Calcutta High Court
Manish Agarwal And Ors vs Oswal Residential Buildings Llp And Anr on 24 November, 2025
Author: Arindam Mukherjee
Bench: Arindam Mukherjee
OD-1, 2 & 3
ORDER SHEET
IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
ORIGINAL SIDE
IA No.GA/1/2024
In
CS/93/2023
MANISH AGARWAL AND ORS.
VS.
OSWAL RESIDENTIAL BUILDINGS LLP AND ANR.
IA No.GA/3/2024
In
CS/93/2023
MANISH AGARWAL AND ORS.
VS.
OSWAL RESIDENTIAL BUILDINGS LLP AND ANR.
IA No.GA/4/2025
In
CS/93/2023
MANISH AGARWAL AND ORS.
VS.
OSWAL RESIDENTIAL BUILDINGS LLP AND ANR.
BEFORE:
The Hon'ble JUSTICE ARINDAM MUKHERJEE
Date: 24th November, 2025.
Appearance:
Ms. Priyanka Agarwal, Adv.
. . .For plaintiffs
Mrs. Ramya Hariharan, Adv.
Mr. S. Rao, Adv.
. . .For defendants
The Court: The plaintiffs and the defendants entered into an
agreement on 11th February, 2013 by an order which the defendants
agreed to sell and the plaintiffs agreed to purchase a flat (hereinafter
referred to as the said flat) for an aggregate consideration of Rs.
63,138,45/- to be paid in instalments till the said flat was made ready
and handed over.
The aggregate consideration comprised of Unit Charges, Car
Parking, Utility Charges and ancillary charges and included therein the
service tax payable for the said flat. The plaintiffs paid an aggregate sum
of Rs. 38,46,275/- but could not pay any further amount despite
demand from the defendants. Ultimately, the agreement stood cancelled.
The defendants sold the said flat to a third party but did not refund the
money after deducting the forfeiture charges therefrom.
The plaintiffs say that the defendants agreed to refund a sum of Rs.
23,81,309/- although the defendants were obliged to refund the money
of Rs.1,89,450 from the said sum of Rs. 38,46,275/- on account of
forfeiture charges.
Disputes and differences persisted between the parties although by
a letter dated 5th August, 2021 the defendants had cancelled the
agreement. There is, however, a dispute as to the date of cancellation as
according to the defendants, the agreement stood cancelled with the
expiry of 31st August, 2021. This led to the filing of the suit.
In case of hearing, the defendants were unable to say as to the
amount collected by them as service tax from out of the sum, of Rs.
38,46,275/-.
The defendants have filed a fresh set of documents as recorded in
the order dated 19th November, 2025. The defendants say that they had
deposited the service tax collected from the plaintiffs referring to the
documents, the defendants say that a sum of Rs.1,23,745/- was
deposited as service tax against the payments made by the plaintiffs for
purchase of the said flat till the agreement stood cancelled. However, no
document has been shown regarding the amount of service tax, the
defendants had collected from the third party to whom the defendant had
sold the flat after the agreement between the plaintiffs and the
defendants got cancelled. In respect of the self-same flat when the sale
between the plaintiffs and the defendants stood cancelled, there cannot
be imposition of service tax twice. The sale transaction which at the end
took place in respect of the said flat in question was between the
defendants and the third party. The defendants were required to collect
the entire service tax payable for the sale of the flat from the third party
and deposit the same. The defendants were, therefore, liable to refund
the service tax they had collected from the plaintiffs and should have
taken benefit thereof from the Goods and Service Tax authorities owing
to the cancellation of the agreement for sale of the flat in question
between the plaintiffs and the defendants. Even if the defendants had
deposited the service tax collected from the plaintiffs then also the
defendants under the prevailing provisions of law were liable to refund
the same treating it to be a deposit in respect of a transaction which fell
through.
In the aforesaid facts and circumstances, the defendants are
directed to pay a sum of Rs.1,23,745/- on account of service tax
collected from the plaintiffs corresponding to the part consideration paid
by the plaintiffs prior to the agreement stood cancelled within a period of
three weeks from date.
It is evident from the facts of this case that the defendants had held
on to the money received from the plaintiffs even after the agreement
stood cancelled may be for one reason or the other though the
defendants were obliged to refund the amount after deducting the
amount which on cancellation got forfeited as per the agreement. The
defendants, therefore, have derived benefit of the principal sum paid by
the plaintiffs after adjusting the amount required to be forfeited. The
defendants have derived benefit out of such money and are liable to
compensate the plaintiffs for the same since the plaintiffs were deprived
of the benefits of such money.
In terms of the order dated 18th September, 2025 the defendants
have without prejudice to their rights and contentions paid a sum of
Rs.35,00,000/- to the plaintiffs which was also accepted by the plaintiffs
without prejudice to their rights. The payment, although, was made
beyond the prescribed period of time but this Court is inclined to ignore
the delay in paying the sum of Rs.35,00,000/-. The plaintiffs will be
entitled to appropriate the said sum of Rs.35,00,000/- and the
defendants will be absolved from the liability of such sum. On a scrutiny
of the amounts paid by the plaintiffs to the defendants and the amount
to which the defendants were entitled to refund on account of forfeiture it
will appear that a sum of Rs.38,46,275/-was paid as principal sum for
the sale consideration which includes the service tax amount of
Rs.1,23,745/-. After deducting Rs.1,23,745/- from Rs.38,46,275/- the
balance sum is Rs.37,22,530/-. A sum of Rs.1,89,450/- is to be further
deducted from the said sum of Rs.37,22,530/- on account of cancellation
charges. After deducting Rs.1,89,450/- from Rs.37,22,530/-, the balance
sum is Rs.35,33,080/-. The plaintiffs have already received
Rs.35,00,000/-. So they are to receive Rs.33,080/- on account of
unrefunded principal sum. The defendants are directed to pay this sum
of Rs.33,080/- also within three weeks from date. The defendants shall
pay interest on Rs.35,33,080/- at the rate of 6% simple interest per
annum from 1st November, 2022 till 30th September, 2025. The interest
amount is also to be paid within a period of three weeks from date.
Though the plaintiffs have insisted for refund of the court fees
amount by way of cost to be borne by the defendants but I am not
inclined to grant the same since the disputes flared out of non-payment
by the plaintiffs leading to cancellation of agreement and I have already
granted interest to the plaintiffs on the principal sum refundable, for the
period of same remained with the defendants.
Nothing further remains to be adjudicated in the suit. By consent
of the parties, the suit is treated as on the day's list and is disposed of by
the judgment and order as aforesaid. The department is directed to draw
up the decree expeditiously.
Since the suit is finally disposed of, the pending applications being
GA 1 of 2024, GA 3 of 2024 and GA 4 of 2025 also stand disposed of
without any further order.
Interim order including appointment of Receiver, if any, stands
vacated and/or discharged.
(ARINDAM MUKHERJEE, J.)
pa
