New Delhi, May 2 (PTI) The law aids the vigilant, not those who sleep over their rights, the Supreme Court on Friday said and upheld a high court verdict over a property-related dispute in Bengaluru.

A bench of Justices J B Pardiwala and R Mahadevan was hearing the issue over the forfeiture of Rs 20 lakh paid as the first tranche of the total sale consideration of a property.

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The bench, which elaborated on "earnest money" and "advance money" for being relevant to the matter, said the Karnataka High Court denied the relief of refund of advance money to the appellant as he did not seek an alternative prayer for a refund in the suit.

The top court said it was a settled position of the law that the plaint might be amended at any stage of the proceedings to enable the plaintiff to seek an alternative relief, including that of the refund of earnest money, and the courts were vested with wide judicial discretion to permit such amendments.

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It referred to a provision of the Specific Relief Act, 1963 and said the courts couldn't grant such relief suo motu.

The provision of the Act, the bench said, was adequately broad and flexible to allow the appellant to seek an amendment of the plaint for the said relief, even at the appellate stage.

"However, no such application for an amendment of the plaint was moved either before the trial court or during the course of the first appeal before the high court. That is to say, the appellant never prayed for the refund of the advance money," it added.

The top court went on, "Here, it would be redundant to state that the law aids the vigilant, not those who sleep over their rights."

The apex court delivered its verdict on an appeal challenging the high court's August 2021 order.

The bench noted the dispute arose from a claim for specific performance of a July 2007 agreement of sale with respect to a property for a total sale consideration of Rs 55.50 lakh.

It noted Rs 20 lakh was paid towards part payment and the agreement stipulated that the sale transaction would be completed with the payment of the balance amount within four months.

The appellant before the apex court first moved a trial court seeking a direction to the original owner to execute the sale deed and deliver the possession of the suit property.

The trial court dismissed the suit following which he moved high court, which affirmed the trial court verdict observing the appellant failed to pay the balance sale consideration within the stipulated four months.

In its verdict, the top court said the only question that fell for its consideration was whether the appellant was entitled to refund of Rs 20 lakh purportedly paid as "advance money".

The bench said there was an explicit forfeiture clause in the agreement, which stipulated that the advance money paid would stand forfeited in the event of default by the buyer in fulfilling the terms of contract.

The word "advance" means money in whole or in part, forming the consideration of an agreement paid before the same was completely payable, it added.

On the other hand, the bench explained the term "earnest" was 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 it goes through.

It said the amount of Rs 20 lakh was essentially "earnest money" and was in the nature of a guarantee for the due performance of the contract.

"Consequently, when the appellant-purchaser failed to comply with the contractual stipulation of paying the balance sale consideration within a period of four months from the date of the agreement, the respondents 1-4 (vendors) were justified in forfeiting the advance money," it held.

The appellant, the top court said, neither sought any extension for performing his part of the contract nor was any extension of time granted by the four respondents.

The forfeiture clause was fair and equitable rather than one-sided and unconscionable, as it imposed liabilities on both the purchaser and sellers, in which the seller was obligated to pay twice the advance amount paid by the buyer in case of his default.

Holding that the forfeiture of advance money was justified, the bench found no "perversity or illegality" in the high court's verdict.

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