Forfeiture Of Earnest Money Not Automatic Consequence Of Breach; Seller Must Prove Legal Injury U/S 74 Contract Act: Delhi High Court
The Bench dismissed buyer’s appeal for specific performance for want of proof of readiness and financial capacity, but upheld refund of Rs. 4.15 lakh as seller showed no loss.
Explanation in simple terms
- What:
- The court ruled that sellers cannot automatically keep a deposit if a buyer breaks a contract.
- Who:
- The Delhi High Court is the court, while Shriram Pal Saini and Anil Kumar are the involved parties.
- When:
- Reported on 22 Oct 2026.
- Where:
- Delhi High Court, Delhi.
- Why:
- The court decided the seller must prove they actually lost money or suffered harm due to the breach.
- What it means:
- Sellers must now show proof of financial injury before they are allowed to keep a buyer's deposit.
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