Maula Bux v. Union of India AIR 1970 SC 1955.

Introduction: – 

This case deals under the provision of Indian Contract Act, 1872 under the given topic “Breach of Contract”. Under this case it states about the actual damages or loss of claiming damages from breach of contract under the given act.

Facts of the Case: –

1. In this case the Maula Bux (hereinafter referred as petitioner) made the contractual relationship with government to supply potatoes, eggs, and fish for a one year in a military headquarters.
2. In respect of contract, he deposited an amount of Rs.18500/- as security, in respect of performance of contract 
3. The government has decided, if without having sufficient reason for the petitioner breach of contract, the government forfeited the amount deposited by the plaintiff.

Issues raised: –

1. Does the deposited money paid by the petitioner under the position of contractor can be considered as the earnest money under the contract?
2. Does the amount forfeit by the government come under actual damages or loss?

Contention: –

1. The respondent stated that the amount stood forfeited in the case petitioner neglected to perform the part of the contract.
2. The petitioner stated that there was no sufficient evidence that explains or proves the actual damage or loss sustained by the other party in respect of breach of contract, the respondent filed the suit for recovery of the amount of interest.

Judgement of the case: –

The supreme court held that the amount deposited is not in the form of earnest money. The supreme court also stated that the union (hereinafter referred as respondent) has failed to established the clear stated evidence that reflects that they have suffered a loss or damages by the petitioner by doing breach of contract. They failed to give proper evidence. The amount that is paid by the plaintiff of Rs. 18500/-is considered as a question of deposit, so in respect of it the government shall pay the amount to the plaintiff with the interest at the rate of 3% (three percent) per annum from the date of the suit till payment.

Conclusion: –

To be concluded here, so basically this case deals under the question of breach of contract that whether the petitioner has caused the breach to the respondent. So, with the judgement of the honorable court it stated clearly that the amount is considered under the question of deposit and the government should return the forfeited amount with interest.

References of the case: –

https://indiankanoon.org/doc/158693/

https://lawplanet.in/maula-bux-vs-union-of-india-case-summary-1970-sc/

This Case Analysis is written by SOMYA RAJAWAT student of Maharani Laxmi Bai Arts and Commerce College, Gwalior Madhya Pradesh. Intern at Legal Vidhiya.

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