K.R. Suresh vs R. Poornima 2025 INSC 617 -S. 22 Specific Relief Act - Earned
Specific Relief Act 1963- Section 22- The relief of refund of earnest money under Section 2 2(1)(b) is not a relief that automatically flows from a decree for specific performance of a sale agreement and must, therefore, be explicitly sought- The plaint may be amended at any stage of the proceedings to enable the plaintiff to seek an alternative relief, including that of refund of earnest money, and the courts have been vested with wide judicial discretion to permit such amendments. However, the courts cannot grant such relief suo moto, since the inclusion of the prayer clause remains a sine qua non for the grant of such a relief. In other words, when an “appropriate case” exists for seeking the said relief under this provision, it must be specifically sought either in the original plaint or by way of an amendment. Section 22(2) is adequately broad and flexible to allow the appellant to seek an amendment of the plaint for the said relief, even at the appellate stage. (Para 58-63)
Indian Contract Act 1872 - Section 74 - clause for the forfeiture of earnest money is not penal in the ordinary sense, rendering Section 74 of the 1872 Act, inapplicable. (Para 51)
Contract Law - Distinction between “advance money” and “earnest money”- The word “advance” means money in whole or in part, forming the consideration of an agreement paid before the same is completely payable. On the other hand, the word “earnest” stands for a sum of money given for the purpose of binding a contract, which is forfeited if the contract does not go off and adjusted in price if the contract goes through - The principles governing the scope of “earnest money” - Referred to Shree Hanuman Cotton Mills v. Tata Air Craft Ltd (1969) 3 SCC 522, Videocon Properties Ltd. v. Bhalchandra Laboratories (2004) 3 SCC 711, In Satish Batra v. Sudhir Rawal, (2013) 1 SCC 345, Central Bank of India v. Shanmugavelu (2024) 6 SCC 641,(Para 30-32)
