Pre-suit interest requires a legal basis; absent contract or notice, it cannot be awarded before suit.

Pre-suit interest on a money claim is recoverable only if it is supported by agreement, usage having the force of law, a substantive enactment, or a written notice claiming interest where no written instrument fixes the payment date. In the absence of any contract for interest, any pleaded or proved agreement, recognised usage, or written demand for interest, pre-suit interest cannot be awarded on the principal sum adjudged. Pendente lite and future interest remain governed by Section 34 of the Code of Civil Procedure, 1908, and were not disturbed.

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Issues: Whether, in the absence of any contract providing for interest and without any claim for interest in the plaint or demand notice, pre-suit interest could be awarded on the principal sum adjudged.

Analysis: Interest on a money claim falls into three distinct heads: pre-suit interest, pendente lite interest, and future interest. Pendente lite and future interest are governed by Section 34 of the Code of Civil Procedure, 1908, while pre-suit interest is governed by Sections 3 and 4 of the Interest Act, 1978. Pre-suit interest is allowable only where it is payable by agreement, by usage having the force of law, by substantive enactment, or on the basis of a written notice claiming interest when no written instrument fixes the time for payment. In the present case, there was no written instrument making the debt payable at a certain time, no pleaded or proved agreement, no usage having the force of law, and no written notice claiming interest.

Conclusion: Pre-suit interest was not payable and the award of interest for the period prior to the institution of the suit was unsustainable. The award of pendente lite and future interest was not interfered with.

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