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Report No. 63

2A.8. Interest in absence of express stipulations.-

Interest, where expressly stipulated, was of course, permissible, subject to a legal maximum. What is remarkable is that the Hindu Law allowed the creditor to charge interest under certain circumstances even in the absence of a definite contract in that respect. Interest does run where there is an agreement. But, even in the absence of an agreement, when a debt is demanded and is not paid, interest accrues from the date of demand. In friendly loans, in the absence of an agreement, no interest was chargeable. With this rule, we may compare Antonio's retort to Shylock1:

"For when did friendship take, A breed for barren metal of his friend." But such a friendly loan was presumed to be for 6 months only2.

1. Merchant of Venice, Act, I, Scene 3, line 128.

2. Narada I, 108-109.

Interest Act, 1839 Back

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