Case Law Analysis
|Kerala High Court
Contract Termination Damages | State Cannot Recover Without Proving Actual Loss; Security Deposit Must Be Refunded with Interest : Kerala HC
The Kerala High Court ruled that the state cannot withhold or claim damages upon contract termination unless it proves actual financial loss, mandating the return of the security deposit with 9% interest. This reinforces the principle that liquidated damages must reflect real harm, not serve as punitive leverage in public procurement - a critical safeguard for contractors.