The Court decreed the suit for refund of Rs. 40 Lakhs plus 12% interest paid as earnest money by the Plaintiff, rejecting the Defendant's claim for specific performance due to lack of independent access and title clouds.
Defendant to refund Rs. 40 Lakhs with 12% interest from 11.12.2019; Plaintiff to have charge on property until refund.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
$~38
* IN THE HIGH COURT OF DELHI AT NEW DELHI
VINOD RAJORIA .....Plaintiff Through: Mr. Dinesh Garg and Ms. Rachna Agrawal along with Mr. Vinod Rajoria, Plaintiff
versus
MOHINDER KUMAR VERMA .....Defendant
Through: Mr. Giriraj Subramanium, Ms. Aadhyaa Khanna and Mr. Arun Kumar, Advocates Mr. Abhimanyu Bhandari, Sr. Advocate with Mr. Arjun Syal and Mr. Shreyan Das, Advocates for Applicants in I.A. No. 2108/2023, 6771/2023, 6761/2023
% CORAM:
HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA
O R D E R 22.07.2025
MANMEET PRITAM SINGH ARORA, J :
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No. 185/2 min East (0-09), situated in the Revenue Estate of Village Khanpur, Tehsil Mehrauli, Sainik Farms, New Delhi, along with the super-structure, tube-wells, boundary wall etc. built thereon and marked as ‘Plot A’ in the Site Plan annexed with the Sale Deed dated 16.04.1993 (‘Subject Plot’).
1.1. The Plaintiff in the alternative seeks refund of the part sale consideration paid under the ATS.
1.2. The Plaintiff inter-alia seeks relief of permanent injunction against the Defendant from selling, alienating or creating any third-party interest in any manner with respect to the title and possession of the Subject Plot.
Facts germane for adjudication of the present suit
4.1. The subject matter of the captioned suit is the Subject Plot. The ATS records that Plaintiff had agreed to purchase the Subject Plot for a sum of Rs. 3.30 Crores. As per the averment in the plaint an amount of Rs. 40 Lakh has been paid over to the Defendant by the Plaintiff on 11.12.2019 and balance amount of Rs. 2.90 Crores was to be paid by the Plaintiff to the Defendant at the time of handover of vacant possession of the Subject Plot.
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4.2. It is stated in the plaint that a large tract of land admeasuring 4 Bighas and 16 Biswa was owned by one Lt. Col. S.S. Kamal. It is stated that he divided this large tract of land into three (3) parts, each measuring 1 Bigha and 12 Biswa. The three (3) parts were assigned a private number i.e., Plot A, Plot B and Plot C respectively.
4.3. Plot A (i.e., Subject Plot) was purchased by the Defendant from Lt. Col. S.S. Kamal vide registered sale deed dated 16.04.1993. Plot B and Plot C were purchased by Defendant’s brother and Defendant’s sister-in-law respectively. However, since Plots A, B and C were initially owned by a common individual (i.e., Lt. Col. S.S. Kamal), it is a large tract of land, which is bounded on all sides and there is only one (1) entry and exit gate from Plot B, which is owned by the Defendant’s brother. The site plan of the larger tract depicting, Plot A, Plot B and Plot C with the boundary wall and the single entry and exit from Plot B is annexed to the Defendant’s sale deed dated 16.04.1993. The said site plan is reproduced herein below for reference:
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4.4. Summons in the captioned suit were issued to the Defendant vide order dated 07.03.2022 and the Defendant was directed to file written statement as well as affidavit of admission/denial of documents within four (4) weeks. However, since the Defendant elected to not file written statement, his right was foreclosed vide order dated 10.04.2024.
Interim Applications
“9. It is pertinent to note that the agreement to sell was executed on 11.12.2019 at the prevalent market rates of that time and that today the prices have increased considerably, and that selling the suit property in the year 2024 at the rates of the year 2019 not only causes undue and wrongful loss to the defendant but also brings undue and wrongful gain to the plaintiff, who gets to purchase the suit property at the rates of the year 2019.
10.That the non-execution of sale deed is solely attributable to the inaction on part of the plaintiff whose real intention, as it stands clear today, was to hold onto the property and wait for its market rates to rise to get criminal amounts of profit. That the conduct of the plaintiff puts the defendant at severe disadvantage as the defendant is now being forced to bear huge losses on the realizable sale proceeds qua suit property.
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11.It is further humbly submitted that on a bare perusal of the order sheets in the matter, it is clear that the defendant has all through been willing to execute the sale deed at the already decided terms and conditions as per the agreement to sell dated 11.12.2019, however, the inordinate delay is gravely prejudicial to financial interests of the defendant, who has every right to sell his property at the prevailing market rates.”
(Emphasis supplied)
5.1. I.A. 31220/2024 was partly heard on 07.01.2025, where after addressing arguments, Defendant agreed to refund the entire amount of Rs. 40 Lakh with 12% simple interest from the date of receipt of Rs. 40 Lakh i.e., 11.12.2019 to the Plaintiff in a time bound manner. The Plaintiff agreed to accept the refund with interest and have the suit disposed of in terms thereof. The relevant part of the order dated 07.01.2025 reads as under:
“1. Learned senior counsel for the defendant states that the defendant is ready and willing to refund the entire amount of Rs. 40 lakhs with interes t to the plaintiff in a time bound manner. He states that the rate of interest may be determined by this Court .
3. The defendant is hereby directed to refund the amount of Rs. 40 lakhs at the rate of 12% simple interest from the date of receipt of Rs. 40 lakhs till the date of refund.
(Emphasis supplied)
5.2. However, at the hearing held on 10.01.2025, learned counsel for the Defendant expressed Defendant’s inability to specify the timeline within which the amount of Rs. 40 Lakh along with interest would be refunded by
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the Defendant to the Plaintiff. In these facts the order dated 07.01.2025 was recalled so as to not prejudice the rights of the Plaintiff. The order dated 10.01.2025 reads as under:
“1. The matter was called out at 02:15 p.m. Learned counsel for the defendant stated that since the defendant is currently abroad, he is unwilling to give the advocate instructions with respect to the timeframe within which he will refund the amount of Rs. 40 lakhs with 12% simple interest as submitted before this Court on 07.01.2025.
(Emphasis supplied)
5.3. Subsequently, on 07.02.2025, I.A. 5759/2025 was filed by the Defendant under Section 16(c) of the Specific Relief Act, 1963 (‘Act of 1963’) seeking a direction to the Plaintiff to deposit the balance sale consideration of Rs. 2.90 Crores, which remains to be paid by the Plaintiff to the Defendant as per the ATS in Court and that the money so deposited to be placed in Fixed Deposit Receipt (‘FDR’). In this application it is averred that
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Defendant is ready and willing to execute the sale deed in pursuance to the ATS and, therefore, the balance consideration of Rs. 2.90 crores be placed in an interest-bearing FDR for the benefit of the Defendant and also to balance the equities. It is also averred in this application that the above said direction is necessary to give the Defendant benefit of price escalation of the Subject Plot. The relevant portion of the application reads as under:
“9. In these circumstances, it would be fair, expedient and in the interest of justice that the Hon'ble Court in order to balance the equities of the parties directs the Plaintiff to deposit the balance sale consideration of Rs. (2,90,00,000/- (Rupees Two Crores and Ninety Lakhs) under the Receipt cum Agreement to Sell dated 11.12.2019 in Court. So that, the money so deposited in Court by the Plaintiff is kept in a FDR and can earn interest as the time being taken in completion of statutory requirements in the present case is depriving the Defendant from the benefit of price enhancement of the Suit Property despite the Defendant being ready and willing to execute the Sale Deed under the Receipt cum Agreement to Sell dated 11.12.2019 with the Plaintiff.
(Emphasis supplied)
5.4. It is pertinent to note that the I.A. 5759/2025 filed by the Defendant makes no reference to his previous I.A. 31220/2024 (seeking dismissal of the suit). It also makes no reference to the orders dated 07.01.2025 and 10.01.2025, wherein the Defendant earlier agreed to refund to the Plaintiff advance amount of Rs. 40 Lakh with interest, which was paid by the Plaintiff in pursuance to the ATS and later, resiled from the said statement by not giving timeline for the said refund.
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5.5. The Plaintiff has filed its reply to both these applications and has pleaded that the Subject Plot forms part of a larger tract of land and before it can be handed over to the Plaintiff, it has to be demarcated and granted an independent access by the Defendant. The Plaintiff relies upon the order dated 25.01.2023, whereby a Local Commissioner was appointed by the Court to visit and identify the Subject Plot in order to ascertain whether there is an independent access to the Subject Plot. The Plaintiff further relies upon the report dated 31.01.2023 filed by the Local Commissioner confirming that there is no existing independent entry and exit gate for the Subject Plot.
5.6. Secondly , the Plaintiff states that there is a cloud on the title of the Defendant to the Subject Plot as Defendant’s brother and sister-in-law are claiming co-ownership rights in the said plot. Plaintiff refers to the applications (I.A. Nos. 2108/2023, 6771/2023 and 6761/2023) filed before this Court by third-parties i.e., Ms. Madhu Verma and Ms. Shaina Verma (wife and daughter of the Defendant’s brother respectively) claiming title rights in the Subject Plot. Plaintiff also refers to the pendency of National Company Law Tribunal (‘NCLT’) proceedings pending (i.e., C.P. 41/241-242/PB/2019) against the Defendant, wherein the said third parties are claiming that the Subject Plot is the asset of M/s Magistic Holding Pvt. Ltd. and is duly reflected as an asset in the balance sheet of the said company.
5.7. Thirdly , it is stated that since adjoining Plot B and Plot C are owned by Defendant’s brother and sister-in-law and with the disputes between Defendant and his family members, the Plaintiff has apprehension that the Subject Plot (i.e., Plot A) would not have any independent access and unhindered enjoyment/occupation .
Arguments of the Plaintiff
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6.1. He stated that Defendant did not disclose to the Plaintiff about the pendency of the NCLT disputes before entering into the ATS.
6.2. He stated that in these facts the allegation of the Defendant in I.A. 31220/2024 that Plaintiff is not ready and willing to perform his part of the ATS is without any merit.
6.3. He stated that as per the Clause ‘4’ of the ATS the Defendant had undertaken to handover vacant, peaceful physical possession of the Subject Plot to the Plaintiff but in view of the Defendant’s dispute with his brother and sister-in-law as well as the pending NCLT proceedings, performance of the said undertaking is no more possible.
6.4. He stated that Plaintiff was liable to pay Rs. 2.90 Crores to the Defendant only upon receiving the vacant and unencumbered possession of the Subject Plot. He states that in these facts the Defendant’s prayer in I .A. 5759/2025 seeking deposit of balance amount of Rs. 2.90 Crores is without any basis.
6.6. He stated on instruction from the Plaintiff, who is present in Court, that the Plaintiff prays for refund of the advance payment of Rs. 40 Lakh along
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with interest and also prays for a restraint against Defendant from disposing of the Subject Plot until the refund is affected.
6.7. He stated that in the facts and circumstance as they exist today, the Plaintiff is unwilling to purchase the Subject Plot. He states that Plaintiff is not willing to purchase the Subject Plot on as is where is basis. He states that the Plaintiff does not want to be stuck in between the rival claims of Defendant’s brother and sister-in-law.
Arguments of the Defendant
7.1. He states that the Local Commissioner appointed by this Court vide order dated 25.01.2023 has in his report dated 31.01.2023 identified the particular point, where a gate can be constructed for granting independent entry and exit to Plot A (i.e., Subject Plot). He states that the Court can appoint a Local Commissioner to ensure that independent entry and exit to Plot A (i.e., Subject Plot) is constructed.
7.2. He states that Defendant is the absolute owner of the Subject Plot and there is no cloud over the title of the Defendant qua the Subject Plot. He states that the sale deed of the Subject Plot admittedly stands in favour of the Defendant.
7.3. He states that M/s Majestic Holding Pvt. Ltd. has no right or title in the Subject Plot and, therefore, the NCLT order dated 19.03.2019 restraining the Defendant to deal with the properties of the firm i.e., M/s Majestic Holding
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Pvt. Ltd. would not be applicable to the ATS executed between the Plaintiff and the Defendant.
7.4. He states that Plaintiff’s legal notice dated 04.01.2022 calling upon the Defendant to have the Subject Plot demarcated, fenced and installed with an independent gate for entry and exit is extraneous to the ATS. He states that Plaintiff is not ready and willing to perform his part of the ATS as he has not filed any documents to show his capacity to pay the balance sale consideration as per the ATS.
8.2. He states that vide order dated 19.03.2019, NCLT has restrained the Defendant herein from dealing with the immovable property of M/s Majestic Holding Pvt. Ltd. He states that therefore, the sale of the Subject Plot would be in contravention of the said order.
Findings
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state of lack of independent entry and exit gate from the main road as well as during the pendency of the rival claims of Defendant’s brother and sister-inlaw on the Subject Plot. The Plaintiff has stated that he would be satisfied if the advance of Rs. 40 Lakh along with interest is directed to be refunded to the Plaintiff.
Defendant has opposed the said prayer of the Plaintiff.
Having perused the record and in view of the orders dated 07.01.2025 and 10.01.2025, this Court is of the opinion that the intent of the Defendant in filing I.A. 31220/2024 and seeking dismissal is that the Defendant is unwilling to refund the advance of Rs. 40 Lakh received under the ATS to the Plaintiff.
Similarly, having perused the record which includes the Local Commissioner’s report, this Court is of the opinion that the intent of the Defendant in filing I.A. 5759/2025 is that he wants a direction to the Plaintiff to purchase the Subject Plot on ‘as is where is basis’ in its existing physical position (without independent entry and exit to the plot) and with the
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knowledge that Defendant’s brother and sister-in-law are raising rival claims in the Subject Plot. Moreover, the Defendant wants the orders of this Court to ensure an independent entry and exit to Subject Plot is constructed through appointment of Local Commissioner.
Section 22 (1) (b) of Act of 1963:
(b) any other relief to which he may be entitled, including the refund of any earnest money or deposit paid or made by him, in case his claim for specific performance is refused .”
(Emphasis supplied)
“13. The buyer's charge engrafted in clause (b) of sub-section (6) of Section 55 of the Transfer of Property Act would extend and enure to the purchase money or earnest money paid before the title passes and
1 (2004) 3 SCC 711.
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property has been delivered by the seller to the purchaser , on the seller's interest in the property unless the purchaser has improperly declined to accept delivery of property or when he properly declines to accept delivery — including for the interest on purchase money and costs awarded to the purchaser of a suit to compel specific performance of the contract or to obtain a decree for its rescission. The principle underlying the above provision is a trite principle of justice, equity and good conscience. The charge would last until the conveyance is executed by the seller and possession is also given to the purchaser and ceases only thereafter. The charge will not be lost by merely accepting delivery of possession alone. This charge is a statutory charge in favour of a buyer and is different from contractual charge to which the buyer may become entitled to under the terms of the contract, and in substance a converse to the charge created in favour of the seller under Section 55(4)(b). Consequently, the buyer is entitled to enforce the said charge against the property and for that purpose trace the property even in the hands of third parties and even when the property is converted into another form by proceeding against the substituted security, since none claiming under the seller including a third-party purchaser can take advantage of any plea based even on want of notice of the charge. The said statutory charge gets attracted and attaches to the property for the benefit of the buyer the moment he pays any part of the purchase money and is only lost in case of the purchaser's own default or his improper refusal to accept delivery. So far as payment of interest is concerned, the section specifically envisages payment of interest upon the purchase money/price prepaid, though not so specifically on the earnest money deposit, apparently for the reason that an amount paid as earnest money simpliciter, as mere security for due performance does not become repayable till the contract or agreement gets terminated and it is shown that the purchaser has not failed to carry out his part of the contract, and the termination was brought about not due to his fault, the claim of the purchaser for refund of earnest money deposit will not arise for being asserted.
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1955]. Further, it is not the description by words used in the agreement only that would be determinative of the character of the sum but really the intention of parties and surrounding circumstances as well, that have to be looked into and what may be called an advance may really be a deposit or earnest money and what is termed as “a deposit or earnest money” may ultimately turn out to be really an advance or part of purchase price. Earnest money or deposit also, thus, serves two purposes of being part-payment of the purchase money and security for the performances of the contract by the party concerned, who paid it.”
(Emphasis Supplied)
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and exit to these plots through Plot B. The Defendant admits this position and this is also borne out from Local Commissioner’s report dated 31.01.2023.
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of the Defendant to provide the independent entry and exit gate to the Subject Plot as well as have the Subject Plot demarcated without the assistance of the Court is also a matter of record. In the considered opinion of this Court the expectation of the Plaintiff that the Subject Plot would be demarcated and an independent entry and exit gate will be provided for the Subject Plot (i.e., Plot A) is reasonable and in consonance with common prudence of a buyer of a plot.
This Court, therefore, finds that the Plaintiff’s statement recorded first on 07.01.2025 and subsequently on 26.05.2025 to this effect that it does not want to proceed with the ATS and seeks to limit its claim to refund of the advance consideration of Rs. 40 Lakh with interest is merited.
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Plaintiff to perform the ATS also negates the relief of dismissal of suit sought for in I.A. 31220/2024 .
During, the hearing dated 26.05.2025 this Court had observed in Court that the seller/Defendant’s conduct in opposing the buyer/Plaintiff’s request for rescinding the ATS and refund of Rs. 40 Lakh was opposed to reasonable conduct, given that the market prices of the Subject Plot admittedly have escalated.
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In reaching the above said conclusion this Court relies on the Judgments of the Supreme Court in the Fateh Chand v. Balkishan Dass2 and Kailash Nath Associates v. Delhi Development Authority and Another3 and the Judgment of Single Judge of this Court in the case of Pawan Kumar Jain v. Rajinder Kumar4 . In the facts of this case, the Defendant admits that market prices of the Subject Plot have increased exponentially.
“5. It becomes pertinent to note that Order XV Rule 1 of the Code is a power conferred upon a court to pronounce judgement where it finds on the first hearing of the suit that parties do not appear to be at issue on any question of law or a fact. Order XII Rule 6 of the Code, on the other hand, contemplates the rendering of a judgement on admission. Insofar as the power conferred under Order XII Rule 6 is concerned, it is by now wellsettled that a judgement of admission can be rendered only in case the Court discerns from the pleadings that a material fact which would warrant the suit being decreed has been unequivocally admitted. If the Order XV, on the other hand, places an obligation upon the Court to sift through the pleadings of parties and to consider whether a triable issue arises or whether the parties can be said to be at variance on a material question of law or fact which would warrant the suit being tried on merits. Trial Judge finds to the contrary, it may proceed to pronounce judgement forthwith.”
(Emphasis Supplied)
2 1963 SCC OnLine SC 49 at para 16.
3 (2015) 4 SCC 136 at para 42.
4 2011 SCC OnLine Del 777 at para 4.
5 2022: DHC:1877.
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In the facts of this case having perused the pleading of the parties, this Court is satisfied that no triable issue arises for consideration.
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MANMEET PRITAM SINGH ARORA, J
JULY 22, 2025/hp/sk
Click here to check corrigendum, if any
CS(OS) 131/2022
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3 issues framed by the court
Whether the Plaintiff was properly entitled to refund the advance payment of Rs. 40 Lakhs with interest due to inability to accept delivery of the property.
Whether the Defendant is liable to refund the purchase money given the property value escalation and lack of independent access.
Whether the Plaintiff has a charge on the property under Section 55(6)(b) of the Transfer of Property Act, 1882.
Colour shows how this judgement treated each authority
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Kunwar Chiranjit Singh v. Har SwarupExplained¶14
Kunwar Chiranjit Singh v. Har Swarup AIR 1926 PC 1 · Who else cites this
Maula Bux v. Union of IndiaExplained¶14
Maula Bux v. Union of India (1969) 2 SCC 554 · Who else cites this
Fateh Chand v. Balkishan DassRelied on¶23
Fateh Chand v. Balkishan Dass 1963 SCC OnLine SC 49 · Who else cites this
Kailash Nath Associates v. Delhi Development Authority and AnotherRelied on¶23
Kailash Nath Associates v. Delhi Development Authority and Another (2015) 4 SCC 136 · Who else cites this
Pawan Kumar Jain v. Rajinder KumarRelied on¶23
Pawan Kumar Jain v. Rajinder Kumar 2011 SCC OnLine Del 777 · Who else cites this
Meenakshi Manna v. Smt. Suriti Manna and AnotherRelied on¶24
Meenakshi Manna v. Smt. Suriti Manna and Another 2022: DHC:1877
2 provisions across 2 enactments
Mohinder Kumar Verma
Manmeet Pritam Singh Arora
As recorded by the court registry
A civil suit filed on the original side of a High Court exercising ordinary original civil jurisdiction.
Judgements on the same questions, provisions and authorities, from every court
