Suresh Kumar Wadhwa vs State of M.P. - Supreme Court

 Suresh Kumar Wadhwa vs State of M.P. - Supreme Court Important Judgment 2017 - 

 

On 25th October, 2017, in the case of Suresh Kumar Wadhwa v. State of M.P. & Ors. [Civil Appeal No.7665 of 2009], keeping in view the provisions of Section 74 of the Indian Contract Act, 1872 it was held that “in order to forfeit the sum deposited by the contracting party as "earnest money" or “security" for the due performance of the contract, it is necessary that the contract must contain a stipulation of forfeiture. In other words, a right to forfeit being a contractual right and penal in nature, the parties to a contract must agree to stipulate a term in the contract in that behalf. A fortiori, if there is no stipulation in the contract of forfeiture, there is no such right available to the party to forfeit the sum.”