- CS (OS) No. 1599/1999
- High Court of Delhi
- Sandvik Asia Pvt. Ltd. v. Vardhman Promoters Pvt. Ltd.
SALES CONTRACT - BETWEEN TWO INDIAN COMPANIES - REFERENCE TO THE UNIDROIT PRINCIPLES TO CONFIRM THE SOLUTION ADOPTED UNDER APPLICABLE DOMESTIC LAW (INDIAN LAW)
CONTRACT INTERPRETATION - INDIVIDUAL TERMS TO BE INTERPRETED IN THE LIGHT OF THE WHOLE CONTRACT (ARTICLE 4.4 UNIDROIT PRINCIPLES) - INDIVIDUAL TERMS TO BE INTERPRETED SO AS TO GIVE EFFECT TO ALL OF THEM RATHER THAN TO DEPRIVE SOME OF THEM OF EFFECTS (ARTICLE 4.5)
Plaintiff, an Indian company, and Defendant, another Indian company, entered into an agreement for the sale by Defendant of an apartment (hereinafter the “Agreement”). Under the Agreement the buyer had to pay 20% of the purchase price immediately and the balance after receiving from the seller the clearance of the Income Tax Department. If the buyer failed to pay the balance within twenty days of receipt of the clearance, the money paid in advance would be forfeited. The Agreement also provided that a series of other documents had to be produced by the seller, one of which was an irrevocable and registered general power of attorney, with respect to which it was expressly stated that failure to execute it within five months would lead to the cancellation of the Agreement and the refund to the buyer of the advance payment. After the buyer had paid the required 20% in advance and the seller had delivered the clearance the buyer asked for the execution not only of the power of attorney but also of a sale deed. When the seller failed to provide the sale deed within five months the buyer claimed the refund of the payment made in advance. On its part the seller insisted on the payment of the balance claiming that otherwise it would forfeit the buyer’s advance payment.
The Court decided in favour of the seller, i.e. it found that according to the Agreement only the failure to execute the power of attorney led to the cancellation of the Agreement and the refund of the advance payment, while the failure to execute the sale deed was insufficient to justify the same result. In reaching this conclusion the Court pointed out that in order to ascertain the meaning of its individual clauses the Agreement had to be read as a whole, and that the individual clauses had to be interpreted so as to give effect to all of them rather than to deprive some of them of effect. In support of this finding the Court referred not only to a number of Indian and English decisions as well as legal writings but also to the UNIDROIT Principles, citing Article 4.4 and quoting 4.5.
Pradeep Nandrajog, J.
1. Suit seeks recovery of Rs. 21,00,000 (Rupees Twenty one lacs only) which the plaintiff paid to the defendant under an agreement to sell dated 19.11.1998 entered into between the parties. As per the agreement to sell (hereinafter referred to as the 'agreement'), the plaintiff had agreed to purchase the entire third floor having a super area of 3802 sq. ft. in the building constructed by the defendant on Plot No. 4, Block J, Community Center, Rajouri Garden, New Delhi for a sale consideration of Rs. 84,82,262. It is alleged by the plaintiff that the amount of Rs. 21,00,000 was paid as advance towards the sale consideration. Case of the defendant is that the sum received was by way of earnest money and as plaintiff failed to perform its obligations to pay the balance sum, the amount was forfeited.
2. Under the terms of the agreement proved as Ex. D-l, which is an admitted document, the defendant was to obtain requisite no objection from the Income Tax department under Section 249 UL (3) of the Income-tax Act in Form 37-1 and on receipt of the no objection, the plaintiff was to be informed and thereupon the balance sum of Rs. 63,82,262 (Rupees Sixty three lacs eighty two thousand two hundred and sixty two only) had to be paid within 10 days. The agreement further stipulated that simultaneously, on receipt of payment, the defendant was to execute an irrevocable and registered general power of attorney, no objection affidavits for mutation in DDA, an indemnity bond for property tax and other encumbrances, and/or any other relevant document requested for by the plaintiff. Clause 4 of the agreement stipulated that if the vendee, i.e. plaintiff fails to make the payment of the balance sale consideration within 10 days from the knowledge of the permission having being obtained from the IT department, the vendor, i.e. defendant shall be entitled to send a notice calling upon the vendee to make the payment within 10 days, failing which the said sum of Rs. 21 lacs was to be forfeited by the vendor. Clause 5 of the agreement stipulated that if the transaction is not completed within a period of 5 months, the vendor shall immediately refund to the vendee the sum of Rs. 21 lacs, except where the same has been forfeited in accordance with Clause 4. Under Clause 7 of the agreement, it was the duty of the vendor to ensure that the property is free from all kinds of encumbrances and under Clause 9 of the agreement the liability to pay house tax, property tax, water and electricity charges, lease money, etc. was of the vendor up to the date of the agreement.
3. On the pleadings of the parties, the following issues were framed on 08.01.2004:
(1) Whether the suit has been filed by a duly authorized and competent person ? OPP
(2) Whether the sum of Rs. 21 lacs paid by the plaintiff under the agreement to sell dated 19.11.1998 was an advance or earnest money ? OP Parties
(3) If the aforesaid issue is decided in favour of the plaintiff, holding the same to be an advance money, could the same be forfeited by the defendant ? OPD
(4) Whether the plaintiff was willing to fulfill the terms of agreement to sell and was ready and willing to perform the same ? OPP
(5) Whether the plaintiff is entitled to refund of Rs. 21 lacs or any part thereof, and if so, at what interest ? OPP
(6) Whether any damages have been suffered by the defendant by any breach of contract, if any, committed by the plaintiff, and if so, what amount ? OPD
4. Several letters and communications have been exchanged between the parties. These have been duly proved. Vide letter dated 31.03.1999 (Ex. D-l/12) defendant informed the plaintiff of the IT clearance as provided for in Clause 2 of the agreement, and reqiaested it to make balance payment within 10 days. Plaintiff acknowledged receipt of Ex. D-l/12 on 06.04.1999 and vide reply dated 07.04.1999 (Ex. PW-1/3) expressed its willingness to complete transaction and requested for the execution of the following documents:
(1) Sale Deed
(2) Power of Attorney
(3) No Objection Affidavit
(4) Indemnity Bond
(5) Possession Letter
5. Vide letter dated 09.04.1999 (Ex. D-4), defendant replied to Ex. PW-1/3 and informed plaintiff that as per the agreement it had to pay balance sale consideration within 10 days of receipt of no objection from the income tax authorities and, therefore, requested for payment. Defendant offered possession and said that it would execute the necessary documents envisaged under the agreement. Vide letter dated 15.04.1999 (Ex. PW-1/5), the defendant informed the plaintiff that in case they failed to make balance payment, the amount of Rs. 21 lacs would be deemed to be forfeited without any further notice. Furthermore, they would also be liable to pay damages due to the breach of the agreement. Plaintiff replied vide letter dated 16.04.1999 (Ex. PW-1/16). Making a reference to its earlier letter dated 07.04.1999, reiterating that the required documents had not been executed and, in addition, various payments, taxes, bills have not been cleared, plaintiff said that same be done and thereafter it would make payment. Vide its notice dated 19.04.1999 (Ex. D-7), the defendant offered an extension by a period of 21 days for plaintiff to make the balance payment and accept possession. The defendant reiterated its willingness to execute the necessary documents, on getting balance sale consideration. Vide Ex. PW-1/7, plaintiff served legal notice dated 23.04.1999 on the defendant, asking for the refund of the advance money of Rs. 21 lacs within 21 days. Reply to the notice was given vide letter dated 03.05.1999 (Ex. DW-1/21). Defendant stated that since plaintiff had failed to pay the balance sum and since it was ready to hand over possession and give possession letter and execute general power of attorney and other documents (except sale deed), sum of Rs. 21 lacs was forfeited.
6. Evidenced by the contents of the letters exchanged between the parties, the major bone of contention between the parties was regarding the non-execution of the sale deed. Whereas, the plaintiff insisted on execution of the sale deed in its favour, defendant stated that sale deed was not to be executed and offered to execute a general power of attorney and hand over possession.
7. The plaintiff examined one witness, PW-1, Sh. Sudhir Malik, Regional Sales Manager, Coromat Division, Delhi, M/s. Sandvik Asia Limited. He deposed that M/s. Sandvik Asia is a multinational company and that he is duly authorized to sign, verify, file, present and prosecute the present suit on behalf of M/s. Sandvik Asia vide a Board Resolution dated 13.05.1999 (Ex. PW-1/I). He deposed that the company wanted a property with a clear and clean title and hence, it was agreed that the seller, i.e. defendant would take all requisite permissions, sanctions and would sell the property without any charge, encumbrance, claim or demand to the buyer, i.e. plaintiff. To quote in verbatim, deposition of PW-1 further records:
Being a multinational company, the deponent was not interested in taking any property solely on the basis of a power of attorney without the corresponding conveyance deed. Defendant assured us a simultaneous request for execution of deed of apartment, sale permission would be taken provided we give bulk payment (at least 25 %) in advance. Since we had bona fide intentions to purchase the same and believed the defendant to be sincere, we agreed to all his conditions including that of payment of Rs. 21,00,000 as advance money. It was also negotiated in such agreement to sell that upon the sale permission been given by DDA, the defendant would execute sale deed in favour of the deponent. Therefore, in Clause 3 of the agreement to sell it was added that the defendant will execute 'any document so requested by the deponent'.
8. He deposed that when dispute surfaced it was orally conveyed to the plaintiff by the defendant's office that they shall not execute any document other than what was expressly written in the agreement to sell even though they had promised to execute the sale deed and had explicitly agreed to execute any other relevant document requested for. In his cross-examination PW-1 stated that the assurance was given to him verbally by Mr. Jain, Director of defendant company. On further cross-examination, PW-1 admitted that plaintiff wrote to the defendant for the execution of the sale deed for the first time vide their letter dated 07.04.1999.
9. Defendant examined 4 witnesses. DW-1, Mr. Ashok Kumar Jain, Director, M/s. Vardhman Promoters Pvt. Ltd., deposed that he never agreed to execute a sale deed in favour of the plaintiff. He stated that what was agreed under the agreement to sell was the execution of receipt, General Power of Attorney (GPA), Will, Indemnity or such collateral documents as the plaintiff may require as the plaintiff at that point of time required immediate possession of the premises, as it was required to vacate a tenanted office in Connaught Place, New Delhi, and the formalities for execution of sale deed required certain permissions to be obtained from the DDA on fulfillment of formalities and payment of Rs. 100 only. He deposed that it was, therefore, agreed that initially on payment of sale consideration, only documents in the nature of agreement to sell and other documents would be executed till the time the necessary sale permission was obtained for the execution of a formal sale deed for which in any case, GPA would be executed by the defendant in favour of the plaintiff. He further stated that as a result of breach committed by the plaintiff, defendant suffered a loss of more than Rs. 44 lacs due to the reason that third floor was sold in different portions to 16 parties who paid to the defendant the amounts as reflected in the flat buyer agreements, office copies whereof were Ex. DW-1/22.
15. Before deciding issue Nos. 2, 3, 5 and 6 which I propose to decide together, issue No. 4 needs to be decided because decision on said issue would have a bearing on the remaining issues and the relief.
16. Ex. D-l is the foundation of the dispute. A proper interpretation of the clauses of the contract would lead us to the ultimate meaning and import of the contract.
17. On the question of interpretation of contracts, courts have time and again reiterated the principle of harmonious construction of the terms of a contract. Chitty, in Chitty on Contracts, Volume 1, 29th Edition, observes:
12.063. The whole contract is to be considered. Every contract is to be construed with reference to its object and the whole of its terms Tlirocmerton v. Trucey (1585) 1 Plow 145,161 and accordingly, the whole context must be considered in endeavoring to collect the intention of the parties, even though the immediate object of inquiry is the meaning of an isolated word or clause. International Fina Services AG v. Katrina SJiipping Limited (1995) 2 Lloyd's Rep. 344, 350. It is true rule of construction that the sense and meaning of the parties in any particular part of an instrument may be collected ex antccedentibus el consequentibus; every part of it may be brought into action in order to collect from the whole one uniform and consistent sense, if that may be done. Coles v. Hulme (1828) 8 B and C 568. And so Lord Davey said in N.E. Raihvaij v. Lord Hastings (1900) AC 260, 267 quoting Lord Watsons Chamber Colliery Ltd. v. Tivyerould (1893) (1915) 1 Ch. 268n, 272. The deed must be read as a whole in order to ascertain the true meaning of its several clauses, and the words of each clause should be interpreted so as to bring them into harmony with the other provisions of the deed, if that interpretation does no violence to the meaning of which they are naturally susceptible.
18. The principle ex antecedentibus et consequentibus fit optima interpretation (the whole of the agreement) is also referred to by Mulla in Indian Contract and Specific Relief Acts, 12th Edition at Page 267:
The deed must be read as a whole in order to ascertain the true meaning of its several clauses, and the words of each clause should be interpreted so as to bring them into harmony with the other provisions of the deed, if that interpretation does no violence to the meaning of which they are naturally susceptible. North Eastern Railway v. Lord Hastings (1900) AC 260 at 267 per Lord Davey at 267 (1900-3) All ER Rep. 199 quoting Lord Watsons in Chamber Colliery Ltd. v. Twyerould (supra). The document must be construed as a whole in order to ascertain the meaning of several clauses. Thakkar Hemraj Keshavji v. Shah Haridas Jethabhai MANU/SC/0036/1963; Navnit Lal and Co. v. Kishan Chand and Co. MANU/MH/0104/1956; State of W.B. v. Narendra Nath Roy MANU/WB/0004/1958; Gulabchand Gambhirlal v. Kudilal Govindram MANU/MP/0052/1959; Soundararajan and Co. Ltd. v. Kpat Annamali Nadar MANU/TN/0152/1960; Ram Laljagan Nath v. Punjab State MANU/PH/0068/1966; Abdul Kader Laskar v. State of W.B. MANU/WB/0036/1967; UNIDROIT Principles, Article 4.4. All terms in the contract must be given effect rather than deprive some of them of the effect. M. Ami Jothi v. Lajja Bal MANU/SC/0141/2000.
19. This principle is further substantiated by Kim Lewison, QC in his book The Interpretation of Contracts, 2nd Edition:
6.02. 'In order to arrive at the true interpretation of a document, a clause must not be considered in isolation, but must be considered in the context of the whole of the document.
In Chamber Colliery Ltd. v. Twyerould (supra), Lord Watsons said:
'I find nothing in this case to oust the application of the well-known rule that a deed ought to be read as a whole in order to ascertain the true meaning of its several clauses, and that the words of each clause should be interpreted so as to bring them into harmony with the other provisions of the deed, if that interpretation does no violence to the meaning of which they are naturally susceptible.'
The expression of this principle of construction is no more than an enlargement of the general proposition that an individual word takes its meaning from the context in which it is found. So too an individual clause takes its meaning from the context of the document in which it is found. Thus, in Batron v. FitzGerald (1812) 15 East 530, Lord Ellenborough, CJ said:
'It is a true rule of construction that the sense and meaning of the parties in any particular part of an instrument may be collected ex antecedentibus et consequentibus; every part of it may be brought into sense, if that may be done.'
In Re. Strung Music Hall Co. Ltd. Lord Romilly MR (1865) 35 Beav 153 said:
The proper mode of construing any written instrument is to give effect to every part of it, if this be possible, and not to strike out or nullify one clause in a deed, unless it be impossible to reconcile it with another and more express clause in the same deed'.
20. A plethora of cases have upheld and applied this principle in interpreting terms of a contract. In the report published as Bihar SEB v. Green Rubber Industries MANU/SC/0075/1989 it was observed:
Every contract is to be considered with reference to its object and the whole of its terms and accordingly trie whole contract must be considered in endeavoring to collect the intention of the parties, even thought the immediate object of enquiry is the meaning of an isolated clause.
21. The above stated principle has been referred to and applied in the report published as MANU/SC/0783/2006 SO-Shin Satellite Public Co. Ltd. v. Jain Studios Ltd.
22. Therefore, in light of the above stated principles, a harmonious construction of the clauses of the agreement in question has to be done. The relevant clauses in question are Clauses 3, 4 and 5. The same read as under:
3. That within 10 days from the knowledge of the date of receipt of permission from the appropriate authorities in Form 37-1, under Section 249 UL (3) of Income-tax Act, 1961 the vendee will pay to the vendor the balance consideration amount of Rs. 63,82,262 (Rupees Sixty three lacs eighty two thousand two hundred sixty two only). At the same time vendor will execute an irrevocable and registered general power of attorney, no objection affidavits for mutation in DDA and indemnity bond for property tax, water, electricity or other encumbrances and/or any other relevant document requested by vendee in favour of the vendee, failing to which vendee shall be entitled to get transaction enforced through the court of law by specific performance of the contract or enforce any other appropriate legal remedy at the cost and expense of the vendor.
4. It is also agreed that in case the vendee fails to make the payment within 10 days from the knowledge of the receipt of aforesaid permission from Income Tax department, the vendor shall be entitled to send a notice under registered AD and UPC at the registered office and Delhi office (M/s. Sandvik Asia Ltd., Indra Palace, Connaught Place, New Delhi - 110001) of the vendee as aforesaid mentioned, demanding from the vendee to make the balance payment within 10 days. Even after the expiry of 10 days from the receipt of the notice, if the vendee fails to pay the balance consideration, the advance money amounting to Rs. 21,00,000 (Rupees Twenty one lacs only) will be forfeited by vendor.
5. Except when the advance money of the vendee has been forfeited in accordance with paragraph 4 above, if the parties, for whatsoever reasons or even for any reasons attributed to any of the parties, fail to sign and execute the irrevocable and registered power of attorney within a period of 5 months of signing of this agreement to sell, the vendor shall immediately refund the vendee of its advance of Rs. 21,00,000 without any interest for the period of 5 months. However, in case of any further delay beyond 5 months, the advance of Rs. 21,00,000 shall carry a penal interest of 24% per annum till its refund and/or recovery. The refund of the said advance shall be without prejudice and in addition to the right of the vendee to have the specific performance of this agreement enforced through the court of law or any other appropriate legal remedy.
23. Clause 3 contemplates the execution of the following documents:
(1) An irrevocable and registered general power of attorney.
(2) No objection affidavits for mutation in DDA.
(3) Indemnity bond for property tax, water, electricity and other encumbrances.
(4) And/or any other relevant document, requested by the vendee.
24. He who reads Clause 3 may infer that the vendee may request for any other relevant document to be executed, along with those provided for. But when Clause 3 is read along with Clause 5, the position changes and this inference falters. Clause 5 provides that if the parties fail to sign and execute the irrevocable and registered general power of attorney within a period of 5 months of the signing of the agreement (i.e. till 18.04.1999), then the vendor shall refund the vendee advance of Rs. 21 lacs without any interest for the 5 months period. On harmoniously construing these two clauses, the logical conclusion which flows out is that it was only the irrevocable and registered general power of attorney, the execution of which, would have satisfied Clause 3. In other words, completed the transaction. It is true that on perusal of only Clause 3, it would seem that the vendee can ask for the execution of a sale deed, but reading the agreement as a whole, i.e. Clause 3 together with Clause 5, would make it crystal clear that the power of attorney was the document which was of consequence. The sale deed was not a requirement, but just an ancillary document, if a request had been made. Though it may have been requested for, its non-execution would not be fatal to the transaction.
26. The plaintiff asserts that it had asked for the execution of a sale deed, which was not done by the defendant, and hence it did not pay the balance consideration. Its witness deposed to the effect that being a multinational company and wanting a clear title, plaintiff necessarily wanted a sale deed to be executed for the property. PW-1 deposed that the part ".... and/or any other relevant document requested by the vendee" was specifically added in Clause 3 because plaintiff wanted a sale deed for the property. However, in his cross-examination he admitted that the alleged assurance by the defendant that a sale deed would be executed had verbally been given by the defendant. He also admitted that a written request for the execution of the sale deed was made for the first time vide plaintiff's letter dated 07.04.1999, i.e. barely eleven days before the transaction was to be completed as per the agreement.
27. I fail to appreciate the plaintiff's stand, because if it was so adamant on the execution of a sale deed, what prevented it from specifically recording in the agreement that a sale deed would be executed. Surely, when three documents were specifically mentioned, when agreement was drawn, as to be executed when balance sale consideration was to be paid, the fourth, i.e. sale deed could also have been mentioned, more so if the same was supposedly of utmost importance.
28. Evidence led by the defendant to show that the defendant did not execute the sale deed for any of its other buyers, and that they had been given oral assurance, etc. are wholly immaterial as it is a settled principle of law that once the parties reduce their dealing into the form of a contract, the intention of the parties is to be construed from the contract itself and nothing else. Similarly, the fact that the plaintiff is a multinational company and, therefore, obviously wanted a clear title in the property as stated by its witness, is of no consequence.
29. Chitty in his book on contracts (supra) says:
12.043. Intention of parties—The task of ascertaining the intention of the parties must be approached objectively; the question is not what one or other of the parries meant or understood by the words used, but 'the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract'. The cardinal presumption is that the parties have intended what they have in fact said, so that their words must be construed as they stand. That is to say the meaning of the document or of a particular part of it is to be sought in the document itself. One must consider the meaning of the words used, not what one may guess to be the intention of the parties. Smith v. Lucas (1881) 18 Ch. D 531,542. See also Prenn v. Simmonds (1971) 1 WLR 1381, 1385.
30. Kim Lewison in his book on The Interpretation of Contracts (supra) has taken the similar view. He propounds that the intention of the parties must be ascertained from the language they have used, considered in the light of the surrounding circumstances and the object of the contract, insofar as that has been agreed or proved.
31. In Delta International Ltd. v. Shyam Sundar Ganeriwalla AIR 1999 SC 260, the Hon'ble Supreme Court held:
15. (2) The intention of the parties is to be gathered from the document itself. Mainly, intention is to be gathered from the meaning and the words used in the document except where it is alleged and proved that the document is a camouflage....
If the dispute arises between the very parties to the written instrument, the intention is to be gathered from the document read as a whole.
32. The Hon'ble Supreme Court took note of the following extract from Kim Lewison's book:
1.03. For the purpose of the construction of the contracts, the intention of the parties is the meaning of the words they have used. There is no intention independent of that meaning.
33. In addition to the above, the court also placed reliance on Fausset v. Carpenter (1831) 2 Dow and CI 232, wherein the House of Lords accepted the submission of the counsel that the court:
.... in judging of the design and object of a deed, will not presume that a party executing the deed meant to do and did what he was wrong in doing, when a construction may be put on the instrument perfectly consistent with his doing only what he had right to do.
34. Similarly, in Oil and Natural Gas Corporation Ltd. v. Saw Pipes Ltd. MANU/SC/0314/2003 (SO, the Hon'ble Supreme Court held (para 40 of Arb. LR):
It cannot be disputed that for construction of the contract, it is settled law that the intention of the parties is to be gathered from the words used in the agreement. If words are unambiguous and are used after full understanding of their meaning by experts, it would be difficult to gather their intention different from the language used in the agreement. If upon a reading of the document as a whole, it can fairly be deduced from the words actually used therein that the parties had agreed on a particular term, there is nothing in law which prevents them from setting up that term. Re. Modi and Co. v. Union of India MANU/SC/0051/1967. Further, in construing a contract, the court must look at the words used in the contract unless they are such that one may suspect that they do not convey the intention, correctly. If the words are clear, there is very little the court can do about it. Re. Provash Chandra Dalui and Anr. v. Biswanath Banerjec and Anr. 1989 Siippl. (1) SCC 487.
35. Also worth a mention in this regard is Sections 91 and 92 of the Evidence Act. The courts have propounded that where the terms have been reduced to writing, Section 91 excludes oral evidence of the agreement as well as of what took place when the agreement was made. Therefore, the decisive consideration is the intention of the parties, as it flows from the contract between them. And this intention has to be ascertained on a consideration of all the relevant provisions in the agreement.
36. The defendant did not resile from its obligation under the contract to execute the documents which were enunciated in the agreement. This stand of the defendant was reiterated time and again as can be gathered from Ex. PW-1/4, Ex. PW-1/5 and Ex. D-7.
37. I, accordingly, decide issue No. 4 holding that the plaintiff was insisting on the defendant executing a document which was not agreed to between the parties and defendant was prepared to execute the required documents and hand over possession. Since plaintiff did not tender balance sale consideration within the agreed period, I hold against the plaintiff and in favour of the defendant on issue No. 4.
38. As noted above, testimony of DW-1 pertaining to sale of the third floor to third parties and amount realised has not been challenged by the plaintiff. Total sale consideration between the parties was Rs. 84,82,262 out of which defendant received Rs. 21 lacs when agreement was entered into. Balance amount receivable was Rs. 63,82,262. From third parties defendant realised a sum of Rs. 25,31,385. It is obvious that the defendant suffered a loss as a result of breach by the plaintiff. The loss is more than Rs. 21 lacs paid by the plaintiff to the defendant. But, there is no counter-claim. Since loss suffered by the defendant is more than Rs. 21 lacs no useful purpose would be served in discussing issue Nos. 2 and 3 for the reason whatever be the nature of the payment of Rs. 21 lacs paid at the time of execution of the agreement, since damages in excess have been established the amount was liable to be forfeited as per the agreement. I, accordingly, hold on issue No. 5 that the plaintiff is not entitled to a refund of Rs. 21 lacs.
39. The suit fails. It stands dismissed.
40. However, on the facts and circumstances there shall be no order as to costs.}}