Seller can forfeit buyers earnest money
Earnest money paid by a buyer of an immovable property can be forfeited by the seller if the former fails to pay the balance amount of sale consideration, the Supreme Court has held in the case of Satish Batra vs Sudhir Rawal. Earnest money is paid or given at the time when the contract is entered into and as a pledge for its due performance by the depositor and it is to be forfeited in case of non-performance by the depositor, the apex court said, while setting aside a Delhi High Court order that held that the seller is entitled to forfeit only a nominal amount and not the entire sum. There can be converse situation also that if the seller fails to perform the contract, the purchaser can also get the double the amount, if it is so stipulated If the payment is made only towards part payment of consideration and not intended as earnest money, then the forfeiture clause will not apply. In this case, Batra (seller) and Rawal (purchaser) had entered into an Agreement for Sale of property in November 2005 for a total consideration of R70 lakh to be paid on or before March 2006. While R7 lakh was paid towards earnest money, the purchaser could not pay the balance amount of R63 lakh before the stipulated date and consequently the sale deed could not be executed. When the seller refused to return the earnest money, the purchaser sought its recovery from the trial court, which dismissed the suit, holding that the seller was entitled to retain the earnest money. However, the HC on appeal took the view that Batra was entitled to forfeit only a nominal amount of R50,000.
A realistic take on compensation for motor vehicle accidents
Holding that compensation in a motor vehicle accident case should be based on some pragmatic computation and a realistic approach, the Supreme Court in the case of K Suresh vs New India Assurance said that compensation must be granted for both permanent disability consequent to the mishap as well as loss of earning capacity. Overturning the Madras High Court judgment that held that no compensation can be granted towards permanent disability once compensation is computed for the loss of earning capacity, the apex court said: It cannot be disputed that apart from the fact that the permanent disability affects the earning capacity of the person concerned, undoubtedly, one has to forego other personal comforts and even for normal avocation they have to depend on others. Citing its earlier rulings, the apex court said it becomes a challenge for courts to determine just compensation which is neither a bonanza nor a windfall, and simultaneously, should not be a pittance. While the Motor Accidents Claims Tribunal had arrived at the figure of R25 lakh, the HC reduced it to R9.78 lakh. However, the Supreme Court enhanced the amount to R13.48 lakh. The insurance company had contended that the analysis by the HC was absolutely flawless and the interference in the quantum cannot be faulted inasmuch as the tribunal had awarded a large sum on certain heads, which were totally impermissible in law.