Concept of Earnest Money

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....s forfeited when the transaction falls through, by reason of the fault or failure of the vendee." ( Emphasis supplied ) The above referred decision of the Privy Council has been referred to and relied upon by the High Court of Bombay in the case of Dinanath Damodar Kale v. Malvi Mody Ranchhoddas and Co. reported in AIR 1930 Bom 213. The Court observed as under: - "Turning to the law ....

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....= (1897) A.W.N. 123], where it was stated that a deposit is a payment actually made or advanced and therefore Ss. 73 and 74 of the Contract Act, have no application in such a case and are not intended to apply to it. These sections show what is the compensation to the seller, who is not responsible for the breach. They contemplate a case in which he is seeking to recover compensation for the breac....

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....es following the failure of the buyer to complete the sale." ( Emphasis supplied ) In Satish Batra- [2012 (10) TMI 595 - SUPREME COURT], after taking note of the decisions in Delhi Development Authority v. Grihshapana Cooperative Group Housing Society Ltd. [1995 (2) TMI 457 - SUPREME COURT], V. Lakshmanan v. B.R. Mangalagiri & Ors. [1994 (12) TMI 322 - SUPREME COURT] and HUDA v. Kewal Krishnan ....