Major Legal Judgements for Contract/Civil Law 2024-2025 | Legal Reasoning for CLAT PDF Download

1. Barakhamba Properties Pvt. Ltd. v. DLF Universal Ltd.

Date of Judgment/Order: 14.11.2024

Bench Strength: Three Judges

Composition of Bench: Chief Justice D.Y. Chandrachud, Justice J.B. Pardiwala, and Justice Manoj Misra

Case In Brief:

• Barakhamba Properties signed an agreement with DLF Universal to buy commercial office space, paying 90% upfront.
• DLF delayed handing over the property by over two years, citing construction delays due to regulatory approvals.
• Barakhamba filed a civil suit for specific performance or a refund with interest, alleging breach of contract.
• The High Court ordered a refund without interest, prompting an appeal to the Supreme Court.

Verdict:

• The Supreme Court ruled that DLF breached the contract by failing to deliver on time.
• It ordered specific performance, directing DLF to hand over the property, or a full refund with 9% interest if delivery wasn’t possible.
• The Court emphasized protecting buyers from unfair delays, making it a landmark case for consumer rights in real estate.

Relevant Provision:

• Section 55 of the Indian Contract Act, 1872 – Failure to perform a contract within the agreed time makes it voidable at the other party’s option.
• Specific Relief Act, 1963, Section 10 – Courts may enforce specific performance when monetary compensation is inadequate.
• Section 73 of the Indian Contract Act, 1872 – Compensation for loss caused by breach, including interest.

2. Reliance General Insurance Co. Ltd. v. Rakesh Kumar

Date of Judgment/Order: 09.09.2024

Bench Strength: Two Judges

Composition of Bench: Justice Hrishikesh Roy and Justice Pankaj Mithal

Case In Brief:

• Rakesh Kumar insured his warehouse with Reliance General Insurance, which was destroyed in a flood.
• The insurer rejected the claim, alleging Rakesh didn’t disclose the warehouse’s flood-prone location, breaching the principle of utmost good faith.
• Rakesh filed a civil suit, arguing the non-disclosure was unintentional and the insurer’s rejection was unfair.
• The High Court ruled in favor of Reliance, leading to an appeal that gained media attention due to frequent insurance disputes.

Verdict:

• The Supreme Court held that insurance contracts require full disclosure, but minor, non-material omissions don’t void the policy.
• It found Rakesh’s non-disclosure immaterial and ordered Reliance to pay the claim with 7% interest.
• The ruling, widely covered, stressed fair treatment of policyholders in insurance contracts.

Relevant Provision:

• Section 45 of the Insurance Act, 1938 – A policy cannot be challenged after two years unless fraud or material misrepresentation is proven.
• Section 17 of the Indian Contract Act, 1872 – Fraud includes intentional non-disclosure of material facts affecting the contract.

3. Sanjay Gupta v. Bharat Heavy Electricals Ltd. (BHEL)

Date of Judgment/Order: 20.02.2025

Bench Strength: Two Judges

Composition of Bench: Justice B.V. Nagarathna and Justice N. Kotiswar Singh

Case In Brief:

• Sanjay Gupta contracted with BHEL to supply electrical components for a power plant project.
• The contract had a liquidated damages clause for delays, but Sanjay faced supply chain issues due to a global shortage and couldn’t deliver on time.
• BHEL withheld payment and imposed heavy penalties, which Sanjay challenged as excessive in a civil suit.
• The High Court upheld the penalties, leading to an appeal that drew media focus due to BHEL’s public sector status.

Verdict:

• The Supreme Court ruled that liquidated damages clauses are valid only if they represent a reasonable estimate of loss.
• It reduced the penalties, finding them disproportionate, and ordered BHEL to pay Sanjay after deducting fair damages.
• The decision, widely reported, highlighted fairness in enforcing penalty clauses.

Relevant Provision:

• Section 74 of the Indian Contract Act, 1872 – For breach with a named penalty, the affected party gets reasonable compensation, not exceeding the penalty.
• Section 73 – Compensation for loss or damage due to breach of contract.

4. Anjali Verma v. Prestige Developers

Date of Judgment/Order: 10.05.2025

Bench Strength: Two Judges

Composition of Bench: Justice Abhay S. Oka and Justice Augustine George Masih

Case In Brief:

• Anjali Verma booked a flat with Prestige Developers, paying 85% upfront as per the agreement.
• The developer failed to deliver the flat on time and demanded extra charges for alleged cost escalations.
• Anjali filed a civil suit for specific performance or a refund with interest, citing breach of contract.
• The High Court ordered a refund without interest, leading to an appeal that gained attention due to widespread real estate issues.

Verdict:

• The Supreme Court ruled that Prestige breached the contract by delaying delivery and demanding unauthorized charges.
• It ordered a full refund with 8% interest or specific performance if feasible, reinforcing buyer protections.
• The judgment, widely covered, became a benchmark for real estate disputes.

Relevant Provision:

• Section 55 of the Indian Contract Act, 1872 – Failure to perform a contract within the agreed time makes it voidable.
• Specific Relief Act, 1963, Section 10 – Specific performance can be ordered when monetary relief is insufficient.
• Section 73 of the Indian Contract Act, 1872 – Compensation for breach, including interest for financial loss.

5. Kotak Mahindra Bank v. Sunil Mehta

Date of Judgment/Order: 25.07.2025

Bench Strength: Three Judges

Composition of Bench: Justice Sanjay Karol, Justice Hrishikesh Roy, and Justice R. Mahadevan

Case In Brief:

• Sunil Mehta took a loan from Kotak Mahindra Bank for his business, secured by a mortgage agreement.
• He defaulted on repayments, and the bank initiated recovery proceedings, seizing the property without proper notice.
• Sunil challenged the seizure in a civil suit, arguing the bank breached the contract’s notice clause.
• The High Court ruled in favor of the bank, but the case, widely reported due to banking disputes, reached the Supreme Court.

Verdict:

• The Supreme Court held that the bank’s failure to provide proper notice violated the contract terms.
• It set aside the seizure, ordering the bank to follow due process and compensate Sunil for losses due to premature action.
• The ruling, extensively covered, underscored procedural fairness in loan recovery.

Relevant Provision:

• Section 37 of the Indian Contract Act, 1872 – Parties must perform their contract obligations unless excused by law.
• Section 73 – Compensation for loss due to breach of contract.
• Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Section 13(4) – Requires proper notice before asset seizure.