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1 - 10 of 11 (1.04 seconds)Section 73 in The Indian Contract Act, 1872 [Entire Act]
Simplex Infrastructures Ltd. vs National Highways Authority Of India on 14 January, 2011
20. The case of Fateh Chand has also been placed for the interpretation of
Section 74 at paragraph 15 of the report. The Supreme Court observed that
such provision does not confer a special benefit upon any party; it merely
declares the law that notwithstanding any terms of contract pre-
determining 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 claimed or penalty stipulated. The
appellant has relied on another judgment reported at 239 DLT 324
(Simplex Infrastructures Limited v. National Highways Authority of India)
where the bid security furnished was to the tune of Rs.2.41 crore. The
tender documents provided for appropriation of the security deposit in case
of material misrepresentation, corrupt practice, fraudulent conduct and
the like. On facts, the court held that forfeiture of the entire bid security
was penal in nature and "absolutely unreasonable". The court concluded
that no loss had been suffered by the employer, with respect to time and
the processing of the bid. Since the bidder was ready to part with an
amount of Rs.30,000/-, the balance earnest deposit was to be refunded.
National Highway Authority Of India vs Ganga Enterprises And Anr on 28 August, 2003
The court referred to the
Ganga Enterprises case, set aside the High Court judgment and dismissed
the writ petition, thereby upholding the forfeiture. The entire reason is
based on the dictum in Ganga Enterprises that the whole purpose of such
a clause is to see that only genuine bids are received and such purpose
would be lost if forfeiture was not permitted. Again, the aspect of penalty
was not considered.
National Thermal Power Corp. Ltd vs M/S Ashok Kumar Singh & Ors on 13 February, 2015
In the next judgment brought by the respondents, reported at (2015) 4
SCC 252 (National Thermal Power Corporation Limited v. Ashok Kumar
Singh), the tender was in two parts: one technical and the other
commercial. The quantum of security deposit furnished was about Rs.4.41
lakh in one case and Rs.3.34 lakh in the other.
M/S. Kailash Nath Associates vs Delhi Development Authority & Anr on 9 January, 2015
18. The appellant has first referred to a judgment reported at (2015) 4 SCC 136
(Kailash Nath Associates v. Delhi Development Authority). The matter
pertained to a public auction conducted by the Delhi Development
Authority for a plot. The appellant before the Supreme Court put in the
highest bid and deposited 25 per cent of the bid amount as earnest money
in accordance with the conditions of the auction. The tender terms
provided that if the earnest money was not paid the auction would stand
cancelled. Another clause provided that the breach or non-compliance of
the terms and conditions of the auction or misrepresentation of the bidder
would result in the earnest money being forfeited. The balance
consideration was to be paid by the auction purchaser within three months
of the acceptance in writing of the bid. Though the earnest deposit had
been made within time, the balance payment could not be made within the
period stipulated or even within the extended time permitted by DDA. The
earnest deposit was forfeited. A writ petition challenging the same failed
and a suit for specific performance of the agreement was filed with an
alternative relief for recovery of the earnest deposit. During the pendency of
the suit the property was re-auctioned and it fetched a sum more than
three times the value of the previous highest bid. The suit for specific
performance was dismissed but the earnest deposit was directed to be
refunded with interest. In appeal, the forfeiture of the earnest money by
DDA was found to be in order. Hence, the appeal by special leave to the
Supreme Court.
Article 226 in Constitution of India [Constitution]
Section 2 in The Indian Contract Act, 1872 [Entire Act]
Aggarwal Associates (Promoters) Ltd. vs D.D.A on 1 November, 1997
25. The respondents finally refer to a judgment reported at (2010) 15 SCC 380
(Aggarwal Associates (Promoters) Limited v. Delhi Development Authority) for
the principle that any person who approaches a court of equity must
demonstrate that he has acted with fairness. Paragraph 11 of the judgment
instructs that since the appellant in that case did not act fairly and the
transaction failed by reason of the default of the appellant, the appellant
was not entitled to any sympathetic consideration of his demand for refund
of the earnest money. The judgment did not dwell on the propriety of a
forfeiture clause or the permissibility to forfeit a large amount without
indicating any corresponding loss or damage of commensurate value. It is
such issue which has arisen here.
Fateh Chand vs Balkishan Das on 15 January, 1963
19. At paragraph 29 of the report, the Supreme Court observed that there may
not have been any breach of contract on the part of the appellant before it
and, in any event, "it would be arbitrary to allow DDA as a public authority
to appropriate Rs 78,00,000 (Rupees seventy-eight lakhs) without any loss
being caused." The court then referred to the famous decision reported at
AIR 1963 SC 1405 (Fateh Chand v. Balkishan Dass) and summed up the
legal position as follows at paragraph 43.1 of the report: