Case Law Details
Rajesh Gupta Vs Ram Avtar (Delhi High Court)
Facts- In terms of the Agreement, the petitioner agreed to purchase the manufacturing unit including the built up factory and all movable assets for a sale consideration of ₹1,60,00,000/-. The petitioner paid a sum of ₹60,00,000/- to the respondent. The receipt of the said amount was expressly acknowledged in the Agreement as receipt of ‘earnest money’.
After the parties had entered into the Agreement, the petitioner claimed that the respondent had committed fraud by representing that the entire constructed/covered area of the factory premises was 10,000 sq.ft. whereas, upon taking measurements, the actual constructed area was found to be only 6,500 sq.ft. The petitioner claims that on discovering that the covered/constructed area of the factory premises was less by 3,500 sq.ft, the petitioner called upon the respondent to either reduce the consideration price; or to refund the earnest money/part sale consideration.
On 02.05.2009, the petitioner sent a legal notice calling upon the respondent to either refund the amount paid (₹60,00,000/-), or in the alternative, execute the sale deed in respect of the factory premises based on actual measurements. However, the respondent did not respond to the said legal notice. Thereafter, the petitioner filed a suit before this Court captioned C.S. (OS) No. 1971/2009 for recovery of the earnest money along with damages.
The respondent filed an application under Section 8 of the A& C Act, which was allowed and by an order dated 19.01.2010, the parties were referred to arbitration under the aegis of the Delhi International Arbitration Centre (DIAC).
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