STATE OF MAHARASHTRA & ANR. vs DIGAMBAR BALWANT KULKARNI

The Supreme Court held that the rescission of a works contract was justified as the contractor failed to complete the work within the stipulated time, which was deemed essential under Clause (2) of the contract. The Court clarified that the right to rescind the contract accrued only when the compensation due exceeded the security deposit or the contractor abandoned the work. The High Court's ruling that the right to rescind could not exist after the performance date was incorrect, and thus the appeal was allowed, affirming the forfeiture of the security deposit.