M/S. Kailash Nath Associates vs Delhi Development Authority & Anr

The Supreme Court addressed the issue of forfeiture of earnest money in public auctions conducted by the Delhi Development Authority (DDA) under the auction conditions. The Court held that the DDA's failure to respond to the appellant's requests for an extension of time to pay the remaining bid amount constituted a breach of the auction terms, thereby invalidating the forfeiture of the earnest money under the relevant provisions. The Court ruled in favor of the appellant, ordering the DDA to refund the forfeited earnest money of Rs.78,00,000/- with interest.