A WILLIAMS Vs. (FIRM) KALLU MAL MAGAN LAL

JUDGEMENT

(1.) This is a second appeal against a decree passed by the learned Subordinate Judge of Jhansi in first appeal. The suit which gave rise to the appeal was instituted for the recovery of certain sums of money on the bsais of three instruments which were alleged to be promissory notes. In respect of one instrument which was executed by the wife of the defendant-appellant, no decree was passed. In respect of the other two instruments a decree was passed. The only dispute now is about interest upon the sum due on the basis of one of the instruments. About the other instruments there is no dispute. In the instrument which is in dispute, there is no reference to any payment of interest. The document is in these terms: Due to Kallu Bania for stores purchased the sum of Rs. 649-14-6 (Rupees six hundred and forty-nine annas fourteen and pies six) only.

(2.) The inconsistency is in the original. It is doubtful whether this can be called a promissory note, but it is so called by the plaintiff and this description was accepted by the defendant. The only question is whether interest should be paid on this sum of Rs. 649 odd because there is no mention of any covenant to pay interest in the instrument itself. I must presume for the purposes of this appeal that this is a promissory note, and under Section 80, Negotiable Instruments Act, interest is payable at the rate of 6 per cent per annum. The further question has arisen whether interest should be paid from the date of the execution of the promissory note or from some future date which may be considered to be the date of demand. The case of Ganpat Tukaram V/s. Sopana Tukaram 1928 Bom. 35, is authority for the proposition that interest should run from the date of the execution of the instrument. In support of the same proposition there is another case, viz., Khurshid Haq V/s. Ram Ditta Mal 1928 Lah. 665. On the other side, my attention has been drawn to the case of Prem Lall Sein V/s. Radha Bulla Kankra 1931 Cal. 140. In the Calcutta case the learned Judge agreed with the view expressed in Ganpat Tukaram V/s. Sopana Tukaram 1928 Bom. 35, that the money due on a promissory note becomes due at the date of execution if the promissory note is one which is payable on demand. In that view of the matter it would normally be assumed that interest would run from that date because under Section 80, Negotiable Instruments Act, the interest runs from the date when the amount due ought to have been paid. The basis of the decision in the Calcutta case is that the word "same" in Section 80, Negotiable Instruments Act, refers to "interest" and not to "amount due." If that was so the section would run: When no rate of interest is specified in the instrument interest on the amount due shall. be calculated at the rate of 6 per cent, per annum from the date at which the interest ought to have been paid by the party charged until tender or realisation of the amount due thereon.

(3.) If this were the wording of the section, it seems to me that it would be meaningless because interest could not be calculated until it became due and interest could not become due so that it ought to have been paid before the date from which it could be calculated. I therefore consider that the view taken by the Bombay High Court in Ganpat Tukaram V/s. Sopana Tukaram 1928 Bom. 35, is the proper view. In the result the appeal is allowed and the decree of the lower appellate Court is varied to this extent that instead of interest being charged on the first promissory note at the rate of 2 per cent per mensem, interest shall be charged at the rate of 6 per cent per annum. Interest shall run from the date of the execution of the promissory note. In other respects the order of the Court below shall stand. The appellant will get 3-4 of his costs in this Court and the order for costs in the Courts below shall stand.