JUDGMENT 1. - This is an appeal by the State of Rajasthan from the appellate judgment and decree by the District Judge, Partabgarh whereby the plaintiff-respondent's suit was decreed for Rs. 3060/-. 2. The plaintiff-respondent took a contract for cutting wood in jungle coupl No.11 in Bhesrodgarh of Rs. 25,600/- for the year 1959-60. He paid Rs. 500/- as earnest money and also deposited Rs. 2560/- as security representing 10% of the contract amount. Admittedly the plaintiff completed this contract within the stipulated period but neither the earnest money nor the security deposit were refunded to him. Consequently, be filed the present suit for the recovery of Rs. 3060/-, and also interest thereon. 3. The defendant's case was that no doubt the plaintiff had completed the contract in respect of coupe No.11 evidenced by the agreement Ex.A.1, but he had committed default in respect of another contract Ex.A 2, on account of which Rs. 1380/- were forfeited. It was submitted on behalf of the State that the plaintiff was entitled to get back Rs. 1603.09 paisa only. It may be stated here that the plaintiff's right to recover the amount of Rs. 1603.09 was also resisted on the ground that the refund had not been applied for after complying with the necessary formalities regarding production of certificate about completion of work. 4. Aggrieved by the judgment & decree of the trial court the plaintiff filed appeal for enhancement of the decretal amount and the defendant filed cross-objection for dismissal of the whole suit. The learned District Judge, Partabgarh dismissed the cross objection but allowed the plaintiff's appeal and enhanced the decretal amount to Rs. 3060/-. 5. The first point for determination is whether the deposit of Rs. 500/- as earnest money towards the contract Ex.A 1 had been appropriated as earnest money towards the contract Ex.A 2? A perusal of condition No.10 of Ex.A 2 shows that the deposit of earnest money was necessary for bidding for the contract. It is also this admitted case of the plaintiff that he had not made any fresh deposit of earnest money for giving bid in respect of contract Ex.A 2. His case is that he was permitted to give bid without making any deposit of earnest money, whereas the defendant's case is that on the plaintiff agreeing to treat Rs. It is also this admitted case of the plaintiff that he had not made any fresh deposit of earnest money for giving bid in respect of contract Ex.A 2. His case is that he was permitted to give bid without making any deposit of earnest money, whereas the defendant's case is that on the plaintiff agreeing to treat Rs. 500/- deposited as earnst money in respect of contract Ex A 2, was allowed to bid for the second contract. This fact is clearly supported by the order of the Divisional Forest Officer, dated 9.1.1960 marked Ex.A 11 which clearly goes to show that four persons made a deposit of Rs. 500/- each whereas rest of the bidders including the plaintiff who had already made such deposit in respect of the other contracts and which was lying in tact were allowed to bid on their agreeing to treat that deposit as one towards the contract Ex.A 2. The Divisional Forest Officer accepted this request of such bidders Shri Amrit Lal, Divisional Forest Officer has appeared in evidence on behalf of the State and has corroborated this fact as recorded in Ex.A 11 Learned counsel for the respondent was not able to point out any thing from the statement of Shri Amrit Lal which may go to show that Ex.A 11 was falsely recorded. It is true that after about 3 to 4 months of recording of this order some dispute had arisen between the Forest Department and the plaintiff regarding the working of the contract Ex. A.2 but that is no ground for holding that the order Ex A 11 dated 9.1.1960 was wrongly recorded. If anybody derived advantage out of the order Ex A.11 it was the plaintiff and not the State because the plaintiff was allowed to give bid for the contract Ex A.11 without making a fresh deposit of Rs. 500/-. The learned District Judge has completely missed this aspect of the case and has given no reasons why Ex.A.11 and the statement of Shri Amrit Lal (DW 1) be rejected. I, therefore, hold that the deposit of Rs. 500/- made towards contract Ex.A 1 was agreed by the parties to be treated as deposit for the contract Ex A 2. Consequently the State was entitled to forfeit the amount of Rs. I, therefore, hold that the deposit of Rs. 500/- made towards contract Ex.A 1 was agreed by the parties to be treated as deposit for the contract Ex A 2. Consequently the State was entitled to forfeit the amount of Rs. 500/- deposited as earnest money in case of breach of the conditions of the contract vide CI.28 of Ex.A.2. 6. There is, however, a serious question whether the rest of the amount of the plaintiff in respect of the contract Ex A 1 lying with the State could be forfeited for breach in respect of another contract Ex.A.2. A bare reference to Cl.28 of Ex A 2 would show that the State was entitled to forfeit the earnest money and/or the security deposit representing 25% of the contract amount (vide Cl.10) in case of breach of any terms of the contract. There is, however, no warrant for the proposition that the State could have forfeited any other amount lying with it an any other account of the plaintiff. Forfeiture is in nature of penalty or a fine and is not a debt for which the creditor can appropriate any other amount of the debtor lying with him. Forfeiture can only be strictly according to the terms of the contract. Since the amount other than Rs. 500/- did not represent any deposit by the plaintiff towards the suit contract, the State was not entitled to forfeit the same. 7. The result of the foregoing discussion is that the forfeiture of the plaintiff's money beyond Rs. 500/- was not justified. Consequently I partly allow this appeal and modify the judgment and decree of the learned District Judge and direct that the plaintiff shall be entitled to recover from the defendant Rs. 2560/- only. The parties will pay and get costs throughout according to their success and failure in the suit. *******