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1969 (10) TMI 68 - SC - Indian LawsWhether the sum of ₹ 2,50,000 was paid by the plaintiffs as and by way of part payment or as earnest deposit? Whether the defendants were entitled to forfeit the said amount? Held that:- In the case before us, the contract read with the Terms of Business of the company, clearly refers to the earnest money being paid and to the fact of ₹ 2,50,000 having been paid as earnest. Therefore, there is no ambiguity regarding the nature of the above payment and the right of the respondents to forfeit the same, under the terms of the contract, when the appellants admittedly had committed breach of the contract, cannot be assailed. The first contention for the appellants therefore fails. The question of the quantum of earnest deposit which was forfeited being unreasonable or the forfeiture being by way of penalty, were never raised by the appellants. The Attorney General also pointed out that as noted by the High Court the appellants led no evidence at all and, after abandoning the various pleas taken in the plaint, the only question pressed before the High Court was that the deposit was -not by way of earnest and hence the amount could not be forfeited. If the. appellants had proceeded on that basis, then the contract would have been voidable at their instance under s.19 of the Contract Act. But they have abandoned that plea and have admitted that the breach of contract was committed by them. Hence s. 64 cannot be invoked by the appellants. In this view, the second contention also fails. Appeal dismissed.
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