1) Fateh Chand v. Balkishan Dass AIR 1963 SC 1405
2) (Kunwar) Chiranjit Singh v. Har Swarup AIR 1926 P.C. 1
3) Shree Hanuman Cotton Mills and Others v. Tata Air Craft Limited 1969 (3) SCC 522
4) Delhi Development Authority v. Grihstrapana Cooperative Group Housing Society Ltd. 1995 Supp (1) SCC 751
5) V. Lakshmanan v. B.R. Mangalgiri and others (1995) Suppl. (2) SCC
33
6) Housing Urban Development Authority and another v. Kewal Krishan Goel and others (1996) 4 SCC 249
7) Videocon Properties Ltd. v. Dr. Bhalchandra Laboratories and others (2004) 3 SCC 711
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 7588 OF 2012
[Arising out of SLP (Civil) No. 4605 of 2012]
Satish Batra .. Appellant
Versus
Sudhir Rawal .. Respondent
whether the seller is entitled to forfeit the earnest money deposit where
the sale of an immovable property falls through by reason of the fault or
failure of the purchaser
..........
When we examine the clauses in the instant case, it is amply clear
that the clause extracted hereinabove was included in the contract at the
moment at which the contract was entered into. It represents the guarantee
that the contract would be fulfilled. In other words, ‘earnest’ is given
to bind the contract, which is a part of the purchase price when the
transaction is carried out and it will be forfeited when the transaction
falls through by reason of the default or failure of the purchaser. There
is no other clause militates against the clauses extracted in the agreement
dated 29.11.2011.
19. We are, therefore, of the view that the seller was justified in
forfeiting the amount of Rs.7,00,000/- as per the relevant clause, since
the earnest money was primarily a security for the due performance of the
agreement and, consequently, the seller is entitled to forfeit the entire
deposit. The High Court has, therefore, committed an error in reversing
the judgment of the trial court.
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