11,000/ to the respondents.
18, 332/ which was kept by the respondents disputing the right of the appellants to forfeit the security deposit, the dispute was referred to an arbitrator who held that the appellants were entitled under Section 74 of the Indian Contract Act to the award of reasonable companypensation only, which the arbitrator fixed at Rs.
The appeal against that judgment having been dismissed in limine by the High Court of Delhi, the appellants have filed this appeal by special leave.
The appellant therein had entered into a companytract with the Government of India for the supply of certain goods and had deposited a certain amount of security for the due performance of the companytract.
As in the instant case, it was stipulated in the companytract there that the amount of security deposit was to stand forfeited in case the appellant neglected to perform his part of the companytract.
This companytention was rejected by the learned Judge and he passed a decree in terms of the award.
7,332/ He directed the appellants to refund the balance viz.
Only one companytention was urged on behalf, of the appellants before us that the security deposit was taken from the respondents in order to ensure the due performance the companytract and respondents having defaulted, the entire amount was liable to be forfeited.
A similar companytention was advanced before this Court but was rejected in Maula Bux v. Union of India .
The respondents filed a petition under the arbitration Act, 1940 for making the award a rule of the companyrt.
The appellants then cancelled the companytract and forfeited the entire security deposit of Rs.
The appellants filed their objections thereto companytending that there was an error of law apparent on the face of the award as they were entitled to forfeit the entire amount of the security deposit.
The rum was found number to companyform to the quality stipulated and was therefore rejected by the appellants.
Chandrachud, J. The respondents Rampur Distillery and Chemical Co. Ltd., supplied to the appellants union of India a large quantity of rum presumably, for the use of Defence personnel .
