BEHARILAL Vs. ASARAM

JUDGEMENT

(1.) THE bond in suit for Rs. 4,000 was executed on 16th July 1922. Repayment was to be made on 15th February 1923, and the original rate of interest fixed was 1 per cent, per mensem simple. If repayment was not made, compound interest was to run at 2 per cent, per mensem, compound yearly. The lower Courts have granted simple interest at Re. 1-8-0 per cent, per mensem from the date fixed for repayment.

(2.) IT has not been contended here that, the lower Courts were incorrect in holding that the provision for compound interest at an enhanced rate was a penal; one. What has been urged is that, afc the least, the appellant should have been allowed simple interest at 2 per cent, per mensem, or compound interest at 1 per cent, per mensem.

(3.) EACH and every case has to be judged on its own merits as regards the quantum of compensation so to be given. Here we have the following facts. The bond in suit was wholly for old debt with the exception that Rs. 400 was added by way of interest on the date of the bond. The time fixed for repayment was unusually short, only seven months being allowed. The rate of 1 per cent, per mensem simple interest was quite a normal one, but the provision for enhanced compound interest at 2 per cent, per mensem was a highly penal one. In those circumstances, it is only too obvious that the plaintiff has received ample compensation, so far as the rate of interest is concerned from the date fixed for repayment, at the hands of the lower Courts.