1. This is a defendant's appeal in a suit for recovery of interest on a debt of Rs. 4,000 incurred by defendant's father on the 11th of April 1921. The debt is evidenced by what is in the document itself described as a 'ruqa.' Admittedly up to the date of suit no action of any sort was taken by either the plaintiff or the defendant or his father in regard to this debt beyond that the principal was paid up in three instalments of Rs. 1,000, Rs. 1500 and Rs. 1,500, on the 10th of October 1923,, 20th of January 1924 and the 1st of April 1924, respectively. These instalments of principal were expressly paid as instalment of principal and they were, therefore, credited as such. The suit was filed on the 9th of April 1924, and up to that date no demand for interest had been made by the plaintiff as against the defendant.
2. The ruqa in question simply stated that the defendant's father had borrowed Rs. 4,000 cash (ap se udhar liye hain) 'which is to be debited to my account and I have, therefore; executed this ruqa. The instalments of payment of principal duly appear in the account-books, but from beginning to end there is no mention in the account-books of any interest being due. The trial Court dismissed the suit as there was no stipulation for interest in the written document and no demand had even been made for interest. The lower appellate Court held that the document was really a pronote and that as such interest must be allowed upon it in view of Section 80 of the Negotiable Instruments Act. It further held that the plaintiff was entitled to interest in the form of compensation under Section 73 of the Contrast Act. On behalf of the appellant it is urged that the document in question was not a promissory note, that interest could not be given under Section 1 of Act 32 of 1839 and that Section 73 of the Contract Act is not applicable. All these propositions are challenged by the respondent and he adds a fourth, that in any case in equity he should be allowed interest.
3. The document in question was, on the face of it, merely an acknowledgment that the defendant's father had taken a certain sum of money from the plaintiff and that it was debited against him in the plaintiff's account-book. There was nothing in the form of a promise to pay and nothing in the shape of any stipulation as to interest. It is difficult then to take it out of the Illustration (c) to Section 4 of the Negotiable Instruments Act. The particular document in question is really on exactly the same footing as I.O.U. As to Section 1 of Act 32 of 1839, there is no stipulation in the document as to the date on which the principal is to be paid. Nor in reference to the second portion of that section has there been any attempt to establish that a demand was made. Interest, therefore, cannot be claimed by virtue of that section unless the interest is legally payable under some other law in the terms of the proviso to Section 1.
4. Beyond Sections 4 and 80 of the Negotiable Instruments Act with which we have already dealt no other statutory law is relied upon except Section 73 of the Contract Act. The compensation is there given for the breach of a contract. We should therefore, have to find here of what contract there had been a breach. It is impossible to hold that there has been any breach of a contract to pay the principal. The borrower was liable to pay back the principal whenever the plaintiff-demanded it but no demand was made; or at any rate there is nothing to show that if any demand was made it was not complied with. We cannot, therefore, hold that there was any breach as regards the payment of the principal. Is it possible then to hold that there was any breach of contract to pay interest? Admittedly there was no express contract to pay interest. It is quite impossible for us to infer then that there was any breach of a contract to pay interest. It would be necessary for us to be able to infer that there was a contract to pay some specific rate of interest, and admittedly there was no such contract. It, therefore, follows that there was no breach of any contract within the meaning of Section 73 for which compensation should be allowed.
5. Lastly, the plaintiff falls back on a general plea that the defendant's father and the defendant having had the money ought in equity to pay some interest thereon, and we are asked to assume that a liability to pay interest was implied in the mere act of the taking of the money. It is clearly impossible to infer this. There must be many cases in which a person lands money to another without any stipulation as to interest or any intention of taking interest. In this particular case if any inference is to be drawn at all it would be from the absence of any mention of interest in the document and any mention of interest in the account books of the plaintiff that no interest was intended to be charged. Whether this inference is certainly correct or not it is impossible to say, but it is certainly equally impossible for us to draw the other inference that some interest was agreed to be paid and to then proceed to arbitrarily determine what the amount of interest should be. We hold, therefore, that the plaintiff has failed to establish that he was entitled in law to any interest and the decree of the trial Court should be restored. We, therefore, allowing the appeal, set aside the decree of the lower appellate Court and restore that of the Court of first instance dismissing the suit. The defendant will have his costs all through.