SH Vikas Chaudhary Vs Unknown On 5 May 2021

Sh.
Vikas Chaudhary ) vs Unknown on 5 May, 2021
Delhi District Court

Sh. Vikas Chaudhary ) vs Unknown on 5 May, 2021
IN THE COURT OF SH HARGURVARINDER SINGH
JAGGI, ADDL. DISTRICT JUDGE - 02, SOUTH WEST
DISTRICT, DWARKA COURTS, DELHI
CS DJ ADJ No. 516435/2016

CNR No. DLSW010023972015
IN THE MATTER OF:
Sh. Vikas Chaudhary )

S/o Sh. Mohinder Chaudhary )
R/o A-1/239, Second Floor )
Janak Puri, New Delhi - 110058 ) ... Plaintiff/Defendant
v.
Sh. Hakumat Singh Paul )
S/o Late Sardar Jit Singh )
R/o 1001, Plot No. 40-A )
Baroda House Apartments )
Sector - 10, Dwarka )
New Delhi - 110075 ) ... Defendant/Counter-Claimant
Mr. R.D. Singh, Ms. Vanshika Kohli, Advocates for Mr. Vikas
Chaudhary (Plaintiff / Defendant).
Mr. Surendra Kumar, Advocate for Mr. Hakumat Singh Paul
(Defendant / Counter-Claimant).
Date of institution of suit: 02.12.2015

Date of judgment reserved: 27.02.2021
Date of pronouncement of judgment: 05.05.2021
CS DJ ADJ No. 516435/2016

Page No. 1/49
HARGURVARINDE Digitally signed by
HARGURVARINDER SINGH JAGGI
R SINGH JAGGI Date: 2021.05.05 16:43:35 +05'30'
JUDGMENT
1. The present dispute is a classic buyer-seller dispute where after entering into an agreement to
sale-purchase of an immovable property and having paid 10% of the total sale amount, the deal went
sour, and the seller forfeited the sum paid by the buyer. The seller in his defence has justified
adjustment of the advance money paid by the buyer, coupled with a set-off, and a counter-claim
against the buyer for causing loss to him by breach of the contract entered between them.
Indian Kanoon - http://indiankanoon.org/doc/19050932/ 1
Pleadings
2. The facts traced from the plaint are that Vikas Chaudhary (hereinafter "Chaudhary") and
Hakumat Singh Paul (hereinafter "Paul") after negotiation entered into a written sale-purchase
agreement on 30.11.2012 (hereinafter "contract") regarding an immovable property i.e., A-1/239,
ground floor, Janakpuri, New Delhi - 110058 (hereinafter "suit property") for a total sale
consideration of 4.50 crores (Rupees Four crores and fifty lakhs only) (hereinafter "sale
consideration"). Chaudhary paid Paul a sum of 45.00 lakhs (Rupees Forty five lakhs only) against
the sale consideration.
3. After entering of the agreement, Chaudhary learnt that at the time of him entering contract with
Paul, the market value of the suit property was 4.00 crores (Rupees Four crores only) and not 4.50
crores (Rupees Four crores and fifty lakhs only). Chaudhary has urged that Paul deliberately,
knowingly, willingly, and intentionally concealed the material fact of the true market value of the
suit property. Chaudhary has also urged in his plaint that Paul attempted CS DJ ADJ No.
516435/2016 Page No. 2/49 to gain undue, unjust benefit of 50.00 lakhs (Rupees Fifty lakhs only)
by playing fraud upon him.
4. On being confronted by Chaudhary, Paul assured and promised to pay back the sum of 45.00
lakhs (Rupees Forty five lakhs only) to Chaudhary within a period of one year, by December 2013.
After expiry of one year period, when Chaudhary approached Paul in January 2014 and claimed
refund of 45.00 lakhs (Rupees Forty five lakhs only), Paul cited financial hardship and requested for
another one year to refund the entire amount.
5. However, when Chaudhary approached Paul in February 2015 claiming refund of 45.00 lakhs
(Rupees Forty five lakhs only), Paul avoided his request on one pretext or other. Chaudhary
contacted Paul on 20.10.2015 and asked him to refund 45.00 lakhs (Rupees Forty five lakhs only),
but Paul outrightly refused to return a single penny to Chaudhary. A demand notice dated
21.10.2015 was issued to Paul by Chaudhary demanding refund of 45.00 lakhs (Rupees Forty five
lakhs only), however the same was not replied by Paul.
6. As per Chaudhary, Paul has unabashedly refused to refund his hard earned money and has made
unjust enrichment at the cost of causing him financial loss, damages, mental torture. Chaudhary has
also pleaded in his plaint that since February 2013 Paul has been deriving rental income of 55,000/-
(Rupees Fifty five thousand only) from the suit property.
7. As per Chaudhary, Paul neither cancelled the contract nor undertook any steps for seeking
enforcement, performance of the contract, which clearly proves that Paul lacked bona fide intention
to comply with the terms and conditions of the contract. With the cause of action having arisen on
30.11.2012, the date when CS DJ ADJ No. 516435/2016 Page No. 3/49 Chaudhary and Paul entered
in a contract, and thereafter on subsequent dates when demands made by Chaudhary seeking
refund of 45.00 lakhs (Rupees Forty five lakhs only) went unanswered as late as 21.10.2015.
Chaudhary has been constrained to prefer the present suit seeking a money decree of 45.00 lakhs
(Rupees Forty five lakhs only) along with pendente lite and future interest @ 18% per annuum along

with costs of the suit.
8. On the other hand, Paul has not only thwarted Chaudhary's money claim of 45.00 lakhs (Rupees
Forty five lakhs only), but also set-off a sum of 45.00 lakhs (Rupees Forty five lakhs only) against his
loss of 1.00 crore (Rupees One crore only) and lodged a counter- claim of 55.00 lakhs (Rupees Fifty
five lakhs only) against Chaudhary.
9. The defence urged by Paul in his written statement is on the lines that it is Chaudhary, who failed
to perform his share of the obligations as per the contract, and Paul rightfully forfeited the sum of
45.00 lakhs (Rupees Forty five lakhs only) as per the normal business practice in such sale-purchase
contracts pertaining to immovable properties.
10. Though, Paul has admitted the contract between the parties, however he has urged in his defence
that the parties entered a contract after thorough negotiation, deliberation, and discussions for the
sale-purchase of the suit property at the total consideration of 4.50 crores (Rupees Four crores and
fifty lakhs only). It is also urged by Paul that the plea of Chaudhary that the actual market value of
the suit property was 50.00 lakhs (Rupees Fifty lakhs only) lower than the total sale consideration is
an afterthought, because Chaudhary himself deals in the sale and purchase of properties in the CS
DJ ADJ No. 516435/2016 Page No. 4/49 same locality and he was well-versed with the market price
of the suit property. Paul has also urged in his written statement that Chaudhary's plea of the suit
property being overvalued by Paul is an afterthought as the same surfaced for the first time in the
legal notice dated 21.10.2015 issued at the cusp of three years period from the date of signing of the
contract i.e., 30.11.2012.
11. Paul has also averred in his written statement that he has no issue, and cannot have any issue
under law, with the terms and conditions of the contract i.e., sale agreement dated 30.11.2012.
12. Paul has urged in his written statement that after waiting for seven months from the date of
signing of the contract between them, he issued a written communication dated 09.07.2013 to
Chaudhary, wherein Chaudhary was reminded to pay the balance amount and finalise the deal
within 10 days from the date of receipt of the said letter. It is averred by Paul that the said letter was
sent through registered post A.D. and the same was duly received by Chaudhary's daughter. It is also
urged by Paul that despite receipt of the letter dated 09.07.2013 by Chaudhary, Chaudhary failed to
pay the balance amount as per the contract.
13. Pursuant to letter dated 09.07.2013, Paul issued another letter dated 31.07.2013 through
registered post A.D. to Chaudhary titled as final reminder for payment, wherein Paul sought a
written confirmation from Chaudhary on or before 15.08.2013 that Chaudhary would pay the
balance sale consideration by 31.08.2013. On 07.08.2013, Paul received back the letter dated
31.07.2013 as undelivered to Chaudhary, despite having met Chaudhary on 02.08.2013 and
requested him to receive the said letter. It is averred by Paul in the written statement that as a
matter of abundant caution, CS DJ ADJ No. 516435/2016 Page No. 5/49 he once again on
10.08.2013 dispatched the letter dated 31.07.2013 to Chaudhary by a registered post A.D. and speed
post and thereafter through email on 15.08.2013. It is also averred by Paul that it is not in issue that

Chaudhary failed to pay the balance amount to him.
14. Paul has averred in his written statement that Chaudhary has conveniently concealed material
facts from this Court by advancing an oral theory that it was Chaudhary who approached Paul
within one week from the date of signing of the contract, and Paul assured Chaudhary that he would
return 45.00 lakhs (Rupees Forty five lakhs only) within one year. Paul has also averred that the
story urged by Chaudhary that it was Paul who promised to return 45.00 lakhs (Rupees Forty five
lakhs only) to him within a period of one year is falsified from the letter dated 09.07.2013, letter
dated 31.07.2013, and an email dated 15.08.2013.
15. Paul has urged in his defence that he has no legal obligation to return the sum of 45.00 lakhs
(Rupees Forty five lakhs only) to Chaudhary, as it is Chaudhary who is in clear breach of the
contract. About the receipt of legal notice dated 21.10.2015, Paul has urged that he was away from
the suit property to attend his granddaughter's marriage ceremony from 18.10.2015 until 15.11.2015,
by the time he could contact his counsel and instruct him to draft an adequate response based on
documents, Chaudhary had already preferred the present suit.
Set-off and Counter-Claim
16. Paul in his written statement has set up a claim of set-off and counter-claim against Chaudhary
on the bedrock of pleadings that Paul and his wife who are in advanced age and having no son, CS
DJ ADJ No. 516435/2016 Page No. 6/49 decided to move closer to his younger daughter, who was
residing in Dwarka.
17. Paul has averred in the counter-claim that it was Chaudhary who approached and convinced
Paul to sell the suit property to him rather than realising monthly rent by letting out the same to
tenants. It is also averred by Paul that initially he demanded 4.75 crores (Rupees Four crores and
seventy five lakhs only) from Chaudhary, however after thorough negotiation, deliberation, and
discussions he agreed to sell the suit property for 4.50 crores (Rupees Four crores and fifty lakhs
only) to Chaudhary and they entered in a written contract. Chaudhary paid a sum of 10.00 lakhs
(Rupees Ten lakhs only) to Paul in the month of October 2012, and thereafter a further sum of 35.00
lakhs (Rupees Thirty five lakhs only) on 30.11.2012.
18. Paul has averred in the counter-claim that in the original draft agreement made in October 2012,
the payment was to be completed by the month of February 2013, but Chaudhary in his own
handwriting corrected and endorsed in November 2012 that a further sum of 3.05 crores (Rupees
Three crores and five lakhs only) was to be paid before 28.02.2013 and thereafter the balance
payment of 1.00 crore (Rupees One crore only) was to be paid in March/April 2013. It is urged by
Paul that Chaudhary failed to make any further payment in terms of the contract after having paid a
sum of 45.00 lakhs (Rupees Forty five lakhs only) to him.
19. Paul has averred in the counter-claim that Chaudhary kept on seeking extension of time to make
the balance payment on the assurances that he would arrange money by selling some of his
properties. It is also averred by Paul that after having waited patiently and on expiry of seven

months, on 09.07.2013 he issued a CS DJ ADJ No. 516435/2016 Page No. 7/49 reminder for
payment to Chaudhary through registered post A.D., whose delivery was accepted by Chaudhary's
daughter.
20. Paul has further averred in the counter-claim that when he did not receive any response from
Chaudhary after receipt of letter dated 09.07.2013, he issued another letter on 31.07.2013 wherein
he categorically called upon Chaudhary to intimate him before 15.08.2013 that he would pay the
balance sale consideration by 31.08.2013. It is averred by Paul that the letter dated 31.07.2013
dispatched through registered post A.D. was received back to him on 07.08.2013. It is further
averred by Paul that on 10.08.2013 he once again sent the letter dated 31.07.2013 by registered post
A.D. and speed post to Chaudhary. It is also averred by Paul that as a matter of abundant caution he
did send a scanned copy of letter dated 31.07.2013 to Chaudhary through email and yet Chaudhary
failed to make good the balance payment.
21. Paul in his counter-claim has pleaded having suffered damages on the following counts:
(a) With Chaudhary's inability to pay the balance amount as per the contract in a timely manner, the
market value of the suit property in the latter part of 2013 crashed by 20 to 25%, which computes
around 1.00 crore (Rupees One crore only) approximately.
(b) Paul had planned to spend the balance sale consideration to repay the loan of 30.00 lakhs taken
by his younger daughter and his son-in-law, Kuljit Singh in early 2012 from Axis Bank for the
purchase of a flat in Sector 85, Gurgaon. Because of Chaudhary's default to pay the balance sale
consideration of 4.05 crores (Rupees Four crores and five lakhs only) as per CS DJ ADJ No.
516435/2016 Page No. 8/49 the contract, Paul could not honour his commitment of repaying the
loan and his kin/successors suffered a loss of 7,05,497/- (Rupees Seven lakhs five thousand four
hundred and ninety seven only) as interest on the aforesaid loan w.e.f. 01.05.2013 to 10.01.2016.
(c) Paul had also planned to pay 2.50 crores (Rupees Two crores and fifty lakhs only) to his younger
son-in-law, Kuljit Singh for his purchase of 1/5th share in a banquet hall at Rama Road, Delhi along
with four other partners. Because of Chaudhary's default to pay the balance sale consideration of
4.05 crores (Rupees Four crores and five lakhs only) as per the contract, the banquet hall could not
be purchased and the same was taken on monthly rent of 8.00 lakhs (Rupees Eight lakhs only) w.e.f.
July 2013 and the same was reduced to 6.00 lakhs (Rupees Six lakhs only) w.e.f. October 2014. Paul
has urged that consequentially his son-in-law, had to pay a sum of 43.20 lakhs (Rupees Forty three
lakhs and twenty thousand only) as monthly rent for a period of 31 months w.e.f. 01.07.2013 till
January 2016.
(d) Paul had also planned to purchase a commercial property in the joint name of his two
grandsons, which was booked by him in the month of October 2012. Regardless of the default on
part of Chaudhary, Paul somehow managed to complete the purchase of the aforesaid commercial
property, but to meet the shortfall of funds, Paul undertook a loan of 22.00 lakhs (Rupees Twenty
two lakhs only) at the interest rate of 9.30% per annum from the State Bank of Hyderabad in
December 2015. As per Paul, the loan of 22.00 lakhs (Rupees Twenty CS DJ ADJ No. 516435/2016

Page No. 9/49 two lakhs only) was completely avoidable, if Chaudhary made the balance payment as
per the contract, however, he is not claiming the aforesaid loan amount at this stage.
22. Paul has categorically averred in paragraph No. 13 of the counter-claim that the total loss
suffered by him on account of breach of contract by Chaudhary is of 1,50,25,497/- (Rupees One
crore fifty lakhs twenty five thousand four hundred and ninety seven only), but he is confining his
claim for damages to 1.00 crore (Rupees One crore only). It is also averred by Paul that against the
damages of 1.00 crore (Rupees One crore only) he has set-off the sum of 45.00 lakhs (Rupees Forty
five lakhs only) and presses for his counter- claim of 55.00 lakhs (Rupees Fifty five lakhs only)
against Chaudhary.
23. Paul has prayed in his written statement for the dismissal of Chaudhary's suit with exemplary
costs and decreeing his set-off and counter-claim with costs in his favour and against Chaudhary.
24. Chaudhary in his replication to Paul's written statement and reply/written statement to Paul's
counter-claim has denied all the averments made by Paul therein. Chaudhary has refuted Paul's
claim that it is Chaudhary, who has breached the contract. Chaudhary has urged that it is Paul, who
dishonestly, fraudulently and maliciously retained the sum of 45.00 lakhs (Rupees Forty five lakhs
only) and failed to return the same despite repeated requests made by him.
25. Chaudhary has urged that not only Paul erred by claiming set- off and counter-claim together,
but also with the specific performance of contract being barred by limitation, no question for filing
the counter-claim arises. It is also urged by Chaudhary that Paul never intended to seek a decree of
specific performance of the CS DJ ADJ No. 516435/2016 Page No. 10/49 contract between them and
thus the set-off and counter-claim by Paul is an afterthought and taking advantage of his own
wrong. Chaudhary has also urged in his replication that the contract between the parties had no
clause for forfeiture of money paid by him to Paul and thus the set-off and counter-claim preferred
by Paul is false and frivolous.
26. Chaudhary has denied receiving any letter, correspondence from Paul except the letter dated
09.07.2013 through his daughter. Chaudhary has denied that the email does not pertain to him.
Chaudhary has prayed that the relief sought by him in his plaint be decreed in his favour and against
Paul and the counter-claim preferred by Paul be dismissed with cost.
27. On the other hand, Paul has preferred a replication to Chaudhary's written statement to his
claim. Paul has refuted Chaudhary's claim that set-off and counter-claim are barred by limitation.
Paul has also challenged the averments of Chaudhary that set-off and counter-claim cannot be
pleaded together. It is urged by Paul that both the set-off and counter-claim are based on substantial
cause of action against Chaudhary and the same has been pleaded in his written statement cum
set-off and counter-claim.
28. Paul has denied the non-existence of forfeiture clause in the contract. Paul has urged that 45.00
lakhs (Rupees Forty five lakhs only) rightly stands forfeited by him as it was Chaudhary, who
breached the contract by failing to pay the balance sale consideration within the stipulated time.

Paul has also urged that the breach of contract by Chaudhary caused him huge loss of 1,50,25,497/-
(Rupees One crore fifty lakhs twenty five thousand four hundred and ninety seven only) but has
decided to confine the same to 1.00 crore CS DJ ADJ No. 516435/2016 Page No. 11/49 (Rupees One
crore only), as averred by him in his written statement/set-off and counter-claim. Paul has prayed
that Chaudhary's money claim be dismissed and his set-off and counter- claim against Chaudhary be
allowed.
29. Before proceeding further, I find it relevant to observe herein that as per Order VIII, Rule 6A of
the Code of Civil Procedure, 1908 (CPC) a counter-claim is required to be treated as an independent
suit, and therefore the counter-claim preferred by Paul against Chaudhary ought to have been
lodged and registered separately - See PSA Nitrogen Limited v. Maeda Corporation & Ors.1 Issues
30. On completion of pleadings, the following issues were framed on 15.02.2017:
(i) Whether the plaintiff was not willing to perform agreement to sell dated 30.11.2012, if so its
effect? ... OPD
(ii) Whether the defendant is entitled to claim set off as prayed in the counter-claim? ... OPD
(iii) Whether the defendant is entitled to counter claim as prayed? ... OPD
(iv) Whether the plaintiff is entitled to recovery of money as prayed? ... OPP
(v) Whether plaintiff is entitled to interest, if so at what rate and for what period? ... OPP Evidence
led by parties
31. To prove his claim, Chaudhary (PW1) and his wife, namely, Winky Chaudhary (PW2) stepped in
the witness box. On the other CM(M) No. 4/2019 date of decision 17.09.2019 by Hon'ble High Court
of Delhi CS DJ ADJ No. 516435/2016 Page No. 12/49 hand, to refute Chaudhary's claim and to
prove his counter-claim, Paul (DW1) a solitary defence witness stepped in the witness box.
32. Chaudhary (PW1) along with his oral testimony has relied on the following documents:
S.No. Exhibit Mark put Description and Date, if any, of the

on the Document Document
(i) Ex.PW1/A Evidence by way of affidavit.
(ii) Ex.PW1/1(OSR) Copy of sale agreement dated 30.11.2012.
(iii) Ex.PW1/2 (Colly.) Copy of legal notice along with postal receipt.
(iv) Ex.PW1/3 Copy of delivery report of speed post.
33. Paul (DW1) along with his oral testimony has relied on the following documents:

S.No. Exhibit Mark put Description and Date, if any, of the

on the Document Document
(i) Ex.DW1/1 Evidence by way of affidavit.
(ii) Ex.DW1/A (Colly.) Letter dated 09.07.2013 with registered post

A.D. and duly signed A.D. card.
(iii) Ex.DW1/B (Colly.) Letter dated 31.07.2013 with registered post

receipt.
(iv) Ex.DW1/C Original envelope received back containing

the letter dated 31.07.2013.
(v) Ex.DW1/D (Colly.) Letter dated 10.08.2013 along with

registered post and speed post receipts.
(vi) Ex.DW1/E Copy of email dated 15.08.2013.
(vii) Ex.DW1/F Bank statement from Axis Bank regarding

interest.
(viii) Ex.DW1/G Copy of ledger account regarding the rent

paid.
CS DJ ADJ No. 516435/2016

Page No. 13/49
Submissions advanced by the Counsels for the parties
34. Mr. R.D. Singh learned counsel for Chaudhary and Mr. Surendra Kumar learned counsel for
Paul advanced their oral arguments. Mr. R.D. Singh learned counsel for Chaudhary opened his
arguments on the note that Paul showed his intention to sell the suit property to Chaudhary in the
month of October 2012, and on 30.11.2012 the parties entered into an agreement to sale for 4.50
crores (Rupees Four crores and fifty lakhs only). The learned counsel further submitted that
Chaudhary paid Paul a sum of 45.00 lakhs (Rupees Forty five lakhs only).
35. Mr. Singh learned counsel for Chaudhary submitted that after one week of having entered a
contract, Chaudhary made an enquiry about actual market value of the suit property, and he gained
knowledge that Paul had fixed a higher price of the suit property then the prevailing market rate.
The learned counsel further submitted that the prevailing market rate of the suit property was 4.00
crores (Rupees Four crores only) and not 4.50 crores (Rupees Four crores and fifty lakhs only). The
learned counsel submitted that Chaudhary within 15 days of the agreement to sale informed Paul
that he is not willing to purchase the suit property and his 45.00 lakhs (Rupees Forty five lakhs
only) be returned. The learned counsel for Chaudhary submitted that Chaudhary in his plaint has
clearly averred that it was Paul, who induced and allured Chaudhary for the sale consideration of
4.50 crores (Rupees Four crores and fifty lakhs only).

36. The learned counsel for Chaudhary further submitted that when Chaudhary brought the fact of
the sale consideration of the suit property been fixed between the parties 50.00 lakhs (Rupees Fifty
CS DJ ADJ No. 516435/2016 Page No. 14/49 lakhs only) higher than the prevailing market rate of
4.00 crores (Rupees Four crores only), Paul assured Chaudhary that he would return his 45.00
lakhs (Rupees Forty five lakhs only) within a period of one year. The learned counsel further
submitted that when in the month of January 2014 Chaudhary approached Paul seeking refund of
his 45.00 lakhs (Rupees Forty five lakhs only), Paul informed Chaudhary that he is undergoing
financial crunch and sought some more time, to return the amount.
37. Mr. Singh learned counsel for Chaudhary submitted that neither the contract between the
parties provides for forfeiture of the earnest money paid by Chaudhary to Paul, nor Paul suffered
any losses to claim a set-off and a counter-claim against Chaudhary. The learned further submitted
that Paul's intention from the very beginning had been dishonest and the same is apparent nay
evident from the fact that the sale consideration of the suit property was marked up by him than the
prevailing market rate, and resiling from his promise to return the entire earnest money within one
year.
38. The learned counsel for Chaudhary submitted that the contradictions from the
cross-examination of Paul about letting out of the suit property in the month of April 2013 or May
2013 reveals that he had no intention either to sell the suit property or return the sum of 45.00 lakhs
(Rupees Forty five lakhs only) to Chaudhary. The learned counsel for Chaudhary further submitted
that the very fact of letting out the suit property by Paul to a tenant in the month of April 2013
without waiting for Chaudhary to pay the balance sale consideration, fortifies Chaudhary's claim
that Paul was very much aware about the fact that Chaudhary does not intend to purchase the CS DJ
ADJ No. 516435/2016 Page No. 15/49 suit property and it is for that reason Paul was looking for a
tenant since January 2013.
39. The learned counsel for Chaudhary further submitted that the defence pleaded by Paul that on
failure on the part of Chaudhary, Paul had to take loan from Axis bank is falsified from the fact that
not only the said loan was taken prior to the date of agreement to sale entered between the parties,
but also the said loan was in the name of Kuljit Singh, who is the son-in-law of Paul but certainly not
his kin/successor.
40. The learned counsel for Chaudhary further submitted that similarly the plea urged by Paul that
on failure on the part of Chaudhary to pay the balance sale consideration, Paul could not pay 2.50
crores (Rupees Two crores and fifty lakhs only) to his younger son-in-law for purchase of 1/5th
share in the banquet hall at Rama Road Delhi is a self-serving, bottomless plea. The learned counsel
further submitted that under no manner can Paul fasten such a preposterous liability of
unwarranted and untenable claims upon Chaudhary. The learned counsel for Chaudhary further
submitted that Paul is still the owner of the suit property and he has all the rights over the suit
property to sell and dispose of the same and utilise, invest the sale proceeds as per his wishes.
41. The learned counsel for Chaudhary submitted that the potential investment of gifting an
immovable property to his grandchildren by Paul and on failure of Chaudhary to pay the balance

sale consideration, Paul undertook a loan of 20.00 lakhs (Rupees Twenty lakhs only) to 22.00 lakhs
(Rupees Twenty two lakhs only) is also far-fetched. The learned counsel further submitted CS DJ
ADJ No. 516435/2016 Page No. 16/49 that Paul has failed to lead any evidence to prove the fact of
having availed a loan from State Bank of Hyderabad.
42. Mr. Singh learned counsel for Chaudhary submitted that the documentary evidence led by Paul
hopelessly falls short of proving the fact that he had suffered any loss, damages, as the financial
documents by Paul are in the name of his younger son-in-law, namely, Kuljit Singh. The learned
counsel further submitted that Paul also miserably failed to prove any loss and damage suffered by
him and authorising him to forfeit Chaudhary's hard earned 45.00 lakhs (Rupees Forty five lakhs
only).
43. To buttress his arguments, Mr. Singh placed reliance upon the judgment of the Hon'ble High
Court of Delhi in the case of Rajbir Singh & Anr. v. Jaswant Yadav2 and stressed that under no
manner and circumstances can Paul justify the forfeiture of 45.00 lakhs (Rupees Forty five lakhs
only) and Chaudhary's suit be decreed against Paul by directing him to return the sum of 45.00
lakhs (Rupees Forty five lakhs only) along with interest at the rate of 18% per annum.
44. Per contra, Mr. Surendra Kumar learned counsel for Paul valiantly contended the arguments
advanced by the learned counsel for Chaudhary. The learned counsel submitted that as per the
pleadings of Chaudhary, the cause of action urged is not bundle of facts, rather bundle of lies. The
learned counsel for Paul further submitted that Chaudhary has alleged that Paul manipulated and
fixed higher sale consideration of 4.50 crores (Rupees Four crores and fifty lakhs only), which was
50.00 lakhs (Rupees Fifty lakhs RFA No. 404/2018 date of judgment 14.05.2018 CS DJ ADJ No.
516435/2016 Page No. 17/49 only) higher than the prevailing market value of the suit property. The
learned counsel further submitted that Chaudhary has averred in his plaint that Paul assured him
that he would return the earnest money of 45.00 lakhs (Rupees Forty five lakhs only) to him within
one year. The learned counsel drew attention of the court to paragraph No. 5 of the plaint and
submitted that it is Chaudhary's own case that the parties entered in a contract for sale-purchase of
the suit property for a total sale consideration of 4.50 crores (Rupees Four crores and fifty lakhs
only) after thorough negotiation, deliberation, and discussions on 30.11.2012.
45. Mr. Kumar learned counsel for Paul submitted that averments made by Chaudhary in his plaint
that he discovered the fraud played by Paul upon him within one week from the date of signing of
the agreement to sale is belied from the averments made by Paul in his set-off and counter-claim, as
a sum of 10.00 lakhs (Rupees Ten lakhs only) was paid by Chaudhary to Paul in the month of
October 2012 and further a sum of 35.00 lakhs (Rupees Thirty five lakhs only) was paid by him to
Paul on 30.11.2012. The learned counsel further submitted that the averments made by Chaudhary
in his plaint are self-contradictory and no fraud was played upon him by Paul. The learned counsel
further added that the sale consideration of 4.50 crores (Rupees Four crores and fifty lakhs only)
was agreed between the parties is consensus ad idem, out of their free will, consent, after thorough
negotiation, deliberation, and discussions.

46. Mr. Kumar the learned counsel for Paul shifted the entire weight of his arguments, on the
admissions made by Chaudhary (PW1) during his cross-examination that the balance consideration
remains unpaid by him. The learned counsel further submitted that CS DJ ADJ No. 516435/2016
Page No. 18/49 it has come out in the cross-examination of PW1 and PW2 that there was paucity of
funds at their end and the property at Bahadurgarh was sold on a much later date, particularly
beyond the cut-off date of the contract between the parties.
47. The learned counsel further submitted that Chaudhary (PW1) and his wife (PW2) have admitted
that the handwritten notes on the agreement to sale (Ex.PW1/1) were in the handwriting of
Chaudhary. The learned counsel once again stressed that it was never the case of the suit property
being valued higher than the prevailing market value, but it was the nonavailability of the funds on
part of Chaudhary that he could not pay the balance sale consideration to Paul in a timely manner
and the breach of contract resulted in a huge loss to Paul.
48. Mr. Kumar learned counsel for Paul further submitted that Chaudhary and his wife have
admitted the receipt of letter dated 09.07.2013, wherein Paul had categorically stated that despite
repeated extensions granted by him to Chaudhary, Chaudhary has failed to pay the balance 90% of
the sale consideration. The learned counsel further submitted that Paul by the said reminder letter,
put Chaudhary to notice and called upon him to pay the balance sale consideration along with
interest at the rate of 18% per annum on delay payment with effect from 01.03.2013 within 10 days
from the date of the letter and finalize the transaction. The learned counsel further submitted that
the pleadings and evidence before this court clearly proves that the breach of contract is on the part
of Chaudhary and not Paul, therefore Chaudhary's claim seeking refund of 45.00 lakhs (Rupees
Forty five lakhs only) be dismissed with exemplary costs.
CS DJ ADJ No. 516435/2016 Page No. 19/49
49. About the justification of a forfeiture of earnest money, Mr. Kumar the learned counsel for Paul
submitted that the reliance placed by Chaudhary on the judgment of Hon'ble High Court of Delhi in
Rajbir Singh & Anr. v. Jaswant Yadav3 does not come to his rescue as the same is not applicable to
the facts of the case at hand. The learned counsel further submitted that not only Paul has pleaded
that he suffered loss, but also proved that loss was suffered by him because of breach of contract by
Chaudhary. Mr. Kumar learned counsel for Paul added that forfeiture of earnest money becomes
insignificant if loss is pleaded and proved.
50. The learned counsel submitted that Paul has suffered loss of over 1.50 crores (Rupees One crore
and fifty lakhs only) as breach of contract by Chaudhary but has confined the same to 1.00 crore
(Rupees One crore only). The learned counsel further submitted that against the loss of 1.00 crore
(Rupees One crore only) claimed by Paul from Chaudhary, Paul has set-off the sum of 45.00 lakhs
(Rupees Forty five lakhs only) and further as a counter-claim, Paul has sought the balance sum of
55.00 lakhs (Rupees Fifty five lakhs only) from Chaudhary.
51. The learned counsel further submitted that Paul does not have any male descendants and he had
commitments towards his daughters and sons-in-law, whose fulfilment were hinged to the payment

of balance sale consideration by Chaudhary. The learned counsel further submitted that as
Chaudhary failed to discharge his contractual obligations, Paul had to avail certain loans and pay
interest on the same. The learned counsel for Paul further added that RFA No. 404/2018 date of
judgment 14.05.2018 CS DJ ADJ No. 516435/2016 Page No. 20/49 because of the breach of contract
by Chaudhary, Paul's succession plan has been derailed and caused grave hardship to him and his
family members.
52. Mr. Surendra Kumar learned counsel for Paul submitted that about the loss caused to Paul on
account of fall in the prices of the suit property, this Court must take judicial notice of the slump in
market prices of the suit property. The learned counsel further submitted that the testimony of Paul
(DW1) makes it abundantly clear that he has filed documentary evidence as proof of loss and
damages and the same has gone unchallenged by Chaudhary. To add sinew to the above submission,
the learned counsel placed reliance upon the judgment of the Hon'ble High Court of Calcutta
reported as A.E.G. Carapiet v. A.Y. Derderian,4 Sarwan Singh v. State of Punjab 5 and Laxmibai
(Dead) Thr. L.Rs. and Ors. v.
Bhagwantbuva (Dead) Thr. L.Rs. and Ors.6
53. The learned counsel for Paul concluded his arguments on the note that the suit preferred by
Chaudhary be dismissed with costs and Paul' set-off and counter-claim be allowed with costs. The
learned counsel added that the entire costs be awarded to Paul.
54. Mr. R.D. Singh rejoined his arguments and contended the fact that Paul has suffered any losses.
The learned counsel for Chaudhary submitted that the counter-claim filed by Paul is an afterthought
and with no loss suffered by Paul the set-off and counter-claim be dismissed. The learned counsel
further submitted that no letters and email as alleged were received by Chaudhary. The learned
counsel 1960 SCC OnLine Cal 44 :: AIR 1961 Cal 359, p. 362 pp. 9 AIR 2002 SC 3652 :: (2003) 1
SCC 240, p. 247 pp.9 AIR 2013 SC 1204 :: (2013) 4 SCC 97 pp. 31 CS DJ ADJ No. 516435/2016 Page
No. 21/49 added that the reliance placed upon the judgments by Paul are misplaced. The learned
counsel further added that the position is well settled in law that the earnest money cannot be
forfeited as a matter of right and the same be returned by the seller to the buyer. The learned
counsel concluded his arguments on the note that forfeiture of earnest money is not provided in the
terms and conditions of the agreement to sale and thus Paul is duty bound in law and factually to
return the entire sum of 45.00 lakhs (Rupees Forty five lakhs only) to Chaudhary with the costs of
the suit. Reasoning & Findings
55. I, have perused the complete case record, considered, and deliberated over the submissions
advanced by the learned counsels for the parties. The issue-wise findings ensue in the following
paragraphs of this judgment.
Issue No.1 Whether the plaintiff was not willing to perform agreement to sell dated 30.11.2012, if so
its effect?

56. The onus to prove the issue No. 1 has been casted upon Paul. On bare perusal of the contract
entered between the parties, it is observed that the total sale consideration agreed between the
parties was 4.50 crores (Rupees Four crores and fifty lakhs only) against which Chaudhary paid Paul
a sum of 45.00 lakhs (Rupees Forty five lakhs only). The entire payment was to be paid by
Chaudhary to Paul before March/April 2013, the actual physical possession of the property to be
handed over and the sale deed was to be executed on receipt of full payment. It is observed from the
written contract dated 30.11.2012 7 entered between the parties that it does have duly countersigned
handwritten endorsements by both of them.
Ex.PW1/1 (OSR) CS DJ ADJ No. 516435/2016 Page No. 22/49
57. The defence urged by Paul against Chaudhary's claim of refund of earnest money in his written
statement and as a set-off and counter-claim is that it was Chaudhary, who failed to perform his part
of the obligation of the contract by paying the balance sale consideration of 4.05 crores (Rupees
Four crores and five lakhs only) by the end of April 2013. It is urged by Paul that initially agreement
between the parties was made in October 2012 and a sum of 10.00 lakhs (Rupees Ten lakhs only)
was paid by Chaudhary to Paul and the entire transaction was to be completed by February 2013.
Paul has acknowledged receipt of further 35.00 lakhs (Rupees Thirty five lakhs only) and in total
45.00 lakhs (Rupees Forty five lakhs only) from Chaudhary as on 30.11.2012 at the time of signing
of the written agreement between the parties.
58. However, Paul has also urged in his written statement that the timelines for payment of total
sale consideration were recast at behest of Chaudhary on 30.11.2012. It is pleaded by Paul that the
same can be corroborated from the relevant endorsements made in the sale agreement
(Ex.PW1/1(OSR)) by Chaudhary in his own handwriting.
59. Paul has also pleaded that when Chaudhary failed to make payment of the balance sale
consideration by the month of April 2013, he on 09.07.2013 issued a written letter Chaudhary
reminding him about the unpaid amount despite repeated extensions granted to him upto
15.04.2013 and thereafter till 30.06.2013. Through his letter dated 09.07.2013 called upon
Chaudhary to pay the balance sale consideration along with interest at the rate of 18% per annum
within 10 days from the date of the said letter.
60. Paul has also urged that after 09.07.20138, he issued letters dated 31.07.2013 9 , 10.08.201310
and an email dated 15.08.2013 11 whereby a scanned copy of letter dated 31.07.2013 was sent and
called upon Chaudhary to pay the balance amount. Paul in his letter dated 31.07.2013 sought written
confirmation from Chaudhary before 15.08.2013 that he would pay the balance sale consideration
by 31.08.2013. Paul has also averred that despite receipt of his letter dated 09.07.2013 an email
dated 10.08.2013, Chaudhary not only refrained from replying to the aforesaid letter and email, but
also miserably failed to pay the balance sale consideration of 4.05 crores (Rupees Four crores and
five lakhs only).

61. On the other hand, the case pleaded by Chaudhary is that Paul dishonestly, and fraudulently
allured him to enter a contract for purchase of the suit property at a much higher price of 4.50
crores (Rupees Four crores and fifty lakhs) than the prevailing market rate. As per Chaudhary, the
true value of the suit property was 4.00 crores (Rupees Four crores only) and not 4.50 crores
(Rupees Four crores and fifty lakhs only) and thus when he approached Paul asking for a refund of
his 45.00 lakhs (Rupees Forty five lakhs only), Paul initially sought a period of one year to refund
the entire amount to Chaudhary. It is urged by Chaudhary that when he approached Paul in January
2014, Paul once again sought further period of one year to refund the sum of 45.00 lakhs (Rupees
Forty five lakhs only). It is also urged by Chaudhary that Paul had repeatedly cited his financial
hardship to return the entire sum, when he approached him Ex.DW1/A Colly.
Ex.DW1/B Colly.
Ex.DW1/D Colly.
Ex.DW1/E CS DJ ADJ No. 516435/2016 Page No. 24/49 once again in February 2015, Paul refused
the refund of 45.00 lakhs (Rupees Forty five lakhs only) on one pretext or other. Penultimately,
Chaudhary issued a notice dated 21.10.2015 calling upon Paul to return the entire sum of 45.00
lakhs (Rupees Forty five lakhs only).
62. The admitted facts are that the parties entered in a written contract for sale-purchase of a suit
property for a sum of 4.50 crores (Rupees Four crores and fifty lakhs only) against which Chaudhary
only paid a sum of 45.00 lakhs (Rupees Forty five lakhs only) to Paul. It is also admitted that as per
the written contract the balance sale consideration was to be paid by March/April 2013. It is an
admitted fact that a sum of 4.05 crores (Rupees Four crores and five lakhs only) remains unpaid by
Chaudhary to Paul. It is admitted by parties in their respective pleadings and by both the plaintiff'
witnesses that the endorsements made in the written contract12 were in the handwriting of
Chaudhary, as per which the entire sale consideration was to be paid by March/April 2013.
63. Chaudhary in his plaint has not averred a single word about having received a notice dated
09.07.2013 and an email dated 10.08.2013, however in his replication cum written statement to
Paul's written statement cum set-off and counter-claim, he has admitted the receipt of letter dated
09.07.2013 by his daughter. Chaudhary has also averred in paragraph No. 8 of his replication13 that
his daughter never intimated him about the letter dated 09.07.2013.
64. In his cross examination Chaudhary (PW1) testified that he does not know whether Paul had
issued a letter dated 09.07.2013 Ex.PW1/1(OSR) Replication, pp 8 under the heading Replication on
Merits CS DJ ADJ No. 516435/2016 Page No. 25/49 reminding him about the balance payment.
Chaudhary did admit that letter dated 09.07.2013 was received by his daughter. Chaudhary
admitted that his email address is progressindiabuilders@gmail.com. Chaudhary denied the
suggestion that he also received letters dated 31.07.2013, 10.08.2013 and an email dated 15.08.2013.
Chaudhary admitted that there has been no written communication on his part prior to the issuance
of legal notice dated 21.10.2015.14 At this stage, it is observed that the email dated 15.08.201315
stated to be sent by Paul to Chaudhary is marked with the recipient's email address as

progressindia@gmail.com, however, Chaudhary during his cross- examination has admitted his
email address as progressindiabuilders@gmail.com. It is found that no evidence has been led by
Paul that the correct email address of Chaudhary is progressindia@gmail.com and not
progressindiabuilders@gmail.com, thus this court concludes that the email dated 15.08.2013 by
Paul was not delivered to Chaudhary.
65. During her cross examination, Winky Chaudhary (PW2), wife of Chaudhary admitted that the
endorsements made on the first page of the written contract16 are in her husband in writing,
however she feigned ignorance about any extension date about the payment schedule sought by her
husband. She also denied the suggestion that her husband ever sought an extension of payment
schedule upto April 2013. PW2 stated that she has no knowledge whether her daughter received any
reminder letter dated 09.07.2013 calling for the payment of balance sale consideration. DW2 denied
the Ex.PW1/2 Colly.
Ex.PW1/E Ex.PW1/1 (OSR) CS DJ ADJ No. 516435/2016 Page No. 26/49 suggestion that her
husband received any letter dated 31.07.2013, 10.08.2013 and email dated 15.08.2013.
66. Section 37 of the Indian Contract Act, 1872 (hereinafter "the Contract Act") provides that the
parties to a contract must either perform or offer to perform their respective promises unless the
performance is dispensed with or excused under the provisions of the Contract Act or any other law.
Section 39 of the Contract Act provides that when a party to a contract has refused to perform, or
disabled himself from performing, his promise in its entirety, the promisee may put an end to the
contract, unless he has signified, by words or conduct, his acquiescence in its continuance.
67. In the case at hand, the admitted fact is that Chaudhary did not make any payment to Paul other
than 45.00 lakhs (Rupees Forty five lakhs only) against the total sale consideration of 4.50 crores
(Rupees Four crores and fifty lakhs only). It is Chaudhary's case that after one week from the date of
payment of 45.00 lakhs (Rupees Forty five lakhs only) he gained knowledge that Paul had fixed the
total sale consideration of the suit property 50.00 lakhs (Rupees Fifty lakhs only) higher than the
prevailing market value of 4.00 crores (Rupees Four crores only). It is also the case of Chaudhary
that Paul deliberately, knowingly, intentionally, and willingly concealed the material fact that the
market value of the suit property at that point in time was 4.00 crores (Rupees Four crores only)
and not 4.50 crores (Rupees Four crores and fifty lakhs only). Thereafter, Chaudhary instantly
sought refund of 45.00 lakhs (Rupees Forty five lakhs only) from Paul, who failed to do the needful
despite repeated requests and extension of time.
68. This Court finds that Chaudhary himself has averred in the paragraph No. 5 of the plaint that the
sale consideration of 4.50 crores (Rupees Four crores and fifty lakhs only) for the suit property was
agreed between the parties after thorough negotiation, deliberation, and discussion and thereafter
they entered a written contract on 30.11.2012. It is also observed that neither Chaudhary averred in
his plaint how and through whom, he gained knowledge about the fact of the true valuation of the
suit property being 50.00 lakhs (Rupees Fifty lakhs only) lesser than the total sale consideration of

4.50 crores (Rupees Four crores and fifty lakhs only). It is observed that in the plaint, Chaudhary
has averred that he gained knowledge after one week of the sale agreement dated 30.11.2012 about
the actual market value of the suit property, but during the cross examination, Chaudhary stated
that he came to know about the true market value of the suit property after about 12 to 15 days of the
execution of the agreement. The statement of Chaudhary in his cross-examination that he got to
know about the true market value of the suit property through various property dealer in the locality
is found to be beyond pleadings.
69. Similarly, the testimony of Winky Chaudhary (PW2) cannot come to Chaudhary's and take his
case any further, as when she was asked how she gained knowledge about the market value of the
suit property was 50.00 lakhs (Rupees Fifty lakhs only) lesser than 4.50 crores (Rupees Four crores
and fifty lakhs only), she riposted that she does not know, her husband knows.
70. This Court finds that Paul indeed has shifted the onus casted upon him, by proving that he did
put Chaudhary to notice by a letter dated 09.07.2013 whose delivery is admitted, and wherein Paul
CS DJ ADJ No. 516435/2016 Page No. 28/49 called upon him to perform his part of the contractual
obligations. It is found that Paul has "proved"17 that it was Chaudhary, who was not willing to
perform the sale agreement dated 30.11.2012, as not only it is admitted by Chaudhary in his
pleadings that against the total sale consideration of 4.50 crores (Rupees Four crores and fifty lakhs
only), he only paid 45.00 lakhs (Rupees Forty five lakhs only), but also admitted by him in his cross
examination that he only paid 45.00 lakhs (Rupees Forty five lakhs only) to Paul against the total
sale consideration. This Court also finds that Chaudhary has failed to lead any evidence to prove his
contention that Paul defrauded him by concealing the true and correct market value of the suit
property. It is held that no evidence has been led by Chaudhary that the market value of the suit
property as on 30.11.2021 was 4.00 crores (Rupees Four crores only) and not 4.50 crores (Rupees
Four crores and fifty lakhs only). Further, no evidence has been led by Chaudhary to prove that Paul
acted dishonestly and played fraud upon him.
71. A relevant fact, which has been elicited by Paul during Chaudhary's cross-examination is that
Chaudhary had planned to sell his property at Bahadurgarh and pay that sale consideration to Paul
towards the discharge of his obligations, however, Chaudhary only managed to sell the Bahadurgarh
property after about two and half years from the date of the execution of the sale agreement dated
30.11.2012. Therefore, an inference and a logical conclusion which can be drawn from the above is
that it seems to be more of a case of "Proved".-- A fact is said to be proved when, after considering
the matters before it, the Court either believes to exist, or considers its existence so probable that a
prudent man ought, under the circumstances of the particular case, to act upon the supposition that
it exists - See Section 3, Interpretation Clause, the Indian Evidence Act, 1872.
CS DJ ADJ No. 516435/2016 Page No. 29/49 nonavailability of funds on part of Chaudhary and
consequential failure to perform the contract.
72. This Court also finds that Paul successfully elicited from Chaudhary during his
cross-examination that he is in the business of construction of residential and commercial
properties. I do find it improbable that a person, who is engaged in the business of realty would

enquire about the going market rate of an immovable property not only after entering in a contract,
but also after having paid a sum of 45.00 lakhs (Rupees Forty five lakhs only). Thus, it is highly
improbable that a person, who himself is stated to be engaged in the business of the construction of
residential and commercial properties would not be well versed with going market prices of
properties in his own neighbourhood, particularly, the same building where he resided, and him
being defrauded by Paul, by selling the suit property at a higher price is found to be "disproved".18
73. In view of the above discussions, observations and findings, this Court rules that it was
Chaudhary, who was not willing to perform the agreement to sell dated 30.11.2012. The failure to
perform and discharge the obligations as enshrined in the written contract between the parties
tantamount to breach of contract. As per the Contract Act, the remedy for breach of contract is
either seeking its performance by a decree of specific performance and/or compensation for the loss
caused by such breach. In the case at hand, Paul has already lodged his claim for loss against
Chaudhary by set-
"Disproved".-- A fact is said to be disproved when, after considering the matter before it, the Court
either believes that it does not exist, or considers its non-existence so probable that a prudent man
ought, under the circumstances of the particular case, to act upon the supposition that it does not
exist - See Section 3, Interpretation Clause, the Indian Evidence Act, 1872. CS DJ ADJ No.
516435/2016 Page No. 30/49 off and a counter-claim qua which issue Nos. 2 and 3 have been
adequately framed and the same shall been taken up in the ensuing paragraphs of this judgment.
74. Accordingly, issue No. 1 is decided in favour of Paul and against Chaudhary.
Issue No.2 Whether the defendant is entitled to claim set-off as prayed in the counter-claim?
& Issue No.3 Whether the defendant is entitled to counter-claim as prayed?
75. The issue Nos. 2 and 3 are being taken up together by me as the same are correlated and
intertwined. The onus to prove both the issues has been casted upon Paul.
76. The relevant provisions about set-off and counter-claim are enshrined in Order VIII of the Code
of Civil Procedure, 1908 (hereinafter "CPC"). In all cases where the defendant does not merely
defend the claim preferred by the plaintiff against him but also advances his claim to recover money
or other relief against the plaintiff, the provisions of set-off and counter-claim would be applicable
in such circumstances. In Black's Law Dictionary, 'setoff' has been defined as a defendant's
counterdemand against the plaintiff, arising out of a transaction independent of the plaintiff's claim;
A debtor's right to reduce the amount of debt by any sum the creditor owes the debtor; the
counterbalancing sum owed by the creditor. 19
77. Set-off means a claim set against another. It is a reciprocal acquittal of debts between two
persons. Where a written statement Black's Law Dictionary, p. 640, Second Pocket Edn. CS DJ ADJ
No. 516435/2016 Page No. 31/49 contains a claim for set-off, it has the same effect as plaint in a
cross- suit, and the rules relating to written statement by defendant apply to written statement in

answer to claim of set-off - See Order VIII, Rule 6(3), CPC.
78. The following conditions must be satisfied before the defendant can plead set-off against the
plaintiff:
(a) The suit of the plaintiff must be for recovery of money.
(b) The claim of the defendant against the plaintiff must be for an ascertained sum of money.
(c) Such some must be legally recoverable.

(d) Such some must not exceed pecuniary limits of jurisdiction of
the Court.
(e) Both the parties must fill in the same character in set-off as
well as suit claim.
(f) Claim of set-off must be recoverable by the defendant or by
all the defendants, if more than one.
(g) It must be recoverable from the plaintiff or from all the
plaintiffs, if more than one.
79. Therefore, no set-off can be pleaded where the suit is not for recovery of money. If the claim of
set-off is time-barred, it is not legally recoverable and hence set off cannot be allowed. If the set- off
exceed pecuniary limits, the proper course is to file a separate suit. However, it is open to the
defendant to abandon or relinquish a portion of the claim more than pecuniary limits and continue
set-off within certain limits to avoid bringing a separate suit.
80. In case of set-off claimed by the defendant, the plaintiff is entitled to file a written statement.
The court can pass a decree in favour of the defendants and against the plaintiff. The effect of set- CS
DJ ADJ No. 516435/2016 Page No. 32/49 off, if allowed, is either to negative or to reduce the claim
of the plaintiff against the defendant. The court fees are payable in respect of set-off.
81. 'Counter-claim' has been defined as a claim for relief asserted against an opposing party after an
original claim has been made; esp., a defendant's claim in opposition to or as a setoff against the
plaintiff's claim. 20 A counter-claim is a claim made by the defendant in a suit against the plaintiff.
It is a claim, independent of an inseparable from the plaintiff's claim, in foreseeable by cross-
section. A counter-claim is treated as a cross-suit which must contain all the features of a regular
suit and must be filed within the limitation period.
82. Order VIII, Rule 6A, CPC was added to the Code by way of an amendment in the year 1976. The
relief of a counter-claim is discretionary remedy, but such discretion is to be exercised in a judicious
manner. The object of the said amendment was to ensure trial of all issues between the parties at
one time as far as possible. It makes a complete departure from provisions for set-off and makes it
easier for the defendant to make a counter-claim. The restrictions attached to set-off are not
applicable to the counter-claim. The right to make a counter-claim is in addition to the right to claim
set-off and both are not inconsistent or mutually exclusive.

83. As a matter of fact, when the claim against the plaintiff exceeds the claim against the defendant,
it is a combination of both, set-off, to the extent of plaintiff's claim, and counter-claim for the excess
over and above such claim. As observed in the preceding Black's Law Dictionary, p. 153, Second
Pocket Edn. CS DJ ADJ No. 516435/2016 Page No. 33/49 paragraphs of this judgement, a
counter-claim is required to be treated as an independent suit in view of the provisions enshrined
under Order VIII, Rule 6A, CPC.
84. The defendant can set up any right accruing against the plaintiff. However, there is one
important condition, which is that such cause of action must have arisen before the written
statement was filed or before the time to submit written statement has expired. It is immaterial
whether it has accrued before or after the institution of the suit, but no counter-claim can be made
to set up any right or claim which has accrued after the time for filing the written statement or
delivering the defence has lapsed. Similarly, the counter-claim must not exceed the pecuniary limits
of the jurisdiction of the court. It has the same effect as that of a cross-suit, and the rules relating to
a written statement by defendant apply to a written statement filed in answer to a counter-claim. In
short, a set- off or counterclaim cannot travel beyond the scope and limit of the suit with which it is
concerned. Set-off and counter-claim are valuable provisions to avoid multiplicity of legal
proceedings. They enable parties to lodge and address their grievances against each other before one
forum. They seek to ensure consistent and coherent trial of the suit.
85. Now coming to the case at hand, the question which is to be answered is whether Paul has
rightly and justifiably forfeited the earnest money to the tune of 45.00 lakhs (Rupees Forty five
lakhs only) paid by Chaudhary, as a set-off, and further his counter-claim of 55.00 lakhs (Rupees
Fifty five lakhs only) as compensation for damages, loss on account of breach of contract is also
tenable.
86. The relevant legal provisions to answer the above question are enshrined under Chapter VI,
Section 73 - 75 of the Contract Act. However, with no clause in the written contract between the
parties where the penalty for breach of contract by either party is stipulated it is observed that
Section 74 of the Contract Act would have no applicability, and rather Section 73 of the Contract Act
would be relevant and applicable to the facts of the present case.
87. Section 73 of the Contract Act reads as under:
"73. Compensation for loss or damage caused by breach of contract.-- When a

contract has been broken, the party who suffers by such breach is entitled to receive,
from the party who has broken the contract, compensation for any loss or damage
caused to him thereby, which naturally arose in the usual course of things from such
breach, or which the parties knew, when they made the contract, to be likely to result
from the breach of it.

Such compensation is not to be given for any remote and indirect loss or damage
sustained by reason of the breach.
Compensation for failure to discharge obligation resembling those created by

contract.-- When an obligation resembling those created by contract has been
incurred and has not been discharged, any person injured by the failure to discharge
it is entitled to receive the same compensation from the party in default, as if such
person had contracted to discharge it and had broken his contract.
Explanation.-- In estimating the loss or damage arising from a breach of contract, the
means which existed of remedying the inconvenience caused by the non-performance
of the contract must be taken into account."
88. Section 73 has eighteen illustrations appended to it, however the relevant illustrations for the
present case are illustration (k) and
(l), which reads as under:
(k) A contracts with B to make and deliver to B, by a fixed day, for a specified price, a certain piece of
machinery. A does not deliver the piece of machinery at the time specified, and in consequence of
this, B is obliged to procure another at a higher price than that which he was to have paid to A, and
is prevented from performing a contract which B had made with a third person at the time of his
contract with A (but which had not been then communicated to A), and is compelled to make
compensation for breach of that contract. A must pay to B, by way of compensation, the difference
between the contract price of the price of machinery and the sum paid by B for another, but not the
sum paid by B to the third person by way of compensation.
(l) A, a builder, contracts to erect and finish a house by the first of January, in order that B may give
possession of it at that time to C, to whom B has contracted to let it. A is informed of the contract
between B and C. A builds the house so badly that, before the first of January, it falls down and has
to be re-built by B, who, in consequence, loses the rent which he was to have received from C, and is
obliged to make compensation to C for the breach of his contract. A must make compensation to B
for the cost of rebuilding the house, for the rent lost, and for the compensation made to C."
[Emphasis added by underlining, and highlighting of text]
89. Breach does not give a direct right to claim the loss suffered. The claim for compensation must
be adjudicated by the Court and not a party to the contract - See State of Karnataka v. Shree
Rameshwara Rice Mills.21 Breach by one party merely gives to the other party a right to sue and
have compensation assessed. The claim does not give rise to a debt until the liability is adjudicated
upon, and the compensation assessed.

AIR 1987 SC 1359 CS DJ ADJ No. 516435/2016 Page No. 36/49
90. In relation to liability, general damages are those which arise naturally and in the normal course
of events, whereas special damages are those which do not arise naturally out of the defendants'
breach and are recoverable only where they were in the reasonable contemplation of the parties at
the time, they made the contract. Losses that naturally arise from breach of contract are awarded as
a matter of course. These will be presumed to be the natural or probable consequence of the wrong
complained of, with the result that the plaintiff is required only to assert that such damage has been
suffered.
91. In some instances, loss or damage does not arise naturally from the breach, but compensation is
awarded because both parties knew when the contract was entered into that it was the likely result
of the breach. This includes reasonably foreseeable losses, those that are normally prudent person,
standing in his place possessing his information when contracting would have reason to foresee as
probable consequences of future breach. It is necessary to prove that not only the plaintiff but also
the defendant knew when the contract was made about the special law is likely to result from the
breach -- see illustration (k) and (l), Section 73 of the Contract Act.
92. A loss which is not a normal consequence of a breach is regarded as remote, and unless the
parties knew when they enter the contract that the loss was a likely result of the breach, damages are
not awarded. Although the normal measure of damages is based on a quantification of the loss
suffered because of the breach, the Court may award more than the normal measure of damages, by
taking into account the defendant's motives for conduct. Such damages are exemplary or punitive
damages and can be awarded. CS DJ ADJ No. 516435/2016 Page No. 37/49
93. The nominal damages are awarded when there is a violation of a legal right and it gives no right
to any real damages yet give the right to a judgement because the right has been violated. Nominal
damages are awarded when the breach has not caused any loss to the plaintiff, or where the plaintiff
failed to prove the loss or where there is no basis for asserting the amount.
94. A famous law report of Hadley v. Baxendale22 on the facts of breakage of crank shaft of a steam
engine of a mill, communication of special circumstances and remoteness of damage still holds the
water and has withstood the test of times, although the same was pronounced prior to the
enactment of the Contract Act.
95. The Apex Court in Karsandas H. Thacker v. Saran Engineering Co. Ltd.23 upheld the legal
principle as culled out in Hadley v. Baxendale24 that when a party commits breach of contract, the
other party is entitled to receive compensation for any loss by the damage caused to him which
naturally arose in the usual course of business from such breach or which the parties knew when
they made the contract to be likely to result from the breach of it. Remote and indirect loss or
damage sustained by reason of the breach will not entitle the party complaining breach, to any
compensation.

96. In a contract, pertaining to sale-purchase of immovable property if either party to an agreement

to transfer the immovable property refuses to perform his promise, the other party can seek specific
performance and compensation in the alternative, or in addition to specific performance
compensation to be assessed Court of Exchequer (1854) 156 ER 145 AIR 1965 SC 1981 Court of
Exchequer (1854) 156 ER 145 CS DJ ADJ No. 516435/2016 Page No. 38/49 according to principles
of Section 73 of the Contract Act. 25 The admitted position in the case at hand is that Paul has not
sought a decree of specific performance, rather he has sought compensation for damages and loss
caused to him by breach of contract by set-off and counter-claim against Chaudhary.
97. The Apex Court in Jagdish Singh v. Natthu Singh26 held that the measure of the compensation
in sale-purchase contracts of immovable property is by the standards of Section 73 of the Contract
Act. It was observed therein that the legislature has not prescribed a different measure of damages
in the case of contracts dealing with land from that laid down in the case of contracts relating to
commodities.
98. The position is well settled in law that mere breach of contract does not entitle award of
damages and it in necessary that unless by breach of contract losses are caused, a person who is
guilty of breach cannot claim damages and such alleged damages forfeit an amount received from
the other party.
99. Section 73 of the Contract Act clearly provides that an aggrieved person cannot claim damages
unless losses are proved to be caused to him on account of breach of contract by the other side. This
aspect has been so held in the Constitution Bench judgment of the Hon'ble Supreme Court in the
case of Fateh Chand v. Balkishan Dass27 and which judgment has been followed by the Apex Court
in the landmark judgment on law of damages under the Contract Act in See Section 21 of the
Specific Relief Act, 1963 (1992) 1 SCC 647, pp 27-28 at p. 657 AIR 1963 SC 1405 CS DJ ADJ No.
516435/2016 Page No. 39/49 the case of Kailash Nath Associates v. Delhi Development Authority &
Anr. 28
100. At this stage, I would like to observe that the reliance placed by the learned counsel for Paul on
the law reports of A.E.G. Carapiet v. A.Y. Derderian, 29 Sarwan Singh v. State of Punjab 30 and
Laxmibai (Dead) Thr. L.Rs. and Ors. v. Bhagwantbuva (Dead) Thr. L.Rs. and Ors.31 does not come
to the rescue of Paul, as it is Paul who has to prove his own case i.e., losses suffered by him on the
breach caused by Chaudhary and the same is based on the dictum as old as the hills, one who avers
must prove.
101. Keeping the above legal provisions, legal principle and ratio of judicial pronouncements foisted,
in the case at hand against Chaudhary's money claim of 45.00 lakhs (Rupees Forty five lakhs only),
Paul has preferred a counterclaim of 1.00 crore (Rupees One crore only) as damages for the loss
suffered by him due to the breach of contract by Chaudhary. Paul has set-off a sum of 45.00 lakhs
(Rupees Forty five lakhs only) paid by Chaudhary to him as earnest money against his counter-claim
of 1.00 crore (Rupees One crore only) as damages and has further sought the balance sum of 55.00
lakhs (Rupees Fifty five lakhs only) as a money decree along with costs.

102. Paul has pleaded in his written statement and counter-claim that on account of breach of
contract by Chaudhary's failure to pay the balance sale consideration of 4.05 crores (Rupees Four
crores and five lakhs only) as per the agreed terms and conditions, though (2015) 4 SCC 136 1960
SCC OnLine Cal 44 :: AIR 1961 Cal 359, p. 362 pp. 9 AIR 2002 SC 3652 :: (2003) 1 SCC 240, p. 247
pp.9 AIR 2013 SC 1204 :: (2013) 4 SCC 97 pp. 31 CS DJ ADJ No. 516435/2016 Page No. 40/49 he
suffered losses on four counts, but he is asserting only three of them and confining his losses to 1.00
crore (Rupees One crore only).
103. Firstly, a loss of 1.00 crore (Rupees One crore only) on account of fall in the market price of the
suit property. Secondly, Paul could not honour his commitment of repaying the loan availed by his
son-in-law, who was burdened with an interest of 7,05,497/- (Rupees Seven lakhs five thousand four
hundred and ninety seven only). Thirdly, a loss of 43.20 lakhs (Rupees Forty three lakhs and twenty
thousand only) suffered by his son-in-law, to whom Paul had committed to pay a sum of 2.50 crores
(Rupees Two crores and fifty lakhs only) out of the sale proceeds of the suit property for purchase of
1/5th share in the banquet hall, but who had to settle with letting out of the banquet hall and not
purchase of the same. Paul has withheld and not pressed his claim of 22.00 lakhs (Rupees Twenty
two lakhs only) availed as a loan for purchase of an immovable property for his grandsons. Though,
the counter-claim of losses suffered by Paul on the above-stated three counts adds upto a figure of
1,50,25,497/- (Rupees One crore fifty lakhs twenty five thousand four hundred and ninety seven
only), however, Paul has confined his losses to a counter-claim of 1.00 crore (Rupees One crore
only).
104. To prove the losses suffered, Paul has relied upon his oral testimony along with a bank
statement from Axis Bank32 to show payment of 7,05,497/- (Rupees Seven lakhs five thousand four
hundred and ninety seven only) as interest, and a copy of ledger account33 regarding the rent of
43.20 lakh paid by his son-in-law, Ex.DW1/F Ex.DW1/G CS DJ ADJ No. 516435/2016 Page No.
41/49 Kuljit Singh. It is observed from the bank statement34 that the date of statement is
18.04.2019 and the loan was sanctioned to Kuljit Singh, son-in-law of Paul as a mortgage loan. It is
also observed that disbursed loan amount is 34,91,448/- for a term of 91 months w.e.f. 10.01.2012
till 10.04.2021. It is further observed that the said loan was availed almost 11 months prior to the
date of sale agreement in question i.e., 30.11.2012 and yet there is no mention of the same in the
written contract (Ex.PW1/1) between the parties.
105. Regarding, the statement of ledger account,35 it is observed that the same pertains to the rent
account of Masala Magic Hospitality Pvt. Ltd., 36 Rama Road, Industrial Area, New Delhi - 110015.
It is observed that the said ledger account pertains to the period 01.04.2013 to 31.01.2016, which is
after the date of signing of the contract between the parties i.e., 30.11.2012. It is found that though
the ledger accounts are stated to be of a private limited company, neither the same are audited
accounts accompanied by an auditor's certificate nor Paul has led any evidence to prove the
constitution, directors, shareholding pattern of Masala Magic Hospitality Pvt. Ltd. A purported
ledger account merely bearing an endorsement stamp of blue colour, For Masala Magic Hospitality
Pvt. Ltd., Authorised Signatory fails to satisfy the standard mode of proof and its relevancy for the
fact in issue. It is also found that neither Kuljit Singh and Masala Magic Hospitality are signatories
to the written agreement in question nor parties to the present suit.

106. Paul during his cross-examination did answer a specific question put to him about the existence
of a forfeiture clause in Ex.DW1/F Ex.DW1/G CS DJ ADJ No. 516435/2016 Page No. 42/49
affirmative, by responding that Clause 8 of the contract provides for forfeiture of the earnest money.
Mr. Kumar learned counsel for Paul during his arguments had vociferously argued that forfeiture of
earnest money becomes insignificant if loss is pleaded and proved by a party. The relevant clause 8
of the contract36 reads as under:
"... ....
8) That any violation of the conditions of this Agreement shall be dealt with strictly as
per law and as per normal practices in such Sale Purchase deals."
107. On bare perusal of clause 8 of the contract and reading the whole contract holistically, I fail to
agree with Paul's contention that clause 8 of the contract empowers him to forfeit the entire earnest
money paid by Chaudhary. The relevant clause unequivocally beams out that in case of violation of
the conditions of the agreement, the same shall be dealt strictly as per law and the normal practice
in such transactions. This Court finds that there exists no clause in the written contract between the
parties, empowering Paul to forfeit the sum of 45.00 lakhs (Rupees Forty five lakhs only) paid as
earnest money by Chaudhary to Paul against the total sale consideration of 4.50 crores (Rupees
Four crores and fifty lakhs only).
108. Mr. Kumar the learned counsel for Paul had argued that it is a standard trade practice that
where a buyer resiles from his commitment not only the earnest money is forfeited, but also the
buyer is liable to pay double the amount of earnest money. I am not impressed by the contentions of
Paul and the arguments advanced by his counsel, merely because, not only one must plead, but also
prove the loss suffered on account of alleged breach of contract.
Ex.PW1/1 (OSR) CS DJ ADJ No. 516435/2016 Page No. 43/49
109. Though, Paul has pleaded in his written statement cum set-off and counter-claim that he
suffered losses to the tune of 1.00 crore (Rupees One crore only), but this Court based on the
pleadings, evidence and submissions of the parties arrive at the following findings, and conclude
that Paul has failed to prove the losses suffered by him on account of breach of contract by
Chaudhary:
(a) There exists no clause, recital in the written contract entered between the parties, which states
that it has been communicated to Chaudhary about the special purpose for which the contract is
intended and the sale proceeds generated from the contract were to be deployed, utilised in a certain
manner by Paul, and further in case of breach of contract by Chaudhary, he could be made liable for
such losses.
(b) Paul has also failed to prove that Chaudhary had knowledge about existence of any special
purpose, intent, and circumstances at the time of entering the contract with Paul.

(c) Keeping the nature of contract in mind, losses could have been proved by Paul by proving the
falling of prices of the suit property, and only if the prices of the property had fallen and breach was
committed by Chaudhary, Paul could have been held entitled to forfeit the sum of 45.00 lakhs
(Rupees Forty five lakhs only) as damages on account of loss caused. No shred of evidence has been
led by Paul to prove that the market price of the suit property and/or similar placed immovable
properties have fallen and consequentially he has suffered a loss of 1.00 crore (Rupees One crore
only) as price fall.
(d) Paul's claim that Chaudhary's lapse to pay the balance sale consideration resulted in his failure
to honour the commitment to clear the outstanding loan availed by his son-in-law from Axis Bank,
who had to service the loan by paying an interest of 7,05,497/- (Rupees Seven lakhs five thousand
four hundred and ninety seven only) flies in the face of Section 73 of the Contract Act, as the same
lacks remoteness of damage and is an indirect loss.
(e) Similarly, Paul has also failed to prove the loss of 43.20 lakhs (Rupees Forty three lakhs and
twenty thousand only) as the documentary evidence of ledger account as payment of rent37 is a
self-serving document. It is observed that Paul's claim of loss of 43.20 lakhs (Rupees Forty three
lakhs and twenty thousand only) as 1/5th share of rent paid by his son-in-law, on Paul's failure to
pay him 2.50 crores (Rupees Two crores and fifty lakhs only) out of the sale proceeds of the suit
property is not only hit by Section 73 of the Contract Act, but also is disproved. It is not out of place
to observe herein that there exists no privity of contract amongst Chaudhary, Paul's son- in-law,
Kuljit Singh and Masala Magic Hospitality Pvt. Ltd.
110. In view of the above findings and observations, this Court rules that Paul has failed to prove
that he suffered any loss to the tune of 1.00 crore (Rupees One crore only) as damages. Accordingly,
this Court holds that Paul's claim of 45.00 lakhs (Rupees Forty five lakhs only) as set-off and 55.00
lakhs (Rupees Ex.DW1/G CS DJ ADJ No. 516435/2016 Page No. 45/49 Fifty five lakhs only) as
counter-claim shall fail, and the issue Nos. 2 and 3 are answered against Paul and in favour of
Chaudhary. Issue No.4 Whether the plaintiff is entitled to recovery of money as prayed?
111. The onus to prove issue No. 4 is casted upon Chaudhary. This Court has already found and
concluded that not only Paul has failed to prove the existence of special circumstances being
mentioned in the written contract and/or the same were within the knowledge of Chaudhary, but
also Paul failed to prove that he suffered actual losses to the tune of 1.00 crore (Rupees One crore
only) on account of breach of contract by Chaudhary.
112. In the present case with Paul's claim of damages has been held to be disproved, and even if
Chaudhary is held to be guilty of breach of contract, yet Paul cannot forfeit as an entitled right, the
substantial amount of 45.00 lakhs (Rupees Forty five lakhs only) paid by Chaudhary to him under
the contract. It is observed that a sum of 45.00 lakhs (Rupees Forty five lakhs only) is 10% of the
total sale consideration of 4.50 crores (Rupees Four crores and fifty lakhs only), and therefore, in my
humble opinion, the entire sum of 45.00 lakhs (Rupees Forty five lakhs only) cannot be taken as

earnest money, as the earnest money is only a nominal amount of the total sale consideration - See
Shri Sunil Sehgal v. Shri Chander Batra and Ors.38
113. To further strengthen my opinion that Paul would be on the wrong side of law to forfeit the
entire sum of 45.00 lakhs (Rupees Forty five lakhs only), I place fruitful reliance upon the law
reports CS(OS) No. 1250/2006 date of decision 23.09.2015, High Court of Delhi :: 2015 SCC OnLine
Del 12831 CS DJ ADJ No. 516435/2016 Page No. 46/49 of the Hon'ble High Court of Delhi in
Ranbir Singh & Anr. v. Shri Bhup Singh & Ors.39 ; Rajbir Singh v. Jaswant Yadav40; Praveen
Talwar v. Naresh Kumar Mittal & Ors.41; Vandana Jain v. Rita Mathur & Ors. 42 The reliance
placed by the learned counsel for Chaudhary on the law report of the Hon'ble High Court of Delhi in
Rajbir Singh v. Jaswant Yadav43 does come to Chaudhary's rescue and solidifies his claim for return
of money.
114. In view of the findings arrived in the preceding paragraphs of this judgment and the
above-mentioned judicial pronouncements, this Court finds that Paul, the seller of the suit property
has no lawful right to forfeit the entire sum of 45.00 lakhs (Rupees Forty five lakhs only) paid as
earnest money by Chaudhary, the buyer of the suit property. However, the sum Chaudhary is
entitled to recover from Paul shall be ordered in the following paragraphs of this judgment under
the heading 'relief'. Accordingly, the issue No. 4 is answered in favour of Chaudhary and against
Paul. Issue No.5 Whether plaintiff is entitled to interest, if so at what rate and for what period?
115. The onus to prove issue No. 5 is also casted upon Chaudhary. Chaudhary has sought return of
45.00 lakhs along with pendente lite and future interest at the rate of 18% per annum.
116. Interestingly, on perusal of the plaint, particularly, paragraph No. 5 of the plaint it is observed
that Chaudhary has averred that the parties mutually agreed that if Chaudhary failed to purchase
the suit CS (OS) NO. 2049/2011 date of decision 18.08.2015, High Court of Delhi :: 2015 SCC
OnLine Del 11247 RFA No. 404/2018 date of decision 14.05.2018, High Court of Delhi RFA No.
678/2006 date of decision 26.11.2018, High Court of Delhi RFA No. 38/2018 date of decision
20.04.2018, High Court of Delhi RFA No. 404/2018 date of decision 14.05.2018, High Court of
Delhi CS DJ ADJ No. 516435/2016 Page No. 47/49 property, Paul shall return the amount taken
from him without interest. Though, in such transactions the courts do allow the money claims of
return of earnest money, advance money with interest as high as 18% p.a. to 21% p.a. - See Nehru
Place Hotels Ltd. v. Smt. Kanta Aggarwal44 and Kanta Aggarwal v. M/s Nehru Place Hotels Ltd.,45
however, I am not inclined to award 18% p.a. to Chaudhary, as this Court has found that Chaudhary
did fail to make payment to Paul as per the terms of the contract and has already ruled issue No. 1
against Chaudhary and in favour of Paul.
117. In the facts of the present case, pendente lite and future interest at the rate of 6% per annum
will meet the ends of justice. Accordingly, the issue No. 5 is answered in favour of Chaudhary and
against Paul.
Relief

118. In view of the above discussions, observations, findings, and particularly with issue No. 1 being
ruled against Chaudhary, in my opinion Paul at best is entitled to forfeit only a nominal amount of
the advance amount paid by Chaudhary. Accordingly, this Court orders, Paul to forfeit 10% of 45.00
lakhs (Rupees Forty five lakhs only) which computes to be a sum of 4,50,000/- (Rupees Four lakhs
and fifty thousand only), which is 1% of the total sale consideration of 4.50 crores (Rupees Four
crores and fifty lakhs only).
119. Accordingly, Chaudhary's suit is decreed against Paul for a sum of 40,50,000/- (Rupees Forty
lakhs and fifty thousand only) along with simple interest at the rate of 6% p.a. from the date of filing
of suit i.e., 01.12.2015 until the date of its actual realisation.
2011 (123) DRJ SLP (Civil) Nos. 22065/2011 and 22130/2011 date of order 19.03.2012 CS DJ ADJ
No. 516435/2016 Page No. 48/49 Paul's claim of damages of 1.00 crore (Rupees One crore only)
which constituted of a set-off of 45.00 lakhs (Rupees Forty five lakhs only) and counter-claim of
55.00 lakhs (Rupees Fifty five lakhs only) is dismissed. I deem appropriate to direct the parties to
bear their own costs.
120. Decree sheet be prepared in above terms. All primary documents, if any, filed by the parties
only be returned on filing of certified copies and as per applicable Rules. File be consigned to record
room only after due compliance and necessary action, as per Rules.
HARGURVARI Digitally signed by

HARGURVARINDER
NDER SINGH SINGH JAGGI
Date: 2021.05.05
JAGGI 16:43:58 +05'30'
Pronounced in the open Court (Hargurvarinder Singh Jaggi) through Virtual Proceedings Addl.
District Judge-02 on May 05, 2021 South West District Dwarka Courts Complex, Delhi CS DJ ADJ
No. 516435/2016 Page No. 49/49

SH Vikas Chaudhary Vs Unknown On 5 May 2021

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Sh.

Vikas Chaudhary ) vs Unknown on 5 May, 2021

Delhi District Court

CS DJ ADJ No. 516435/2016

IN THE MATTER OF:

Sh. Vikas Chaudhary )

Date of institution of suit: 02.12.2015

CS DJ ADJ No. 516435/2016

Indian Kanoon - http://indiankanoon.org/doc/19050932/ 2

with costs of the suit.

Indian Kanoon - http://indiankanoon.org/doc/19050932/ 3

Chaudhary failed to pay the balance amount to him.

Set-off and Counter-Claim

Indian Kanoon - http://indiankanoon.org/doc/19050932/ 4

Indian Kanoon - http://indiankanoon.org/doc/19050932/ 5

Indian Kanoon - http://indiankanoon.org/doc/19050932/ 6

30. On completion of pleadings, the following issues were framed on 15.02.2017:

S.No. Exhibit Mark put Description and Date, if any, of the

(ii) Ex.PW1/1(OSR) Copy of sale agreement dated 30.11.2012.

(iv) Ex.PW1/3 Copy of delivery report of speed post.

Indian Kanoon - http://indiankanoon.org/doc/19050932/ 7

S.No. Exhibit Mark put Description and Date, if any, of the

(ii) Ex.DW1/A (Colly.) Letter dated 09.07.2013 with registered post

(iii) Ex.DW1/B (Colly.) Letter dated 31.07.2013 with registered post

(iv) Ex.DW1/C Original envelope received back containing

(v) Ex.DW1/D (Colly.) Letter dated 10.08.2013 along with

(vi) Ex.DW1/E Copy of email dated 15.08.2013.

(vii) Ex.DW1/F Bank statement from Axis Bank regarding

(viii) Ex.DW1/G Copy of ledger account regarding the rent

CS DJ ADJ No. 516435/2016

Submissions advanced by the Counsels for the parties

Indian Kanoon - http://indiankanoon.org/doc/19050932/ 8

Indian Kanoon - http://indiankanoon.org/doc/19050932/ 9

Indian Kanoon - http://indiankanoon.org/doc/19050932/ 10

CS DJ ADJ No. 516435/2016 Page No. 19/49

Indian Kanoon - http://indiankanoon.org/doc/19050932/ 11

Bhagwantbuva (Dead) Thr. L.Rs. and Ors.6

Indian Kanoon - http://indiankanoon.org/doc/19050932/ 12

Ex.PW1/1 (OSR) CS DJ ADJ No. 516435/2016 Page No. 22/49

CS DJ ADJ No. 516435/2016 Page No. 23/49

Indian Kanoon - http://indiankanoon.org/doc/19050932/ 13

Indian Kanoon - http://indiankanoon.org/doc/19050932/ 14

CS DJ ADJ No. 516435/2016 Page No. 27/49

Indian Kanoon - http://indiankanoon.org/doc/19050932/ 15

Indian Kanoon - http://indiankanoon.org/doc/19050932/ 16

& Issue No.3 Whether the defendant is entitled to counter-claim as prayed?

Indian Kanoon - http://indiankanoon.org/doc/19050932/ 17

answer to claim of set-off - See Order VIII, Rule 6(3), CPC.

(a) The suit of the plaintiff must be for recovery of money.

(c) Such some must be legally recoverable.

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CS DJ ADJ No. 516435/2016 Page No. 34/49

87. Section 73 of the Contract Act reads as under:

"73. Compensation for loss or damage caused by breach of contract.-- When a

Indian Kanoon - http://indiankanoon.org/doc/19050932/ 19

Compensation for failure to discharge obligation resembling those created by

(l), which reads as under:

CS DJ ADJ No. 516435/2016 Page No. 35/49

[Emphasis added by underlining, and highlighting of text]

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AIR 1987 SC 1359 CS DJ ADJ No. 516435/2016 Page No. 36/49

Indian Kanoon - http://indiankanoon.org/doc/19050932/ 21

96. In a contract, pertaining to sale-purchase of immovable property if either party to an agreement