Raman borrows ₹ 5,000 from Boman and promises to pay ₹ 10,000, if he fails to pay on a stipulated date. Is on Raman's failure to repay on stipulated date, Boman is entitled to recover ₹ 10,000 from Raman? Examine the val

Yes, the claim can sustain if the Court finds it reasonable. Section 74 of the Indian Contract Act, 1872, provides for reasonable compensation for breach of contract where penalty is stipulated for. When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for. Illustration (a): A contracts with B to pay B ₹ 1,000, if he fails to pay B ₹ 500 on a given day. A fails to pay B ₹ 500 on that day. B is entitled to recover from A such compensation, not exceeding ₹ 1,000, as the Court considers reasonable.