Rajender Kumar Verma Son Of Late Sh. ... vs Miran Kumar Bose Son Of Sh. A.K. Bose R/O: ... on 28 April, 2026

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Delhi High Court - Orders

Rajender Kumar Verma Son Of Late Sh. ... vs Miran Kumar Bose Son Of Sh. A.K. Bose R/O: ... on 28 April, 2026

1. An Appeal under Section 96 read with Order XLI Rule 1 CPC has been filed on behalf of the Appellant against the Judgment and Decree dated 30.01.2024, whereby the learned ADJ dismissed the suit of the Plaintiff for Specific Performance of the Agreement to Sell dated 05.03.2019, and for Permanent Injunction.

2. The facts in brief, as per the Appellant, are that the Plaintiff/Appellant was inducted as a tenant in the property bearing No. 128, First Floor, Pocket 12, Sector-20, Rohini, Delhi (hereinafter referred to as the "Suit Property") by Sh. Miran Kumar Bose (Defendant/Respondent) at a monthly rent of Rs. 4,500/-. The rent was regularly paid till the year 2017.

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/05/2026 at 20:56:07 Thereafter, Sh. Miran Kumar Bose proposed to sell the property for a sum of Rs. 15,51,500/-. Both the parties entered into an oral Agreement dated 14.01.2018. The Plaintiff paid Rs. 2,51,000/- in cash and Rs. 51,500/- by way of cheque, as advance/bayana. The remaining amount of Rs. 13,00,000/- was to be paid at the time of execution of the Sale Deed, which was agreed to be executed on or before 31.08.2018. The relationship of landlord and tenant, therefore, came to an end, and no rent was paid from February, 2018.

3. Shri Rajender Kumar Verma arranged the balance amount of Rs. 13,00,000/- and requested the Defendant to execute the Sale Deed, but he kept on making excuses. Finally, on 14.01.2019, the Plaintiff issued a notice for execution of the Sale Deed, upon receiving the balance amount. The Defendant/Respondent tendered an unconditional apology, and after thorough discussion, a written Agreement to Sell dated 05.03.2019 was executed, and the Plaintiff paid a further sum of Rs. 2,00,000/- by way of cheque. Despite that, the Defendant kept on making excuses; he thereafter issued a letter dated 20.05.2019, cancelling the Agreement to Sell.

4. The Plaintiff, thereafter, issued a Notice dated 20.05.2019 seeking execution of the Sale Deed, upon payment of the balance consideration. The Defendant failed to execute the Sale Deed.

5. The Plaintiff filed the present Suit for Specific Performance or, in the alternative, to direct the Defendant/Respondent to pay an amount equivalent to the market value of the property. A Permanent Injunction was also sought against the Defendant from creating third party rights in the Suit Property.

6. The Defendant in his Written Statement, denied having entered into any oral agreement, but accepted the execution of the written Agreement to This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/05/2026 at 20:56:07 Sell dated 05.03.2019. He claimed that the total sale consideration was Rs. 15,00,000/- and that he received Rs. 2,00,000/-, as earnest money. He further claimed that the Plaintiff did not pay the balance amount by 15.04.2019, which was the last date for execution of the Sale Deed. Therefore, the Sale Deed could not be executed. He admitted that a sum of Rs. 51,500/- was paid to him, but claimed the same to be on account of rent.

7. The Issues on the pleadings were framed on 28.01.2021 as under:

(i.) Whether plaintiff did not perform his part under the contract dated 05.03.2019 and did not make payment as agreed between the parties? OPD

(ii) Whether the plaintiff has made payment to the defendant under the agreement dated 05.03.2019 as stated in the plaint? OPP

(iii) Whether the plaintiff is entitled to decree of specific performance as prayed? OPP

(iv) Whether the plaintiff is entitled to the alternate relief of decree directing the defendant to pay amount equivalent to the market value of the property? OPP

(v) Whether the plaintiff is entitled for decree of permanent injunction, as prayed? OPP

(vi) Relief.

8. The Plaintiff examined himself as PW1 and reiterated his claim as stated in the Plaint.

9. The Defendant appeared as DW1 and took a stand as narrated in the Written Statement.

10. The learned Additional District Judge, on appreciation of the evidence, concluded that the Plaintiff had failed to establish his readiness and willingness to perform the Agreement to Sell and, consequently, dismissed the Suit of the Plaintiff.

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/05/2026 at 20:56:07

11. Aggrieved by the said Order, the present Regular First Appeal has been filed by the Appellant/Plaintiff.

12. The impugned Judgment has been challenged on the ground that the Judgment and Decree have been passed on erroneous assumptions, non- application of mind to the facts and circumstances, and the law applicable thereto. The Plaintiff had clearly and unambiguously proved the documents and also his case through oral testimony, regarding the execution of the oral Agreement to Sell dated 14.01.2018 between the parties. These facts have not been appreciated in the correct perspective.

13. The Plaintiff had specifically suggested to the Defendant in cross- examination, that a sum of Rs. 4,51,000/- had been paid to the Defendant in parts. Furthermore, the Defendant specifically admitted in his cross- examination that there was no dispute with respect to tenancy and that the parties had a cordial relationship.

14. The Legal Notice dated 14.01.2019 sent by the Plaintiff has not been considered, even though it was not challenged in cross-examination.

15. As per the terms of the Agreement to Sell, the Plaintiff had a right to seek specific performance of the Agreement to Sell in case the Defendant failed to perform his part thereof. The impugned Judgment therefore, be set aside and the suit of the Plaintiff be decreed.

16. Learned counsel for the Respondent has appeared on advance notice and has contested the Appeal by claiming that, in fact, he had filed a Suit for Possession and Recovery of arrears of rent, which has been decreed against the Plaintiff. There was no oral agreement ever executed between the parties, as has been rightly held by the learned Additional District Judge.

17. Moreover, there is not an iota of evidence in regard to the readiness This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/05/2026 at 20:56:07 and willingness of the Plaintiff/Appellant. No evidence whatsoever has been led to show that he had sufficient funds for the execution of the Agreement to Sell. It is admitted that Rs. 2,00,000/- had been paid by the Plaintiff by way of earnest money, but it is claimed that, since the Plaintiff failed to perform his part of the Agreement to Sell, the said amount stands forfeited in terms of the Agreement to Sell.

Submissions heard and record perused.

18. The Plaintiff/Appellant had sought specific performance of an Agreement to Sell dated 05.03.2019. It is not in dispute that the Plaintiff/Appellant had been inducted as a tenant in the Suit Property in the year 2012 @ Rs. 4,500/- per month, excluding water and electricity charges, and had been regularly paying the rent till 2017.

Whether the Parties entered into Oral Agreement to Sell dated 14.01.2018:

19. According to the Plaintiff, the Defendant was in financial difficulty and, in the month of December 2017, proposed to sell the Suit Property under the tenancy of the Plaintiff to him. Consequently, the parties entered into an oral Agreement to Sell dated 14.01.2018 for a total sale consideration of Rs. 15,51,500/-. The Plaintiff asserted that he made a cash payment of Rs. 2,00,000/- towards the earnest money on 16.01.2018, though no receipt was executed on account of the long and cordial relationship between the parties. On 15.02.2018, a further payment of Rs. 51,500/- was made through cheque towards the remaining earnest money.

20. Though the Plaintiff had asserted that the parties had entered into an oral agreement to sell, but there is no cogent evidence, in this regard. To corroborate his claim, he asserted that he had paid Rs. 2,00,000/- on 16.01.2018 pursuant to the oral Agreement to Sell between the parties, but This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/05/2026 at 20:56:07 admittedly there is no proof by way of any document or other evidence. The appellant was unable to prove the Oral Agreement to Sell, as has been rightly held by the ld. Trial court.

21. The most significant document in this regard, is the Agreement to Sell dated 05.03.2019, which was admittedly executed between the parties. It has been clearly recorded therein, that a bayana of Rs. 2,00,000/- has been received, which was admittedly paid by the Plaintiff at the time of signing of the formal Agreement to Sell on 05.03.2019.

22. There is no mention whatsoever of the earlier cash payment of Rs. 2,00,000/- in the Agreement to Sell. Admittedly, the Plaintiff himself has claimed that he had a cordial relationship with the Defendant/Respondent till 2019, at the time when they entered into the Agreement to Sell. If that was the case, there was no reason whatsoever for not mentioning about earlier Oral Agreement and payment of Rs. 2,00,000/- in cash, allegedly in 2018. Clearly, there is neither any proof nor any corroboration of the oral Agreement to sell, from the subsequent Agreement to Sell dated 05.03.2019, which was admittedly executed between the parties.

23. The Plaintiff has neither been able to prove that there was any oral Agreement to Sell entered into between the parties in January 2018, nor that he had made any cash payment of Rs. 2,00,000/- in 2018, as bayana under that oral Agreement. Whatever are the rights and liabilities of the parties, they stand crystallized in the Agreement to Sell dated 05.03.2019. Whether the Appellant is entitled to Specific Performance of Agreement to Sell dated 05.03.2019:

24. Having concluded that the parties had entered into an Agreement to Sell on 05.03.2019, under which the bayana in the sum of Rs. 2,00,000/- had This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/05/2026 at 20:56:07 been paid by the Plaintiff, the next pertinent question for consideration is whether the Plaintiff was ready and willing to perform his part of the Agreement and pay the balance sale consideration of Rs. 13,00,000/-. The dispute inter se the parties commenced when the Respondent served a Legal Notice dated 20.05.2019, wherein he raised a dispute regarding replacement of the water tank, terminated the tenancy of the Appellant, and asked him to vacate the premises by 31.05.2019.

25. The Plaintiff, in order to show his readiness and willingness, has made a reference to his legal notice dated 28.05.2019, whereby he referred to the oral Agreement to Sell dated 14.01.2018 and the payment of Rs. 2,00,000/- in cash as earnest money, as well as to the formal Agreement to Sell executed in March 2019, under which the Sale Deed was to be executed in his favour.

26. The Plaintiff, in his notice dated 28.05.2019, also challenged the Notice of the Respondent dated 20.05.2019 asking him to vacate the Suit Property and stated that the said notice was mala fide. He further mentioned in paragraph 13 of his Legal Notice: "that in the premises of the facts stated herein above it is clear that you, the addressee, have turned dishonest and do not have the intention to execute the necessary documents in favour of the Plaintiff after receiving the balance consideration amount, despite the fact that the Plaintiff has many times communicated to you that the consideration amount is ready to be paid immediately upon execution of the documents."

27. Aside from this claim of the Appellant, there is not a single averment in the Plaint or in the evidence from which it can be inferred that he was ready and willing to perform his part of the Agreement This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/05/2026 at 20:56:07

28. It is well settled that "readiness" and "willingness" are distinct requirements in a suit for specific performance.

29. In J.P. Builders v. A. Ramdas Rao, (2011) 1 SCC 429, held that readiness relates to the financial capacity of the Plaintiff, while willingness is to be inferred from his conduct. These elements are not interchangeable, and the Plaintiff must establish continuous readiness and willingness from the date of the contract till adjudication through cogent evidence, failing which the relief of specific performance is liable to be declined.

30. In N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao, (1995) 5 SCC 115 the Hon'ble Supreme Court held that continuous readiness and willingness on the part of the Plaintiff is a condition precedent for grant of Specific Performance, and the same must be established with reference to his conduct prior and subsequent to the filing of the Suit, as well as the attending circumstances. It was further held that the Plaintiff must demonstrate the availability of funds to perform his part of the contract from the date of execution till the date of decree.

31. Similarly, this position has been reiterated in U.N. Krishnamurthy (Since Deceased) v. A.M. Krishnamurthy, 2022 INSC 714 wherein it was observed that the Plaintiff must not only make the requisite averments but also adduce evidence to establish that he had sufficient funds or was in a position to arrange the same within time to discharge his contractual obligations. Failure to establish such continuous readiness and willingness is fatal to the claim for Specific Performance.

32. The evidence of the Plaintiff, even if admitted as gospel truth, is not sufficient to reflect that he had the willingness to perform his part of the Agreement to Sell. The only evidence led by the Plaintiff is the service of a This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/05/2026 at 20:56:07 Notice dated 14.01.2019 calling upon the Defendant to execute the Sale Deed. The Agreement to Sell was to be executed on or before 31.08.2018, whereas the said Notice was issued on 14.01.2019. While it may be considered that time is not of the essence in an Agreement to Sell unless the circumstances otherwise indicate, the fact that the Plaintiff remained silent from August 2018 till January 2019, without taking any steps to approach the Defendant for execution of the Sale Deed, indicates that he was not willing to perform his part of the contract.

33. Apart from willingness, it was also necessary for the Plaintiff to establish his readiness to perform the Agreement.

34. As discussed above, readiness means his financial capacity to pay the balance sum of Rs.13 lakhs. The Plaintiff was unable to explain in his entire pleadings or in the evidence about he having the balance amount of Rs.13 lakhs available with him for the execution of the Sale Deed.

35. The evidence led by the Plaintiff, even if taken at its highest, does not establish his readiness and willingness to perform the Agreement to Sell dated 05.03.2019. The Legal Notice, Ex. PW-1/1 dated 14.01.2019, is premised on an alleged oral agreement and merely sets out the Plaintiff's claim, without indicating any steps taken towards execution of the Sale Deed.

36. The subsequent Legal Notice dated 28.05.2019, Ex. PW-1/3, though referring to the Agreement to Sell dated 05.03.2019, contains only a bald assertion that the Plaintiff was ready with the balance consideration, without any supporting material. These documents do not evidence any concrete steps towards completion of the transaction or the Plaintiff's financial capacity to pay the balance consideration. The evidence, thus, falls short of This is a digitally signed order.

37. During the course of arguments, it was revealed that a dispute had arisen between the parties with regard to the payment of the cash component, which was the reason why the Agreement to Sell could not be concluded.

38. The learned Additional District Judge has rightly held that the Plaintiff/Appellant was unable to prove his readiness and willingness, which is an essential ingredient for success in a suit for specific performance of an Agreement to Sell. It has been further rightly held that the Plaintiff/Appellant was not entitled to the relief of specific performance of the Agreement to Sell.

39. However, in the alternative, the Plaintiff had sought refund of his earnest money allegedly paid under the Agreement to Sell. While the Plaintiff/Appellant claimed that he had paid Rs. 2,00,000/- in cash in January 2018 pursuant to an oral Agreement to Sell dated 14.01.2018, there is no evidence either of such oral Agreement to Sell or of the payment of Rs. 2,00,000/-. Therefore, the Plaintiff cannot claim its refund.

40. Admittedly, the Plaintiff had paid Rs. 51,500/- to the Respondent through cheque. however, it has been explained by the Respondent that the said amount was adjusted towards rent and was not paid under the Agreement to Sell. It is not in dispute that the Appellant, though in possession, has not been paying any rent since February 2018, and therefore, the claim of the Respondent that the said amount stood adjusted towards rent cannot be faulted.

Whether Appellant is entitled to refund of Rs. 2,00,000/-:

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/05/2026 at 20:56:07

41. However, it is an admitted fact that Rs. 2,00,000/- had been paid by the Plaintiff/Appellant under the Agreement to Sell as bayana. The question that arises is, whether he is entitled to refund of the said amount.

42. It is significant to refer to the terms and conditions in the Agreement to Sell in respect of the earnest money amount, which are reproduced as under-:

"Clause 1: that the first party has received Rs.2,00,000/- (Rupees Two Lakh only) as a earnest money/biana and the balance amount will be received at the time of final executions of the sale deed/documents before the Sub-Registrar, Delhi/New Delhi.

Clause 5: that if the second party fails to pay the balance amount within the period then his earnest money shall be forfeited and this Agreement shall stand cancelled."

43. The forfeiture of earnest money (bayana) is governed by Section 74 of the Indian Contract Act, 1872, which mandates that even where a contract provides for forfeiture, only reasonable compensation can be retained, and such forfeiture cannot operate as a penalty. The Court is required to examine whether the amount sought to be forfeited bears a reasonable nexus with the loss suffered, and in the absence of proof of loss, forfeiture cannot be sustained.

44. In K.R. Suresh v. R. Poornima, 2025 INSC 617 the Hon'ble Supreme Court has reiterated that the forfeiture of an amount paid under an Agreement to Sell can be sustained only where such amount is in the nature of earnest money, intended to secure the performance of the contract. It was emphasised that where the amount is merely a part-payment or advance This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/05/2026 at 20:56:07 towards the sale consideration, its forfeiture would be subject to strict scrutiny under Section 74 of the Indian Contract Act, 1872.

45. Thus, the legal position that emerges is that forfeiture of a sum paid under a contract is justified only when:

                                     i.     "the amount constitutes earnest money in the
                                            true sense; and
                                   ii.      such forfeiture is supported by a demonstrable
                                            loss or bears a reasonable nexus thereto. In the
                                            absence of these conditions, forfeiture would
                                            assume the character of a penalty and cannot
                                            be sustained in law."

46. In the present case, applying the aforesaid principles, the Agreement to Sell dated 05.03.2019 was to be executed by 15.04.2019. Thereafter, the Respondent served a Notice dated 20.05.2019 terminating the tenancy without any reference to the Agreement to Sell. It is an admitted fact that the Agreement to Sell, did not materialise.

47. While the Plaintiff has failed to establish his readiness and willingness to perform his part of the contract, the conduct of the Respondent also does not indicate that he afforded a reasonable opportunity to the Appellant to pay the balance consideration and proceed with the execution of the Sale Deed. There is also no material to indicate that the Respondent suffered any loss, warranting forfeiture of the said amount

48. From the terminology of the payment of the bayana and the forfeiture clause, it is evident that the amount of Rs. 2,00,000/- was in the nature of advance money, rather than a security for performance of the Agreement to Sell.

49. In these circumstances, and in the absence of any material to justify This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/05/2026 at 20:56:07 forfeiture, the Plaintiff/Appellant is held entitled, in equity, to refund of the said amount paid under the Agreement to Sell dated 05.03.2019.

50. Notably, the Counsel for respondent also conceded to return of the earnest/advance money. Accordingly, the impugned Judgment dated 30.01.2024 is modified to the extent that, while the dismissal of the suit for specific performance is upheld, the Respondent is directed to refund Rs. 2,00,000/- along with interest @ 6% per annum from 05.03.2019, till the date of payment.

51. The Appeal along with pending application, if any, is, therefore, allowed partly; while the dismissal of suit for Specific performance is upheld, but the Suit is decreed for refund Rs. 2,00,000/- along with interest @ 6% per annum from 05.03.2019, till the date of payment. The Appeal is partly allowed.

52. Pending Applications are disposed of, accordingly.

NEENA BANSAL KRISHNA, J.

APRIL 28, 2026/va/RS This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/05/2026 at 20:56:07

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