Narasimhayya v. Srinivasayya

1. We think we are bound by the Privy Council decisions in Mathura Das v. Raja Narindar Bahadur(1) and Bindesri Naik v. Ganga Saran Sahu(2) and the decisions of this Court in Ghantayya v. Papayya(3) and Ramanathan Chetty v. Nur Muhamad Marakayar(4) to hold that post deem interest is payable on the general promise by the debtor to be liable for interest, though a definite term is fixed in the bond for repayment of the principal and interest. If the liability under that general undertaking to pay interest is further extended by another undertaking (which may be called appurtenant to the principal undertaking) to pay interest, upon arrears of interest and which further undertaking is found in the same document following the provision to pay interest, it is difficult to hold that the parties intended that only the principal undertaking should apply to the question of the liability for post deem interest and not the appurtenant undertaking also. As regards Chajmal Das v. Brij Bhukan Lal(5) that was decided before Mathura Das v. Raja Narindar Bahadur and their Lordships, after reluctantly agreeing with the High Court that there was no covenant to pay post diem interest, gave interest by way of damages taking the principal undertaking alone as a guide for the measure of damages and not the appurtenant undertaking also. Thaithottathil Pokkar v. Ramchandra Shenoy(6) is a similar case. These decisions are of no assistance when considering the question as to whether compound interest is allowable where post diem interest is granted on the covenant and not as damages in the absence of a covenant. On the other hand, the decisions in Bin desri Naik v. Ganga Saran Sahu and Ramanathan Chetty v. Muhamad Marakayar proceed on the view that both the covenants can be availed of by the creditor in respect of post diem interest.

2. We therefore allow the second appeal and restore the decision of the District Munsif dismissing with costs the defendants' appeal to the lower appellate Court.

3. The respondents will pay appellant's costs in this Court. Six months' time will be allowed for payment from this date.

S.N/R.K

4. Appeal allowed.