Delhi District Court
Urmila Farms Llp vs Parsvnath Developers Ltd on 11 August, 2025
IN THE COURT OF MR. SATYABRATA PANDA, DJ-04, PATIALA HOUSE COURTS, NEW DELHI CS No.419/22 DLND010083282022 IN THE MATTER OF: Urmila Farms LLP (Erstwhile Urmila Farms Pvt. Ltd.), Through Its Partner, B-79, Defence Colony, New Delhi-110024 Email: [email protected] ......Plaintiff Vs. Parsvnath Developers Ltd. Parsvnath Tower, Near Shahdara Metro Station. Shahdara, Delhi-110032 Email ID: [email protected], [email protected] ...Defendant Date of Institution: 27.09.2022 Date of Arguments: 12.07.2025 Date of Judgment: 11.08.2025 JUDGMENT
1. The plaintiff has filed the present suit seeking decree
against the defendant for sum of Rs. 40,70,000/- along
with interest.
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PLAINT
2. The case of the plaintiff, as pleaded in the plaint, is as
follows:
2.1. The plaintiff is a limited liability partnership firm
registered under the Limited Liability Partnership
Act, 2008.
2.2. The defendant is a company which is engaged in the
real estate business, inter alia, in the construction of
residential and commercial properties, selling and
purchasing of properties etc.2.3. In the year 2011, the plaintiff came across an
advertisement published by the defendant whereby
the defendant through various means of mass
communication represented to the public at large
that the defendant was coming up with a world class
residential project with modern amenities within
Delhi at Sarai Rohilla-Kishanganj, New Delhi and
invited expression of interest from the needy home
buyers who were in search of their dream home
within Delhi itself.
2.4. Vide the said advertisements, the defendant also
represented that the allotment of the respective
flats/apartments will happen within 12 months from
the date of deposit of earnest money and then theCS No.419/22 Urmila Farms LLP Vs. Parsvnath Developers Ltd. Page No. 2 of 27
“Standard Allotment Agreement” shall be executed
with the respective home buyers.
2.5. With the said representations, the defendant through
its executive approached the plaintiff in the year
2011 and represented that the upcoming residential
project will be one of its kind within Delhi and
assured the plaintiff that the allotment of the
respective flat/apartment shall happen within a
period of 12 months from the date of deposit of the
earnest money.
2.6. The plaintiff, then a private limited company, was in
search for a residence for its the then director Mr.
Sanjay Jain. On 09.04.2012, the plaintiff was
converted into Urmila Farms LLP from Urmila
Farms Pvt. Ltd and thus Mr. Sanjay Jain who earlier
was the director of plaintiff, became the designated
partner of plaintiff.
2.7. Based on the representations of defendant and its
executives, the plaintiff decided to book a residential
apartment admeasuring approximately 1500 sq. ft. in
the said upcoming project of the defendant for the
residence of its partner namely Mr. Sanjay Jain.
2.8. Subsequent to the talks held with the executives of
defendant, a brochure of the then upcoming project
was also shared with the plaintiff which had the brief
details of the said project. The said brochure alsoCS No.419/22 Urmila Farms LLP Vs. Parsvnath Developers Ltd. Page No. 3 of 27
contained the list of amenities the said project will
have. Most importantly, it also had the format of the
“Expression of Interest” printed on it.
2.9. While handing over the said brochure to plaintiff, it
was asked by the executives of the defendant that the
plaintiff should get the exact format/language of the
expression of interest printed/typed verbatim and be
handed over the same to the defendant duly signed
along with the 15% of the basic price of the said
residential apartment.
2.10. Since the plaintiff was looking for a residential
apartment for its Designated Partner Mr. Sanjay Jain
(then director) within Delhi itself, therefore the
plaintiff decided to book a residential apartment in
the said upcoming project of the defendant.
2.11. Accordingly, the plaintiff on 10.03.2011 submitted
the Expression of Interest for a Residential
Apartment and booked a residential apartment
admeasuring approximately 1500 sq. ft. with the
defendant in the said upcoming project at Sarai
Rohilla- Kishanganj, New Delhi. As per the terms
and conditions as mentioned thereunder, the plaintiff
also paid 15% of the basic price of the said
residential apartment i.e. Rs.20,00,000/- to the
defendant vide a cheque bearing no.706148 dated
10.03.2011 drawn on Andhra Bank.
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2.12. The said cheque was duly encashed by the defendant
and pursuant to the said advance payment and
booking of the residential apartment by the plaintiff,
the defendant issued a receipt bearing no.
NY000171 dated 14.03.2011.
2.13. As per the representations and assurances made by
the defendant, the defendant was under obligation to
offer allotment of the said residential flat to plaintiff
within a period of 12 months from the date of
deposit of the earnest money. As per Clause (c) of
the terms of the agreement, it was categorically
mentioned therein that if the defendant failed to allot
a residential apartment within a period 12 months
from the date of payment of the earnest money, the
defendant would be held liable to pay interest @ 9%
p.a. for the period of delay caused by the defendant
from the date of payment of earnest money.
2.14. However, despite lapse of many years from the date
of the deposit of the earnest money, the defendant
failed to allot the said residential apartment to
plaintiff. Upon every such enquiry of the plaintiff,
the defendant only made hollow assurances to
plaintiff that the allotment would happen soon as
there were some technicalities involved and
therefore the said delay. The plaintiff always
believed on false assurances however after having
received a substantial payment from the plaintiff in
the name of booking for a residential apartment, the
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defendant never updated the plaintiff about the
development of the said project to the plaintiff and
kept giving false verbal assurances to the plaintiff.
2.15. Constrained with the never ending hollow
assurances and false promises made by the
defendant, the plaintiff on 01.11.2019 cancelled the
said booking and sought the refund of its booking
amount i.e. Rs.20,00,000/- from defendant. While
receiving the cancellation request of plaintiff, the
defendant yet again assured that defendant will
process the refund of the booking amount
expeditiously however, till date the defendant has
not refunded the said booking amount to the
plaintiff. Constrained with the nonchalant attitude of
the defendant, the plaintiff got issued a legal notice
dated 29.07.2022 seeking a refund of Rs.
20,00,000/- along with 18% interest since March,
2012, however the defendant failed to refund the
money to the plaintiff.
2.16. The defendant and its directors have mischievously
and intentionally induced plaintiff to pay
Rs.20,00,000/- in the name of booking for a
residential apartment with ulterior designs to cheat
the plaintiff and siphon off the amount. The
defendant and its directors have obtained the said
amount from plaintiff just to cheat as they never had
any actual intentions to launch ог deliver any such
residential project/apartment.
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2.17. The plaintiff has also sought interest on the earnest
amount of Rs. 20,00,000/- @ 9% p.a., amounting to
Rs.20,70,000/- since March, 2011 till filing of the
suit. The 9% rate of interest was duly agreed upon
between the parties.
2.18. On this basis the plaintiff has filed the present suit.
WRITTEN STATEMENT
3. The defendant filed its written statement seeking dismissal
of the suit. The defence taken by the defendant is as
follows:
3.1. The plaintiff is a commercial entity and the
residential apartment, as booked by the plaintiff
must have been in course of its commercial affairs.
The utilisation of alleged apartment for use of a
director/ partner by the Plaintiff can only be termed
as purchase of an immovable asset for commercial
purpose. A commercial entity can have a number of
apartments but its allotment to the director cannot be
termed to be for personal use of director. The alleged
apartment would be an asset of the Plaintiff. The
allotment of commercial assets of Plaintiff to its
director and/or partner can only be termed to be a
commercial/ business affair. Therefore, the present
suit being of a commercial nature was not
maintainable before this Court and was barred under
the provisions of Commercial Courts Act.
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3.2. The apartment was booked by the Plaintiff in any
upcoming project launched by the Defendant. It is
denied that the apartment was booked in the alleged
project Sarai Rohilla Kishanganj, Delhi.
3.3. The present suit was barred by limitation. The
advance amount towards the purchase price of the
suit property was paid to the Defendant in March
2011. There is a specific term in the agreement
signed by the Plaintiff which stipulates that in case
allotment is not made within 12 months from the
date of agreement, the Plaintiff can seek refund.
Therefore, limitation for seeking refund starts from
10.03.2012. The present suit has been filed by the
Plaintiff in the year 2022. The suit is, therefore,
barred by limitation and liable to be dismissed on
this ground alone.
3.4. The suit was without cause of action and as such
liable to be dismissed.
3.5. On this basis, the defendant has sought dismissal of
the suit.
REPLICATION
4. The plaintiff has filed replication in which it has reiterated
the averments made in the plaint and denied the averments
made in the written statement.
ISSUES
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5. Vide order dated 08.05.2023, the following issues were
framed in the suit:
1. Whether the suit is barred by limitation? OPD
2. Whether the suit is not maintainable before this
Court as stated in the WS? OPD
3. Whether the plaintiff is entitled to decree of sum
of Rs.40,70,000/- as prayed for in prayer clause ‘a’
of the plaint? OPP
4. Whether the plaintiff is entitled to interest as
claimed in the prayer clause ‘a’ of the plaint? If so,
for what period and at what rate?OPP
5. Relief.
PLAINTIFF’S EVIDENCE
6. In support of its case, the plaintiff has examined its
authorised representative Mr. Rakesh Kumar Jain and he
has tendered its affidavit in evidence as Ex. PW1/X in
which he has deposed along with the lines of the plaint. He
was cross-examined by the defendant. The plaintiff has
relied upon the following documents:
1) Original copy of board resolution dated
05.09.2022 is Ex. PW-1/A.
2) The brochure of the defendant company is Ex.
PW-1/B.
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3) Certificate of registration of conversion dated
09.04.2012 issued by registrar is Ex. PW-1/C.
4) The expression of interest for residential
apartment submitted by the plaintiff is Ex.
PW-1/D (colly).
5) The copy of bank statement qua the transfer of
earnest money is Ex. PW-1/E.
6) The original receipt dated 14.03.2011 is Ex.
PW-1/F.
7) The office copy of letter of the cancellation of
booking dated 01.11.2019 is Ex. PW-1/G.
8) The office copy of legal notice dated 29.07.2022
is Ex. PW-1/H (colly).
9) The email dated 29.07.2022 is Ex. PW-1/1.
10) Certificate under section 65-B of the Indian
Evidence Act is Ex. PW-1/J.
DEFENDANT’S EVIDENCE
7. In support of its case the defendant has examined its
authorised representative Mr. Rajan Wahal who has
tendered his affidavit in evidence as Ex. DW1/A in which
he has deposed on the lines of the written statement. He
was cross-examined by the plaintiff. He has relied upon
the board resolution dated 09.05.2022 Ex. DW1/1.
PLAINTIFF’S SUBMISSIONS
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8. Ld. counsel for the plaintiff has referred to the relevant
pleadings and evidence in support of the plaintiff and has
submitted that the plaintiff has been been able to prove its
case as pleaded and would be entitled to decree as prayed.
Ld counsel has submitted that the Expression of Interest
Ex. PW1/D was not disputed. It is submitted that it was
also not disputed that the plaintiff had deposited amount of
Rs. 20,00,000/- with the defendant under the Expression of
Interest. It is submitted that no allotment was made to the
plaintiff within a period of 12 months and hence, the
plaintiff was constrained to seek cancellation of the
booking and refund of the amount. It is submitted that the
amount was not refunded within 60 days and hence, the
plaintiff also became entitled to interest in terms of the
Expression of Interest. It is submitted that hence, the
plaintiff would be entitled to decree as prayed.
DEFENDANT’S SUBMISSIONS
9. On the other hand, Ld. Counsel for the defendant has
submitted that the suit was not even maintainable as the
subject matter of the suit was a commercial dispute under
the Commercial Courts Act and as such this court did not
have the jurisdiction to adjudicate the present suit. It is
submitted that the plaintiff was a company/LLP engaged in
the business of real estate and renting, and that the
property which was booked would have been utilised by
the plaintiff for a commercial purpose only. It is submitted
that hence, u/s 2 (i) (c) (vii) of the Commercial Courts Act
the dispute was of a commercial nature.
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10. Ld. Counsel for defendant has further submitted that even
otherwise, this court also did not have jurisdiction to
entertain the present suit since the subject matter of the
dispute was under the jurisdiction of the authorities under
the Real Estate (Regulation and Development) Act, 2016
(‘RERA’). Ld. Counsel submits that u/s 2(d) of the RERA
Act, the plaintiff was an ‘allotee’ and Section 18 of RERA
Act provided for refund of amounts paid by the allotee. It
is submitted that hence, the plaintiff could have made a
complaint u/s 79 read with Section 89 of the RERA Act
before the relevant authorities and the jurisdiction of this
court was barred.
11. Ld. counsel for defendant has further submitted that the
suit was also barred by limitation. Ld. Counsel has referred
to clause (d) of the Expression of Interest and has
submitted that the right to sue accrued to the plaintiff upon
the completion of 12 months from the execution of the
EOI and that the limitation period had started at the end of
the period of 12 months of execution of the EOI, and that
the period of limitation of 3 years had already ended on
10.03.2015. It is submitted that when the limitation period
had already commenced earlier and also ended on
10.03.2015, then the cancellation of the booking dated
01.11.2019 neither extended the period of limitation nor
created any fresh cause of action. On this basis, it is
submitted that the suit is liable to be dismissed.
REJOINDER SUBMISSIONS BY PLAINTIFF
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12. In rejoinder, Ld. Counsel for the plaintiff has submitted
that the suit was not commercial in nature. It is submitted
that merely because the plaintiff was a corporate entity,
that by itself would not make the suit commercial. It is
submitted that the nature of business of the plaintiff was
also irrelevant to make the suit commercial in nature. It is
submitted that in the plaint the plaintiff had specifically
stated that the flat would be used for the residence of the
director/partner of the plaintiff and that this fact was not
denied by the defendant in the written statement. It is
further submitted that no plea was taken in the written
statement that the property would be used by the plaintiff
for a commercial purpose.
13. It is further submitted that the relevant criteria was to see
as to what was the “actual use” of the property. It is
submitted that there is no dispute that the Expression of
Interest in the present case was in respect of a residential
property, and hence, the dispute was not commercial in
nature. In this regard, Ld. Counsel has relied upon the
decisions in Daimler Chrysler India Pvt. Ltd. Vs. Controls
& Switchgear Company Ltd. MANU/SC/588/2024,
Omkar Realtors and Developers Pvt Ltd. Vs. Kushalraj
and Developers Pvt. Ltd. MANU/SC/938/2024, Ambalal
Sarabhai Enterprises Ltd. Vs. K.S. Infraspace LLP
MANU/SC/1378/2019, and Mamta Kapoor Vs. Vinod
Kumar Rai MANU/UP/1725/2024. It is further submitted
that in the present case, there was even no allotment made
and even the project was never launched and hence, there
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was also never any use, what to say of any commercial
use, of the property and hence, the dispute was not
commercial in nature.
14. It is further submitted that the present suit was not barred
under the RERA Act. It is submitted that the plaintiff was
not an allotee u/s 2(d) of the RERA Act since there was no
“allotment” in the present case. It is submitted that under
the EOI, the allotment was to happen in the future after
execution of the EOI and that undisputedly, the allotment
never happened.
15. It is further submitted that the suit was well even
limitation. It is submitted that in the plaint, it was the case
of the plaintiff that the expression on interest was executed
towards allotment and booking in a project at the Sarai
Rohilla Project. It is submitted that however, the defendant
took the stand in the written statement that the booking
was not for any specified project but was made generally
and the plaintiff could have been allotted any flat in any
project. It is further submitted that this stand of the
defendant was demolished in the cross examination of
DW-1. It is submitted that the DW-1 admitted in cross
examination that the booking was for the Sarai Rohilla
Project and also that this project could never be launched
due to lack of approval. It is further submitted that from
the cross examination of DW-1 it was also clear that the
plaintiff was never informed that the project could not be
launched. It is submitted that since the plaintiff was never
informed that the project could never be launched, the
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plaintiff waited for allotment, and only after delay in
allotment, the plaintiff decided to cancel the expression of
interest and sought refund of the money. It is submitted
that hence, the right to sue accrued only upon the
cancellation of the expression of interest and request for
refund. Ld. Counsel has submitted that till the cancellation,
the cause of action was continuous in nature. In this
regard, Ld. Counsel has also relied upon the decisions of
the Hon’ble National Consumer Disputes Redressal
Commission in the case of Bharat Naskar Vs. Samar
Biswas MANU/CF/745/2024 and Samruddhi Co-operative
Housing Society ltd. Vs. Mumbai Mahalaxmi Construction
Pvt. Ltd. Civil Appeal No. 4000 of 2019.
SUR-REJOINDER SUBMISSIONS BY DEFENDANT
16. In sur-rejoinder, Ld. Counsel for defendant has submitted
that in the facts and circumstances of the present case, the
RERA Act was applicable and that a complaint to the
authority under the RERA Act would have been
maintainable and as such the present suit was barred by the
RERA Act. Ld counsel has referred to decisions of the
Haryana Real Estate Regulatory Authority, Panchkula
being decision dated 20.03.2023 in case of Sushil Kr.
Agrawal Vs. Parsvnath Developers Ltd., Complaint
No.2942/2022 and decision dated 14.05.2024 in the case
of Adit Bhatia & Usha Bhatia Vs. Parsvnath Developers
Ltd., Complaint No. 1156 of 2023, and has submitted that
these cases also pertained to mere expression of interest
towards future projects without there being any agreement
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to sell and even in these cases it was held that the
complaint to the authority under RERA was maintainable.
17. Ld. counsel for defendant has further referred to clauses
(d) and (e) of the EOI and has submitted that it was clear
that the right to sue accrued upon completion of 12 months
from the date of the execution of the EOI and that there
was no continuous cause of action as argued by the
plaintiff.
FURTHER SUBMISSIONS BY PLAINTIFF
18. In further rebuttal, ld counsel for plaintiff has submitted
that in the present case, the expression of interest was
dated 2011 and that the RERA came into effect on
09.05.2017. Ld. Counsel has relied upon the decision in
Newtech Promoters and Developers Pvt. Ltd. Vs. State of
U.P. MANU/SC/1056/2021 and has submitted that only in
cases of ongoing or future projects the RERA would apply
after the project was registered u/s 3 of the RERA Act. It is
submitted that in the present case, the defendant has not
even shown that the project was registered with the RERA
authority.
19. Ld. counsel for plaintiff has further submitted that the
defendant did not even take the plea of bar of jurisdiction
through the RERA Act in its written statement and even no
issue was framed on this point and no evidence was lead.
It is submitted that the onus was on the defendant to show
that the project was registered u/s. 3 of the RERA which it
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had failed to do. It is further submitted that the DW-1 had
admitted in his cross examination that the project had been
scrapped and as such there was even no ongoing or future
project and neither was the project ever launched.
20. It is further submitted that the decisions of the Haryana
RERA Authority cited by the defendant were not binding
on this court, and further that these decisions were
distinguishable since in those cases, the plaintiff at least
had a specified unit which was allotted, whereas there was
no specified unit allotted in the present case and in the
present case, as per the defendant’s own witness DW-1, the
project had been scrapped.
21. I have considered the submissions of the ld. Counsels for
the parties and I have perused the record.
22. My issue-wise findings are as follows.
ISSUE-WISE FINDINGS & DISCUSSION
Issue No.2- Whether the suit is not maintainable before
this Court as stated in the WS? OPD
23. This issue is taken up first for discussion.
24. The defendant has argued that the suit is of a commercial
nature and hence, this Court did not have the jurisdiction
to entertain and adjudicate the present suit. This argument
of the defendant is completely frivolous and without any
merit. Merely because the plaintiff was a company or a
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firm engaged in commercial activity would not ipso facto
make the present suit commercial. The undisputed position
is that the parties had executed the agreement titled as
“Expression of Interest for a residential apartment” dated
10.03.2011 under which a “residential apartment” was to
be allotted to the plaintiff. The defendant has relied upon
Section 2(1)(c)(vii) of the Commercial Courts Act to argue
that the present suit was commercial in nature. Section
2(1)(c)(vii) provides that commercial dispute means a
dispute arising out of “(vii) agreements relating to
immovable property used exclusively in trade or
commerce”. In the present case, the agreement was in
respect of a property which was admittedly a residential
apartment and would have been used as such. The subject
unit is question was not a property which was to be used
exclusively in the course of commerce or trade but was a
residential property. Hence, there is no scope of the dispute
being a “commercial dispute” in the present case.
Furthermore, the plaintiff has specifically pleaded in the
plaint that the property was to be used for the purpose of
residence of the director/partner of the plaintiff. This has
not been disputed and denied by the defendant in the
written statement. The use by a director/partner of the
plaintiff firm of a residential apartment belonging to the
plaintiff cannot be termed as exclusive use in the course of
commerce or trade. Thus, the argument of the defendant
that the suit was barred under the Commercial Courts Act
stands rejected.
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25. The other argument of the defendant to the maintainability
of the suit is in respect of the bar under the Real Estate
(Regulation and Development) Act, 2016 (‘RERA’).
However, it is seen that the defendant did not even raise
this plea in its written statement. Furthermore, the
defendant has neither pleaded nor led any evidence to
show that the project in respect of which allotment was to
be made to the plaintiff by the defendant was even
registered with the relevant authorities under section 3 of
the RERA. Hence, once the defendant has been unable to
show that the project was even registered under the RERA,
there is no question of bar of the RERA to the present suit.
Pertinently, the defendant’s witness DW-1 deposed in his
cross-examination that the plaintiff had paid the advance
towards allotment of residential unit in a project at Sarai
Rohilla-Kishan Ganj, Delhi and that the said project could
not even be launched as the necessary approvals for the
relevant authorities were not received. Hence, what seems
to have happened is that the project was never launched
and the project was also never registered under the RERA
after the said Act was enacted. Thus, there can be no
question of bar under the RERA to the present suit.
26. In view of the above discussion, the suit is held to be
maintainable. The Issue No.2 is decided accordingly,
against the defendant and in favour of the plaintiff.
Issue No.1- Whether the suit is barred by limitation? OPD
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27. The Expression of Interest dated 10.03.2011 Ex.PW-1/D is
an admitted document and constitutes the contract between
the parties. The relevant terms of the Expression of
Interest are extracted hereunder:
“I/We hereby express our interest in booking a
Residential Apartment of approx. 1500/2000/2500
sq. ft. (approx.139/186/232 sq. mtr.) super area
consisting of 3/4/5 Bedroom Units in the proposed
project to be developed by the Company, subject to
the following terms and conditions:
(a) That you will offer me/us a residential apartment
in the proposed Project, within a period of 12
months of the date of this application.
(b) I/We are ready to deposit 15 % of the basic price
and balance of the basic price plus additional
charges as and when demanded by the Company as
per Payment Plan decided by the Company, will be
payable by me/us.
(c) That in the event of residential apartment being
allotted after 12 months from the date of payment of
initial deposit, simple interest @ 9% per annum shall
be paid to me/us for the period of delay in allotment
beyond 12 months on the amount paid by me/us as
deposit.
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(d) In case the Company fails to allot an apartment
within a period of 12 months from the date of
deposit, then I/We would have the option to
withdraw the amount deposited by me/us and the
Company will refund the amount within 60 days
from the date of application for refund without
liability to pay any interest or any other sum in any
manner whatsoever.
(e) I/ We agree that though the Company shall try to
make an allotment within period of 12 months or
any extension thereof as may be decided by the
Company, but in case it fails or is unable to do so for
any reason whatsoever, no claim of any nature,
monetary or otherwise, would be raised by me/us
except that the advance money paid by me/us shall
be refunded to me/us with 6% simple interest per
annum only if the Company decided to refund the
said amount to me/us.
… … …”
28. It is the argument of the defendant that in view of Clause
(d) of the Expression of Interest, since the allotment was
not made within a period of 12 months from execution of
Expression of Interest, the limitation for a suit for claiming
the refund of the money deposited started at the end of the
said period of 12 months from execution of the Expression
of Interest. However, this argument is wholly erroneous
and without any merit.
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29. Under Clause (a), the defendant was liable to offer a
residential apartment in the proposed project within a
period of 12 months from the date of the Expression of
Interest.
30. Under Clause (c), in case the allotment was made after 12
months from the date of the initial deposit, then simple
interest @ 9% p.a. was to be paid by the defendant to the
plaintiff.
31. Under Clause (d), in case the defendant failed to make
allotment within 12 months from the date of the deposit,
then the plaintiff had the option to withdraw the amount
deposited, and the defendant was bound to refund the
amount within 60 days from the date of application of
refund without liability to pay interest.
32. Under Clause (e), in case the defendant failed to make
allotment within 12 months or any extension thereof for
any reason whatsoever, no claim of any nature could be
raised, except that the advance money paid by the plaintiff
was to refunded with simple interest @ 6% per annum.
33. The argument of the defendant that the limitation period of
3 years immediately started running upon the end of 12
months from the date of the execution of the Expression of
Interest based on Clause (d) is wholly fallacious. Clause
(d) merely gave an option to the plaintiff to seek refund in
case the allotment was not made within 12 months and in
case the option was exercised, then the defendant was
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bound to refund the money within 60 days without any
liability to pay interest. Clause (d) did not provide that in
case the allotment was not made within 12 months of the
deposit, then the liability of refund was automatic and
immediate.
34. Clause (d) mere gave the plaintiff the liberty to exercise
the option for seeking refund in case allotment was not
made within 12 months of the deposit. Importantly, neither
Clause (d) nor any other clause of the agreement gave any
timeline for cancelling the booking and seeking refund in
case the defendant failed to make allotment within 12
months of the initial deposit at the time of execution of the
Expression of Interest.
35. As per the case of the plaintiff, the plaintiff had genuinely
believed that the allotment would be made and, hence, it
had waited, and it is only when there was a gross delay
that ultimately, the plaintiff had cancelled the booking vide
its letter dated 12.08.2019 Ex.PW-1/G. Importantly, the
defendant has not led any evidence to show that prior to
the cancellation letter dated 12.08.2019, the defendant had
ever conveyed to the plaintiff that the project had been
cancelled or would never be completed. Pertinently, the
defendant’s witness DW-1 deposed in his cross-
examination that the plaintiff had paid the advance
towards allotment of residential unit in a project at Sarai
Rohilla-Kishan Ganj, Delhi and that the project could not
even be launched as the necessary approvals for the
relevant authorities were not received. DW-1 further
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deposed that he was also not aware that the plaintiff had
ever been informed that the defendant would be unable to
launch the project. Thus, it is clear that the defendant had
not informed the plaintiff that the project could not be
launched. In such circumstances, the case of the plaintiff
that it waited for an allotment and ultimately cancelled
booking vide cancellation letter dated 12.08.2019 when
there was gross delay in allotment in believable.
36. As already mentioned, there was no timeline fixed in the
contract for the plaintiff to exercise its option to cancel the
booking and seek refund. In the present case, when the
defendant did not even inform the plaintiff that the project
could not be launched, the plaintiff cannot be blamed for
waiting for the allotment and then cancelling the booking
vide its letter dated 12.08.2019 when the delay had
become too much for the plaintiff to wait any longer.
37. Once the plaintiff had exercised its option to cancel the
booking and seek refund of the advance amount paid vide
it letter dated 12.08.2019, then under Clause (d) of the
Expression of Interest, the defendant had 60 days time till
11.10.2019 to refund the advance amount paid. It is only
when this period of 60 days expired, that the right to sue
accrued to the plaintiff to file the suit for refund of the
advance amount paid. Hence, the right to sue accrued to
the plaintiff only on 12.10.2019 when the defendant did
not make refund of the advance amount paid. The present
case would be governed by the residuary article being
Article 113 of the First Schedule to the Limitation Act and
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the period of limitation was of 3 years. Thus, the suit
having been filed on 27.09.2022 was within limitation.
38. Thus, it is held that the suit is within limitation. The Issue
No.1 is decided accordingly in favour of the plaintiff and
against the defendant.
Issue No.3- Whether the plaintiff is entitled to decree of
sum of Rs.40,70,000/- as prayed for in prayer clause ‘a’ of
the plaint? OPP
Issue No.4- Whether the plaintiff is entitled to interest as
claimed in the prayer clause ‘a’ of the plaint? If so, for
what period and at what rate? OPP
39. There is no dispute that the plaintiff had paid the advance
amount of Rs. 20 lacs to the defendant for the allotment.
The undisputed position is also that the defendant did not
make any allotment to the plaintiff of a residential unit in
terms of the Expression of Interest. Hence, the defendant
was bound to refund the advance amount of Rs. 20 lacs to
the plaintiff as per the Expression of Interest. In any case,
the defendant could not retain the amount of Rs. 20 lacs as
this would lead to unjust enrichment. Hence, in so far as
the advance amount of Rs. 20 lacs is concerned, without
any doubt, the defendant is liable to refund the same to the
plaintiff.
40. In so far as the question of interest is concerned, three
clauses of the Expression of Interest are relevant. Clause
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(c) provides for interest @ 9% p.a., Clause (d) provides for
no interest liability, and Clause (e) provides for interest @
6% p.a.
41. Clause (c) has no application to the present case, since it
deals with a case in which allotment was actually made
although with delay, which is not the case in the present
matter.
42. In so far as Clause (d) is concerned, the same provides that
in case the allotment was not made within 12 months and
the plaintiff sought refund, then the defendant was bound
to refund the advance amount paid within 60 days and that
there would be no liability for interest. Clause (d)
providing for no interest liability would be applicable only
in the cases when the defendant had fulfilled its obligation
to refund the amount within 60 days of the request for
refund. However, this was not done by the defendant in the
present case, and hence, Clause (d) would have no
application.
43. It is Clause (e) of the Expression of Interest which would
apply to the present case in so far as the payment of
interest in concerned. Clause (e) provides that in case the
defendant failed to make allotment then the plaintiff was
entitled to refund of the advance amount paid along with
simple interest @ 6% p.a.
44. Hence, the plaintiff would be entitled to refund of amount
of Rs. 20,00,000/- along with interest @ 6% p.a. from the
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date of the deposit, i.e. 14.03.2011, till the date of actual
realisation. The Issues Nos. 3 and 4 are answered
accordingly.
DECISION
45. Accordingly, decree is passed in favour of the plaintiff and
against the defendant for sum of Rs. 20,00,000/- along
with interest @ 6% p.a. from 14.03.2011 till the date of
actual realisation.
46. Costs are decreed in favour of the plaintiff. Pleader’s fee is
computed as Rs. 45,000/-.
47. Let the decree-sheet be drawn up accordingly.
48. File be consigned to record room after due compliance.
Digitally signed by SATYABRATA SATYABRATA PANDA PANDA Date: 2025.08.11 17:29:12 +0530 (SATYABRATA PANDA) District Judge-04 Judge Code- DL01057 PHC/New Delhi/11.08.2025 CS No.419/22 Urmila Farms LLP Vs. Parsvnath Developers Ltd. Page No. 27 of 27