Report No. 63
2A.9. Vishnu and Narada.-
Vishnu1 laid down that when a person took a loan without interest, promising to repay it within a definite period, but did not fulfill that promise within the limited time out of avarice, then the debt would tarry interest from after the expiry of that period. Even where there was no definite period of repayment fixed by the contract, after the expiry of a specified interval (six months according to Narada2, and a year according to Vishnu3), the creditor could charge interest at the legal rate. According to Katyayana, however, interest should not run until there had been a previous demand.
It would thus seem that where there is no contract for the payment of interest but there is a fixed period within which the loan is promised to be repaid, the loan will carry interest after the expiry of that period without payment; this much is perfectly clear. Some doubts exist in regard to the question if the creditor becomes entitled to claim interest when there is neither any contract to pay interest, nor any fixed period for repayment.
1. Vishnu, for Sanskrit text, see P.N. Sen Hindu Jurisprudence, (1918), p. 406.
2. Narada I, 108.