Case: Ramesh Chand  Vs. M/S. Tanmay Developers Pvt. Ltd.

is not mandatory to make a reference to the civil court under Section 30 and adjudication of dispute in an appropriate case can be ordered by way of the civil suit. In the instant case civil suits had already been preferred by respondent No.1. It was not appropriate to decide same dispute under Section 30. 9. In the instant case, there were serious disputed questions as to whether earnest money had been rightly forfeited by the land owners due to the failure of the respondent No. 1 to obtain the sale deeds executed within stipulated time fixed under the agreements, whether respondents were ready and willing to purchase the property and had arrangement of balance consideration for payment to land owner. Whether the power of forfeiture was rightly exercised by the land owners as claimed by them. The Civil Court was already in seisin of the matter as such reference court had rightly rejected the reference made under Section 30 of the Act and rightly asked parties to await outcome of the regular civil suits. 10. The High Court in the impugned judgment has not decided aforesaid objections raised by the appellants/land owners without examining facts and circumstances of the case and due to pendency of civil suits, it was not open to the High Court to order refund of the earnest money.11. A perusal of Section 18 of the Act makes it clear that reference can be sought to a civil court with respect (i) the measurement of the land, (ii) adequacy and quantum of compensation, (iii) persons to whom it is payable and (iv) the apportionment thereof amongst the persons interested. The application under Section 18 is required to be filed within stipulated time whereas no limitation is prescribed under Section 30 of the Act. It is discretionary upon the court to refer a dispute under Section 30 of the Act. The same is confined to the apportionment of the compensation or as to a person to whom the same is payable. The scope of Section 30 of the Act is narrow as compared to Section 18 as laid down in G.H. Grant v. State of Bihar AIR 1966 SC 237 and in Sharda Devi v. State of Bihar, 2003(1) R.C.R.(Civil) 552 : (2003) 3 SCC 128. 12. We need not go into the question whether holder of agreement is "person interested" as defined in Section 3(b) of the Act. As we are satisfied that respondent No. 1 could not have resorted to the remedy of reference for refund of the earnest money as for this very purpose he had filed civil suit earlier in point of time. In the reference petition refund of earnest money had been prayed with interest at the rate of 12 per cent per annum. In civil suit refund had been sought with 18 per cent interest per annum and in one suit specific performance was prayed.13. The High Court has relied upon the decision of this Court in Thiriveedhi Channiah v. Gudipudi Venkata Subba Rao (Dead) by Lrs. & Ors., 2007(2) R.C.R.(Civil) 304 : (2009) 17 SCC 341 , in which the appellant demanded refund of the advance amount on the premise that due to notification under Section 4(1), property could not be sold whereas the plea of forfeiture was advanced by the respondents. This High Court had ignored and overlooked that case arose out of the civil suit in which specific performance of agreement to sale was sought. This Court has found that parties were aware of the notification under Section 4(1) as such right of forfeiture could have been exercised. The facts in the said case were different and the said decision could not have been utilized by the High Court for setting aside the well reasoned award passed by the reference court declining to entertain the prayer made by the respondents, in view of the availing remedy of the civil suits. The High Court should have in fairness reflected that the said decision was rendered by this Court in the context of civil suit. The High Court has referred it in the manner as if it was a case which has been decided under Section 30 of the Act with respect to the apportionment of the compensation.14. The learned counsel on behalf of the respondent has relied upon the decision of Bombay High Court in Mohammad Akil Khan v. Premraj Jawanmal Surana and Anr. AIR 1972 Bom. 217 . The decision is distinguishable as the civil suit had not been filed in the said case. Thus, we need not go into the correctness of the aforesaid decision. Reliance has also been placed on Delhi Development Authority v. Bhola Nath Sharma (Dead) by Lrs. & Ors., 2011(1) R.C.R.(Civil) 820 : 2011(1) Recent Apex Judgments (R.A.J.) 296 : (2011) 2 SCC 54 ; and Sunderlal v. Paramsukhdas & Ors. AIR 1968 SC 366 to contend that definition under Section 3(b) of the "person interested" is "inclusive" definition. Reliance for this purpose has also been placed on U.P. Jal Nigam, Lucknow Through Its Chairman & Anr. v. Kalra Properties (P) Ltd., Lucknow & Ors. (1996) 3 SCC 124 , laying down that a purchaser is entitled to step into the shoes of the owner to claim compensation though could not question the notification for acquisition. In our opinion even if it is held that respondent No.1 was the "person interested" within the meaning of Section 3(b) of the Act its case is not advanced so as to seek adjudication of the questions in the facts of this case in the reference under Section 30 of the Act which remedy was discretionary. The land owners also relied upon Coromandel Indag Products Private Limited v. Garuda Chit and Trading Company Private Limited and Another, 2011(4) R.C.R.(Civil) 677 : (2011) 8 SCC 601 wherein this Court dealt with question when time is essence of the contract and in what circumstances earnest money could be forfeited. This question has to be gone into in civil suits.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]8. It was not rightly disputed that several civil suits with respect to refund of the earnest money and for specific performance of the agreement to sale were filed by the respondent No.1 before reference was sought under Section 30 of the Act. Once remedy in the form of civil suits had been resorted to, in our considered opinion, it was not at all proper exercise of power to invoke provisions under Section 30 of the Act with regard to apportionment of the compensation by directing refund of earnest money. It is not mandatory to make a reference to the civil court under Section 30 and adjudication of dispute in an appropriate case can be ordered by way of the civil suit. In the instant case civil suits had already been preferred by respondent No.1. It was not appropriate to decide same dispute under Section 30.The High Court in the impugned judgment has not decided aforesaid objections raised by the appellants/land owners without examining facts and circumstances of the case and due to pendency of civil suits, it was not open to the High Court to order refund of the earnest money.11. A perusal of Section 18 of the Act makes it clear that reference can be sought to a civil court with respect (i) the measurement of the land, (ii) adequacy and quantum of compensation, (iii) persons to whom it is payable and (iv) the apportionment thereof amongst the persons interested. The application under Section 18 is required to be filed within stipulated time whereas no limitation is prescribed under Section 30 of the Act. It is discretionary upon the court to refer a dispute under Section 30 of the Act. The same is confined to the apportionment of the compensation or as to a person to whom the same is payable. The scope of Section 30 of the Act is narrow as compared to Section 18 as laid down in G.H. Grant v. State of Bihar AIR 1966 SC 237 and in Sharda Devi v. State of Bihar, 2003(1) R.C.R.(Civil) 552 : (2003) 3 SCC 128. 12. We need not go into the question whether holder of agreement is "person interested" as defined in Section 3(b) of the Act. As we are satisfied that respondent No. 1 could not have resorted to the remedy of reference for refund of the earnest money as for this very purpose he had filed civil suit earlier in point of time. In the reference petition refund of earnest money had been prayed with interest at the rate of 12 per cent per annum. In civil suit refund had been sought with 18 per cent interest per annum and in one suit specific performance was prayed.The facts in the said case were different and the said decision could not have been utilized by the High Court for setting aside the well reasoned award passed by the reference court declining to entertain the prayer made by the respondents, in view of the availing remedy of the civil suits. The High Court should have in fairness reflected that the said decision was rendered by this Court in the context of civil suit. The High Court has referred it in the manner as if it was a case which has been decided under Section 30 of the Act with respect to the apportionment of the compensation.