Report No. 63

4.23. Section 1 and contrary Agreement.-

If there is an express contract not to pay interest (i.e., prohibiting interest), interest cannot be allowed under section 1.

4.23A. Right to Interest conferred by law or contract and interest on dishonour of bill of exchange etc.-

We are of the view that an express provision is needed to the effect that the Act should not apply to-

(a) cases where the right to interest is separately conferred by law or contract, or

(b) interest on dishonour of a bill of exchange, promissory note or cheque.

Interest prohibited by express agreement .-We are also of the view that the Act should not apply where interest is prohibited by an express agreement.