The High Court
Case Details
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA-2494-2016 (O&M) Ashwani Kumar Bhagat Gopal Krishan Hooda Vs. . . . . Appellant . . . . Respondent **** Reserved on: 08.09.2025 Pronounced on: 18.09.2025 **** CORAM: HON’BLE MR. JUSTICE DEEPAK GUPTA Argued by:- Mr. Rajinder Sharma, Advocate for the appellant. Mr. Sat Pal Khatri, Advocate and Mr. Ankur Malik, Advocate for the respondent. **** DEEPAK GUPTA, J. It is the defendant’s appeal against concurrent findings of the Courts below. Plain’ff–respondent Gopal Krishan Hooda had filed a suit for recovery of ₹30,00,000/-, which was decreed by the learned Addi’onal Civil Judge (Senior Division), Panchkula on 12.11.2013. In appeal, the learned District Judge, Panchkula partly modified the decree on 09.02.2016, restric’ng recovery to ₹15,00,000/- with interest. 2. Trial Court record was called. Same has been perused. For convenience, par’es are referred to as before the Trial Court. 3. Background: Defendant, owner of Plot No.529, Sector-21, Panchkula, entered into an agreement to sell dated 27.09.2005 (Ex.P1) with plain’ff for a considera’on of ₹1,24,25,000/-. Plain’ff paid ₹15,00,000/- as earnest money, balance being payable on or before 30.12.2005. Defendant was obliged to clear all dues (price, non-construc’on charges, extension fee, NEETIKA TUTEJA 2025.09.18 16:17 I attest to the accuracy and integrity of this document Page 1 of 12 RSA-2494-2016 (O&M) enhanced compensa’on, penal’es etc.), obtain ‘No Objec’on Cer’ficate’ (NOC) and permission to transfer the property from HUDA, Panchkula, and thereaCer execute the sale deed. Agreement also contained the usual default clauses i.e., earnest money forfeiture, if purchaser defaulted; and liability of double the earnest money, if seller defaulted. 4. Plain’ff alleged that he remained present before the Sub-Registrar,
Legal Reasoning
Panchkula on 30.12.2005 with sale considera’on, but defendant failed to turn up and had not even applied for the NOC. On this basis, plain’ff sought recovery of ₹30,00,000/- (double the earnest money) by filing the suit on 20.12.2008. 5. Defendant’s stand: Defendant, amongst others, raised objec’on regarding territorial jurisdic’on ci’ng an exclusive jurisdic’on clause in favour of Courts at Amritsar. On merits, he contended that if NOC was delayed, the date of execu’on was to be extended mutually. He claimed to have obtained the conveyance deed in his favour on 06.02.2006, and thereaCer asked plain’ff vide leFer dated 08.02.2006 to complete the sale on 07.03.2006. Legal no’ce dated 09.03.2006 was also issued, but plain’ff never responded. Defendant further alleged fraud by plain’ff in using his signed blank proforma applica’on to apply for transfer in favour of third par’es namely, Vipin Singla and Mohit Singla both sons of Satpal Singla. He also asserted that plain’ff lacked financial capacity to pay the balance sale considera’on. 6. Trial Court Findings: Necessary issues were framed. Evidence produced by the par’es was taken on record. The Trial Court held that defendant failed to obtain the NOC as required under the agreement and therefore, was not ready and willing to perform his part. Consequently, he could not challenge plain’ff’s financial capacity. The leFer/no’ce allegedly sent by defendant was not proved. It was further held that Panchkula Courts had territorial jurisdic’on, the property being situated there. Applying the forfeiture clause, the Court decreed recovery of ₹30,00,000/- (double the earnest money). NEETIKA TUTEJA 2025.09.18 16:17 I attest to the accuracy and integrity of this document Page 2 of 13 RSA-2494-2016 (O&M) 7. First Appellate Court Findings: In appeal by the defendant, Ld. District Judge upheld findings on merits and jurisdic’on but modified the decree. Observing that the suit was filed on 20.12.2008, barely within limita’on, and plain’ff had not earlier demanded refund, it held plain’ff en’tled only to refund of earnest money of ₹15,00,000/- with 9% interest. 8. Submissions in Appeal: Assailing the aforesaid findings, Ld. Counsel for the Appellant–defendant made following submissions: (cid:1) Courts below ignored plain’ff’s conduct, as he never showed readiness or financial capacity to pay balance ₹1,09,25,000/-. (cid:1) Defendant had cleared dues, obtained conveyance deed on 06.02.2006, and called upon plain’ff to complete the sale, but plain’ff avoided per- formance. (cid:1) No’ces/leFers sent to plain’ff, though under UPC, establish defendant’s efforts. (cid:1) Suit was filed only at the fag end of limita’on, evidencing lack of genuine readiness on the part of the plain’ff. (cid:1) As agreement was executed at Amritsar, and defendant resides there, ju- risdic’on lay with Amritsar Courts in a simple suit for recovery, as per agreement and that Panchkula Court lacked jurisdic’on. 9.
Legal Reasoning
Per contra, Ld. Counsel for the respondent–plain’ff submits that concurrent findings of courts below are based on evidence; and that defendant’s failure to obtain NOC disen’tled him from alleging want of readiness on plain’ff’s part, and so, no interference is warranted. 10. This Court has considered submission of both the sides and have appraised the record carefully. 11. Analysis by this court: Execu’on of the agreement to sell dated 27.09.2005 (Ex.P1) for a total considera’on of ₹1,24,25,000/- is not in dispute. The agreement pertained to Plot No.529, Sector-21, Panchkula, and it is admit- NEETIKA TUTEJA 2025.09.18 16:17 I attest to the accuracy and integrity of this document Page 3 of 13 RSA-2494-2016 (O&M) ted that the plain’ff–respondent paid ₹15,00,000/- as earnest money on the date of execu’on. The sale deed was to be executed on or before 30.12.2005. The present suit was ins’tuted on 20.12.2008. 12. With these admiFed facts, the Court is required to adjudicate the following rival conten’ons: (i) whether the plain’ff was ready and willing to perform his part of the contract, or could s’ll claim recovery on account of default aFributed to the defendant; and (ii) whether the Civil Court at Panchkula had territorial jurisdic’on in light of the s’pula’on contained in the agreement (Ex.P7). 13. In order to understand the controversy, it will be apt to reproduce the relevant clauses of the agreement to sell (Ex.P1), which are as under: “1. xxxxxx 2. 3. xxxxxx That the said seller clear all the outstanding dues against the said Plot i.e. towards price/Non-Construc’on/extension-fee, increased-area/ enhanced compensa’on/penalty and will get No dues cer’ficate, Permission to sell/ Transfer of the said plot in favour of the said purchaser/s from the Estate Offi- cer, HUDA, Panchkula before execu’on of sale deed. The last date for comple- ’on of this bargain that is for final payment and execu’on of transfer papers/ sale deed has been fixed on or before 30/12/2005. 4. 5. xxxxxx That the purchaser(s) can get the said plot transferred in his/her/their own name(s) or in the name(s) of his/her/their nominee(s) of any other per- son(s) whomsoever and the said seller(s) shall have no objec’on for the same. That the said purchaser(s) or his/her/their nominee(s) shall hereinaCer be re- sponsible and en’tled for all type of loss or profit arising out if said deal/bar- gain and said purchaser(s) is authorized by the said seller(s) to receive any amount of earnest money advanced from any other person(s) by virtue of this Agreement to sell and the said seller(s) shall not have an objec’on for the same at any later stage, but the said Purchaser(s) shall be responsible to make the fill and final payment to the said Seller(s) as per Provision of Clause No. 1 of this NEETIKA TUTEJA 2025.09.18 16:17 I attest to the accuracy and integrity of this document Page 4 of 13 RSA-2494-2016 (O&M) “Agreement to Sell”. All the expenses on execu’on of transfer papers/sale deed, Administra’on Charges, Permission to Transfer will be borne by the purchase, and the conveyance deed chargers shall be borne by the said seller/s. 6. That if the permission to transfer/sell is not granted to the seller/s by the Estate Officer, HUDA, Panchkula due to any reason before the date fixed for fi- nal payment, then the seller will have to extend the date as mutually agreed by both the par’es. 7. 8. 9. xxxxxx xxxxxx That if the purchaser will back out from this bargain then his/her earnest money shall stand forfeited in favour of the said seller and if the said seller will back out from this bargain then he/she will pay double of the earnest money received by him to the said purchaser and the said purchaser shall have the op- ’on either to accept the damages or to get the said Plot transferred/executed through sale deed in his/her favour through the Court of Law under the Specific Relief Act. 10. That if any dispute will arises out of this bargain then the same shall be triable by the Amritsar Courts. 11. xxxxxx” 12. Issue rela ng to Jurisdic on: Both Courts below held that jurisdic- ’on lay with the Panchkula Court since the property in dispute was situated there. This view, however, overlooks the relevant provisions of the Code of Civil Procedure, 1908 (CPC), which require interpreta’on in light of the factual posi- ’on that the agreement to sell (Ex.P-1) was executed at Amritsar, and the suit filed was simplicitor for recovery of money, and not for specific performance of the agreement rela’ng to immovable property. 13. Sec’on 16, 17, and 20 of the Code of Civil Procedure are relevant in this case, which read as under: “16. Suits to be ins tuted where subject-ma(er situate.—Subject to the pecu- niary or other limita(cid:24)ons prescribed by any law, suits— (a) for the recovery of immovable property with or without rent or prof- its, (b) for the par(cid:24)(cid:24)on of immovable property, NEETIKA TUTEJA 2025.09.18 16:17 I attest to the accuracy and integrity of this document Page 5 of 13 RSA-2494-2016 (O&M) (c) for foreclosure, sale or redemp(cid:24)on in the case of a mortgage of or charge upon immovable property, (d) or the determina(cid:24)on of any other right to or interest in immovable property, (e) for compensa(cid:24)on for wrong to immovable property, (f) for the recovery of movable property actually under distraint or at- tachment, shall be ins(cid:24)tuted in the Court within the local limits of whose jurisdic(cid:24)on the property is situate: Provided that a suit to obtain relief respec(cid:24)ng, or compensa(cid:24)on for wrong to, immovable property held by or on behalf of the defendant may, where the relief sought can be en(cid:24)rely obtained through his personal obedi- ence, be ins(cid:24)tuted either in the Court within the local limits of whose jurisdic- (cid:24)on the property is situate, or in the Court within the local limits of whose juris- dic(cid:24)on the defendant actually and voluntarily resides, or carries on business, or personally works for gain. Explana(cid:24)on.—In this sec(cid:24)on “property” means property situate in India. 17. Suits for immovable property situate within jurisdic on of different Courts.—Where a suit is to obtain relief respec(cid:24)ng, or compensa(cid:24)on for wrong to, immovable property situate within the jurisdic(cid:24)on of different Courts, the suit may be ins(cid:24)tuted in any Court within the local limits of whose jurisdic(cid:24)on any por(cid:24)on of the property is situate: Provided that, in respect of the value of the subject-ma,er of the suit, the en(cid:24)re claim is cognizable by such Court. 20. Other suits to be ins tuted where defendants reside or cause of ac on arises.—Subject to the limita(cid:24)ons aforesaid, every suit shall be ins(cid:24)tuted in a Court within the local limits of whose jurisdic(cid:24)on— (a) the defendant, or each of the defendants where there are more than one, at the (cid:24)me of the commencement of the suit, actually and voluntar- ily resides, or carries on business, or personally works for gain; or (b) any of the defendants, where there are more than one, at the (cid:24)me of the commencement of the suit, actually and voluntarily resides, or car- ries on business, or personally works for gain, provided that in such case NEETIKA TUTEJA 2025.09.18 16:17 I attest to the accuracy and integrity of this document Page 6 of 13 RSA-2494-2016 (O&M) either the leave of the Court is given, or the defendants who do not re- side, or carry on business, or personally works for gain, as aforesaid, ac- quiesce in such ins(cid:24)tu(cid:24)on; or (c) The cause of ac(cid:24)on, wholly or in part, arises. Explana(cid:24)on.—A corpora(cid:24)on shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of ac(cid:24)on aris- ing at any place where it has also a subordinate office, at such place.” 14. Bare perusal of above provisions would reveal that Sec’on 16 ap- plies to suits rela’ng to recovery, par’’on, foreclosure, redemp’on, or determi- na’on of rights in immovable property, as well as compensa’on for wrong to immovable property. Such suits must ordinarily be filed where the property is situated. However, proviso to Sec’on 16 clarifies that where relief can be en- ’rely obtained through personal obedience of the defendant, the suit may be filed at the place where the defendant resides, carries on business, or works for gain. In such a case, Sec’on 20 applies. Sec’on 17 is relevant only where im- movable property is situated within the jurisdic’on of different Courts, which is not the case here. Sec’on 20 governs all other suits, which may be ins’tuted, where the defendant resides, carries on business, or where the cause of ac’on arises, wholly or in part. 15. In Harshad Chiman Lal Modi v. DLF Universal Ltd. (AIR 2006 SC 646), while referring to Sec’on 15 to 20 of CPC, Hon’ble Supreme Court held as under: “Now, Sec’ons 15 to 20 of the Code contain detailed provisions rela’ng to jurisdic’on of courts. They regulate forum for ins’tu’on of suits. They deal with the maFers of domes’c concern and provide for the mul’tude of suits which can be brought in different courts. Sec’on 15 requires the suitor to ins’tute a suit in the court of the lowest grade competent to try it. Sec’on 16 enacts that the suits for recovery of immovable property, or for par’’on of immovable property, or for foreclosure, sale or redemp’on of mortgage property, or for determina’on of any other right or interest in immovable property, or for compensa’on for wrong to immovable property shall be ins’tuted in the court within the local limits of whose jurisdic’on the property NEETIKA TUTEJA 2025.09.18 16:17 I attest to the accuracy and integrity of this document Page 7 of 13 RSA-2494-2016 (O&M) is situate. Proviso to Sec’on 16 declares that where the relief sought can be obtained through the personal obedience of the defendant, the suit can be ins’tuted either in the court within whose jurisdic’on the property is situate or in the court where the defendant actually or voluntarily resides, or carries on business, or personally works for gain. Sec’on 17 supplements Sec’on 16 and is virtually another proviso to that sec’on. It deals with those cases where immovable property is situate within the jurisdic’on of different courts. Sec’on 18 applies where local limits of jurisdic’on of different courts is uncertain. Sec’on 19 is a special provision and applies to suits for compensa’on for wrongs to a person or to movable property. Sec’on 20 is a residuary sec’on and covers all those cases not dealt with or covered by Sec’ons 15 to 19. Sec’on 16 thus recognizes a well-established principle that ac’ons against res or property should be brought in the forum where such res is situate. A court within whose territorial jurisdic’on the property is not situate has no power to deal with and decide the rights or interests in such property. In other words, a court has no jurisdic’on over a dispute in which it cannot give an effec’ve judgment. Proviso to Sec’on 16, no doubt, states that though the court cannot, in case of immovable property situate beyond jurisdic’on, grant a relief in rem s’ll it can entertain a suit where relief sought can be obtained through the personal obedience of the defendant. The proviso is based on well-known maxim "equity acts in personam, recognized by Chancery Courts in England. Equity Courts had jurisdic’on to entertain certain suits respec’ng immovable proper’es situated abroad through personal obedience of the defendant. The principle on which the maxim was based was that courts could grant relief in suits respec’ng immovable property situate abroad by enforcing their judgments by process in personam, i.e. by arrest of defendant or by aFachment of his property. In Ewing v. Ewing, (1883) 9 AC 34 : 53 LJ Ch 435, Lord Selborne observed : "The Courts of Equity in England are, and always have been, courts of conscience opera’ng in personam and not in rem; and in the exercise of this personal jurisdic’on they have always been accustomed to compel the performance of contracts in trusts as to subjects which were not either locally or ra’one domicilli within NEETIKA TUTEJA 2025.09.18 16:17 I attest to the accuracy and integrity of this document Page 8 of 13 RSA-2494-2016 (O&M) their jurisdic’on. They have done so, as to land, in Scotland, in Ireland, in the Colonies, in foreign countries." The proviso is thus an excep’on to the main part of the sec’on which in our considered opinion, cannot be interpreted or construed to enlarge the scope of the principal provision. It would apply only if the suit falls within one of the categories specified in the main part of the sec’on and the relief sought could en’rely be obtained by personal obedience of the defendant. xxxxxxxxxxxxxxxx Plain reading of Sec’on 20 of the Code leaves no room of doubt that it is a residuary provision and covers those cases not falling within the limita’ons of Sec’ons 15 to 19. The opening words of the sec’on "Subject to the limita’ons aforesaid" are significant and make it abundantly clear that the sec’on takes within its sweep all personal ac’ons. A suit falling under Sec’on 20 thus may be ins’tuted in a court within whose jurisdic’on the defendant resides, or carries on business, or personally works for gain or cause of ac’on wholly or partly arises.” 16. It is, thus ,clear that where a suit squarely falls within Sec’on 16 CPC, Sec’on 20 has no applica’on. However, where relief is only in personam, the proviso to Sec’on 16 allows invoca’on of Sec’on 20. 17. In present case, the plain’ff’s suit was not for specific performance of the agreement to sell, nor for any declara’on of right or interest in immovable property. It was confined to recovery of money under the agreement. The relief could be obtained by personal obedience of the defendant, thereby aFrac’ng the proviso to Sec’on 16 read with Sec’on 20 CPC. 18. Crucially, the agreement (Ex.P-1) was executed at Amritsar. The defendant resides at Amritsar. Clause 10 of the agreement expressly confers jurisdic’on on the Courts at Amritsar, in case of disputes arising out of the bargain. In such circumstances, jurisdic’on would vest exclusively in Amritsar Courts. The reliance placed by the Courts below on the loca’on of the property NEETIKA TUTEJA 2025.09.18 16:17 I attest to the accuracy and integrity of this document Page 9 of 13 RSA-2494-2016 (O&M) at Panchkula was misplaced, as the suit did not involve adjudica’on of rights in immovable property. 19. Since the plain’ff sought only recovery against the defendant, the relief was enforceable through personal obedience of the defendant. Therefore, in terms of Clause 10 of the agreement, the jurisdic’on vested exclusively in Amritsar Courts. The findings of the Courts below on territorial jurisdic’on are reversed, and it is held that the Panchkula Court lacked jurisdic’on to entertain the suit. 20 Issue rela ng to readiness & willingness: For the sake of argu- ments, even if it is assumed that the Courts at Panchkula had jurisdic’on, the concurrent findings of the Courts below cannot be sustained, as both Courts failed to appreciate the overwhelming evidence led by the defendant, which demonstrated the plain’ff’s lack of readiness and willingness to perform his obliga’ons under the agreement, and the bona fide efforts of the defendant to perform his part of the bargain in accordance with the terms of contract. 21. Clause 3 of the agreement expressly required the defendant to clear all outstanding dues towards the plot (price, non-construc’on/extension fee, enhanced compensa’on, penalty, etc.), obtain a “No Dues Cer’ficate,” and secure Permission to Sell/Transfer from the Estate Officer, HUDA, Panchkula, before execu’on of the sale deed. The last date for comple’on of the bargain i.e., final payment and execu’on of the sale deed, was fixed as 30.12.2005. 22. The defendant, though did not himself apply for permission in his name, candidly deposed that he handed over a signed blank proforma to the plain’ff. The plain’ff used that proforma to move an applica’on on 08.11.2005 for NOC in favour of Mohit Singla and Vipin Singla, which fact stands unrebuFed in cross-examina’on. This conduct shows that the plain’ff himself deliberately avoided applying in his own name, thereby defea’ng the contractual s’pula’on. 23. Further, Clause 5 permiFed the plain’ff to get the transfer in his own name or in the name of his nominee(s). However, once the plain’ff opted NEETIKA TUTEJA 2025.09.18 16:17 I attest to the accuracy and integrity of this document Page 10 of 13 RSA-2494-2016 (O&M) to seek NOC in favour of third par’es, he assumed responsibility for comple’ng the transac’on through them. He cannot later plead that the defendant failed in his obliga’on when it was his own act that prevented transfer in his favour. 24. Not only above, Clause 6 specifically provided that if permission was not granted before the target date for any reason, the seller had to extend the date as mutually agreed by the par’es. The plain’ff himself admiFed in cross-examina’on that he never asked the defendant to extend the date for execu’on of the sale deed. Thus, the contractual mechanism for extension was never invoked by the plain’ff. 25. Clause 9 makes the consequences of default clear to the effect that if the purchaser backs out, his earnest money stands forfeited; and if the seller backs out, he must refund double the earnest money. Alterna’vely, the purchaser could seek specific performance under the Specific Relief Act. 26. Here, in this case, the plain’ff never issued any no’ce between 30.12.2005 (i.e., the target date) and 20.12.2008 (i.e., date of ins’tu’on of the suit), for seeking execu’on of the sale deed under Clause 9. Rather, he filed the recovery suit just before expiry of limita’on, showing lack of bona fides and readiness. 27. Under Sec’on 16(c) of the Specific Relief Act, 1963, con’nuous readiness and willingness is a condi’on precedent for seeking relief. The plain’ff miserably failed to prove his financial capacity to pay the balance sale considera’on of more than ₹1.09 crore. Mere marking presence before the Sub- Registrar on 30.12.2005 was not sufficient. The defendant produced unimpeachable evidence through bank officials and income tax records showing that neither the plain’ff nor his family members had the requisite financial means. His ITRs for 2004–05 and 2005–06 (Ex.DW4/6 & Ex.DW4/8) reflected incomes of only ₹1,17,947/- and ₹1,32,021/- respec’vely. His employer confirmed that he was a DraCsman with no other source of income. This evidence stands unshaken and conclusively establishes that the plain’ff never had the capacity to pay. NEETIKA TUTEJA 2025.09.18 16:17 I attest to the accuracy and integrity of this document Page 11 of 13 RSA-2494-2016 (O&M) 28. The Hon’ble Supreme Court in Umabai v. Nilkanth Dhondiba Chavan, 2005 (1) ACJ (SC) and Man Kaur v. Hartar Singh Sangha, 2011 (3) Law Herald 2108 (SC) has categorically held that the plain’ff must prove con’nuous readiness and willingness to perform. Besides, his financial capacity to pay the balance considera’on must be demonstrated. Mere pleadings or self-serving statements are insufficient. 29. Despite no’cing these authori’es, the First Appellate Court failed to correctly apply them to the facts. Instead, both Courts wrongly shiCed the burden onto the defendant, contrary to seFled law that the plain’ff must succeed on the strength of his own case and not on the weakness of the defendant’s. 31. Equally significant is the delay. The agreement was dated 27.09.2005, with target date as 30.12.2005. The plain’ff filed suit only on 20.12.2008, nearly three years later and just days before limita’on expired, without ever calling upon the defendant to execute the sale deed. Such conduct belies readiness and willingness. 32. As against above, aCer obtaining conveyance deed in his favour on 06.02.2006, the defendant issued a legal no’ce dated 09.02.2006 (Mark G) calling upon the plain’ff to complete the bargain on or before 07.03.2006. The plain’ff admiFed that the address men’oned was correct. The Courts below wrongly discarded this no’ce only because it was sent under postal cer’ficate, ignoring seFled law that service under UPC is valid, where the address is correct and admiFed. 33. In the light of above discussion and Clauses 3, 5, 6, and 9 of the agreement, the statutory requirement under Sec’on 16(c) Specific Relief Act, and the overwhelming evidence on record, it is clear that the plain’ff was never ready and willing to perform his part of the contract. Both Courts erred in decreeing the suit for refund of earnest money by shiCing the burden onto the defendant. NEETIKA TUTEJA 2025.09.18 16:17 I attest to the accuracy and integrity of this document Page 12 of 13 RSA-2494-2016 (O&M) 34. Accordingly, the findings of the Courts below are unsustainable.
Decision
The appeal is allowed. The suit filed by the plain’ff-respondent is dismissed with costs throughout. 18.09.2025 Nee(cid:24)ka Tuteja Whether speaking/reasoned? Whether reportable? Yes/No Yes/No (DEEPAK GUPTA) JUDGE NEETIKA TUTEJA 2025.09.18 16:17 I attest to the accuracy and integrity of this document Page 13 of 13