The Authorised Officer Central Bank Of ... vs Shanmugavelu

The Supreme Court addressed the legality of forfeiture of earnest money deposits under the SARFAESI Act, specifically analyzing Sections 73 and 74 of the Indian Contract Act, 1872. The Court held that forfeiture can only be to the extent of the actual loss suffered by the secured creditor, thereby establishing that unjust enrichment principles apply. The judgment of the High Court was upheld, which had ruled that the entire forfeiture was not permissible without demonstrating loss.