A deposit paid as part payment of the price in advance is not liable to forfeiture upon breach of contract, unless there is a specific contractual term providing for such forfeiture.

( 1 ) THIS is an appeal by the plaintiff from the judgment and decree of the learned civil Judge I, Indore dismissing no suit for the refund of an advance payment made to the defendant in course of a transaction following an oral agreement to buy a quantity of stone chips for building purposes, A small quantity has been delivered and accepted, the price of which the plaintiff had deducted from his claim, me rest of the agreed quantity was rejected by the plaintiff for reasons which the defendant considered unsatisfactory; Accordingly, the plaintiff demanded the refund, which being refused, he brought the suit, the Court found that the plaintiff was guilty of the breach; and at the same time that the amount given to the defendant was not earnest money properly so called guaranteeing performance of the contract, out only part of the price paid in advance, sun a decided that he was not entitled to a refund, and accordingly dismissed the suit.

( 2 ) THE questions that arose, are, ore the facts firstly, which of the parties was guilty of the breach; secondly, whether the total amount paid was Rs. 5400/- as averred by the plaintiff or only Rs. 5000/- as admitted by we defendant; and thirdly, whether this was earnest money properly so called liable to forfeiture or mere proof of breach of contract by the purchaser without any pleading or proof of actual damage, or whether it was only payment by way of part price in advance, the crucial issue on law is, whether the latter type of payment is liable to forfeiture by the other side on mere proof of breach of contract, mere were some formal issues with which we are not concerned now.

( 3 ) THE plaintiff's case was that some time in February 1950, he had agreed to purchase from the defendant fifty thousand cubic feet of stone chips of a specified size at Rs. 29-8-0 per hundred cubic feet. The agreement was oral but the plaintiff alleged that the defendant had accepted the condition that the chips supplied should be such as would meet his approval. Actually, the plaintiff in his own turn was to supply them to certain contractors building a new hospital at Indore. The material was to come from a quarry called 'cadh Tekri a short distance from the town, the plaintiff averred that he had made three deposits with defendant, the first Rs. 2000/- on 25-2-1950 about seven or ten days after an agreement to purchase the material, me second of Rs. 3000/- on 2-3-1950, the first in cash and the second by cheque; and the third in cash of Rs. 400/-on the defendant's demand, also on 2-3-1950. In June or early in July, the plaintiff got delivery of five truck loans of chips which he made over to the builders. The latter, however, complained about the quality and the plaintiff himself found that it was interior to the one the determine had agreed to give. Accordingly, the plaintiff decided not to buy any more of stone chips. On a notice by the defendant, dated, 17-7-1950 calling upon the plaintiff to take delivery of the rest of the agreed quantity of chips, the latter replied setting out his objection to the quality that was being actually delivered and demanding better quality of material. As the defendant was not prepared to agree, the contract was not performed except for the five truckloads priced at Rs. 203/ -. The plaintiff accordingly demanded the refund and on refusal sued for Rs. 5400/- plus interest minus the price of the five truck loads of the material. ( 4 ) THE defendant for his part admitted the receipt of the two sums of Rs. 2000/and rs. 3000/- respectively on the dates mentioned, but not the sum of Rs. 400/on 2-3 1950. He also admitted that the contract was oral and was concluded some time about the middle of February 1950. He charged the plaintiff with wilful breach and denied the allegation that he was delivering inferior stuff. Actually, the defendant had heard that the Builders, who were to buy from the plaintiff, has found some cheaper material and were not prepared to bu