JUDGMENT B. Dayal, J. - This is a defendant's Second Appeal. The plaintiff who is carrying on the business of selling Ghee at Aligarh submitted a tender to the Union of India in its railway department for supply of Ghee. This tender was accepted and a purchase order was given to the plaintiff for supply of 120 maunds of Ghee by the 27th of October, 1948. It was stipulated in the contract: "The railway administration will be at liberty to purchase elsewhere on the account and at the risk of the suppliers the said unbooked or undelivered quantity and to recover from the supplier any extra cost that may be incurred from any money due to the supplier by the railway administration and/or forfeit the security deposit in whole or in part at the discretion of the railway administration." On the back of this order again there was condition No. 11 which ran as follows :- "The security deposited by you will be liable to forfeiture by the railway in the event of the failure on the part of the contractors to fulfil this contract under terms and conditions laid down above to the satisfaction of the railway administration." It is common ground between the parties that the plaintiff did not supply any quantity of Ghee under the contract till the 27th of October, 1948 as stipulated but had made a deposit of Rs. 4,000 as security for the due performance of the contract with the railway. The railway administration informed the plaintiff after the 27th of October, 1948 that the supply not having been made within time, the transaction was rescinded. The plaintiff thereupon filed the present suit for the recovery of Rs. 4,000 deposited as security and interest thereon. The case of the plaintiff was that the railway authorities had deliberately avoided purchasing Ghee because the price of the commodity had fallen very considerably and the railway did not supply wagons which they had agreed to supply for carrying the purchased quantity to different places. The railway was therefore responsible for having broken the contract. 2. The defence taken by the railway administration was that the plaintiff never asked them for supply of any railway wagon and the Ghee not having been supplied, the security deposit was liable to be forfeited. The plaintiff was therefore not entitled to the amount claimed. 3. The railway was therefore responsible for having broken the contract. 2. The defence taken by the railway administration was that the plaintiff never asked them for supply of any railway wagon and the Ghee not having been supplied, the security deposit was liable to be forfeited. The plaintiff was therefore not entitled to the amount claimed. 3. The lower appellate court came to the conclusion that the defendant had failed to prove any agreement between the parties that security money would be forfeited in case supply of Ghee was not made. The lower appellate court also held in the alternative that the stipulation was in the nature of penalty and since the railway had not proved any loss, the plaintiff was entitled to the refund of the amount claimed. The decree of lie trial court dismissing the plaintiff's suit was thereby reversed and the lower appellate court passed a decree for Rs. 4700 as claimed. Against that decree, the Union of India has filed the present Second Appeal, and same contention have been raised in this Court. 4. The first point for consideration is whether the plaintiff did receive the purchase order in which the necessary stipulation was contained. The plaintiff in para. 2 of his plaint stated as follows: "That a purchase order No. 442 dated 28-9-1948 was placed with the plaintiff by the Divisional Superintendent of the E. I. Ry. at Allahabad for the supply of 120 maunds of Agmarked Green Seal Ghee at Tundla, the wagons for the same to be made available by the said railway." In para. 3 of the plaint it was further stated that: "In pursuance to the said order the plaintiff had deposited a sum, of Rs. 4,000 with the defendant as security." Thus in the plaint itself the plaintiff had admitted that the purchase order was placed with the plaintiff by the defendant. Learned counsel appearing for the plaintiff while opening the case had made a statement that his client never received the purchase order containing the stipulation. But that statement was in the teeth of the plaint allegations. Shri Sinha (D.W. 2) who was the clerk at the Divisional Superintendent's office has stated that Ext. A-1 on the record filed by the defendant is a carbon copy of the original order which was sent to the plaintiff by registered post. But that statement was in the teeth of the plaint allegations. Shri Sinha (D.W. 2) who was the clerk at the Divisional Superintendent's office has stated that Ext. A-1 on the record filed by the defendant is a carbon copy of the original order which was sent to the plaintiff by registered post. This statement by D. W. 2 is sufficient to prove that the original of the purchase order, a copy of which has been filed in court and is marked Ext. A-1 was sent to the plaintiff and he duly received it. 5. The contention of the learned counsel for the respondent is that the lower appellate court did not believe the statement of D. W. 2 on the ground that he had not produced the despatch and other registers indicating the actual despatch of the original purchase order to the plaintiff and that the note which this plaintiff had made upon the copy produced in court (Ext. A-1) did not contain an endorsement that the registered copy was sent to the plaintiff. The plaintiff's name was not mentioned in the endorsement and his contention therefore is that this is a finding of fact which cannot be upset in Second Appeal. I do not agree with this contention of the learned counsel. The inference drawn by the court below is not based upon any evidence on which such inference could be drawn. Clear admission of the plaintiff in the plaint contained in paras. 2 and 3 thereof along with the statement of defendant No. 2 is quite sufficient to prove the delivery of the original purchase order. In view of the admission of the plaintiff himself in his plaint it was not necessary for the defendant to produce the despatch register. Mere non-production of the despatch register or non-mentioning of the name of the plaintiff on the endorsement made by the clerk is no evidence for holding that the order was not sent to the plaintiff. 6. The next point for consideration is whether in the circumstances of the case the plaintiff is entitled to a refund of this security deposit. The stipulation with regard to the forfeiture of this deposit has been quoted above. It does not say that in case of any breach, the amount shall be forfeited. 6. The next point for consideration is whether in the circumstances of the case the plaintiff is entitled to a refund of this security deposit. The stipulation with regard to the forfeiture of this deposit has been quoted above. It does not say that in case of any breach, the amount shall be forfeited. It merely gives a power to the railway administration to forfeit or not to forfeit it and is certainly in the nature of penalty imposed upon the plaintiff so that he may be induced to perform the contract. The stipulation in the contract itself is that apart from recovering the extra costs and other charges which the railway administration may incur, it will also be entitled to forfeit the security amount of Rs. 4,000. It is, therefore, not in the nature of any compensation for loss that the railway administration may suffer that the security was to be forfeited but is meant only to penalise the plaintiff in case of any default. The case is therefore covered by Sec. 74 of the Indian Contract Act which reads as follows: "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." In this case the forfeiture of security deposit amounts to any other stipulation by way of penalty. The language is quite general and covers a case like this. The defendant complainant in such a case can only recover a reasonable compensation. Learned counsel cited an English case in support of the proposition that a deposit which had been taken as part payment of a contract and was also a guarantee for the due performance of the contract was liable to be forfeited in case the contract was broken. The case is Howe v. Smith, (1884) 27 Ch. D. 89. But since the law in India is codified, English principles of equity in this matter are not a safe guide. The case is Howe v. Smith, (1884) 27 Ch. D. 89. But since the law in India is codified, English principles of equity in this matter are not a safe guide. In the present case the defendant has not proved that by breach of the contract, the defendant had to purchase Ghee from any other source nor has the defendant proved anything as to the amount which can be called reasonable compensation for this breach. On the contrary the plaintiff has clearly proved by evidence that the rate of Ghee had considerably fallen after the contract and if the defendant wanted to purchase Ghee it could have purchased it at a cheaper rate so that there was no question of defendant's suffering any loss whatsoever. I, therefore, agree with the lower appellate court that the stipulation in the present case was in the nature of penalty and in the circumstances of the case the defendant was not entitled to forfeit the security deposit. The plaintiff was, therefore, entitled to recover the deposit made by him. But in view of the fact that the plaintiff was himself responsible for breach of the contract, he was not entitled to claim interest thereon, which was not agreed. 7. Another contention raised by the learned counsel for the defendant appellant was that the court at Aligarh had no jurisdiction to entertain the suit. I am unable to agree with this contention of the learned counsel. The plaintiff was a businessman carrying on the business at Aligarh. He made the deposit with the defendant and after the contract had been rescinded by the defendant who had suffered no damage and was not entitled to forfeit the security deposit was bound to refund the same. On the principle of "debtor must seek the creditor and pay where he is," I agree with the court below on this question also that the courts at Aligarh had jurisdiction to entertain the suit. 8. The result is that the decree passed by the court below is modified to this extent that the plaintiff will get a decree for Rs. 4000 only. With this modification the appeal is dismissed with costs.