Whether landlord can claim rent towards lock-in period without pleading that he has sustained loss due to premature vacation of premises?

The reason why I state that the suit as per averments in the plaint itself was not maintainable and should not have been entertained is, that the plaintiff, though pleading breach of contract i.e. Lease Deed and the Maintenance Agreement by the defendant and without pleading any loss from such breach, is seeking relief in the nature of specific performance and which is not permissible in law. The Lease Deed was not specifically enforceable at the instance of the plaintiff as the landlord and on breach of the Lease Deed by the defendant as tenant, by vacating the premises before expiry of the term thereof, the plaintiff was entitled to only damages for breach of contract and the measure of which damages was the loss if any suffered by the plaintiff. However, the plaintiff was required to plead such loss and no loss has been pleaded.

11. The position with respect to rent of lock-in period is akin to that of earnest money/security and qua which the Supreme Court in Kailash Nath Associates Vs. Delhi Development Authority MANU/SC/0019/2015 : (2015) 4 SCC 136, followed by me in Speed Track Cargo Vs. State Bank of Patiala MANU/DE/0359/2016, Palm Art Apparels Pvt. Ltd. Vs. Enkay Builders Pvt. Ltd. MANU/DE/3533/2017, Mera Baba Pvt. Ltd. Vs. Ram Lubhaya Puri MANU/DE/2199/2018, Klintoz Pharmaceuticals Pvt. Ltd. Vs. Ravinder Shankar Mathur MANU/DE/3733/2018, Satish Verma Vs. Garment Craft (India) Pvt. Ltd. MANU/DE/7859/2017 and Mahendera Verma Vs. Suresh T. Kilachand MANU/DE/2352/2019, held that mere entitlement in the agreement to forfeit is not enough and loss/damages from breach of contract has to be proved. In fact, the matter is no longer res integra. The Division Bench of this Court in Tower Vision India Pvt. Ltd. Vs. Procall Pvt. Ltd. MANU/DE/4958/2012 has held that rent of the lock-in period in a Lease Deed cannot be claimed without pleading loss from vacation by the tenant of the property prior to the expiry of the term of lease. 

IN THE HIGH COURT OF DELHI

CS (OS) 3032/2014

Decided On: 06.01.2020

 Deepak Chopra  Vs.  Flakt (India) Pvt. Ltd.

Hon'ble Judges/Coram:

Rajiv Sahai Endlaw, J.

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Whether court should grant compensation for breach of contract if there is no loss to other side?

 In my opinion there is also a legal issue on the basis of which this appeal has to be allowed and the suit for recovery filed by the appellant/plaintiff has to be decreed. This is because of the provisions of Sections 73 and 74 of the Indian Contract Act, 1872. In law merely because there is a breach of contract such breach is not actionable unless because of the breach loss is caused to the aggrieved party. There can be forfeiture of an amount paid under a contract only when the aggrieved party is caused loss. Two relevant judgments in this regard are the judgments of the Constitution Bench of the Supreme Court in the case of Fateh Chand Vs. Balkishan Dass AIR 1963 SC 1405 and the recent judgment of the Supreme Court in the case of Kailash Nath Associates Vs. Delhi Development Authority and Another, (2015) 4 SCC 136. The relevant paras in the judgment in the case of Kailash Nath Associates (supra) are paras 34, 43 and 43.1 to 43.7 and these paras read as under:-

"34. In Fateh Chand v. Balkishan Das, this Court held: "The section is clearly an attempt to eliminate the somewhat elaborate refinements made under the English common law in distinguishing between stipulations providing for payment of liquidated damages andstipulations in the nature of penalty. Under the common law a genuine pre-estimate of damages by mutual agreement is regarded as a stipulation naming liquidated damages and binding between the parties: a stipulation in a contract in terrorem is a penalty and the Court refuses to enforce it, awarding to the aggrieved party only reasonable compensation. The Indian Legislature has sought to cut across the web of rules and presumptions under the English common law, by enacting a uniform principle applicable to all stipulations naming amounts to be paid in case of breach, and stipulations by way of penalty.....

* * * Section 74 of the Indian Contract Act deals with the measure of damages in two classes of cases (i) where the contract names a sum to be paid in case of breach and (ii) where the contract contains any other stipulation by way of penalty. We are in the present case not concerned to decide whether a covenant of forfeiture of deposit for due performance of a contract falls within the first class. The measure of damages in the case of breach of a stipulation by way of penalty is by Section 74 reasonable compensation not exceeding the penalty stipulated for. In assessing damages the Court has, subject to the limit of the penalty stipulated, jurisdiction to award such compensation as it deems reasonable having regard to all the circumstances of the case. Jurisdiction of the Court to award compensation in case of breach of contract is unqualified except as to the maximum stipulated; but compensation has to be reasonable, and that imposes upon the Court duty to award compensation according to settled principles. The section undoubtedly says that the aggrieved party is entitled to receive compensation from the party who has broken the contract, whether or not actual damage or loss is proved to have been caused by the breach. Thereby it merely dispenses with proof of "actual loss or damages"; it does not justify the award of compensation when in consequence of the breach no legal injury at all has resulted, because compensation for breach of contract can be awarded to make good loss or damage which naturally arose in the usual course of things, or which the parties knew when they made the contract, to be likely to result from the breach.(At page 526, 527) * * *Section 74 declares the law as to liability upon breach of contract where compensation is by agreement of the parties pre-determined, or where there is a stipulation by way of penalty. But the application of the enactment is not restricted to cases where the aggrieved party claims relief as a Plaintiff. The section does not confer a special benefit upon any party; it merely declares the law that notwithstanding any term in the contract predetermining damages or providing for forfeiture of any property by way of penalty, the court will award to the party aggrieved only reasonable compensation not exceeding the amount named or penalty stipulated. The jurisdiction of the court is not determined by the accidental circumstance of the party in default being a Plaintiff or a Defendant in a suit. Use of the expression "to receive from the party who has broken the contract" does not predicate that the jurisdiction of the court to adjust amounts which have been paid by the party in default cannot be exercised in dealing with the claim of the party complaining of breach of contract. The court has to adjudge in every case reasonable compensation to which the Plaintiff is entitled from the Defendant on breach of the contract. Such compensation has to be ascertained having regard to the conditions existing on the date of the breach."

xxxxx xxxxx xxxxx

43. On a conspectus of the above authorities, the law on compensation for breach of contract Under Section 74 can be stated to be as follows:

43.1. Where a sum is named in a contract as a liquidated amount payable by way of damages, the party complaining of a breach can receive as reasonable compensation such liquidated amount only if it is a genuine pre-estimate of damages fixed by both parties and found to be such by the Court. In other cases, where a sum is named in a contract as a liquidated amount payable by way of damages, only reasonable compensation can be awarded not exceeding the amount so stated. Similarly, in cases where the amount fixed is in the nature of penalty, only reasonable compensation can be awarded not exceeding the penalty so stated. In both cases, the liquidated amount or penalty is the upper limit beyond which the Court cannot grant reasonable compensation.

43.2. Reasonable compensation will be fixed on well known principles that are applicable to the law of contract, which are to be found inter alia in Section 73 of the Contract Act.

43.3. Since Section 74 awards reasonable compensation for damage or loss caused by a breach of contract, damage or loss caused is a sine qua non for the applicability of the Section.

43.4. The Section applies whether a person is a Plaintiff or a Defendant in a suit.

43.5. The sum spoken of may already be paid or be payable in future.

43.6. The expression "whether or not actual damage or loss is proved to have been caused thereby" means that where it is possible to prove actual damage or loss, such proof is not dispensed with. It is only in cases where damage or loss is difficult or impossible to prove that the liquidated amount named in the contract, if a genuine pre-estimate of damage or loss, can be awarded. 43.7. Section 74 will apply to cases of forfeiture of earnest money under a contract. Where, however, forfeiture takes place under the terms and conditions of a public auction before agreement is reached, Section 74 would have no application."

(underlining added)

8. In the present case as is seen from the admitted facts on record that the respondent/defendant neither as per its written statement nor as per its evidence led, ever pleaded and proved that any loss has been caused to the respondent/defendant on account of the failure by the appellant/plaintiff to take dealership of the respondent/defendant. Therefore even assuming that there is some breach of contract on the part of the appellant/plaintiff, yet since no loss has been caused to the respondent/defendant which is pleaded and proved, therefore in accordance with the ratio of the judgments of the Supreme Court in the cases of Fateh Chand (supra) and Kailash Nath Associates (supra), the respondent/defendant could not have forfeited the total amount of Rs.6,25,000/- deposited by the appellant/plaintiff with the respondent/defendant.

Delhi High Court

M/S Grover Tankers Investment vs M/S Otc Exchange Of India on 15 October, 2018

CORAM:

HON'BLE MR. JUSTICE VALMIKI

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Whether person aggrieved by breach of contract is required to prove that actual loss or damage was suffered by him?

 It can thus be seen that, in every case of breach of a contract, the person aggrieved by the breach, is not required to prove the actual loss or damage suffered by him, before he can claim a decree and the Court is competent to award reasonable compensation in case of breach, even if, no actual damage is "proved", to have been suffered in consequence of the breach of contract. But the expression "whether or not actual damage or loss is proved to have been caused thereby", as appearing in the said section is intended to cover different types of contracts, which come before the Courts. In case of some contracts, it may be impossible for the Courts to asses compensation, arising from such breach. In such cases, the section dispenses with the proof of such loss or damage and the Court can grant the compensation in terms of the liquidated damages, if the sum named by the parties is regarded as a genuine pre-estimate of such loss. 

IN THE HIGH COURT OF BOMBAY AT GOA

Appeal Under Arbitration Act No. 8 of 2016

Decided On: 10.04.2018

Titagarh Wagons Limited Vs. Chowgule and Company Private Limited

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Whether compensation under right to information Act can be granted even if no loss is suffered by applicant?

I find sufficient force in the submissions made by the learned Government Pleader on the side of the petitioners. Exhibit P2 order has recorded clearly that eight relevant pages in the file were not presently available. However, there is nothing to show that these eight pages were available earlier and that it was withheld to the information of the first respondent. The Commission has not considered this aspect in that angle at all. The commission only says that the pages are presently unavailable but does not investigate or conclude whether these pages were available earlier or whether they have been kept deliberately out of the information of the first respondent.

9. In such view of the matter, I am not sure if the order, namely Exhibit P2, mulcting the State of Kerala with liability to pay compensation, to be recovered from its officers, would stand the test of law. I say this because under the provisions of Section 19(8)(b) of the Right to Information Act, 2005, the Commission would obtain jurisdiction to make such orders to compensate the complainant or to impose penalties only if loss or detriment has been suffered by the applicant. The operational survey of Section 19(8)(b) is unambiguous and concedes to no doubt. A reading of this Section would make the position limpid and for this purpose, I deem it apposite to extract it as below:

“19. Appeal.-(1) Any person who does not receive a decision within the time specified in sub-section(1) or clause (a) of sub-section(3) of section 7, or is aggrieved by a decision of the Central Public Information officer or the State Public Information Officer, as the case may be, may within thirty days from the expirty of such period or from the receipt of such a decision prefer an appeal to such officer who is senior in rank to the Central Public Information Officer or the State Public Information Officer, as the case may be, in each public authority:

(8) In its decision, the Central Information commission or State Information Commission, as the case may be, has the power to,—

(b) require the public authority to compensate the complainant for any loss or other detriment suffered.”

10. In the case at hand, even though the first respondent says that he has suffered a loss of Rs. 3,50,000/-, the Commission has granted an amount of Rs. 25,000/- without any adjudication as to the actual loss suffered by him and also without assessing whether the information said to be not given to him was deliberately withheld by the authorities. In the absence of such an enquiry the order of the Commission certainly would not hold legal sustenance and I am, therefore, left without any option but to set aside the same. I do so.

In the High Court of Kerala at Ernakulam

(Before Devan Ramachandran, J.)

The State Public Information Officer 

v.

Sri. Rajendran Pillai 

W.P. (C) No. 31672 of 2011 H

Decided on August 4, 2017

Citation:2017 SCC OnLine Ker 15958 : (2017) 4 KLJ 468

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How to ascertain reasonable compensation for loss caused by breach of contract?

On the second question, i.e whether the defendant was entitled to

forfeit the amount of ` 1 crore, the single judge analyzed the terms of the

agreement (Ex. PW-1/2) especially Clause 2 which was the forfeiture

condition. The defendant’s argument that all the amounts paid by the

plaintiff constituted earnest money, was rejected:

“Nowhere in the agreement is it stipulated that payment made after

the execution of the agreement would also be covered by the forfeiture

clause. The Earnest Money/Part Payment of Rs. 1,01,00,000/ - as

stipulated in clause 1 would alone be liable to be forfeited.”

Thereafter, the single judge recorded the following finding:

“73. The Defendant is thus entitled to forfeit the amount of Rs.

1,01,00,000/- and is liable to refund the balance amount of Rs.

1,60,00,000/-. I have already held that the Plaintiffs have not been

able to prove the payment of Rs.5,00,000/-. Since the Plaintiffs have

been held liable for committing the breach of the contract, in my view

ends of justice would be met if the Defendant were directed to refund

the balance amount with interest only @ 8% per annum from the date

of filing of the suit.”

29. In such cases, where a party alleges that a forfeiture clause constitutes

a genuine pre-estimate of damages, two considerations have to be weighed 

by the court. One, the task of scrutinizing whether the condition is in reality

one that parties envisioned to be a genuine pre-estimate of damage likely to

be suffered is to be viewed in the context of some proof of “reasonable

damage” that Section 74 of the Contract Act mandates; two, that there might

be cases where the likely damage is one which cannot be estimated with

precision, given the nature of the contract, in which event, the court might

consider if the amount stipulated was one foreseen as reasonable

compensation payable to the aggrieved party without proof of damage or

loss.

30. Kailash Nath Associates v. Delhi Development Authority (2015) 4

SCC 136 is a recent authority on the question of liquidated damages

specified in a contract. The Supreme Court considered the law in Fateh

Chand v Balkishan Dass AIR 1963 SC 1405and several other decisions, and

held as follows:

"The law laid down by a Bench of 5 Judges in Fateh Chand's case is

that all stipulations naming amounts to be paid in case of breach

would be covered by Section 74. This is because Section 74 cuts

across the rules of the English Common Law by enacting a uniform

principle that would apply to all amounts to be paid in case of breach,

whether they are in the nature of penalty or otherwise…

43. On a conspectus of the above authorities, the law on

compensation for breach of contract under Section 74 can be stated to

be as follows:

1. Where a sum is named in a contract as a liquidated amount

payable by way of damages, the party complaining of a breach can

receive as reasonable compensation such liquidated amount only if it

is a genuine pre-estimate of damages fixed by both parties and found

to be such by the Court. In other cases, where a sum is named in a

contract as a liquidated amount payable by way of damages, only

reasonable compensation can be awarded not exceeding the amount 

so stated. Similarly, in cases where the amount fixed is in the nature

of penalty, only reasonable compensation can be awarded not

exceeding the penalty so stated. In both cases, the liquidated amount

or penalty is the upper limit beyond which the Court cannot grant

reasonable compensation.

2. Reasonable compensation will be fixed on well known principles

that are applicable to the law of contract, which are to be found inter

alia in Section 73 of the Contract Act.

3. Since Section 74 awards reasonable compensation for damage or

loss caused by a breach of contract, damage or loss caused is sine

qua non for the applicability of the Section.

4. The Section applies whether a person is a plaintiff or a defendant in

a suit.

5. The sum spoken of may already be paid or be payable in future.

6. The expression "whether or not actual damage or loss is proved to

have been caused thereby" means that where it is possible to prove

actual damage or loss, such proof is not dispensed with. It is only in

cases where damage or loss is difficult or impossible to prove that the

liquidated amount named in the contract, if a genuine pre-estimate of

damage or loss, can be awarded.

7. Section 74 will apply to cases of forfeiture of earnest money under

a contract. Where, however, forfeiture takes place under the terms

and conditions of a public auction before agreement is reached,

Section 74 would have no application."

In Fateh Chand (supra), the Supreme Court had articulated the applicable

principle as follows:

“In all cases, therefore, where there is a stipulation in the nature of

penalty for forfeiture of an amount deposited pursuant to the terms of

contract which expressly provides for forfeiture, the court has

jurisdiction to award such sum only as it considers reasonable, but

not exceeding the amount specified in the contract as liable to

forfeiture.”

31. In the present case, the defendant did not show how it was put to loss

or damage. The record clearly establishes that though the attachment order

was vacated sometime in 2007, the Bank was pursuing the matter. It is not

disputed that the pendency of the Bank’s claim in DRT and the likely cloud

on the property was never pointed out to the plaintiff. What is more, the

defendant did not even reveal that an attachment order was issued in 2009.

The plaintiff virtually stumbled upon that fact, as it were. It is doubtful

whether the defendant would have been able to convey title for the amount

agreed, either to the plaintiff or to anyone else, had the reality been

disclosed. Having regard to this conduct, even though the plaintiff is held

disentitled to a decree for specific performance, this court holds that the

defendant cannot claim “reasonable compensation”. Besides, no evidence of

any kind to show that he was put to loss was led. As a result, it is held that

the forfeiture of the amount of `One crore was not justified. Although the

plaintiff sought refund repeatedly his conduct in insisting that the contract

was nevertheless enforceable and the sale deed had to be executed to some

extent disentitles him to interest from October, 2008. However, the record is

clear that from May, 2009 (after he filed a police complaint seeking refund)

he did not intend to go through with the contract; this court has also

recorded that he did not prove his readiness and willingness. In these

circumstances, in the interests of justice, it would be appropriate to direct the

defendant to refund the sum of `One crore to the plaintiff and also pay 9%

interest on that amount, with effect from the date of filing of the suit, till

date of payment.

IN THE HIGH COURT OF DELHI AT NEW DELHI

PRONOUNCED ON: 25.05.2016

RFA (OS) 160/2014, CM APPL.20644/2014

SURJIT SINGH BHATIA Vs  TEJ RAJ SINGH GOEL (GOEL) .

CORAM:

HON'BLE MR. JUSTICE S. RAVINDRA BHAT

HON'BLE MS. JUSTICE DEEPA SHARMA

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Whether security deposit can be forfeited even though no loss is caused to one of contracting party?

 Only one contention was urged on behalf, of the appellants before us: that the security deposit was taken from the respondents in order to ensure the due performance the contract and respondents having defaulted, the entire amount was liable to be forfeited. A similar contention was advanced before this Court but was rejected in Maula Bux v. Union of India . The appellant therein had entered into a contract with the Government of India for the supply of certain goods and had deposited a certain amount of security for the due performance of the contract. As in the instant case, it was stipulated in the contract there that the amount of security deposit was to stand forfeited in case the appellant neglected to perform his part of the contract. On the appellant committing default in the supply, the Government rescinded the contract and forfeited the security deposit. It was held by this Court that forfeiture of earnest money under a contract for sale of property does not fall within Section 70 of the Contract Act, if the amount is reasonable, because the forfeiture of a reasonable sum paid as earnest money does not amount to the imposition of a penalty. But, "where under the terms of the contract the party in breach has undertaken to pay a sum of money or to forfeit a sum of money which he was already paid to the party complaining of a breach of contract, the undertaking is of the nature of a penalty." It was further held that the amount deposited by way of security for guaranteeing the due performance of the contract cannot be regarded as earnest money.

 It is important that the breach of contract caused no loss to the appellants. The stipulated quantity of sum was subsequently supplied to the appellants by the respondents themselves at the same rate. The appellants, in fact, made no attempt to establish that they had suffered any loss or damage on account of the breach committed by the respondents.

Supreme Court of India

Union Of India (Uoi) vs Rampur Distillery And Chemical ... on 20 February, 1973

Equivalent citations: AIR 1973 SC 1098, (1973) 1 SCC 649, 1973 (5) UJ 560 SC

Bench: J Shelat, Y Chandrachud

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Whether one party can forfeit earnest amount even though no loss is suffered by it due to default of other party to contract?

Even otherwise, it is not case of the Bank that it has suffered damages on account of the non-deposit of the balance of the bid amount by the petitioner. As stated above, it had not taken vacant possession of the property from the borrower. On the other hand, it has settled the matter with the borrower and the borrower has continued with possession of the property. The Bank has not established that it has suffered any loss. In UNION OF INDIA VS. R.D. &. CO. - AIR 1973 SC 1098, the Supreme Court has held that a party to a contract taking security deposit from the other party to ensure due performance of the contract is not entitled to forfeit the deposit on the ground of default when no loss is caused to him in consequence of such default. When no loss is caused in consequence of the breach of contract, the other party is not entitled to forfeit the deposit for the breach.

Karnataka High Court

E Ali S/O Soopy, vs The Syndicate Bank, on 1 June, 2015

Author: S.Abdul Nazeer

Citation; AIR 2015 Karnataka122

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When it is not necessary to prove actual loss to claim damages in case of breach of contract?

In Maula Bux –vs- Union of India, (1969) 2 SCC 554, the Court has
specifically held that it is true that in every case of breach of contract the
person aggrieved by the breach is not required to prove actual loss or
damage suffered by him before he can claim a decree and the Court is
competent to award reasonable compensation in a case of breach even if no
actual damages is proved to have been suffered in consequence of the breach
of contract. The Court has also specifically held that in case of breach of
some contracts it may be impossible for the Court to assess compensation
arising from breach.
 Take for illustration construction of a road or a bridge. If there is delay in
completing the construction of road or bridge within stipulated time, then it
would be difficult to prove how much loss is suffered by the Society/State.
Similarly in the present case, delay took place in deployment of rigs and on
that basis actual production of gas from platform B-121 had to be changed.
It is undoubtedly true that the witness has stated that redeployment plan was
made keeping in mind several constraints including shortage of casing pipes.
Arbitral Tribunal, therefore, took into consideration the aforesaid statement
volunteered by the witness that shortage of casing pipes was only one of the
several reasons and not the only reason which led to change in deployment
of plan or redeployment of rigs Trident-II platform B-121. In our view, in
such a contract, it would be difficult to prove exact loss or damage which the
parties suffer because of the breach thereof. In such a situation, if the parties
have pre-estimated such loss after clear understanding, it would be totally
unjustified to arrive at the conclusion that party who has committed breach
of the contract is not liable to pay compensation. It would be against the
specific provisions of Section 73 and 74 of the Indian Contract Act. There
was nothing on record that compensation contemplated by the parties was in
any way unreasonable. It has been specifically mentioned that it was an
agreed genuine pre-estimate of damages duly agreed by the parties. It was
also mentioned that the liquidated damages are not by way of penalty. It was
also provided in the contract that such damages are to be recovered by the
purchaser from the bills for payment of the cost of material submitted by the
contractor. No evidence is led by the claimant to establish that stipulated
condition was by way of penalty or the compensation contemplated was, in
any way, unreasonable. There was no reason for the tribunal not to rely upon
the clear and unambiguous terms of agreement stipulating pre-estimate
damages because of delay in supply of goods. Further, while extending the
time for delivery of the goods, respondent was informed that it would be
required to pay stipulated damages.
IN THE HIGH COURT OF DELHI AT NEW DELHI
SUBJECT : CONTRACT ACT
FAO(OS) No.240/2008

Date of Decision: August 30, 2011
GAIL(INDIA) LIMITED ...
versus
GEO MILLER & COMPANY LTD. ...
CORAM:
HON'BLE MR. JUSTICE VIKRAMAJIT SEN
HON'BLE MR. JUSTICE SIDDHARTH MRIDUL

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Whether earnest amount can be forfeited when there is no loss or damage to seller?

If damage or loss is not suffered, the law does not provide for a windfall.

 On a conspectus of the above authorities, the law on compensation for breach of contract under Section 74 can be stated to be as follows:- Where a sum is named in a contract as a liquidated amount payable by way of damages, the party complaining of a breach can receive as reasonable compensation such liquidated amount only if it is a genuine pre-estimate of damages fixed by both parties and found to be such by the Court. In other cases, where a sum is named in a contract as a liquidated amount payable by way of damages, only reasonable compensation can be awarded not exceeding the amount so stated. Similarly, in cases where the amount fixed is in the nature of penalty, only reasonable compensation can be awarded not exceeding the penalty so stated. In both cases, the liquidated amount or penalty is the upper limit beyond which the Court cannot grant reasonable compensation.

Reasonable compensation will be fixed on well known principles that are applicable to the law of contract, which are to be found inter alia in Section 73 of the Contract Act.

Since Section 74 awards reasonable compensation for damage or loss caused by a breach of contract, damage or loss caused is a sine qua non for the applicability of the Section.

The Section applies whether a person is a plaintiff or a defendant in a suit.

The sum spoken of may already be paid or be payable in future.

The expression "whether or not actual damage or loss is proved to have been caused thereby" means that where it is possible to prove actual damage or loss, such proof is not dispensed with. It is only in cases where damage or loss is difficult or impossible to prove that the liquidated amount named in the contract, if a genuine pre-estimate of damage or loss, can be awarded.

Section 74 will apply to cases of forfeiture of earnest money under a contract. Where, however, forfeiture takes place under the terms and conditions of a public auction before agreement is reached, Section 74 would have no application.

Supreme Court of India

M/S. Kailash Nath Associates vs Delhi Development Authority & Anr on 9 January, 2015

Bench: Ranjan Gogoi, Rohinton Fali Nariman

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