Kailash Nath Associates Vs. Delhi Development Authority & Anr.
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Head Note
Indian Contract Act, 1872 - Section 63 , Constitution of India, 1950 - Article 14
Earnest Money - Forfeiture of - The appellant is the promisor and DDA is the promise - In such a situation, DDA can certainly unilaterally extend the time for payment under Section 63 of the Contract Act as the time for payment is not for DDA's own benefit but for the benefit of the appellant - It would be arbitrary for the DDA to forfeit the earnest money as there is no breach of contract on the part of the appellant and DDA not having been put to any loss - Even if DDA could insist on a contractual stipulation in its favour, it would be arbitrary to allow DDA as a public authority to appropriate Rs.78,00,000/- without any loss being caused - Article 14 would apply in the field of contract in this case and the finding of the Division Bench on this aspect liable to be reversed.
Topic(s)-Earnest Money - Refund with interest