GOSWAMI SRI GHANSHIAM LALJI Vs. RAM NARAIN

JUDGEMENT

(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 six per cent by Section 89 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 Civil P. C., Section 532, be calculated at the rale 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 is pay interest only from the time that ho receives notice of the dishonour.