Report No. 110
45.11. Section 354-No interest for first year.-
This takes us to section 354, which provides that no interest is payable on the arrears of an annuity within the first year from the death of the testator, although a period earlier than the expiration of that year may have been fixed by the will for making the first payment of the annuity.
This section also needs no change.
The language of section 354 is slightly defective. Although (as provided in the section) annuities do not carry interest within the first year even though an earlier time may have been fixed for payment, it is not intended that no interest shall be paid, for the subsequent years. The position as regards the period after one year is governed by section 352. This point was settled after some debate in the Calcutta High Courts, and is worth codification. To achieve this object we recommend the addition of the following Explanation to section 354:
"Explanation-Nothing in this section shall affect interest admissible under section 352."
45.13. Section 355-Interest on sum to be invested to produce annuity.-
Section 355 lays down that where a sum of money is directed to be invested to produce an annuity, interest is payable on it from the death of the testator.
The section needs no change.