§ 74 declares the law on liability for infringement when compensation is fixed in advance by agreement of the parties or when a provision is punishable. However, the application of the Order is not limited to cases where the injured party, as the applicant, seeks compensation. The Section does not grant any particular benefit to any party; It simply explains the law that, notwithstanding a provision in the contract providing for damages or the punishable forfeiture of ownership, the court will only award the injured party reasonable compensation that does not exceed the amount or penalty set. The jurisdiction of the Court of First Instance is not determined by the fortuitous fact that the party in default is an applicant or defendant in an action. The use of the phrase “obtain from the party who broke the contract” does not presuppose that the jurisdiction of the Tribunal for the adjustment of the amounts paid by the defaulting party cannot be exercised in the processing of the claim of the party complaining of infringement. In any event, the Tribunal must assess reasonable compensation to which the applicant is entitled from the defendant in the event of an infringement. Such compensation must be determined taking into account the conditions existing at the time of the infringement. The loss of serious money from a contract for the sale of movable or immovable property, where the amount is reasonable, does not fall within the scope of section 74. This decision was taken in several cases: Kunwar Chiranjit Singh v. Har Swarup A.I.R.1926 S.C.1 RoshanLal v. The Delhi Cloth and General Mills Company Ltd., Delhi I.L.R. All.166 Muhammad Habibullah v. Muhammad Shafi I.L.R. All.

324 Bishan Chand v. Radha Kishan L`I.D. 19 All. 490.; These cases are easy to explain, because forfeiture of a reasonable amount, paid as serious money, does not mean imposing a fine. However, if forfeiture is of the type of sentence, section 74 applies. If, in accordance with the contractual conditions, the party in breach has undertaken to pay a sum of money or to recover a sum of money which it has already paid to the party who has contested an infringement, the obligation shall have the character of a penalty. In this case, the Court found that the security was not an amount as provided for in the Rouwkoop clause in the real intention of the Rouwkoop clause. A penalty clause will only come into force in the event of breach of contract. Unfortunately, many sales contracts confuse the legal position that the expiration clause is merged with a Rouwkoop clause that provides that if the buyer violates the contract and the seller terminates the contract as a result of it, the buyer loses his down payment as Rouwkoop. Applying the principles of section 74, the Supreme Court decided that the applicant was entitled to withhold only the serious money of Rs 1,000 of Rs 25,000 which he had received and the amount of R24,000 paid for part of the sale price could not expire in the following explanatory memorandum: – In the case of the seller, the seller`s damages are often liquidated only during the resale of the good and the seller`s right exists only for the deficit between the amount of the resale and the initial amount of the terminated contract.

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