FATEH CHAND versus BALKLSHAN DAS

FATEH CHAND versus BALKLSHAN DAS

The forfeiture of Rs. 1,000/- (earnest money) was permissible, but there being no proof of actual loss from breach, no further sum could be forfeited or awarded as compensation under the penalty clause. The plaintiff is entitled to mesne profits at the rate fixed by the trial court together with interest, but cannot retain more than Rs. 1,000/- from the Rs. 25,000/- received.

Parties
Appellant: Fateh Chand; Respondent: Balkishan Das
Jurisdiction
India
Judgment Date
15 January 1963
Procedural Posture
Civil Appeal / Appeal From Judgment and Decree Dated August 22, 1957 of the Punjab High Court (circuit Bench) at Delhi in Civil Regular First Appeal No. 37 D of 1950
Outcome
Decree modified; appeal dismissed.
Legal Topics
Breach of Contract, Forfeiture and Penalty Clauses, Damages and Compensation, Mesne Profits
Contract Law Civil Procedure Breach of Contract Forfeiture and Penalty Clauses Damages and Compensation Mesne Profits

Case Brief

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Parties

Fateh Chand

Appellant

Balkishan Das

Respondent

Procedural Posture

Civil Appeal / Appeal From Judgment and Decree Dated August 22, 1957 of the Punjab High Court (circuit Bench) at Delhi in Civil Regular First Appeal No. 37 D of 1950

Legal Issues

  1. 1 Whether the plaintiff was entitled to forfeit the sum of Rs. 25,000/- received under the sale agreement as compensation for breach of contract
  2. 2 Whether reasonable compensation could be awarded without proof of actual damage resulting from breach
  3. 3 What mesne profits and interest, if any, should be awarded for use and occupation of the property

Ratio Decidendi

The forfeiture of Rs. 1,000/- (earnest money) was permissible, but there being no proof of actual loss from breach, no further sum could be forfeited or awarded as compensation under the penalty clause. The plaintiff is entitled to mesne profits at the rate fixed by the trial court together with interest, but cannot retain more than Rs. 1,000/- from the Rs. 25,000/- received.

Court Disposition

Decree modified; appeal dismissed.

Orders

  • Plaintiff may retain only Rs. 1,000/- as earnest money out of the Rs. 25,000/- received; the rest must be returned.
  • Plaintiff is entitled to mesne profits at Rs. 140/- per mensem from June 1, 1949 until delivery of possession (subject to a three-year limit from decree) together with interest at 6% per annum accruing month to month.