DLF UNIVERSAL LTD. versus EKTA SETH & ANR.

DLF UNIVERSAL LTD. versus EKTA SETH & ANR.

Although the contract terms empowered seller to escalate costs and forfeit earnest money for payment default, the open-ended nature of escalation and delayed possession justified equitable relief. The Court, in exercise of Article 142, directed refund of 50% of the forfeited earnest money to buyer, balance 50% legitimately forfeited as per agreement.

Parties
Appellant: DLF Universal Ltd.; Respondent: Ekta Seth
Jurisdiction
India
Judgment Date
15 July 2008
Procedural Posture
Civil Appeal / Appeal Against MRTP Commission Final Order
Outcome
Appeal partly allowed, directions modified.
Legal Topics
Unfair Trade Practice, Forfeiture of Earnest Money, Apartment Buyer's Agreement, Escalation of Costs, Delivery of Possession
Consumer Protection Contract Law Competition Law Unfair Trade Practice Forfeiture of Earnest Money Apartment Buyer's Agreement Escalation of Costs Delivery of Possession

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Parties

DLF Universal Ltd.

Appellant

Ekta Seth

Respondent

Procedural Posture

Civil Appeal / Appeal Against MRTP Commission Final Order

Legal Issues

  1. 1 Whether forfeiture of earnest money by seller due to buyer’s default in payment and escalation of costs amounts to unfair trade practice under MRTP Act, 1969

Ratio Decidendi

Although the contract terms empowered seller to escalate costs and forfeit earnest money for payment default, the open-ended nature of escalation and delayed possession justified equitable relief. The Court, in exercise of Article 142, directed refund of 50% of the forfeited earnest money to buyer, balance 50% legitimately forfeited as per agreement.

Court Disposition

Appeal partly allowed, directions modified.

Orders

  • Appellant to refund 50% of earnest money forfeited to respondent within three months from judgment date; balance 50% considered lawfully forfeited.
  • If refund not made within stipulated period, amount will carry simple interest at 8% per annum from expiry date until payment.