DLF UNIVERSAL LTD. versus EKTA SETH & ANR.

Citation: [2008] 10 S.C.R. 999 · Decided: 15-07-2008 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Disposed off

Judgment (excerpt)

[2008] 10 S.C.R. 999 
~4 
DLF UNIVERSAL LTD. 
A 
V. 
EKTA SETH & ANR. 
(Civil Appeal No. 4380 of 2008) 
JULY 15, 2008 
B 
-,, 
[S.B. SINHA AND DR. MUKUNDAKAM SHARMA, JJ.] 
Monopolies and Restrictive Trade Practices Act, 1969; 
S.12-B: 
Unfair trade practice - Compensation - Apartment c 
Buyer's Agreement - Default in payment of instalment by 
buyer - Cancellation of allotment and earnest money forfeited 
- Application claiming compensation on ground of unfair trade 
practice - MRTP Commission directing return of earnest 
L 
money with interest - Correctness of - Held: Parties to con-
D 
t 
tract are governed by terms and conditions thereof - In terms 
of clause 4 of agreement, seller vested in itself unrestricted 
power to increase the cost - Allottee stopped payment of in-
stalment after certain period as increase in cost of the flat was 
beyond his means - However, there were bonafide reasons 
E 
· on the part of the seller for not handing over possession of the 
flat in time and increase in cost - In such peculiar facts and 
circumstances of the case, in exercise of discretionary Juris-
diction under Article 142 of the Constitution the seller directed 
,), 
to refund 50% of the amount of earnest money forfeited by it F 
·\; 
to the buyerlallottee - Indian Contract Act, 1872 - Contract·-
Enforcing of 
Respondent booked a flat by entering into an Apart-
ment Buyer's Agreement with the appellant. The sale price 
of the flat was payable in instalments. Respondent after G 
making payment of certain instalments stopped further 
";..,. 
payment. The appellant demanded further sum on ac-
count of escalation of cost etc. in terms of the agreement, 
which was also not paid by the respondent. Therefore, 
999 
H 
1000 
SUPREME COURT REPORTS 
[2008) 10 S.C.R. 
A appellant cancelled the allotment of the flat, forfeited the · 
earnest money and returned the balance amount due. 
Aggrieved, the respondent filed an application before the 
M.R.T.P. Commission claiming compensation on the 
ground of unfair trade practice. The Commission directed 
B the appellant to return the earnest money with certain rate 
~-
of interest.· Hence the present appeal. 
Appellant contended that its action in forfeiting the 
earnest money was legal and justified. 
c 
Respondent submitted that the posse:ssion was pro-
posed to be given to him within three years from the date 
of booking, i.e. in 1993 but the possession was not given 
even till 1998, therefore, the appellant could not have re-
sorted to the power of forfeiture of the •~arnest money; 
0 that a sum of Rs.4,21,474.06/- demanded itowards cost of 
escalation,. increase in area, external electrification, fire 
fighting system and stand-by generators was exorbitant; 
and that it is unfair on the part of the appeillant to dema.nd 
such a huge amount in such a short span of six months. 
E 
· Disposing of the aJ>peal, the Court 
H~LD: 1.1. The parties to the contract are governed 
and bound by the terms and conditions c>f the agreemen~ 
entered into. In the case in hand though it cannot be de-
nied that the respondents at the time of s,igning the Apart-
F ment Buyer's Agreement was well awarn of the fact that 
~-
additional amount could be demanded oin account of fac-
tors enumerated in clause 4 of the agreiement, but what 
would be the max.iinum enhancement was not prescribed 
in' the agre·ement. It seems that by inserting the words "the 
G decision of the Company in this regard would be final and 
blnding on the Apartment Allottee" in clause 4 of the agree-
ment, the com·pany has vested in itself unrestricted power 
-¥ ~ 
to' increase the cost. (Para - 10) [1006-G,D & "E] . . 
, 
. 
. 
H 
1.2 As per clause 16 of the agreement, it was pro-
DLF UNIVERSAL LTD. v. EKTA SETH & 
1001 
ANR. 
posed that the possession could be given within three A 
years from the date of booking i.e. by 16th June, 1996 but 
· the same was not done even till September 1998 and it is 
evident from letter dated 22"d February, 1999 issued by 
the Company that there was still some time and further 
work to be done by it to enable it to hand over the pos-
B 
-y 
session. The only option given was that if there is delay 
in delivering the possession t~en the allottee would be 
entitled for refund of entire amount deposited with the 
appellant but without any interest. In other words,.as per 
the terms of the agreement no liability will accrue upon c 
the appellant due to delay in handing the possession. 
(Para - 11) [1006-F,G &

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