Section 79 NI Act: Interest when rate specified
Negotiable Instruments Act, 1881
Section 79 NI Act at a Glance
Section 79 NI Act requires interest on a promissory note or bill of exchange with an expressly specified rate to be calculated at that rate on the principal due from the instrument's date until tender, realization, or a date directed by the Court.
Section 79 NI Act Bare Act Text
79. Interest when rate specified.
When interest at a specified rate is expressly made payable on a promissory note or bill of exchange, interest shall be calculated at the rate specified, on the amount of the principal money due thereon, from the date of the instrument, until tender or realization of such amount, or until such date after the institution of a suit to recover such amount as the Court directs.
Section 79 NI Act in Simple Words
Section 79 NI Act governs how interest is calculated when a promissory note or bill of exchange expressly makes interest payable at a specified rate.
When a promissory note or bill of exchange expressly specifies a rate of interest, Section 79 NI Act requires interest to be calculated at that specified rate on the amount of the principal money due on the instrument.
Interest under Section 79 NI Act is calculated starting from the date of the instrument. It runs until the amount is tendered or realized, or, where a suit is instituted to recover the amount, until such date after the institution of the suit as the Court directs.
When Section 79 NI Act Applies
- The instrument is a promissory note or a bill of exchange.
- Interest at a specified rate is expressly made payable on the instrument.
- Interest is calculated at the specified rate on the amount of the principal money due on the instrument.
- Interest runs from the date of the instrument.
- Interest continues until tender or realization of the amount, or until such date after the institution of a suit to recover the amount as the Court directs.
Example of Section 79 NI Act
FAQs on Section 79 NI Act
What is Section 79 NI Act?▼
Section 79 NI Act sets the rule for calculating interest when interest at a specified rate is expressly made payable on a promissory note or bill of exchange. It requires interest to be calculated at that specified rate on the principal money due from the date of the instrument until tender, realization, or a date after the institution of a suit directed by the Court.
From what date is interest calculated under Section 79 NI Act?▼
From the date of the instrument. Section 79 NI Act provides that interest at the specified rate is calculated on the principal money due starting from the date of the promissory note or bill of exchange.
On what sum is interest calculated under Section 79 NI Act?▼
On the amount of the principal money due on the promissory note or bill of exchange. Section 79 NI Act directs the specified rate of interest to be applied to the principal money due.
Until when is interest calculated at the specified rate under Section 79 NI Act?▼
Until tender or realization of the amount due, or until a date after the institution of a suit that the Court directs. If a suit is filed to recover the amount, the Court may direct the date after the institution of the suit up to which interest runs under Section 79 NI Act.
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Sources: Bare Act Text, Negotiable Instruments Act, 1881 (India Code) ·