SMT. SARITA DOKANIA AND ANR.ETC. versus SMT. KRISHNA DEY AND ANR.

Citation: [2013] 5 S.C.R. 1089 · Decided: 06-05-2013 · Supreme Court of India · Bench: S.S. NIJJAR, PINAKI CHANDRA GHOSE · Disposal: Case Partly allowed

Judgment (excerpt)

[2013] 5 S.C.R. 1089 
SMT. SARITA DOKANIA AND ANR.ETC. 
v. 
SMT. KRISHNA DEY AND ANR. 
(Civil Appeal Nos. 4547-4548 of 2013) 
MAY 06, 2013 
[SURINDER SINGH NIJJAR AND 
PINAKI CHANDRA GHOSE, JJ.] 
A 
B 
Interest -
On earnest money -
Suits for specific 
performance of agreement - Decreed by trial court - Decree C 
modified by High Court declining the relief of specific 
performance and granting the alternative relief of refund of 
earnest money - On appeal to Supreme Court notice issued 
limited on the question of interest on earnest money - Plea 
of vendor that vendee was not entitled to interest because the 
D 
vendor had immediately after the agreement had offered to 
refund the earnest money - Held: Vendor was liable to pay 
interest on the earnest money from the date of its receipt -
The vendors in order to avoid the liability to pay interest, 
should have deposited the earnest money with the trial court, 
E 
instead of utilizing the same - Direction to vendor to refund 
the earnest money alongwith interest at the rate of 9% from 
the date of receipt of earnest money, till the date of its 
payment. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 
4547-4548 of 2013. 
From the Judgment & Order dated 04.01.2011 of the High 
Court of Patna in FA No. 5 and 8 of 2008. 
F 
G 
phruv Mehta, A.K. Das, Bankey Bihari, Sameer for the 
Appe'llants. 
Neeraj Shekhar for the Respondents. 
1089 
H 
1090 
SUPREME COURT REPORTS 
[2013] 5 S.C.R. 
A 
The following Order of the Court was delivered 
ORDER 
1. We have heard learned counsel for the parties. 
B 
2. Leave granted. 
3. The appellants impugn the judgments dated 4th January, 
2011 rendered by the Patna High Court in First Appeal No. 5 
of 2008 and First Appeal No. 8 of 2008. The appellants have 
C filed two suits against the respondents for specific performance 
of agreements dated 25th July, 1999 and 27th July, 1999. The 
suits were contested by the respondents on legal issues as well 
as on facts. It was the specific plea of the respondents that 
notice dated 4th September, 1999 was sent to the appellants 
0 with a request to receive back the earnest money as the legal 
representatives of the sister were not agreeing to the 
performance of the Agreement executed by the respondents. 
The appellants, however, did not accept the aforesaid offer and 
filed the suit for specific performance. 
E 
4. The Trial Court decreed the two suits for specific 
performance. The respondents challenged the judgment and 
decree passed by the Trial Court in First Appeal Nos. 5 of 2008 
and 8 of 2008. 
F 
5. The High Court upheld all the findings recorded by the 
Trial Court but declined the relief of specific performance and 
granted the alternative relief for refund of the earnest money 
deposited by the appellants. The relief of specific performance 
was denied to the appellants on the ground that specific 
performance of the contract would cause undue hardship to the 
G respondents. However, on admission that the respondents had 
received the earnest money, a direction was issued to refund 
the same. The judgment and decrees passed by the Trial Court 
was modified accordingly. 
H 
6. In the present two appeals, the appellants claim that the 
SARITA DOKANIA v. KRISHNA DEY 
1091 
High Court having upheld on facts the agreements entered into 
A 
between the parties and noticing that the respondents had 
received the earnest money, wrongly declined to grant relief of 
specific performance to the appellants. 
7. We are not inclined to examine the issue on merits at 
this stage, even though Mr. Dhruv Mehta, learned senior counsel 
appearing for the appellants has tried to persuade us to decide 
B 
the issue on merits. This Court while issuing notice on 
9.12.2011 restricted the same as to why the appellants be not 
granted interest on the earnest money admittedly received by 
the respondents. Faced with this situation, Mr. Mehta submits 
C 
that the appellants are entitied to receive interest from the date 
the respondents received the amount till date. On the other hand, 
Mr. Neeraj Shekhar, learned counsel for the respondents 
submits that the appellants had been asked to receive back 
the earnest money on 27th July, 1999. Therefore, the appellants 
D 
cannot now, rightly, claim any interest. 
8. We have considered the submissions made by the 
learned counsel for the parties. We are of the opinion that the 
claim made by the appellants with regard to interest deserves 
to be accepted. It is not d

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