023. Earnest Money in Property Deals: What India’s 2025 Supreme Court Ruling Means for You

Описание: #EarnestMoney #IndianLegalSystem #SupremeCourtJudgment #PropertyLawIndia #RealEstateLaw #Section74ContractAct #SpecificPerformance #LegalAdviceIndia #CivilLawExplained #BayanaMoney #LegalUpdate2025 #GodrejCase #ContractLawIndia #LegalAwareness

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In this video, Indian Legal System breaks down the latest 2025 Supreme Court judgment that has changed the way Earnest Money (also called Bayana) is treated in Indian property transactions.
Traditionally, courts followed a rather lenient approach where if a property deal failed, the seller would return the buyer’s earnest money—either with or without interest—based on fairness. But on February 3, 2025, in the case of Godrej Projects Development Ltd. vs. Anil Karlekar (Civil Appeal No. 3334 of 2023), the Supreme Court of India made a significant shift.
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⚖️ Key Legal Takeaways Covered in this Video:
• What is Earnest Money and why is it paid in real estate deals?
• How the sale agreement legally binds both buyer and seller.
• What happens when one party defaults or backs out from the deal?
• What is the concept of “Readiness and Willingness” in Specific Performance suits?
• How does Section 74 of the Indian Contract Act apply to forfeiture of earnest money?
• Why the purpose of earnest money (security vs part-payment) decides whether it can be lawfully forfeited.
• What 3 essential conditions must be fulfilled for valid forfeiture of earnest money?
This video doesn’t just present the law — it teaches you how to draft better sale agreements and avoid costly legal mistakes in real estate transactions.
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📌 About the Supreme Court Ruling (2025):
The Apex Court upheld that forfeiture of earnest money is legal if:
1. The agreement explicitly allows such forfeiture,
2. The forfeited amount is not excessive (usually within 10–20% of total price),
3. The money is paid as a security, not as part-payment.
⚠️ If the money is considered part of the purchase price, it cannot be forfeited.
This judgment now acts as a binding precedent for all Indian courts and alters how Section 74 of the Indian Contract Act is interpreted in property transactions.
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💡 Who Should Watch This Video?
• Property buyers and sellers
• Real estate agents and brokers
• Lawyers handling civil and property law cases
• Law students and competitive exam aspirants
• Anyone involved in drafting or signing sale agreements
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🎯 Don’t take real estate law lightly — even a small clause in your agreement can lead to forfeiture of lakhs of rupees. Watch this video to know how to protect yourself and what exact clauses your agreement must contain.
📢 This is an original video by Indian Legal System — India’s trusted legal platform for deep legal insights in simple language.
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TIME STAMP:
00:00 Intro
01:17 Why Earnest money Paid
02:49 Legal Disputes on Earnest money
03:36 Court’s Money Back Policy
04:36 Change in Law of Earnest money
06:44 All Points of Learning on Earnest money
07:09 Case Reference
08:30 Lessons Learnt
09:05 About Indian Legal System

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