https://www.taxtmi.com/caselaws?id=199601 A contractual clause permitting forfeiture of a security deposit on breach was treated as penal in nature, not as an automatic entitlement to retain the whole amount. The Court held that where the deposit is security for due performance and no actual loss is proved, section 74 of the Contract Act permits only reasonable compensation. As the amount was not earnest money and the appellant had shown no proved loss from the breach, full forfeiture was disallowed and recovery was confined to reasonable compensation, with the balance security deposit refundable. en-us Tue, 20 Feb 1973 00:00:00 +0530 Wed, 07 Mar 2018 15:25:24 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=199601 A contractual clause permitting forfeiture of a security deposit on breach was treated as penal in nature, not as an automatic entitlement to retain the whole amount. The Court held that where the deposit is security for due performance and no actual loss is proved, section 74 of the Contract Act permits only reasonable compensation. As the amount was not earnest money and the appellant had shown no proved loss from the breach, full forfeiture was disallowed and recovery was confined to reasonable compensation, with the balance security deposit refundable. Case-Laws Indian Laws Tue, 20 Feb 1973 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=199601