Earnest money forfeiture under apartment buyer agreements may be moderated by equitable relief despite contractual default and delay in possession.

Earnest money under an apartment buyer's agreement may be forfeited where the allottee fails to continue instalments, but the contractual terms and surrounding circumstances can justify equitable moderation. The agreement here treated part of the payments as earnest money and allowed forfeiture on non-fulfilment of the allottee's obligations, while also reserving the company's power to revise costs on specified heads and providing refund without interest for delay in possession. Given the delay in handing over possession and the substantial additional demand, the forfeiture was not disturbed in full. The forfeiture was upheld only to the extent of 50 per cent, and the balance was directed to be refunded with interest if payment was delayed beyond the stipulated period.

---

---

Issues: Whether the forfeiture of earnest money under the apartment buyer's agreement was justified, and what relief should be granted in the circumstances.

Analysis: The agreement treated a part of the amounts paid as earnest money and permitted forfeiture on non-fulfilment of the allottee's obligations. The respondent had stopped further instalments after paying for several years, relying on alleged escalation in cost and delay in possession. The terms also showed that the company had reserved power to revise costs on specified heads and that the remedy for delay in possession was refund without interest. At the same time, the facts showed delay in handing over possession and a substantial demand of additional amount. Balancing the contractual stipulations with the surrounding circumstances, the appropriate course was not to disturb the forfeiture in full but to grant equitable relief.

Conclusion: The forfeiture was upheld to the extent of 50 per cent of the amount, and the appellant was directed to refund the remaining 50 per cent with interest if payment was delayed beyond the stipulated period.

---