How can a seller, harmed by buyers' procrastination in paying installments, stipulate a penalty clause, and does Islam disregard the seller's right in favor of the buyer's right? What is the better option for the buyer: paying a financial fine or settling good deeds on the Day of Judgment? And is the seller in this case considered greedy and exploitative?

The fatwa is correct and has been agreed upon by contemporary Fiqh academies. It prohibits explicit usury, which is represented by imposing an additional amount on the principal debt when there is an inability to pay or a delay in payment.

The Sharia has permitted the seller to take a pledge or request a guarantor to safeguard his right and prevent disputes. It has also permitted punishing the wealthy and capable defaulter with a deterrent penalty determined by the legitimate ruler, such as imprisonment and the like. If the seller incurs expenses and litigation fees due to the defaulter, the oppressor is obliged to pay them.

The justifications mentioned by the questioner are not to be heeded due to the conclusive and decisive textual evidence prohibiting usury.