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Ram NaraIn Vs. Ghanshiam Lalji - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Judge
Reported in(1907)ILR29All33
AppellantRam Narain
RespondentGhanshiam Lalji
Excerpt:
interest - rate of interest--hundis silent as to interest--collateral contemporaneous agreement fixing rate--act xxviii of 1855 (usury laws repeal act)--act no. xxvi of 1881, (negotiable instruments act) section 80. - cantonments act[c.a. no. 41/2006]. section 346 & cantonment fund (servants rules, 1937, rules 13, 14 & 15: [h.l. gokhale, ag. cj, p.v. hardas, naresh h. patil, r.m. borde & r.m. savant, jj] jurisdiction of school tribunal constituted under maharashtra employees of private schools (conditions of service) regulations act, (3 of 1978) held, school run by the cantonment board is a primary school and it is not a school recognised by any such board comparable to the divisional board or the state board. the school tribunal constituted under section 8 of the maharashtra act cannot..........the class, affected by this suit.2. the contention of the appellant was that, notwithstanding the agreement of the parties, the respondent's right to interest was restricted to 6 per cent. by section 80 of the negotiable instruments act, xxvi of 1881. both the courts in india rejected this contention, and, their lordships think, rightly.3. the section says:when no rate of interest is specified in the instrument, interest on the amount due thereon shall, except in cases provided for by the code of civil procedure, section 532, be calculated at the rate of six per centum per annum, from the date at which the same ought to have been paid by the party charged until tender or realization of the amount due thereon, or until such date after the institution of a suit to recover such amount as.....
Judgment:

Arthur Wilson, J.

1. The suit out of which this appeal arises was brought upon six hundis drawn by the defendant (appellant) upon himself in favour of the plaintiff (respondent). The hundis were silent as to interest; but there was a collateral agreement, embodied in written documents, that the hundis should bear interest at a rate equivalent to 30 per cent. per annum. And it has been held that the dealing with interest by a collateral agreement, and not on the face of the hundis, was in accordance with the custom prevailing in the district, and amongst the class, affected by this suit.

2. The contention of the appellant was that, notwithstanding the agreement of the parties, the respondent's right to interest was restricted to 6 per cent. by Section 80 of the Negotiable Instruments Act, XXVI of 1881. Both the Courts in India rejected this contention, and, their Lordships think, rightly.

3. The section says:

When no rate of interest is specified in the instrument, interest on the amount due thereon shall, except in cases provided for by the Code of Civil Procedure, Section 532, be calculated at the rate of six per centum per annum, from the date at which the same ought to have been paid by the party charged until tender or realization of the amount due thereon, or until such date after the institution of a suit to recover such amount as the Court directs

Explanation: When the party charged is the indorser of an instrument dishonoured by non-payment, he is liable to pay interest only from the time that he receives notice of the dishonour.

4. In 1855, by Act XXVIII of that year, the usury laws previously in force were repealed, and the general rule was laid down that 'in any suit in which interest is recoverable, the amount shall be adjudged or decreed by the Court at the rate (if any) agreed upon by the parties.' Section 80 of the Negotiable Instruments Act does not purport to deprive those dealing with such instruments of the freedom of contract possessed by other contracting parties. It purports to confer a right to interest, not to take away such a right otherwise existing. When a plaintiff has to rely upon the section as the ground of his claim to interest, no doubt the terms of the section must be followed. But to read the section as depriving him of a contractual right of interest would be to read into it something which it does not say, and which cannot reasonably be implied from its language.

5. Their Lordships will humbly advise His Majesty that the appeal should be dismissed. The respondent not having appeared, there will be no order as to costs.


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