Section 74 declares the Law on Liability for Violations when compensation is set in advance by the consent of the parties or where there is a sanction requirement. However, the application of the order is not limited to cases where the victim, as an applicant, requests discharge. The section does not confer any particular benefit on any party; it merely states that, notwithstanding a clause in the contract that predetermines the damage or provides for the derogation of property as a sanction, the court receives only adequate compensation to the injured person that does not exceed the amount or penalty provided. The Tribunal`s jurisdiction is not determined by the fortuitous fact that the defaulting party is a plaintiff or defendant in a lawsuit. The use of the phrase “receiving from the party who broke the contract” does not prejudge that the Tribunal`s jurisdiction to adjust the sums paid by the late party cannot be exercised to process the request of the party who complains contractually. In any event, the Tribunal must assess appropriate compensation to which the plaintiff is entitled by the defendant in the event of a breach of contract. This compensation must be considered in light of the conditions in force at the time of the infringement.” The oil industry caused its share of companies to fall in liquidity problems or, worse, went bankrupt, especially in the 1980s, after the oil price crash of 1985-86. From this experience, other players in the industry have developed very narrow and cumbersome provisions (some even say draconian) to deal with a failing party under various agreements. It is now customary to include several provisions that address the possibility of a party filing for bankruptcy or being threatened with bankruptcy. Given that it now appears that we are embarking on a new round of liquidity problems and perhaps even for some additional companies seeking protection from their creditors, these issues could come back into force. “However, there is no arrest warrant for the acceptance of certain high courts in India, as S. 74 applies only to cases where the aggrieved party attempts to obtain a certain amount in the event of a breach of contract and not in cases where an amount collected under the contract is to be withheld. In our judgment, the phrase “the contract contains any other sanction provision” applies fully to any contract involving a penalty, whether for payment in the event of a violation of property or money in the future or for forfeiture of the right to money or other goods already delivered.
The obligation not to enforce the penal clause, but only to provide adequate compensation, is imposed by law on the courts of P. 74. In all cases where there is a sanction of the nature of the forfeiture of an amount deposited in accordance with the contractual terms expressly providing for forfeiture, the court has jurisdiction to award such an amount only if it deems it appropriate, but does not exceed the amount declared as dilapidated in the contract. In exchange for these privileges, the Lord was obliged to lose his rights if he did not protect and defend the tenant, or do something that harmed the feudal relationship.