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Salem Town Bank, Ld., by Its Secretary, K. Narasinga Row Vs. S. Venkatachar and anr. - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in9Ind.Cas.197
AppellantSalem Town Bank, Ld., by Its Secretary, K. Narasinga Row
RespondentS. Venkatachar and anr.
Excerpt:
contract act (ix of 1.872), section 74 - stipulation for high interest from default of payment of instalment--penalty. - wallis, j.1. the contract, exhibit a, has been reduced to writing and we cannot import into it any additional terms. on the face of it, it is a contract for the re-payment of an advance of rs. 300 by 20 instalments without interest. the interest only becomes payable on default, and i do not think this is a case of a stipulation for an enhanced rate of interest on default so as to bring the case within the explanation to section 74 of the indian contract act(ix of 1872), or that the stipulation can be said to be penal.2. it follows that the plaintiff is entitled to recover interest at the contract rate of 18 3/4 per cent, and the decree will be modified by allowing interest at this rate instead of at 6 per cent. the respondents will pay the costs of the petitioner.
Judgment:

Wallis, J.

1. The contract, Exhibit A, has been reduced to writing and we cannot import into it any additional terms. On the face of it, it is a contract for the re-payment of an advance of Rs. 300 by 20 instalments without interest. The interest only becomes payable on default, and I do not think this is a case of a stipulation for an enhanced rate of interest on default so as to bring the case within the explanation to Section 74 of the Indian Contract Act(IX of 1872), or that the stipulation can be said to be penal.

2. It follows that the plaintiff is entitled to recover interest at the contract rate of 18 3/4 per cent, and the decree will be modified by allowing interest at this rate instead of at 6 per cent. The respondents will pay the costs of the petitioner.


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