https://www.taxtmi.com/caselaws?id=310934 A default-interest clause may be treated as a penalty under Section 74 of the Indian Contract Act, 1872 where the contract allows no interest if instalments are paid on time but imposes an exorbitant rate from the date of default. The Court distinguished ordinary contractual interest from a high default rate operating as a sanction for breach, and held that such a stipulation can attract statutory relief even if only one rate is stated. It also held that interest cannot be cut down on purely equitable grounds outside Section 74. The reduced rate allowed by the lower appellate court was upheld. en-us Wed, 08 Jul 1931 00:00:00 +0530 Mon, 27 Nov 2023 16:28:21 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=310934 A default-interest clause may be treated as a penalty under Section 74 of the Indian Contract Act, 1872 where the contract allows no interest if instalments are paid on time but imposes an exorbitant rate from the date of default. The Court distinguished ordinary contractual interest from a high default rate operating as a sanction for breach, and held that such a stipulation can attract statutory relief even if only one rate is stated. It also held that interest cannot be cut down on purely equitable grounds outside Section 74. The reduced rate allowed by the lower appellate court was upheld. Case-Laws Indian Laws Wed, 08 Jul 1931 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=310934