Regular Second Appeal No. 1092 of 2008 -1- IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Regular Second Appeal No. 1092 of 2008 Date of decision : July 19, 2010 Kehar Singh ....Appellant versus Amrik Singh ....Respondent Coram: Hon'ble Mr. Justice L.N. Mittal Present : Ms Ekta Thakur, Advocate, for the appellant Ms. Sonia G. Singh, Advocate, for the respondent L.N. Mittal, J. (Oral) This is second appeal by defendant Kehar Singh who was successful in trial court but has remained unsuccessful in lower appellate court. Amrik Singh respondent filed suit against appellant for specific performance of the agreement to sell dated 20.4.1998 and in the alternative for recovery of Rs 2,60,000/- alleging that the defendant agreed to sell the suit property to the plaintiff vide agreement dated 20.4.1998 for Rs 2,60,000/- and received Rs 50,000/- as earnest money and executed the aforesaid agreement. The plaintiff also paid Rs 15,000/- to the defendant later on. Sale deed was to be executed on or before 20.10.1998. On the Regular Second Appeal No. 1092 of 2008 -2- said date, the plaintiff went to the office of the Sub Registrar as well as to the house of the defendant with balance sale consideration and asked the defendant to give original documents of suit property and to deliver 'no objection certificate' (NOC) from the revenue authorities or other concerned competent authorities but the defendant put off the matter. When the defendant failed to prove his ownership over the suit property, the plaintiff demanded back his earnest money but the defendant did not perform his part of the agreement. The defendant cheated the plaintiff knowing that the defendant was not owner of the suit land. The plaintiff later on learnt that one Narinder Kapoor was owner of the suit property and was in possession thereof. The defendant's stand is that he received Rs 40,000/- only as earnest money instead of Rs 50,000/-. He also did not receive further amount of Rs 15,000/- from the plaintiff. The defendant went to the office of Sub Registrar on 20.10.1998 to execute the sale deed as per agreement but the plaintiff did not turn up as he did not have requisite money to get the sale deed executed. Defendant always remained ready and willing to perform his part of the contract but the plaintiff committed breach thereof. Accordingly, as per terms and conditions of the agreement, the earnest money stood forfeited. It was also pleaded that defendant was owner of the suit property and Narinder Kapoor has nothing to do therewith. Various other pleas were also raised. Learned Civil Judge (Junior Division), Chandigarh vide judgment and decree dated 31.5.2006 dismissed plaintiff's suit. However, first appeal preferred by the plaintiff has been partly allowed by learned Regular Second Appeal No. 1092 of 2008 -3- Additional District Judge, Chandigarh vide judgment and decree dated 15.1.2008 and thereby plaintiff's suit has been decreed for recovery of Rs 50,000/- with interest thereon at various rates for different periods. Feeling aggrieved, the defendant has preferred the instant second appeal. I have heard learned counsel for the parties and perused the case file. Following substantial question of law arises for determination in the instant second appeal:- “Whether finding of the lower appellate court that plaintiff is entitled to recovery of Rs 50,000/- from the defendant is legally sustainable ?” Learned counsel for the appellant contended that the appellant- defendant always remained ready and willing to perform his part of the contract and the plaintiff-respondent himself committed breach thereof and consequently earnest money paid by the plaintiff to the defendant stood forfeited and decree for recovery thereof passed by lower appellate court is illegal and unsustainable. On the other hand, learned counsel for the plaintiff-respondent contended that the plaintiff went to the office of Sub Registrar to get the sale deed executed as per agreement, but the defendant did not have documents of title and therefore, the sale deed could not be executed. It was accordingly contended that the lower appellate court has rightly ordered refund of earnest money of Rs 50,000/- paid by the plaintiff to the defendant at the time of agreement. I have carefully considered the aforesaid contentions. The plaintiff's case is self contradictory. The plaintiff has Regular Second Appeal No. 1092 of 2008 -4- pleaded that on 20.10.1998, he had gone to the office of Sub Registrar to get the sale deed executed, but the defendant did not have documents of title relating to the suit property and did not prove his ownership even till filing of suit and therefore, the plaintiff demanded back the earnest money paid by him to the defendant. However, in spite of this plea, the plaintiff sought the relief of specific performance of the agreement to sell by also pleading that the plaintiff always ready and willing to perform his part of the contract. If defendant was not owner of the suit property and if one Narinder Kapoor was owner thereof as pleaded in the plaint, it is not explained as to why the plaintiff still sought relief of specific performance of the agreement. Here it may be noticed that according to the agreement, possession of the suit property was delivered to the plaintiff at the time of agreement, but in the plaint, the plaintiff still pleaded that Narinder Kapoor is not only owner but is also in possession of the suit property. Thus, plaintiff's version is completely un-reliable. It is also significant to notice that there is no cogent evidence to depict that the plaintiff went to the office of Sub Registrar on 20.10.1998, the date fixed in the agreement for execution of sale deed. On the other hand, the defendant got issued notice dated 21.10.1998, Ex. P2 through his counsel to the plaintiff stating therein that the defendant had gone to the office of Sub Registrar on 20.10.1998 to execute the sale deed as per agreement and waited for the plaintiff throughout the day, but the plaintiff did not turn up and therefore, the earnest money paid by the plaintiff stood forfeited. The plaintiff did not send any reply to this notice. It would mean that the plaintiff accepted the assertion made in the notice because Regular Second Appeal No. 1092 of 2008 -5- otherwise the plaintiff would have repudiated the contents of the notice by sending reply thereof. In addition to it, the plaintiff remained silent for three years and filed the suit on 20.10.2001, the last date of period of limitation. Till then, for three years, the plaintiff never alleged that he could not get the sale deed executed because the defendant failed to prove his title over the suit property. The plaintiff did not give any such notice to the defendant requiring him to prove his title over the suit property. For the first time in the plaint, the plaintiff pleaded that the defendant did not prove his title over the suit property. Had this been the reason for not getting the sale deed executed, the plaintiff immediately after 20.10.1998 would have served notice on the defendant requiring him to do the needful. However, no such notice was ever served. The plaintiff for the first time took this plea in the plaint and therefore, it is apparent that the plaintiff for no good reason was not ready to get the sale deed executed as per terms of the contract and thus, the plaintiff committed intentional breach of the agreement. This fact becomes more conspicuous and manifest in view of notice dated 21.10.1998 Ex. P2 served on behalf of defendant on the plaintiff. Terms of the agreement provide that in case of breach of contract by the plaintiff, his earnest money shall stand forfeited. It is correct that in case of sale of immovable property, time may not be essence of the contract. However, in the instant case, the plaintiff committed intentional breach of the contract by not getting sale deed executed for three years till filing of the suit. Consequently, earnest money paid by the plaintiff to the defendant stood forfeited. Here it may be added that the earnest money Regular Second Appeal No. 1092 of 2008 -6- paid was Rs 50,000/- and not Rs 40,000/- as pleaded in the written statement. This fact is evident from the agreement as well as from the receipt on the back of the agreement and also from the assertion of the defendant in his notice dated 21.10.1998 Ex. P2. However, said earnest money stood forfeited as mentioned in notice dated 21.10.1998, Ex. P2. It was not assailed by the plaintiff in any manner. In fact, the plaintiff remained silent for three years after service of the said notice and after expiry of date of sale deed stipulated in the agreement. In view of aforesaid discussion, I find that the finding of the lower appellate court that defendant is liable to return the earnest money of Rs 50,000/- to the plaintiff is perverse and illegal and therefore, not sustainable in law. Substantial question of law framed herein above is accordingly answered in favour of the defendant-appellant and against the plaintiff-respondent. As a necessary upshot of aforesaid discussion, the instant appeal is allowed and judgment and decree dated 15.1.2008 passed by the lower appellate court are set aside and judgment and decree dated 31.5.2006 passed by the trial court thereby dismissing the suit of the plaintiff- respondent are restored. However, parties are left to suffer their respective costs throughout. ( L.N. Mittal ) July 19, 2010 Judge 'dalbir'