Prakash Vs. Dlf Universal Ltd  Insc 865 (24 November 2006)
Sinha & Dalveer Bhandari
CIVIL APPEAL NO. 5179 OF 2006 [Arising out of SLP (C) No. 26795 of 2004] CIVIL
APPEAL NO.5180 OF 2006 [Arising out of SLP (C) No. 3788 of 2005] S.B. SINHA, J
granted in the SLPs.
of jurisdiction of the Monopolies and Restrictive Trade Practices Commission
(for short "the Commission") is the question involved in these
appeals, although they arose under different fact situations.
notice the fact involved in both the appeals separately.
Civil Appeal arising out of SLP (C) No. 26795 of 2004, Sunil Gulati, Respondent
herein entered into an agreement with Respondent No. 1 (DLF) for purchasing a
flat in a building known as Windsor Court, DLF City, Gurgaon and made payment
of a sum equivalent to 10% of the agreed price as earnest money at the first
instance. The balance payment was to be made in instalments. Clause 17 of the
Agreement entitled the allottee to cancel the allotment at any time and take
refund of the amount paid by him without interest, but the earnest money was
liable to be forfeited in the following terms:
In case the allotment is got cancelled by the Allottee himself, he shall be
entitled to the refund of the amount paid by him, after deducting the earnest
money, but without payment of any interest on the balance amount, paid by
him." Clause 8 of the said Agreement reads as under:
That the time of payment of installments as stated in schedule of payments
(Annexure II) and applicable stamp duty, registration fee, maintenance charges
and other charges payable under this agreement as and when demanded is the
essence of this Agreement. It shall be incumbent on the Apartment Allottee to
comply with the terms of payment and/ or other terms and conditions of sale,
failing which he shall forfeit to the Company the entire amount of earnest
money and the Agreement of sale shall stand cancelled and the Apartment Allottee
shall have no right, title, interest or claim of whatsoever nature on the said
premises. The company shall thereafter be free to resell and deal with the said
premises in any manner, whatsoever, at its sole discretion. The amount(s), if
any paid over and above the earnest money shall however be refunded to the
Apartment Allottee by the Company without any interest or any compensation of
whatsoever nature." Respondent paid some instalments but allegedly was
unable to pay the same from the month of June, 1996. One of his cheques bounced
which fact was intimated to him by Appellant by a letter dated 7th January, 1998.
entered into an Apartment Buyers Agreement on 8.4.1996. At his request a 2 and
= year payment plan was converted into a 7 year payment plan in May, 1996.
Respondent did not pay the instalment in due time wherefor allegedly reminders
demand letter was also sent to him. Respondent on or about 3.8.1998 showed his
inability to make any payment and informed Appellant that he was in desparate
need of funds so as enable him to make a new beginning in India, requested
Appellant to promptly make payment of the amount with interest at the rate of
24% per annum. A reminder was sent by him on 10th September, 1998. On 3.11.1998, he suggested that he may be allotted
some other smaller property. The said letter reads as under:
Chairman, DLF Universal Limited New Delhi.
Sir, Re: SO8B Windsor
Court I am writing
this letter with the hope that due regard and consideration will be extended to
me by your goodselves.
working in Bangkok and due to the Asian fallout I have
lost my job and I am back home trying to settle my family and myself. I have
been paying my instalments against the above stated property, but now due to my
present circumstances, I will not be able to pay any further instalments. Till
date I have already paid a sum of Rs. 24,96,685/- towards the said property.
I do not have a house, my immediate need is to settle down my family. I have
been talking to your sales people and they have suggested me to look for some
other smaller property where I could swap the amount paid against the new
getting a list of the limited available options, I have chosen property No.
L19/97 in Phase II (a town house unit) for which an application form has
already been handed over by me to your sales department. The cost of the
property is Rs. 24,85,428/- plus Rs. 2,60,000/- towards registration.
figure works out as under:
amount paid: Rs. 24,96,685/- + parking charges Cost of townhouse: Rs.
23,45,428/- The amount suits my budget and the balance amount should be
refunded to me so that I can get the interiors done and settle down my family.
been told that the earnest money of Rs. 602,221/- will not be adjusted against
the new property and will be forfeited. Since I am swapping from one property
to another I don't see why this amount would not be adjusted against the cost
of the townhouse, this townhouse is a backside unit and is lying unsold since
it was constructed. The drawback of a backside unit is evident by itself. To
add to this, my dream of property an 'A' class unit in Windsor Court is not coming true as I am now
settling down for a lesser grade property. If I am told that my earnest money
will be forfeited, inspite of the fact that I am swapping from one property to
another, I will not be able to pay any further difference and in that case
would request you to refund my money of Rs. 18,94,464/- immediately so that I
can go somewhere else and buy a house and settle my family.
always believed in the name DLF and inspite of my present financial situation I
would still like to be a part of your colony. The rest depends on your goodselves
I hope that my earnest money will not be forfeited but adjusted in this new
property as it is a case of swapping.
for a favourable consideration. With due regards, Sd/- SUNIL GULATI Nov. 3,
1998" Respondent through his advocate by a notice dated 26th March, 1999
called upon Appellant to pay the entire amount i.e., Rs. 25,83,625/- along with
interest at the rate of 24% as also damages.
Appellant did not accede to his request, he filed an application before the
Commission purported to be under Section 12-B of the Monopolies and Restrictive
Trade Practices Act, 1969 (for short "the Act") contending:
Applicant desired to swap the amount paid for this property against another
property which was less expensive. The Applicant indicated his choice of
property in this letter and requested the Respondent to adjust the amount paid
in installments by the Applicant towards the cost of the new property. In the
alternative the Respondent was asked to refund the money of the Applicant at
the earliest. Thereafter the Applicant visited the office of the Respondent and
inquired about the possible options now that it was decided that the Applicant
was not proceeding with the purchase of this property. The Applicant was told
by the Respondent to go in for a corporate discount scheme and then adjust the
moneys already paid by him against a new property which the Respondent would
help him identify. Thereafter on many occasions the Applicant went to the
office of the Respondent but was denied any sort of change in the situation. In
fact on 28.08.98 the Applicant sent a fax and letter to the respondents from McCreade
Software (Asia) Pvt. Ltd. to clarify that the
applicant was working for them as a SAP Consultant. The respondent replied to
this letter by their letter dated 12.12.98 that they had not received any
intimation from the applicant on the subject of swapping and so were closing
that option." The application filed by Respondent herein was allowed by
the Commission on arriving at the following findings:
Respondents did not reciprocate and took no steps to refund the amount even
consequent to the terms of the agreement by retaining the earnest money and
making the necessary payment to which the Applicants were entitled in law. The
Applicants sent a legal notice through their Counsel dated March 26, 1999 which also had no effect and the
Respondent continued to withhold the amount which was allegedly and validly due
to the Applicants even according to the terms of the agreement. These facts
illustrate that the Respondent was clearly guilty of unfair and restrictive
trade practices causing immense damage to the Applicants. In this background,
it is neither understood nor appreciated in what context the Respondent has
made lengthy legal submissions taking shelter of the law which will not apply
to the facts and circumstances of the present case. It is unfortunate that the
Respondent only treated cancellation from 26th February, 2004 and claimed
recovery from the Applicants for a sum of Rs. 33,21,290/-. This is a
preposterous claim and cannot be given any credence. In this background we feel
that even the forfeiture of earnest money by the Respondent cannot be justified
as immense delay in the refund of the amount requested by the Applicants as far
back as in 1998 was without any just and bonafide reason and is clearly an
arbitrary and discriminatory exercise of power which does not vest in the
Respondent. The gross delay in return of the money even in terms of the
agreement by the Respondent is an unfair trade practice within the meaning of
Section 36-A as well as restrictive trade practice within the meaning of
Section 2(o) and the Compensation Application filed by the Applicants is
maintainable and the Applicants are entitled for the relief as prayed for. The
Respondent has also not proved any loss which may have occurred by the action
of the Applicants to justify retention of alleged earnest money.
7 of the agreement may also be referred to reiterate that the Respondent is not
entitled to retain the earnest money in the facts and circumstances of the
case. Furthermore the law is well settled that the party to a contract taking
security deposit from the other party to ensure due performance of the contract
is not entitled to forfeit the deposit on ground of default when no loss is
caused to it in consequence of such default." Appellant was directed to
refund the entire amount together with the interest at the rate of 12% per
annum from the date of filing of the Compensation Application till the date of
Anil B. Divan, learned senior counsel appearing on behalf of Appellant
principally raised three contentions:
The Commission had no jurisdiction to entertain the application as no case of
indulgence in unfair trade practices or restrictive trade practices was made
Respondent did not prove as to how he suffered any damage by reason of any action
on the part of Appellant.
In any event, in terms of Clause 17 of the Agreement, refund could be directed
to be made only after deduction of earnest money.
O.P. Dua, learned counsel appearing on behalf of Respondent, on the other hand,
would submit that Appellant in the instant case has accepted that a sum of more
than Rs. 25 lakhs was paid. The only contention raised by Appellant, it was
pointed out, was that such refund of the amount would be subject to deduction
of the earnest money. It was contended that Appellant had been constructing
flats. It had been promoting sale of apartments including promotion of the
services which would come within the purview of the provisions of the said Act.
fact involving Civil Appeal No. 7960 of 2004 is as under:
3.6.1995, Appellant made an application to DLF for sale of an apartment and a
parking space for a total consideration of Rs. 54,37,664 and paid Rs. 5.48 lakhs
as earnest money. In the application form, it was stated that the possession
would be given in 4 years. Under clause 9 of the application form, it was
stated that the existing fire fighting safety code/ regulations were already
covered and extra fire-fighting charges would be levied if further measures are
required to be taken due to additional requirements imposed by the authorities.
It was also stipulated that DLF would send the buyer an Apartment Buyers'
Agreement which the buyer would have to sign.
8.8.1998, DLF sent Appellant an unsigned Apartment Buyers' Agreement for his
signatures thereupon. In this Agreement, DLF unilaterally altered the time
period for handing over the possession. It extended the time period by a grace
period of 90 days in terms of clause 15 of the application form. It also added
several other exclusion clauses on various grounds and limited their liability
for delay. However, Appellant signed the Agreement and returned it to DLF.
31.10.1995, DLF sent the Agreement signed by it at a future date, i.e.,
6.11.1995. It had subsequently taken this date, i.e., 6.11.1995 as the base
date for computing the compensation payable by it for delay. On the other hand,
it purported to have counted delay on Appellant's part with reference to the
date of application and, thus, it had burdened Appellant with interest for such
prior period also. However, the said period is not a long one.
contended that Respondent had taken an advantage of eight months for which no
compensation had been paid to anyone. Even at the rate it had offered
compensation, this could have come to Rs. 120,000 for Appellant's flat. Since
there were 134 flats in Windsor
Court, DLF had gained
well over Rs. 1.5 crores.
letter dated 14.10.1999 issued by DLF, it was stated that the apartment would
be completed by January, 2000. It demanded an additional amount of Rs. 2,08,099.22
50,943.33 towards additional fire-fighting equipment.
59,767.53 towards increase in area of 3.026 sq. mts.
97,388.76 towards DG sets to provide about 7 to 10 KW per apartment.
further stated in the aforesaid letter:
are in the process of submitting these figures for independent auditing and we
wish to assure you that if during the process of audit any reduction is
effected, the same shall be credited to your account".
it allegedly never gave any accounts despite repeated requests. Appellant paid
29.5.2000, Appellant requested DLF for the audited statement of accounts. DLF
in its letter dated 9.6.2000 stated that the audit was not complete and it
would inform him thereabout as and when the same is completed. It has not
supplied audited accounts. However, it has only offered to show Appellant the
accounts in its office when they become available.
25.7.2000, Appellant asked DLF for a statement of accounts which was denied by
about 31,7.2000, DLF asked Appellant to furnish an undertaking in the following
11 ".Further, I hereby agree not to raise any claim or dispute on any
account whatsoever." Clause 16 "That I/We undertake not to approach
HSEB for individual electric connection to the Apartment in view of the Power
Back up being provided by the Company." Appellant objected to the said
terms of undertakings and on 5.8.2000 offered to submit the same without the
objectionable clauses. DLF gave no reply thereto.
be mentioned that as of this date Appellant had paid all principal amounts.
There was no demand for interest outstanding as on that date. On 11.11.2000,
Appellant invoked Clause 18 of the agreement and cancelled his booking. He also
exercised his option of taking immediate refund of the full amount in the
alternative. As DLF did not act according to Clause 18, Appellant filed the
application before the Commission.
Commission held that Appellant was not seeking possession of the apartment but
was seeking refund of the money deposited by him along with interest. It
at the totality of facts and circumstances as discussed in the foregoing order,
a case of unfair trade practice as defined in Section 36-A of the MRTP Act, is
made out against the respondent.
have, therefore, no hesitation in holding that the applicant is entitled to
refund of the amount deposited by him with interest. Although the applicant has
claimed interest @20% per annum and he has also cited case law in support of
his claim. He has also referred to the ruling of Hon'ble Supreme Court to
justify award of interest @18% per annum. However, in Ghaziabad (supra), the Hon'ble Supreme Court
has considered that it is reasonable to award interest @12% per annum. In a
recent case in Sunil Gulati Compensation Application No. 222/1999 also, which
is similar to the instant case, the MRTP Commission has ordered refund of the
amount deposited by the applicant at a rate of 12% per annum.
view of the above, we order that the respondent shall refund the entire amount
of Rs. 57,45,763.22 (Rupees fifty seven lacs forty five thousand seven hundred
sixty three and paise twenty two only) deposited by the applicant with interest
@ 12% per annum from the date of filing of the present Compensation Application
till the date of refund.
also award costs which are quantified at Rs. 30,000=00 (Rupees thirty thousand
only). The respondent is directed to comply with this order within two months
from the date of receipt of this order and file an affidavit of compliance
within two weeks thereafter." Appellant, who appeared in person, submitted
that in the instant case Section 36-A of the Act was clearly attracted as the
action on the part of DLF would come within the purview of the expression
"for the purpose of promoting the sale". According to him, as there
had been no cancellation, the offer remained valid and, thus, he was entitled
to purchase the self-same flat at the rate which was prevailing in the year
2000 upon deducting the amount which has already been paid.
Anil Diwan, learned senior counsel appearing on behalf of Respondent would
submit that the Commission in the facts and circumstances of this case had no
jurisdiction to grant any relief to Appellant and in any event, it has not
determined the jurisdictional fact.
Act was enacted to provide that the operation of the economic system does not
result in the concentration of economic power to the common detriment for the control
of monopolies, for the prohibition of monopolistic and restrictive trade
practices and for matters connected therewith or incidental thereto. The Act,
therefore, primarily deals with the control of monopolies and prohibition of
monopolistic and restrictive trade practices.
Practice' has been defined in Section 2(u) to mean any practice relating to the
carrying on of any trade, and includes (i) anything done by any person which
controls or affects the price charged by, or the method of trading of, any
trader or any class of traders, (ii) a single or isolated action of any person
in relation to any trade.
2(o) defines 'restrictive trade practice' to mean a trade practice which has,
or may have, the effect of preventing, distorting or restricting competition in
any manner and in particular, (i) which tends to obstruct the flow of capital
or resources into the stream of production, or (ii) which tends to bring about
manipulation of prices, or conditions of delivery or to affect the flow of
supplies in the market relating to goods or services in such manner as to
impose on the consumers unjustified cost or restrictions.
expression 'service' has been defined in Section 2(r) in the following terms:
means service which is made available to potential users and includes the
provision of facilities in connection with banking, financing, insurance chit
fund, real estate, transport, processing, supply of electrical or other energy,
board or lodging or both, entertainment, amuse- ment or the purveying of news
or other information, but does not include the rendering of any service free of
charge or under a contract of personal service." 'Unfair trade practice'
has been defined in Section 36-A of the Act to mean a trade practice which, for
the purpose of promoting the sale, use or supply of any good or for the
provision of any services, adopts any unfair method or unfair or deceptive
practice including any of the practices enumerated therein.
(1) of Section 36-A enumerates various kinds of visible representation.
power of the Commission is enumerated under Section 12 of the Act. Section 12-A
provides for the power of the Commission to grant temporary injunction. Power
to award compensation by the Commission is contained in Section 12-B of the
Act, sub-section (1) whereof reads as under:
Power of the Commission to award compensation.(1) Where, as a result of the
monopolistic or restrictive, or unfair trade practice, carried on by any
undertaking or any person, any loss or damage is caused to the Central
Government, or any State Government or any trader or class of traders or any
consumer, such Government or, as the case may be, trader or class of traders or
consumer may, without prejudice to the right of such Government, trader or
class of traders or consumer to institute a suit for the recovery of any
compensation for the loss or damage so caused, make an application to the
Commission for an order for the recovery from that undertaking or owner thereof
or, as the case may be, from such person, of such amount as the Commission may
determine, as compensation for the loss or damage so caused." The power of
the Commission to award compensation, therefore, is restricted to a case where
loss or damage had been caused as a result of monopolistic or restrictive or
unfair trade practice. It has no jurisdiction where damage is claimed for mere
breach of contract.
not a case where a notice of inquiry had been directed. If there had been no
inquiry, the petitioner has to file a suit wherein the relevant particulars are
required to be stated as to how loss or damage occurred owing to one or the
other trade practices referred to therein. The power of the Commission is not
in addition to the power of the civil court. An application under Section 12-B
of the Act would not lie where a complaint is confined to a breach of contract.
Purchases on the part of Respondent must necessarily relate to one or the other
trade practices contemplated under sub- section (1) of Section 12-B of the Act.
question came up for consideration before this Court in Colgate Palmolive
(India) Ltd. v. MRTP Commission and Others [(2003) 1 SCC 129] and Hindustan
Ciba Geigy v. Union of India and Others [(2003) 1 SCC 134]. In Colgate
Palmolive (supra), it was stated:
A bare perusal of the aforementioned provision would clearly indicate that the
following five ingredients are necessary to constitute an unfair trade
There must be a trade practice [within the meaning of Section 2(u) of the
Monopolies and Restrictive Trade Practices Act].
trade practice must be employed for the purpose of promoting the sale, use or
supply of any goods or the provision of any services.
trade practice should fall within the ambit of one or more of the categories
enumerated in clauses (1) to (5) of Section 36-A.
trade practice should cause loss or injury to the consumers of goods or
trade practice under clause (1) should involve making a "statement"
whether orally or in writing or by visible representation." Yet again in
Premier Engineers v. Taj Rubber Industries and Another, [(2005) 6 SCC 610],
following Colgate Palmolive (supra), this Court categorically held:
In the present case, we find that in the application filed by the respondent
applicant apart from saying that the defective machinery fitted with
old/second-hand parts had been supplied after considerable delay the respondent
did not say a word regarding the actual loss and injury or a notional loss
caused to the respondent. There is nothing on the record to suggest that any
actual loss or injury was caused to the respondent. The application filed by
the respondent applicant was not only cryptic but lacked in particulars to fall
within the definition of unfair trade practice as defined in Section 36-A read
with Section 2(u) of the MRTP Act. The MRTP Commission in its order has not
adverted to this fact and has not recorded a finding as to any actual loss or
injury caused to the respondent." We have noticed hereinbefore that the
issue addressed before us veered around the question as to whether it was a
sheer breach of contract or deficiency in service. There had been allegations
fact remains that the applicant before the Commission did not pay the amount.
They intended to get refund of the amount which had already been paid. They
sought for grant of interest also.
Civil Appeal arising out of SLP (C) No. 26795 of 2004, Appellant was entitled
to deduct the amount of earnest money. A distinction exists between the
security and earnest money. The Commission unfortunately lost sight of the said
H.U.D.A. and Another v. Kewal Krishan Goel and Others, [(1996) 4 SCC 249, the
law was stated in the following terms:
A combined reading of the aforesaid three clauses of letter of allotment
together with the advertisement issued indicates that the scheme of allotment
was that an applicant could make an application along with 10% of the tentative
price of the land as earnest deposit. On receipt of the letter of allotment he
is required to indicate either his letter of acceptance or letter of refusal
within 30 days from the date of the receipt of the allotment letter. In case of
acceptance he would be further required to make an additional deposit which
deposit together with the earnest money already deposited would constitute 25%
of the total tentative price. If he fails to accept the allotment within 30
days from the date of receipt of the letter then the authority is entitled to forfeit
the earnest money. Further the balance amount could be deposited in instalments.
Thus under the allotment in question an allottee was required to deposit 10% of
the tentative price of the land as earnest money which is given to bind the
contract and the said earnest money could be forfeited by the authority in case
the allottee does not communicate the letter of refusal within 30 days from the
date of receipt of the allotment order." In the facts of the matter, it
was held that the demand was not unreasonable.
again in Union of India v. Rampur Distillery & Chemical Co. Ltd. [(1973) 1
SCC 649], this Court stated:
Only one contention was urged on behalf of the appellants before us: that the
security deposit was taken from the respondents in order to ensure the due
performance of the contract and respondents having defaulted, the entire amount
was liable to be forfeited. A similar contention was advanced before this Court
but was rejected in Maula Bux v. Union of India.The appellant therein had entered
into a contract with the Government of India for the supply of certain goods
and had deposited a certain amount of security for the due performance of the
contract. As in the instant case, it was stipulated in the contract there that
the amount of security deposit was to stand forfeited in case the appellant
neglected to perform his part of the contract. On the appellant committing
default in the supply, the Government rescinded the contract and forfeited the
security deposit. It was held by this Court that forfeiture of earnest money
under a contract for sale of property does not fall within Section 70 of the
Contract Act, if the amount is reasonable, because the forfeiture of a
reasonable sum paid as earnest money does not amount to the imposition of a
penalty. But, "where under the terms of the contract the party in breach
has undertaken to pay a sum of money or to forfeit a sum of money which he has
already paid to the party complaining of a breach of contract, the undertaking
is of the nature of a penalty". It was further held that the amount
deposited by way of security for guaranteeing the due performance of the
contract cannot be regarded as earnest money." The distinction between a
security and an earnest money has also been pointed out by this Court in Maula Bux
v. Union of India [(1969) 2 SCC 554] in the following terms:
Under the terms of the agreements the amounts deposited by the plaintiff as
security for due performance of the contracts were to stand forfeited in case
the plaintiff neglected to perform his part of the contract. The High Court
observed that the deposits so made may be regarded as earnest money. But that
view cannot be accepted.
to Earl Jowitt in Dictionary of English Law at p. 689; "Giving an earnest
or earnest- money is a mode of signifying assent to a contract of sale or the
like, by giving to the vendor a nominal sum (e.g. a shilling) as a token that
the parties are in earnest or have made up their minds". As observed by
the Judicial Committee in Kunwar Chiranjit Singh v. Har Swarup:
money is part of the purchase price when the transaction goes forward; it is
forfeited when the transaction falls through, by reason of the fault or failure
of the vendee." In the present case the deposit was made not of a sum of
money by the purchaser to be applied towards part payment of the price when the
contract was completed and till then as evidencing an intention on the part of
the purchaser to buy property or goods. Here the plaintiff had deposited the
amounts claimed as security for guaranteeing due performance of the contracts.
Such deposits cannot be regarded as earnest money." Referring to Section
74 of the Indian Contract Act, it was observed:
is authority, no doubt coloured by the view which was taken in English cases,
that Section 74 of the Contract Act has no application to cases of deposit for
due performance of a contract which is stipulated to be forfeited for breach, Natesa
Aiyar v. Appayu Padayachi; Singer Manufacturing Company v. Raja Prosad; Manian Pattar
v. Madras Railway Company. But this view is no longer good law in view of the
judgment of this Court in Fateh Chand case. This Court observed at p. 526:
74 of the Indian Contract Act deals with the measure of damages in two classes
of cases: (i) where the contract names a sum to be paid in case of breach, and
(ii) where the contract contains any other stipulation by way of penalty,' 'The
measure of damages in the case of breach of a stipulation by way of penalty is
by Section 74, reasonable compensation not exceeding the penalty stipulated
for.' " The Court also observed:
was urged that the section deals in terms with the right to receive from the
party who has broken the contract reasonable compensation and not the right to
forfeit what has already been received by the party aggrieved. There is however
no warrant for the assumption made by some of the High Courts in India, that Section 74, applies only to
cases where the aggrieved party is seeking to receive some amount on breach of
contract and not to cases whereupon breach of contract an amount received under
the contract is sought to be forfeited. In our judgment the expression
"the contract contains any other stipulation by way of penalty"
comprehensively applies to every covenant involving a penalty whether it is for
payment on breach of contract of money or delivery of property in future, or
for forfeiture of right to money or other property already delivered.
not to enforce the penalty clause but only to award reasonable compensation is
statutorily imposed upon courts by Section 74. In all cases, therefore, where
there is a stipulation in the nature of penalty for forfeiture of an amount
deposited pursuant to the terms of contract which expressly provides for forfeiture,
the court has jurisdiction to award such sum only as it considers reasonable,
but not exceeding the amount specified in the contract as liable to forfeiture,
and that, "There is no ground for holding that the expression 'contract
contains any other stipulation by way of penalty' is limited to cases of
stipulation in the nature of an agreement to pay money or deliver property on
breach and does not comprehend covenants under which amounts paid or property
delivered under the contract, which by the terms of the contract expressly or
by clear implication are liable to be forfeited." DLF, therefore, cannot
be said to be wrong in exercising its right to forfeit the earnest amount.
be so, but we have noticed hereinbefore that Respondent in its letter dated
3.11.1998 gave three offers. It was expected that at least the amount would be
refunded after deducting the earnest amount. DLF, however, did not do so.
Civil Appeal arising out of SLP (C) No. 26795 of 2004, we, therefore, are of
the opinion that the interest of justice would be subserved if we, in exercise
of our discretionary jurisdiction under Article 142 of the Constitution of
India keeping in view the facts and circumstances of this case, direct DLF to
pay a sum of Rs. 37 lakhs to Respondent herein. Such payment should be made
within four weeks from date failing which interest at the rate of 9% per annum
shall be levied till actual payment is made. The appeal is disposed of
Civil Appeal No. 7960 of 2004, the principal contention of Appellant was his
insistence on the part of the developer not to deposit further amount by way of
additional fire fighting equipments as the same was not necessary. Our
attention has further been drawn to the fact that DLF insisted on furnishing of
undertakings which is contrary to law. Appellant also questions the levy of
holding charges and/ or maintenance charges.
had been some delay also in handing over of the possession. DLF, however,
appears to have treated all the allottees on similar terms.
validity or otherwise of the conditions imposed by DLF is not in question. It
was, therefore, not a case which could be entertained by the Commission.
However, we suggested as to whether Appellant herein can be given possession of
the flat on his clearing of the dues, DLF agreed thereto.
total amount payable in respect of the flat is a sum of Rs.17,27,612/-.
has agreed to deduct a sum of Rs.93,745/- which was agreed to be paid by way of
compensation. The total amount payable, therefore, would be Rs.16,33,867/-. The
amount has been calculated on the premise that the registration would be done
in the name of Appellant's wife and/or daughter on the rate of stamp duty and
charges payable in case of family allottee.
furthermore clarify that Appellant, upon getting possession of the said flat
shall be treated by DLF at par with all others similarly situated.
may pay the aforementioned amount of Rs.16,33,867/- within eight weeks from
date, whereupon, Respondent shall execute and/or register the requisite
documents in favour of the wife of Appellant.
passing this order on broad consensus arrived at by the parties as also in
exercise of our jurisdiction under Article 142 of the Constitution of India.
order shall not be treated to be a precedent.
are, therefore, of the opinion that in a case of this nature the Commission had
no jurisdiction. Civil Appeal No. 7960 of 2004 and Civil Appeal arising out of
SLP (C) No. 3788 of 2005 are disposed of accordingly.
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