DESH RAJ vs. ROHTASH SINGH

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C.A. No.-009217-009217 - 2022Supreme Court2022 INSC 127914 December 2022Bench: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE J.B. PARDIWALAAuthor: HON'BLE THE CHIEF JUSTICE25 pages
For Petitioner: SIDDHARTH MITTAL

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REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURI ICTION CIVIL APPEAL NO. 921 OF 2022 [Arising out of Special Leave Petition (C) No. 22191 of 2019] Desh Raj & Ors. … Appellant(s) VERSUS Rohtash Singh … Respondent JUDGMENT Surya Kant, J.

1.

Leave Granted.

2.

The   present   appeal   is   directed   against   the   judgment   dated 15.05.2019 passed by the High Court of Punjab and Haryana whereby a   second   appeal   preferred   by   the   Appellants   was   dismissed   and judgment and decree of the Trial Court as well as the First Appellate Court   were   affirmed.   The   decree   entitled   the   Respondent   for   the recovery   of   earnest   money,   which   constituted   of   partly   paid   sale consideration in lieu of the concerned agreements to sale along with requisite interest. The factual matrix is succinctly discussed before Digitally signed by VISHAL ANAND Date: 2022.12.14 16:29:19 IST Reason: Signature Not Verified

delving into the issue of law regarding breach of contractual terms which requires adjudication before us. A. FACTS

3.

The subject matter of the original suit was a property measuring 23 Kanals 4 Marlas bearing Khewat No. 226, Khatoni No. 225, Rect. No. 27, Kila No 3 min (2­9), 4 min (4­15), 7(8­0), 14(4­0) situated in the   revenue   estate   of   Village   Tigra,   Tehsil   and   District   Gurgaon (hereinafter, ‘Concerned Property’) which the Appellants jointly owned to the extent of their respective shares.

4.

Two   separate   agreements   to   sell   were   entered   between   the present parties for the Concerned Property on 17.02.2004 (hereinafter, ‘Sale Agreements’). In the first agreement, Appellant Nos. 1 to 4 agreed to sell their share to the extent of 4/5th  of the Concerned Property while in the second agreement, Appellant No. 5 agreed to sell the remaining 1/5th  share to the Respondent which accrued to her and her  minor  son.  It  must be  noted  that   the  material  terms  of  both agreements   are   identical   except   that   in   the   second   agreement, Appellant No. 5 was contractually bound to secure the permission under The Hindu Minority and Guardianship Act, 1956 to sell the share of the minor.

5.

Under the Sale Agreements, the sale consideration was set at the rate of Rs 79,00,000/­ per acre. Accordingly, the Respondent is stated to have paid Rs 22,90,000/­ in total as part payment of the sale consideration   which   was   in   the   nature   of   earnest   money.   As   per Clause 4 of Sale Agreements, the earnest money could be confiscated by the Appellants if the sale deed was not executed on prescribed date, i.e. 16.08.2004 (hereinafter, ‘Date of Execution’). Furthermore, as per Clause 8 of the Sale Agreements, the Respondent was also liable to secure all the necessary No Objection Certificates (hereinafter, ‘NOC’). Additionally,  he  had  to  also  intimate  the  Appellants  regarding  the grant of NOCs well before the Date of Execution, failing which the agreement was deemed to be cancelled.

6.

The Appellants state that as per the Sale Agreements, requisite permission under The Hindu Minority and Guardianship Act, 1956 was obtained by them before the Date of Execution. The same was communicated to the Respondent via notice dated 10.07.2004. Their case is that in furtherance of the agreements, Appellants appeared before the Sub­