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Periathambi Udayan Vs. Angammal Alias Amminiammal and ors. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Judge
Reported in4Ind.Cas.725
AppellantPeriathambi Udayan
RespondentAngammal Alias Amminiammal and ors.
Excerpt:
contract act (ix of 1872), section 74 - covenant to pay interest at 75 per cent. in default of payment of any one instalment--penalty--consideration--execution of bond admitted--burden of proof of non-receipt of consideration. - - from the date of default, i do not think it is a penalty within the meaning of section 74 of the indian contract act ix of 1872. the defendants were given the use of the money on the understanding that if they repaid it in certain instalments they would be charged no interest, but if they failed to repay as agreed they would be liable to pay it with interest......or that any undue advantage was taken of them.2. the plaintiff, in modification of the lower court's decree, will have a decree for rs. 300 with interest at 75 par cent. in the principal sum adjudged from date of suit till date of decree and, further interest on the aggregate at 6 per cent. per annum till payment. the defendants will pay the plaintiff's costs throughout.
Judgment:

Munro, J.

1. The execution of the bond was admitted, and the burden of proving want of consideration was upon the defendants and they adduced no evidence. Even otherwise, the evidence of the plaintiff's witnesses proved payment. of the entire consideration and stands unrebutted by any evidence on record. As to the interest at 75 per cent. from the date of default, I do not think it is a penalty within the meaning of Section 74 of the Indian Contract Act IX of 1872. The defendants were given the use of the money on the understanding that if they repaid it in certain instalments they would be charged no interest, but if they failed to repay as agreed they would be liable to pay it with interest. The defendants are not in a worse position than if at the time they had borrowed the money they had agreed to pay the interest now demanded. The rate of 75 per cent. is, no doubt, high, but there is nothing to show that the defendants did not enter into the contract with their eyes wide open or that any undue advantage was taken of them.

2. The plaintiff, in modification of the lower Court's decree, will have a decree for Rs. 300 with interest at 75 par cent. in the principal sum adjudged from date of suit till date of decree and, further interest on the aggregate at 6 per cent. per annum till payment. The defendants will pay the plaintiff's costs throughout.


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