time got any notice issued
to the defendants calling upon the defendants to transfer the land to the
plaintiff and perform their part of the agreement to sell; (l) that the plaintiff,
at the time of execution of the agreement to sell, obtained signatures of the
defendants on blank NOC forms and also promised that the draft sale deeds
to be got executed from the defendants would be sent to the defendants, but
did not send the draft sale deeds; (m) that it is the plaintiff who has miserably
failed to perform its part of the agreement to sell; (n) that the plaintiff did not
inform the defendants the name in which the NOC was to be obtained and
CS(COMM) 982/2016 & CS(COMM) 983/2016 Page 6 of 19
did not even pay for the expenses for obtaining the NOC; (o) that inspite
thereof, the defendants of their own applied for and obtained the NOC and
forwarded the same to the plaintiff along with the notice dated 17 th August,
2013; (p) that the defendants have "already invested a big/greater part of the
earnest money and had entered into various agreements of sale & purchase
of the land and in case the plaintiff is not able to perform its part of
contractual liability then the defendant will get their money forfeited which
was paid as earnest money"; (q) that the defendants have entered into such
agreements to sell dated 9th May, 2013 and 4th May, 2013 respectively with
one Rajesh Kumar Yadav for purchase of his share in land in revenue estate
of Village Nawada Fatehpur, Gurgaon, Haryana; (r) that the defendants, in
pursuance to the agreement to sell dated 9th May, 2013 and 4th May, 2013
respectively, have paid Rs.39,29,141/- and Rs.78,68,124/- respectively as
earnest money; and, (s) that the defendant in each of the suits will have to
suffer loss of earnest money of Rs.39,29,141/- and Rs.78,68,124/-
respectively.
18. Besides the aforesaid, the counsel for the defendants has also argued
that the defendants even now are ready to perform their part of the agreement
to sell by sale in terms thereof in favour of the plaintiff, and in mediation had
also offered to sell to the plaintiff at price lower than that mentioned in the
agreements to sell, but it was the plaintiff who was not willing to purchase.
19. I have considered the aforesaid grounds for leave to defend.
20. Why I have observed at the outset that the defence as disclosed by the
counsel for the defendants did not constitute a defence in law was on account
of the dicta of the Supreme Court in Kailash Nath Associates Vs. Delhi
CS(COMM) 982/2016 & CS(COMM) 983/2016 Page 7 of 19
Development Authority (2015) 4 SCC 136 followed by this Court in Dr.
V.B. Roy Vs. Ravindra Kishore Sinha 2017 SCC OnLine Del 10924, Palm
Art Apparels Pvt. Ltd. Vs. Enkay Builders Pvt. Ltd. MANU/DE/3533/2017
and Satish Verma Vs. Garment Craft (India) Pvt. Ltd. 2018 SCC OnLine
Del 6829 holding that there can be no forfeiture, without proving loss and
making a claim therefor.
21. I may in this context also mention that in the agreements to sell, which
are identical in nature in the two suits, and are titled „Advance Receipt-cum-
Agreement to Sell & Purchase‟, the amount paid is not even described as
„earnest money‟. The relevant clauses of the agreement to sell in each of the
case and in which the plaintiff is described as „Second Party‟ and defendant
in each suit as „First Party‟, are as under:
"6. That the total sale consideration of the above said
property has been settled between the parties is as
Rs.16,68,75,000/- (Rupees Sixteen Crore Sixty Eight
Lacs & Seventy Five Thousand only).
7. That the Second Party has already paid a sum of
Rs.1,66,87,500/- (Rupees One Crore Sixty Six Lacs
Eighty Seven Thousand and Five Hundred Only) and
the First Party have acknowledge the receipt of the same.
The details of payments paid as per the following
manner:-
Sl.No. DD/Chq./Cash & Date Amount
----------------------------------- -----------------
i) Chq. No.403791 dt. 12/04/2013 Rs.1,65,25,000/-
ii) By Cash Rs.1,62,500/-
CS(COMM) 982/2016 & CS(COMM) 983/2016 Page 8 of 19
______________________________________________
Total Rs. Rs.1,66,87,500/-
______________________________________________
8. That balance of amount Rs.15,01,87,500/- (Rupees
Fifteen Crore One Lac Eighty Seven Thousand & Five
Hundred Only) shall be paid by the Second Party within
a period of 03 months from this date of Agreement on or
before 12th July, 2013.
9. That at time of making final payment the First Party shall
execute all sale concerning document like, SALE DEED
or whatsoever applicable as required by the Second Party
in its own firm/Company or its nominee.
.........
8. That in case the Second Party fails to perform the terms
and conditions of the said Agreement to Sell & purchase,
then their paid amount shall be Forfeited in favour of the
First Party, and in case of breach of any clause by the
First Party, the Second Party shall have every right to get
the physical vacant possession of the said property
through Court of Law by Specific Performance Act, after
depositing the balance sale consideration amount as per
this agreement to sell."
22. Though the amounts paid under the agreements to sell are not
described as „earnest‟ or „security‟ but the agreements do provide for
forfeiture thereof in the event of breach by the plaintiff. However, the said
forfeiture would be governed by the dicta and the judgments aforesaid.
Merely because there is a provision in the agreements to sell, of forfeiture,
will not entitle the defendants to forfeit, without establishing loss.
CS(COMM) 982/2016 & CS(COMM) 983/2016 Page 9 of 19
23. The defendants, neither in the leave to defend applications have
pleaded that they have made a claim for any loss nor has the counsel for the
defendants has today claimed so. The limitation for the defendants to
recover the compensation for loss, if any suffered by the defendants on
account of breach by the plaintiff, has now long since elapsed, inasmuch as
the suits have also been pending for more than two years and the defendants
cannot today make a claim for compensation for breach of contract against
the plaintiff.
24. Not only have the defendants not made any claim for compensation
for loss by breach, but the pleas in the applications for leave to defend are
nebulous. The defendants, in the applications for leave to defend, at one
place have pleaded that the defendants had apprised the plaintiff "that the
defendant had already invested money and had paid earnest money for the
purchase of another piece of land and the defendant will loose money under
that agreement if timely payment is not made". In the subsequent paragraph,
it is pleaded that:
"....the defendant and his brother and other family members
had already invested a big/greater part of the earnest money
and had entered into various agreements of sale & purchase of
the land and in case the plaintiff is not able to perform its part
of contractual liability then the defendant will get their money
forfeited which was paid as earnest money. The defendant
herein had also entered into such agreement to sell dated
09.05.2013 with one Sh. Rajesh Kumar Yadav S/o Late Sh.
Samay Singh Yadav R/o H.No.B-284-A, Block-B, Sushant Lok-I,
Gurgaon, Haryana for 1/3 share of his 1/3 rd share in the land
admeasuring 26 Kanal 16 Marla comprised in Khewat/Khata
Jamabandi No.7/9 Mustil No.8 Kila No.6 (8 Kanal), 7 (07 kanal
CS(COMM) 982/2016 & CS(COMM) 983/2016 Page 10 of 19
12 marla), 8/2(06 Kanal 4 Marla) Mustil no.9 kila No.10/2 (05
Kanal) situated in the revenue estate of Village Newada
Fatehpur, Tehsil & Dist. Gurgaon, Haryana. The defendant in
pursuance of the said Agreement to Sell dated 09.05.2013 paid
Rs.39.29,141/- as earnest money out of total Sale Consideration
of Rs.1,50,00,000/- (Rupees One Crores fifty lacs only). The
copy of the said agreement is annexed herewith as ANNEXURE
A-3."
In yet subsequent paragraph, it is pleaded:
"That the defendant had to suffer loss of his earnest money of
Rs.39,29,141/- paid in pursuant to the Agreement to Sale dated
09.05.2013, due to plaintiff's failure of performance of his
contractual obligation under Agreement dated 12.04.2013. The
defendant also could not fulfil his contractual obligations under
the agreement to Sell dated 09.05.2013 and the amount paid by
the defendant was forfeited by Mr. Rajesh Kumar Yadav only for
the reason that the plaintiff's failure in the agreement dated
12.04.2013.
That as the defendant had entered into Agreement to Sell dated
09.05.2013 and had also communicated this fact to the plaintiff
vide its legal notice dated 17.08.2013, thereby making the time
essence of the contract/agreement dated 12.04.2013 and even
then the plaintiff had miserably failed to perform his part of
contractual obligation."
The pleas in leave to defend application in other suit are verbatim the
same save for the earnest money paid by defendant being Rs.78,68,124/- as
against total consideration of Rs.2,97,50,000/-.
CS(COMM) 982/2016 & CS(COMM) 983/2016 Page 11 of 19
25. The defendant in each of the suits, save for making the aforesaid pleas
and filing agreement to sell purportedly entered into between the defendant
and Rajesh Kumar Yadav, of sale by Rajesh Kumar Yadav to the defendant
of agricultural land, has not produced before this Court any document of title
or of entry in the revenue records in the name of Rajesh Kumar Yadav of the
land which the defendants claim Rajesh Kumar Yadav had agreed to sell to
the defendants and in pursuance to which the defendants claim to have paid
earnest money to the said Rajesh Kumar Yadav. Moreover, the agreements
to sell by Rajesh Kumar Yadav relied upon by the defendants are of 9th May,
2013 and sale in pursuance whereto was to be completed on or before 28 th
August, 2013. Though the said agreements to sell provide for forfeiture by
Rajesh Kumar Yadav of the "advance money" paid by the defendants and
received by Rajesh Kumar Yadav under the agreements to sell, in the event
of the defendants failing to comply with their part of the agreement to sell,
but the defendants have not produced before this Court any correspondence
exchanged with Rajesh Kumar Yadav qua forfeiture. There is absolutely
nothing to support, that the monies were forfeited. There is absolutely
nothing to show that even if the defendants had entered into the agreements
to sell with Rajesh Kumar Yadav and even if had paid the amounts claimed
to have been paid to Rajesh Kumar Yadav and even if the defendants owing
to breach by the plaintiff herein were unable to fulfil their part of the
agreements to sell with Rajesh Kumar Yadav and Rajesh Kumar Yadav had
refused to refund the money received as advance under the agreements to
sell, the defendants took any steps whatsoever for demanding the said
monies from Rajesh Kumar Yadav. The law as cited above would equally
apply to the monies paid by the defendants as advance sale consideration to
CS(COMM) 982/2016 & CS(COMM) 983/2016 Page 12 of 19
Rajesh Kumar Yadav and the defendants cannot be permitted to plead loss
and claim compensation therefor from the plaintiff, without being diligent
and taking appropriate steps for mitigating the loss if any.
26. There is another aspect of the matter. The defendant in CS(COMM)
No.982/2016, out of the amount of Rs.1,66,87,500/- received from the
plaintiff, claims to have paid a sum of Rs.39,29,141/- only to Rajesh Kumar
Yadav and claims forfeiture of the said amount of Rs.39,29,141/- only. The
defendant in CS(COMM) No.983/2016, out of the amount of
Rs.1,66,87,500/- received from the plaintiff claims to have paid a sum of
Rs.78,68,124/- only to Rajesh Kumar Yadav and which is claimed to be
forfeited by Rajesh Kumar Yadav. Even after deducting the said amounts,
the defendant in CS(COMM) No.982/2016 has not explained the loss of
Rs.1,27,58,359/- remaining after deducting Rs.39,29,141/- and the defendant
in CS(COMM) No.983/2016 has not explained the loss of Rs.88,19,376/-
after deducting Rs.78,68,124/-. The plaintiff in any case would be entitled to
recover the said amounts from the defendants respectively.
27. A defendant in an Order XXXVII suit cannot be entitled to leave to
defend, merely by taking a plea and without giving particulars and filing
documents as would logically be available in support of the said plea and if
fails to do so, cannot be entitled to leave to defend. If leave to defend suits
under Order XXXVII of the CPC were to be granted merely by taking a plea,
even if does not inspire confidence owing to lack of particulars and
documents, there would be no case in which leave would not be granted
owing to the drafting skills of the Advocates for the defendants and disposal
of the suits under Order XXXVII of the CPC, instead of being summary,
CS(COMM) 982/2016 & CS(COMM) 983/2016 Page 13 of 19
would be lengthier, for having additional issuance of summons for
appearance, summons for judgment and filing of application for leave to
defend and consideration thereof.
28. Supreme Court, in IDBI Trusteeship Services Limited Vs. Hubtown
Limited (2017) 1 SCC 568, while holding the earlier dicta in Mechelec
Engineers & Manufacturers Vs. Basic Equipment Corporation (1976) 4
SCC 687 which had held fort for decades, to be no longer good law pursuant
to amendment of the CPC in the year 1976, laid down the following law for
grant of leave to defend:
"17.1. If the defendant satisfies the Court that he has a
substantial defence, that is, a defence that is likely to succeed,
the plaintiff is not entitled to leave to sign judgment, and the
defendant is entitled to unconditional leave to defend the suit.
17.2. If the defendant raises triable issues indicating that he
has a fair or reasonable defence, although not a positively good
defence, the plaintiff is not entitled to sign judgment, and the
defendant is ordinarily entitled to unconditional leave to
defend.
17.3. Even if the defendant raises triable issues, if a doubt is
left with the trial Judge about the defendant's good faith, or the
genuineness of the triable issues, the trial Judge may impose
conditions both as to time or mode of trial, as well as payment
into court or furnishing security. Care must be taken to see that
the object of the provisions to assist expeditious disposal of
commercial causes is not defeated. Care must also be taken to
see that such triable issues are not shut out by unduly severe
orders as to deposit or security.
17.4. If the defendant raises a defence which is plausible but
improbable, the trial Judge may impose conditions as to time or
mode of trial, as well as payment into court, or furnishing
security. As such a defence does not raise triable issues,
conditions as to deposit or security or both can extend to the
CS(COMM) 982/2016 & CS(COMM) 983/2016 Page 14 of 19
entire principal sum together with such interest as the court
feels the justice of the case requires.
17.5. If the defendant has no substantial defence and/or raises
no genuine triable issues, and the court finds such defence to be
frivolous or vexatious, then leave to defend the suit shall be
refused, and the plaintiff is entitled to judgment forthwith.
17.6. If any part of the amount claimed by the plaintiff is
admitted by the defendant to be due from him, leave to defend
the suit, (even if triable issues or a substantial defence is
raised), shall not be granted unless the amount so admitted to
be due is deposited by the defendant in court."
29. Applying the aforesaid law, I find the case of the defendants in these
suits to be falling under para 17.5 above. I find the pleas raised by the
defendants in the applications for leave to defend to be not raising any
substantial defence and/or not raising any genuine triable issues. I find the
defence of the defendants to be frivolous and vexatious.
30. The defendants, had there been substance in their defence, could have
produced documents to show title of Rajesh Kumar Yadav to the land with
respect to which the defendants claim to have entered into agreement to sell
with Rajesh Kumar Yadav. The defendants have not pleaded or filed any
letters or notices issued to Rajesh Kumar Yadav, for refund of the monies
claimed by the defendants to have been paid to Rajesh Kumar Yadav. The
defendants did not take any steps for recovery of the amounts claimed to
have been paid to Rajesh Kumar Yadav and forfeited by him. The
defendants have not pleaded that Rajesh Kumar Yadav suffered any loss or
was entitled to forfeit the monies claimed to have been paid to him. Without
all the said particulars, the defence cannot qualify as substantial and, to
borrow the words from Mechelec Engineers & Manufacturers supra,
CS(COMM) 982/2016 & CS(COMM) 983/2016 Page 15 of 19
though overruled, is a moonshine and the defendants cannot be permitted to
create a mirage to fool the Court. In fact, there is nothing to show that any
person by the name of Rajesh Kumar Yadav exists.
31. There is yet another aspect. The defendants, after the alleged breach
by the plaintiff, did not take any steps for recovery from the plaintiff of the
losses claimed to be suffered by them. The defendants, in the present suit
also, have not made any counter-claim. The limitation therefor has now
expired. I have in Mera Baba Pvt. Ltd. Vs. Ram Lubhaya Puri 2018 SCC
OnLine Del 9502 held that a claim for damages/compensation for breach of
agreement being of an unascertained amount, cannot be adjusted. The need
to reiterate the position in detail in this judgment is thus not felt.
32. Thus, the position as of today is, that while the plaintiff has sued for
refund of the amounts paid within the prescribed time, the defendants in law
have no defence thereto.
33. Once, it is found that the defence raised in the applications for leave to
defend has no merit in law, the question of grant of leave to defend does not
arise.
34. As far as the other plea taken in the applications for leave to defend, of
the suits being not maintainable under Order XXXVII of the CPC is
concerned, the same also has no merit in law. Rule 1(2) of Order XXXVII
of the CPC, while laying down the categories/classes of suits which could be
instituted thereunder, includes "suits in which the plaintiff seeks only to
recover a debt or liquidated demand in money payable by the defendant, with
or without interest, arising on a written contract". It is not in dispute that
there is a written contract between the plaintiff and the defendant in each of
CS(COMM) 982/2016 & CS(COMM) 983/2016 Page 16 of 19
the suits. The next question is, whether the recovery sought in the suits is of
a debt or liquidated demand in money. The plaintiff, under the agreement
with each of the defendant, paid to the defendant advance sale consideration.
Admittedly, the agreements to sell did not fructify. Once an agreement to
sell does not fructify, the seller under the law as laid down above, is liable to
refund to the purchaser the advance sale consideration received. The
agreements to sell do not describe the payments admittedly made by the
plaintiff to each of the defendant as earnest money. However, they do
indeed provide for forfeiture of the monies received. However, for the
defendants as sellers to forfeit, under the law, it is incumbent upon the sellers
to establish loss. I have hereinabove held that the defendants have failed to
establish loss. Once, it is so, the suits would be for recovery of a debt owed
by the defendants to the plaintiff or for recovery of liquidated demand in
money.
35. The Division Bench of this Court in Harbans Lal Vs. Daulat Ram
ILR (2007) I Delhi 706 was concerned with a suit filed for recovery of
double of the earnest money paid under an agreement of purchase of
immoveable property, on the ground of the defendant seller having breached
the agreement. Finding the agreement to sell admittedly entered into
between the parties to contain a clause that in the event of breach by the
seller, the seller will pay twice the earnest money received to the purchaser,
it was held that Order XXXVII of the CPC is attracted inasmuch as the
plaintiff was seeking a decree for recovery of liquidated money payable on a
written contract. Similarly, in Nandan Prasad Gupta Vs. Sunil Gupta 2003
(68) DRJ 315, a suit for recovery of the advance sale consideration paid, on
breach by the defendant of the agreement to sell, was held to be maintainable
CS(COMM) 982/2016 & CS(COMM) 983/2016 Page 17 of 19
under Order XXXVII of the CPC. My research also shows judgments in a
number of other similar suits filed by the plaintiff, all under Order XXXVII
of the CPC but need to refer thereto is not felt. Reference in this regard be
made to Versatile Commotrade Private Limited Vs. Chiranji Lal (2017) 239
DLT 83, Versatile Commotrade Pvt. Ltd. Vs. Adharshila Country Homes
Pvt. Ltd. MANU/DE/3965/2018, Versatile Commotrade Pvt. Ltd. Vs. Satpal
Yadav 2018 SCC OnLine Del 13148 and Versatile Commotrade Pvt. Ltd.
Vs. Angad Developers Pvt. Ltd. MANU/DE/2533/2018.
36. As far as the plea of the defendants, of the remedy of the plaintiff
being to sue for specific performance only is concerned, the same did not
find favour also by the Division Bench of this Court in Harbans Lal supra.
37. The plaintiff is thus found entitled to a decree against the defendant in
each of the suits, for the amount claimed therein.
38. However, as far as the claim of the plaintiff for interest is concerned:
(I) The plaintiff itself has not claimed interest for the pre-suit
period.
(II) The plaintiff has not been diligent in pursuing these suits and
today also is found to be wanting adjournment.
(III) The plaintiff, prior to the notice dated 4th July, 2016 did not
demand refund of the amounts for recovery of which these suits are
filed; without the plaintiff having done so and without the plaintiff
pleading that the defendant, inspite of such demand did not pay, the
plaintiff cannot be entitled to interest.
CS(COMM) 982/2016 & CS(COMM) 983/2016 Page 18 of 19
(IV) The conduct of the plaintiff indeed shows that it is the plaintiff
who is in breach of the agreement to sell; however because the
defendant in each case has not claimed any compensation for loss
suffered by breach, the plaintiff is found entitled to recover the amount
claimed in these suits.
Thus, the plaintiff is not found entitled to any interest pendente lite
and to costs of the suits.
39. The applications for leave to defend being IA No.15264/2017 in
CS(COMM) No.982/2016 and IA No.15267/2017 in CS(COMM)
No.983/2016 are thus dismissed.
40. Resultantly, a decree is passed in favour of the plaintiff and against the
defendant in each of the suits, in the sum of Rs.1,66,87,500/-, without
pendente lite interest and without any costs. The defendant in each of the
suits is granted three months‟ time to pay the decretal amount to the plaintiff,
failing which the decretal amount shall incur interest @ 7% per annum from
the expiry of three months till the date of payment.
No costs.
Decree sheet be drawn up.
RAJIV SAHAI ENDLAW, J.
JANUARY 09, 2019 „bs‟ (Corrected & released on 17th January, 2019) CS(COMM) 982/2016 & CS(COMM) 983/2016 Page 19 of 19