GULAB SHANKER Vs. MUL CHAND-NIMI CHAND

JUDGEMENT

(1.) This is a defendant's appeal in a suit for recovery of interest on a debt of Rs. 4,000 incurred by defendant's father on the 11 of April 1921. The debt is evidenced by what is in the document itself described as a "ruqa." Admittedly up to the date of suit no action of any sort was taken by either the plaintiff or the defendant or his father in regard to this debt beyond that the principal was paid up in three instalments of Rs. 1,000, Rs. 1500 and Rs. 1,500, on the 10 of October 1923,, 20 of January 1924 and the 1 of April 1924, respectively. These instalments of principal were expressly paid as instalment of principal and they were, therefore, credited as such. The suit was filed on the 9 of April 1924, and up to that date no demand for interest had been made by the plaintiff as against the defendant.

(2.) The ruqa in question simply stated that the defendant's father had borrowed Rs. 4,000 cash (ap se udhar liye hain) "which is to be debited to my account and I have, therefore; executed this ruqa. The instalments of payment of principal duly appear in the account-books, but from beginning to end there is no mention in the account-books of any interest being due. The trial Court dismissed the suit as there was no stipulation for interest in the written document and no demand had even been made for interest. The lower appellate Court held that the document was really a pronote and that as such interest must be allowed upon it in view of Section 80 of the Negotiable Instruments Act. It further held that the plaintiff was entitled to interest in the form of compensation under Section 73 of the Contrast Act. On behalf of the appellant it is urged that the document in question was not a promissory note, that interest could not be given under Section 1 of Act 32 of 1839 and that Section 73 of the Contract Act is not applicable. All these propositions are challenged by the respondent and he adds a fourth, that in any case in equity he should be allowed interest.

(3.) The document in question was, on the face of it, merely an acknowledgment that the defendant's father had taken a certain sum of money from the plaintiff and that it was debited against him in the plaintiff's account-book. There was nothing in the form of a promise to pay and nothing in the shape of any stipulation as to interest. It is difficult then to take it out of the Illustration (c) to Section 4 of the Negotiable Instruments Act. The particular document in question is really on exactly the same footing as I.O.U. As to Section 1 of Act 32 of 1839, there is no stipulation in the document as to the date on which the principal is to be paid. Nor in reference to the second portion of that section has there been any attempt to establish that a demand was made. Interest, therefore, cannot be claimed by virtue of that section unless the interest is legally payable under some other law in the terms of the proviso to Section 1.