Home Case Index All Cases Companies Law Companies Law + HC Companies Law - 2013 (2) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (2) TMI 168 - DELHI HIGH COURTRight to retain the money as forfeited - Limitation Act - Licence space for hosting exhibition - plaintiff, a registered society & the defendant ITPO a Central Government agency and custodian of a piece of land in New Delhi which houses trade fairs, i.e. the Pragati Maidan - plaintiff claimed refund of advance license fee as it was not interested in holding an exhibition in New Delhi - Held that:- Payment of earnest money, as the expression itself shows, is intended to serve as a proof of bona fides of the vendee so that if the transaction falls through by reason of the fault or failure of the vendee, this amount is liable to forfeiture. On the other hand, in case the transaction goes forward, the earnest money becomes a part of the purchase price. Distinction between earnest money and money paid in advance as part of the purchase price is thus both real and well-recognised. In the facts of the present case, this Court is of the opinion that the money received by the ITPO cannot be described as what was for the plaintiff’s use. It was pure and simple, a deposit, in anticipation of a contract. When given, it was not the intention of the plaintiff to take it back. That is the true test to determine whether Article 24, of the Indian Limitation Act, applies. In the absence of application of Article 24 as it would apply only if the money was recoverable immediately upon receipt by the defendant, and not on account of any facts which transpire subsequently, necessarily the governing provision was Article 113. There is no doubt that the suit was filed within the time prescribed by this latter provision. Thus the Single Judge’s findings and conclusions do not call for interference as Clause 7 (iii) of the guidelines enabled forfeiture of advance payment made in the event the licensee cancelled the space which was booked. This pre-supposed a concluded contract followed by the act of cancellation by the licensee. Thus defendant had no right to retain Rs. 15 lakhs as forfeited amount - the defendant was also directed to pay interest - appeal dismissed.
|