25% OFF on all LCI Courses. Offer valid till 5th Oct. Use Code: DUS25
LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Interest Clause in Notice - Urgent

(Querist) 04 June 2009 This query is : Resolved 
Dear Members,

Would like to have your insight on the following.

1. Is it necessary while issuing notice for recovery of the money to have interest clause for claiming interest.

2. If there is no such interest clause in the issued notice, can the same shall still be claimed in the plaint being filed with the civil court.

3. If at all we file such plaint will the court deny any such interest to the party.


A V Vishal (Expert) 04 June 2009
Dear Pramod,

While issuing a proper notice it is always prudent to have your claim in writing and the basis of the same. Since you are issuing notice for recovery of money, as per the terms on which it was lent, the borrower has to pay interest, which can be claimed by you on non receipt of the same, also further interest can be claimed for the delay in payment of the money due to you. The interest can be still claimed in the suit even if the same is not claimed in the notice.
Pramod Kumar (Querist) 04 June 2009
Dear Vishal,

Thanx for your prompt response on this. As per your answer "it is always prudent", but is it mandatory, if the notice has already been issued, does the party will be denied the right to claim the interest.

In this particular case, there is no express agreement on the interest. The client is only willing to recover his principal amount. There is no express agreement signed between both the parties for interest in case of delay.

Looking forward for your insights.


sanjeev murthy desai (Expert) 04 June 2009
Dear Mr. Promod Kumar,

I agree with My learned Frind Mr. Vishal,

Where dispute arise in respect of interest all Hon'ble Courts are following the section 34 of Civil procedure code as follows.

34. Interest:-
(1) Where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate not exceeding six per cent per annum as the Court deems reasonable on such principal sum, from
the date of the decree to the date of payment, or to such earlier date as the Court thinks fit.

1[Provided that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced
by nationalised banks in relation to commercial transactions.

Explanation I:- In this sub-section, “nationalised bank” means a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1970 (5 of 1970).

Explanation II:- For the purposes of this section, a transaction is a commercial transaction, if it is connected with the industry, trade or business of the party
incurring the liability.]

(2) where such a decree is silent with respect to the payment of further interest on such principal sum from the date of the decree to the date of payment or other earlier date, the Court shall be deemed to have refused such interest, and a separate suit therefore shall not lie.

A V Vishal (Expert) 04 June 2009
Dear Pramod,

I think Sanjeev has answered your query about Interest clause aptly putting the matter to rest.
Pramod Kumar (Querist) 05 June 2009
Dear Sanjeev & Vishal,

I appreciate your prompt and detailed response. Still things that is unclear which needs your attention is.

If in a notice issued for recovery of money there is not mentioning of interest clause then will the party on a merit basis cannot claim interest in suit filed, becoz he has not expressly claimed in the notice.

Hope you will clarify me on this issue.


N.K.Assumi (Expert) 05 June 2009
I am of the view that, if the debt amount in the contractual agreement is different from the Notice, the documents will be hit by the evidence act. Hence, notice should claerly insert the amount of interest claimed, so that it does not speak of different amount from the stipulated contractual agreement.
B.B.R.Goud. (Expert) 06 June 2009
Yes. it is necessary to include the interest, if any, which are due upon which the case is filed, shall have to include in legal notice.

You need to be the querist or approved LAWyersclub expert to take part in this query .

Click here to login now

Similar Resolved Queries :

Expert of the Month

Post a Suggestion for LCI Team
Post a Legal Query