Report No. 63
Section 1-Power of The Court and Suits Merely for Interest
4.1. Section 1-operative provision-analysis.-
We shall now proceed to deal with the operative provision. The Act contains only one section, quoted below:
"I. Power of Court to allow interest.-It is, therefore, hereby enacted that, upon all debts or sums certain payable at a certain time or otherwise, the Court before which such debts or sums may be recovered may, if it shall think fit, allow interest to the creditor at a rate not exceeding the current rate of interest from the time when such debts or sums certain were payable, if such debts or sums be payable by virtue of some written instrument at a certain time; or if payable otherwise, then from the time when demand of payment shall have been made in writing, so as such demand shall give notice to the debtor that interest will be claimed from the date of such demand until the time of payment: provided that interest shall be payable in all cases in which it is now payable by law."
The section has become somewhat cumbersome. It deals with several points-
(a) Power of the court to award interest.
(b) Amounts with reference to which the power can be exercised.
(c) Rate of interest to be awarded by the Court.
(d) Date of commencement of running of interest.
(e) Savings as to existing laws (in the proviso).
We shall discuss these points serially and indicate the amendments that we recommend on each point.