Forfeiture Clauses in Agreements Must Be Reasonable — Supreme Court reaffirms
by Saloni Kapadia* and Karan Gandhi**
earnest money
NCDRC cannot rewrite terms & conditions of contract and apply its own subjective criteria: SC directs builder to refund deposited amount to buyer for delayed possession
Supreme Court said that once the parties committed themselves to a written contract, whereby they reduced the terms and conditions agreed upon by them to writing, the same would be binding upon them.
Banks can forfeit entire earnest money and not just extent of loss suffered by it due to auction purchaser’s default: SC
Any dilution of the forfeiture provided under Rule 9(5) of SARFAESI Rules would result in entire auction process under SARFAESI Act being disregarded by mischievous auction purchasers through sham bids, thereby undermining the overall object of the Act of promoting financial stability, reducing NPAs and fostering a more efficient and streamlined mechanism for recovery of bad debts.
Mere disagreement with decision-making process of tender authority not a reason for a Constitutional Court to interfere; Allahabad High Court allows State to go ahead with tendering process as per law
Allahabad High Court viewed that the tender authority, has been given a certain degree of leverage by the courts, being the best person to understand its requirements. Hence, a mere disagreement with the authority's decision-making process is not a reason for a constitutional court to interfere.