Refund of earnest money

baljinder singh (Querist) 14 August 2011 This query is : Resolved
the purchaser did not perform his part of agreement to sell and thereafter filed a civil suit for recovery of earnest money only. is the case in such a manner mantainable.

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R.Ramachandran (Expert) 14 August 2011
The seller or buyer can definitely file a suit. But the fact is, the opposite party has to bring out its points and contest the matter. Without contesting the maintainability cannot be questioned.

ajay sethi (Expert) 14 August 2011
what were terms and conditions of agreement . did it mention earnest money is to be refunded in event of failure of the deal

prabhakar singh (Expert) 15 August 2011
All depends on terms incorporated in the agreement and brought to light via pleadings.

Raj Kumar Makkad (Expert) 16 August 2011
I agree with prabhakar singh ji.

Guest (Expert) 16 August 2011
Dear Baljinder,

At first, you may please need to review your question, as you have mentioned the PURCHASER not to have performed his part of agreement to SELL." It seems you have mentioned the word "purchaser" wrongly in place of "seller" or "vendor" as purchaser can only be the other party of the agreement.

Secondly, you will have to refer the terms of agreement. If it is a legally valid agreement and is clearly written that the earnest money can be forfieted on account of non-performance the same can be done.

The seller may be well within his right to file a suit for refund of the earnest money on valid grounds. However, the other party to the agreement can defend his action for not refunding the amount due to the reason of non-performance.

RAJU O.F., (Expert) 17 August 2011
If there is condition for forfeiture of advance deposit, in the sale agreement the purchaser cannot claim it.

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