NEW YEAR SALAD

(T. G. John, Advocate, Tricbur)

One more year has rolled by -- a year of cataclysmic events. In which the fragile, beautiful moon has slipped from the hands of the poets into the grips of the scientists. In the political arena, rhetoric, oratory, slogan-shouting and hijacking have taken the place of law and order at local, national and international levels.

Taking a flash-back of the legal arena of the world, we find many of the editors of magazines and newspapers and broad-casters of Nixon's Land balking, when the American Bar Association recommended a tough code to limit the flow of information to reporters in criminal cases. The Code was drafted by a Committee headed by Massachusetts Justice Paul Reardon and there was a general feeling that the Committee had gone too far. But all were agreed on one point that there was a real need to keep cases from being tried in the Press.

The judicial conference of the U. S. has cleared this mine-field a bit by adopting its own recommendations which attempt to discourage publicity that might influence a jury or judge and result in an unfair trial, but unlike the American Bar Association Code do not attempt to define any standard for the news media or police working beyond the confines of the court room. Instead they rely strictly on a judge's power to discipline those actually under his judicial supervision.

Still new rules have been worked by a Committee headed by U. S. Courts of Appeals Judge Irving Kauffman of New York who has called on Judges to forbid bailiffs, clerks and other Court personnel to give out information on a case unless it is part of a public record. They also urge that each court carefully define the environs of the Court-room where photographers and T. V. Cameramen may not take pictures. Like the A. B. A.  Code the federal rules would prohibit lawyers and prosecutors from divulging a confession, or an accused man^’s past record or making other statements that might result in an unfair trial. But the Kauffman rules do not provide for the two most important recommendations of the American Bar Association: (1) Exclusion under some circumstances of newsmen from preliminary hearings and other hearings (2) Recommendation that judges bring contempt of Court citations against newsmen who publish material will fully designed to influence a trial's outcome.

The American Press objected most strenuously to the last provision and as a result the Kauffman Committee preferred not to include such a rule, since the U. S. Supreme Court has yet to decide whether or not judges have the right to use their contempt powers in this way. The Kauffman Committee's recommendations are likely to become part of the rules in every federal court in the nation.

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Tailpiece:

Sir John Popham, the Lord Chief Justice who tried Sir Walter Raleigh and Guy Fawkes, studied law with the proceeds of his earlier career as a highwayman!

DAMAGES AND GINGER BEER

(T. G. John, Advocate, Trichur)

There is nothing spreeish, crass, or scurrilous in a person stepping into a wayside cafeteria or a provision, store on a hot, stuffy evening and ordering for a bottle of ginger beer. And as he sits on the wire-legged stool watching the waiter dip the bottle and pour out for him the drink that will quench his thirst, and cheer him but not inebriate, he does not care two hoots whether, that particular bottle is opaque or otherwise. However things did not move so smoothly years ago, somewhere in England when a similar bottle of ginger beer was ordered for. For to the utter horror of the customer it was found in the bottle, couched in the lees of the drink the decomposed remains of a snail. From that moment began a controversy which consummated in the celebrated case Donoghue v. Stevenson (M'Alister v. Stevenson) or more familiarly known as the snail-in-the-bottle case, which is an important landmark in the history of English law of damages and incidentally on the question whether an action lies for nervous shock and if so under what circumstances.

Taking a cursory glance at the English authorities on this branch of law, one of the earliest cases is Victorian Railways Commissioners v. Coultas (1888). In that case the buggy of the plaintiffs, a husband and wife, was nearly but not quite run over by a passing train at a level crossing and it was held that the resulting shock and illness was damage which was too remote and hence not recoverable. The above Privy Council decision contains the following dictum: "In every case where an accident caused by negligence had given a person a serious nervous shock, there might be a claim for damages on account of mental injury. The difficulty which now often exists in case of alleged physical injuries of determining whether they were caused by the negligent act would be greatly increased and a wide field opened for imaginary claims". The reasoning seems to be that if one were to arrive at a different conclusion it will open wide the gates of imaginary claims and frivolous litigations.

The view which was not popular even in England gradually gave way by the pronouncement of Kennedy J. in Dulieu v. White & Sons (1901). The plaintiff who was in the family way was behind the bar of her husband's public house. The defendants by their servants negligently drove a horse carriage into the public house and the plaintiff prematurely gave birth to a child and became ill also. Kennedy. J. laid down two propositions, which as stated by Mr. K. Venkoba Rao in "Conundrum presented by shock cases", have become the starting point for discussions on the subject namely that unless the plaintiff is within the area of physical danger, he cannot recover damages for nervous shock and secondly .if a man is killed by the negligence of the defendants in sight of plaintiff and the plaintiff becomes ill, the damage is too remote a consequence of the negligence.

The case of Hambrook v. Siok.s Brothers (1925) is the next important step in the tumultuous march of English case law in this subject. The defendants' servant left a motor lorry at the top of a steep and narrow street u--attended with the engine running and without taking proper precautions to secure it. The lorry started off by itself and ran violently down the incline. Plaintiff's wife who had been walking up the street with her children had left them a little below a point where the street made a bond when she saw the lorry rushing down the bend towards her. She became frightened for the safety of her children whom she knew must have met the lorry in its course. A bystander informed her that a child answering to the description of one of hers had been injured. In consequence of her fright and anxiety, she suffered a nervous shock which eventually caused her death. The action was filed by her husband under the Fatal Accident Act. Bankes and Atkin L. JJ. (Sargant L. J. dissenting) held that on the assumption that shock was caused by what the woman saw with her own eyes as distinguished from what she was told by the bystanders, she was entitled to recover notwithstanding that the shock was brought by fear for her children's safety and not by fear for her own. Atkin L. J. made the following observation; "The legal effects of injury by shock have undoubtedly develop ed in the last 30 or 40 years. At one time the theory was held that damages at law could not be proved in respect of personal injuries, unless there was some injury which was variously called 'bodily' or 'physical' but which necessarily excluded an injury which was only 'mental'. There can be no doubt, at the present day, that this theory is wrong."

Chronologically, in the chain of English Shock Cases, Donoghue v. Stevensun (1932) fits in here. "In that case a manufacturer or ginger beer sold his ginger beer in opaque bottles. A snail had crept into one of the bottles which the manufacturer filled and corked up without noticing the presence of the snail which could not be seen as the bot*le was opaque. It was held that the manufacturer was liable for the injury caused to the retailer's customer who ultimately drank, the contents of the bottle". (Facts as digested in Halsbury's Laws of England, Second Edition, Volume 10). The plaintiff in this case suffered from shock and gastroenteritis. In a suit by the plaintiff to recover damages it was held that the defendants were liable.

The two important pronouncements of the post-Donoghue period are Hay v. Young (1943) and King v. Philips (1953) I All E. Reports 617. In the former case a woman who was in the family way suffered from fright and shock on account of notice produced by the collision between a motor cycle and a motor car. A month later she delivered a still born child In as much as she did not see the accident, standing about 45 feet from the point of impact and she being not within the area of potential danger and the duty of the motor cyclist being to drive with such reasonable care as would avoid risk of injury to such persons as he could reasonably foresee, the House of Lords held that she was not entitled to recover In King v. Philips (1953) a taxi driver negligently backed his cab without looking where he was going and ran into a small boy on a tricycle. His mother who was in her house seventy or eighty yards away, heard him scream and looking out of the window, saw his peril. She suffered nervous shock. It was held that the shock was too remote to be ahead of damage. "The court of appeal affirming the decision of Mc. Nair J, held that the defendant was under no liability to the mother. Singleton L. J. approved of the observations of Atkin, L. J, in Hambrook y. Stokes but he thought that the case was distinguishable because there the mother was on the highway and not up a side street as in the present case. Denning L. J thought that Hambrook v. Stokes was not overruled by Hay v- Young and that the two decisions should be reconciled. The learned Lord Justice distinguished Hambrook v. Stokes on the ground that the slow backing of the taxicab was very different from the terrifying descent of the runaway lorry. The taxi cab driver could not reasonably be expected to have foreseen that his backing would terrify a mother 70 yards away whereas the lorry driver ought to have foreseen that a runaway lorry might seriously shock the mother of children in the danger area. Denning L. J., summed up the effect of care law on the subject thus: Wife or mother who suffers shock on being told of an accident to a loved one cannot recover damages from the negligent party on that account. Nor can a bystander who suffers shock by witnessing an accident from a safe distance. But if the bystander is a mother who suffers from shock by hearing or seeing with her own unaided senses that her child is in peril that she may be able to recover from the negligent party even though she was in no personal danger herself. Hodson L. J, rested his decision on the ground that in the absence of admission of negligence in Hambrook v. Stockes, Lord Thankorten, would not have approved of it in Hay v. Young (Venkoba Rao-Coundrum presented by Shock Cases).

The Indian Case-Law on the point is very sparse and sporadic. In Governor-General in Council v. Surajmal Esarka (A. I. R. 1949Nagpur 256) there was a very minor accident on the railway; a sentinel coach in which the plaintiff was travelling callided with a stationary goods train. Ail that occurred was that the cow-catcher of the coach got entangled with the couplings of the last wagon of the goods trian and was slightly broken. The plaintiff's eye and thigh were bruised and he had a slight scratch on the right foot. Bose J. observed: "Now it may be conceded that a person of normal fortitude might suffer slightly from shock in these circumstances. Now as far as the general damages go we are not able to interfere because mental pain and so forth are not matters which can be gauged in terms of money or money’s worth. We concede that the circumstances are such that a normal man might suffer from a slight temporary shock. He would be entitled for compensation for such suffering. What that should be is a matter on which men will differ widely. Accordingly following the usual practice we do not intend to interfere". Earlier after referring to Victorian Railways Commissioners v. Coultas His Lordship observed:" even if we do not apply the restricted rule laid down by Their Lordships we decline to open wide the flood gates to special and exceptional cases, many of which rest on the border line of the imaginary . The law and particularly a law of this kind must be founded on firm commonsense where ordinary reasonable men, with normal healthy constitutions and of normal fortitude and courage deal with each other".

The next noteworthy case is Mrs. Halliguav. Mohansundaram (1951, II M. L. J. 47l). The plaintiff and her husband who is a well to do merchant and landlord at Cochin and belonging to the community of Cochin Jews came on a four day visit to Madras They engaged the first defendant's taxi and the taxi driver after driving to the Caltex petrol bunk next to Messrs Lawrence and Maye, Ltd. on the Mount Road and after filling up the petrol was crossing the road to Bosoitos when a tram car proceeding towards the Mylapore side collided with the taxi and smashed up the front portion of the car. Mrs. Halligua immediately after collision was seized by what appears to have been a very severe pain in her arms and hands. It was only after a period of five months that she was able to use her arms and ringers. Even then she was unable to bend her right little finger which according to medical evidence was likely to be a permanent deformity. In an action laid by the plaintiff against the taxi owner who in his turn impleaded the Insurance Company as second defendant, for damages for bodily injury, pain and mental shock the defendants were held liable. Mack J. after referring to the view of Atkin L.J. in Hambrook v. Stokes Brothers observes: "With great respect I have no hesitation in following the view of Atkin, L.J................I fully appreciate the difficulty in estimating^; damages claimed by reason of shock............It is not possible to lay down any hard and fast rule and each case has to be dealt with on its own merits. I think the trend of English Case law having exploded the old view that damages cannot be claimed on the basis of nervous shock attributable to negligence, Indian Case Law based on old English decisions should in this domain of law have a similar orientation".

For a judicious summing up of Indian Case Law on this point we have yet to wait and see the march-past of judicial consensus for some more time.

INTEREST ON INTEREST & COMPOUND INTEREST

(Philip K. Thayil B. A , M. L., Advocate, Ernakulam)

There is probably no matter into which more totally unnecessary complications are imported than the matter of interest for a debt which was not paid according to the promise. Is compound interest the same as interest on interest? Is compound interest essentially different from simple interest? Is realisation of interest on interest or compound interest a contravention of the provisions of the usurious Loans Act? Is the right to realize compound interest a legally protected interest? These are interesting questions of interest and are attempted to he answered briefly hereunder in the light of balance of authorities.

Is compound interest the same as interest on interest? There is a bewildering diversity of judicial opinions on this. One of these opinions is this;- "compound interest is not interest on interest; it is interest on a sum or sums which were interests but which on default or liquidation immediately become principal", see Shamsunder & others v. Harban Singh A.I R.1915 Lahore, P. 346 per John stone and Shah Din JJ. In this case their Lordships upheld the right of the plaintiff to compound.interest.

Another judicial opinion is that compound interest and simple interest are not two kinds of interests. Mr Hallifax A.C.J observed in Kishenlal v. Bapu 94 I. C. 971, that simple interest and compound interest are not two kinds of Interests. His Lordship maintains that the only difference between them is that one is paid regularly and the other is not, meaning thereby that simple interest on unpaid simple interest is compound interest But his Lordship nevertheless maintains that simple interest and compound interest are not two kinds of interests.

Still another judicial opinion is found in the Privy Council decision 8. R. M.S. 0. Chettiar v. Loo Thon Poo 1940. P. C. 60 Here their Lordships discussed and considered the question "whether the charge of compound interest, that is to say, interest on interest ought to be allowed". Compound interest is here explained as interest on interest. This Privy Council decision and a long series of English decisions like R.S. Lylee v. Chappet 1932 I K. B. 691 lay down that it ought not to make any difference to the validity of a transaction by way of a loan whether the parties go through the form of payment by the borrower of the whole amount and redelivery of the same amount by the money lender, or the transaction is carried out without any such payment by treating the amount of the principal and interest still due as a debt acknowledged by the borrower to the amount of the agreed debt. It is only just that because of the default of the debtor to pay the amount of interest at the stipulated time the creditor must not be made to lose his interest on that amount. It is again only just that the defaulting debtor must not be rewarded with the privilege of a fresh advance without interest.

The difference between interest on interest on the one hand and capitalized interest on the other is interesting to note. To say that one is compound interest and the other is not is to attach too much importance to a quibble on words, a verbal controversy devoid of legal consequences. Yet there is in essence difference between interest on interest and interest on capitalized interest. The former is interest on interest, the latter is interest on capital and the latter is legally protected right of the money lender. There is the dam up law that interest must not exceed the principal and there was a section in the Travancore Civil Procedure Code that interest must not exceed 50% of the principal. There is now in the Indebted Agriculturists Debt Relief Act (Act 111 of 1956 a provision in S. 5 to the effect that the amount of the interest payable by an agriculturist shall not exceed one half of the principal amount outstanding at the commencement of that Act. There is no statutory prohibition of the capitalization of the defaulter interest. When interest is added to the principal, according to Romer L. J in Inland Revenue Commissioners v. Holder (1931) L. K B 81 and Lord Inglis in Reddie v. Williamson 1. Macph. 228 not only becomes principal but thereafter ceases to be dealt with as principal-see also 1943 Mad. 157 which also does justify the capitalization of defaulted interest, and realizing interest on such consolidated amount If interest is added on to interest alone the interest thus accumulated may easily be hit by the damdupat law or the above mentioned Act 111 of 1956 (S. 5), or the usurious Loans Act. In Khimji v. Chunilal Ambaidas A. I. R. 1919 Bom 131, the amount sought to be recovered was for the most part made up of interest which largely exceeded the principal-a manifest contravention or flagrant violation of the damdupat law-and there was an agreement in writing in this case whereby the debtor agreed to pay interest upon interest. It was decided in this case that there was nothing to prevent the court from awarding the full sum claimed both as a matter of natural inference from the agreement and as a matter of Hindu law. The rule of damdupat it was held in this case does not prevent an agreement between the debtor and the creditor to capitalize interest at a stage when the interest does not exceed the principal. All Smrithi writers and commentators, this judgment says, are agreed that there must be an agreement between the debtor and the creditor to capitalize interest in order to justify the calculation of interest in future on the sum made up of the principal and interest thus agreed to be capitalized. If interest is added on to interest which is not capitalized the law of damdupat and S. 5 of the Act 111 of 1956 will be easily contravened or violated.

Interest on capitalized interest is legally recognized and protected by a catena of decisions even of the House of Lords and the Privy Council There is the overwhelming preponderance of judicial authorities of the Indian High Courts in its favour. In Holder V. Inland Revenue Commissioners, 1932 A. C. 264 (affirming Inland Revenue Commissioners V. Holder (1931) 2 K. B. 81) the Court of Appeal approved the statement of Lord Cowan in Reddie V. Williamson (1863) 11 Macph. 228 "that the periodical interest at the end of each year is a debt to be then paid and which must be held to have been paid when placed to the debit of the account as an additional advance by the bank for the convenience of the obligants". The case went to the House of Lords and the decision was confirmed, see 9, Halsbury's statutes 443. In Paton V Inland Revenue Commissioners 1938 A. C.341 however the point was dealt with by Lord A kin one of the most outstanding luminaries in the judicial horizon in the following terms: "The question is whether when the charges are added to the existing indebtedness at the end of one half-year and the whole sum brought down is a debit item at the beginning of the next half year, so that interest is charged on the last half-year's interest, the charges have been paid. The ordinary man would, I think, say that so far from being paid, they are added to the ordinary indebtedness because they are not paid; and I see no reason why the law should say anything different". His Lordship then quoted Russel L, in Re Jauncy B ird v Arnold (1926) Ch. 471, with approval that the contention that the interest must be deemed to have been paid would really amount to a travesty of the actual facts; because in the case of such a provision as is contained in the present deed which enables the interest to be capitalized the interest is not capitalized because it is in fact paid, but because it has not been paid.

His Lordship (Lord Atkin) further referred to the "'system adopted by the bank.........for the purpose of giving them compound interest without perhaps flaunting the fact before their customers.

Capitalization of defalted interest and realizing interest on such consolidated amount is an age old custom of bankers. This customary right of the bankers is legally recognized and protected by manifold pronouncements of very high iudicial authorities. For example see (a) 1907 2 ch. 448; (b) 1922 1 ch. 126; (c) 1B&B 420; (d) 32, L J. ch. 540-545; (e) 1898. 2. Q. B. 467; (f) Exparte Bevan. 9. Ves. 223' (g) 5. B & Aid. 34; (h) 1931. 2. K.B. 89; (i) 1932. 1. K. B 6; (T) 1938. A. C. 341; (k) 1932. A. C. 264; (1) 1940. P. C. 60; etc.

A series of Privy Council decisions have recognized and protected this right of the lender to realize interest on the defaulted interest. In Venkata Rao Garu v. Gade 1936 P. C. 283, a mortgage suit, this interest on capitalized interest was called compound interest and it was laid down here also that compound interest is in itself perfectly legal but compound interest on the principal moneys being in excess of and outside the ordinary and usual stipulation may well be regarded as in the nature of a penalty. The plaintiff in this mortgage suit was allowed compound interest (interest on the defaulted interest) at the same rate as the simple interest.

In S. R. M. S. C Chettiar v. Loo Thon Poo 1940 P. C. 60 also the Privy Council recognized and upheld the right to realize interest on the capitalized interest. The true view in the above House of Lords and the Privy Council decisions is that periodical interest when becomes due is a debt to be then paid (ie. at each rest) and which must be held to have been paid when placed to the debit of the account as an additional advance by the bank. The effect of the mode of dealing between banker and customer is, according to the long standing usage governing their relations to treat the interest accruing at each rest as discharged by borrowing an equivalent sum from the bank in precisely the same way as if the customer had given the bank a cheque upon the account for the amount in question with which the bank extinguished the interest and then placed the amount of the cheque to the debit of the account as an ordinary draft-see also P. Mudaliar v. N. Ayyar 1943. Mad. -157 & (1932) I. K. B. 691 which also upheld the right of the money lender to realize interest on capitalized interest. In this Madras case his Lordship Patanjali Sastri observes thus: "It will be seen that the mode of dealing adopted by the parties is what is u ually followed, between banker and customer; and it is well established that the effect of this system is to capitalize the interest at the end of each year and treat it as a fresh advance by the bank; in other words according to the usage prevailing between bankers and customers it is an implied term of their dealing that the banker is to be treated as having made an advance to the customer at the end of each year or half-year as the case may be of a sum equivalent in amount to the interest accruing during that period so as to enable the customer to discharge the interest increasing the principal of his debt by a corresponding amount.........This usage which has been adopted by bankers in England for over a century had its origin as a device to secure compound interest by circumventing the usury laws under which agreement for charging compound interest was usurious and illegal". This observation of his Lordship Patanjali Sastri is based on very unshakably deep-rooted catena of decisions for over hundred years in England and several decades in India.

But an observation diametrically opposed to this is found in Anthony v. Mala Catholic Union Bank Ltd., 35 Cochin 542 by Krishna Menon J. This was a suit by a bank for the balance due under an over draft account. There was an agreement between the plaintiff and the defendant for capitalization of defaulted interest and for realizing interest on such consolidated principal. The learned District Judge observed that there was an implied term, in the agreement to the effect that the bank should be considered to have made an advance to the customer at the end of each quarter of a sum equivalent in amount to the interest accrued within that quarter so as to enable the customer to discharge the interest pertaining to that period. This observation of the learned District Judge is based on a series of House of Lords, Privy Council and Indian decisions. More over it is in conformity with the opinions of the most eminent writers on Banking Law, like Paget, Tannan, Hart, Sheldon, Grant and Davar etc. But his Lordship Krishna .Menon says that the observation of the learned Districi Judge that there is such an implied term is an 'absolute fallacy'.!here is no such implied term according to Krishna Menon,J. It may interestingly be noted here that Lord Atkin, the Lord of the Privy Council, and his Lordship Patanjali Sastri and a long series of High Court judges in India have recognized and upheld this implied term.

Another almost unique feature about this Cochin decision is that counter interest is allowed to the small payments made by the debtor towards the discharge of the large debt due to the bank. The payments thus made by the debtor are treated by his Lordship as open payments. When a debtor makes payment to a creditor and when the paid amount is appropriated towards the bigger debt due by the payer to the creditor how can there be open payments? Further when a debtor who owes a large sum to a creditor makes a payment to the creditor the natural presumption is that it is to be adjusted towards the debt and not mere open payments, for the well known maxim is "Debtor non proeumitur donare'. Anyway this decision is contrary to the well known authorities of the system of account keeping See Devaynis v Noble Clayton's case (1816) 1 Mer. 529 the principles deducted from which have been enacted in Ss.59,60, and 61 of our Indian Contract Act (1872). "The appropriation is made by the very act of setting the two items (credit and debit items) against each other. Upon that principle all accounts current are settled and particularly cash accounts"-see Clayton's case. The balance is struck after appropriation and the suit in the Cochin Case was for the balance due under over draft accounts

Interest on capitalized interest is allowed in a very long series of decisions of the Indian High Courts-eg (a) A, T. R. 1915. Lahore 346; (b) 94 I C. 971; (c) 1919. Bom. 131; (d) A. I. R.1929 All. 59; (e) 1904. 31 Cal. 233;(f) 1946. Mad. 35; (g) 1935. Mad. 165; (hi 1943. Mad. 157; (i) 1919. All. 1; (j) 17.1. C. 9; (k) 119.1. C. 468; (1) 111. I. C. 694; (m) 1918. A. C. 372; (n) 1943. Mad. 158.

Capitalization of defaulted interest and realizing interest on such capitalized interest is recognized by a series of Travancore Full Bench decisions also, Among these 1948 T, L. R. 847 may be specially noted. It was held in this case that there is nothing opposed to law in enforcing the right to interest on capitalized interest. But if defaulted interest is not capitalized, interest on non-capitalized interest is not countenanced See Raman Pillai v.Neelakanta Iyer 194f. T. L. R. 716. In Philippose v. Geevarghese Kathanar 29. T. L. J, 1275 (F B.) the right to realize interest on capitalized interest was recognized and legally enforced. In Meenakshi v. Lakshmi 31. T. L. J. 528, interest on capitalized interest at every quarterly rest was allowed In Eapen v. Kochugovindan 10 T. L. J. 367, this right was recognized. See also Smkara Pillai v. Kunjulakshmi 1944. T. L. R. 324.

The right to compound interest was recognized by "Kunjulakshmi Amma v. Narayan Pattar 33. Cochin 448, Even the Agriculturists' Act (XVIII of 1114) does not affect the right to compound interest even when the debt is secured.

The right to interest on interest was considered and upheld by the Kerala High Court (D. B,) in A. S. 26 of 1955 (an unreported decision) judgment pronounced on 23-3-1956. This was a suit to recover money lent on security. Their Lordships held thus: "We do not think that there is anything in the Cochin Agriculturists' Relief Act (Act XVITI of 1114) or in any other law which prohibits parties from agreeing to treat arrears of interest as principal......Here the defendant agreed to have arrears of interest treated as principal and to pay " interest on such principal as if he paid the interest to the bank and the bank advanced it to him as a fresh loan. We therefore hold that the plaintiff is entitled to have arrears of interest treated as principal and to claim interest on such principal."

In Venkateswara Iyer Harihara Iyer v. Mathew George and others 1951 K. L T. 353 interest on capitalized interest is upheld. This is a Full Bench decision. This was also a case of secured debt. By Varghes Ouseph v. Lakshmi Amrnal Pichi Ammal and another 1951 K. L. T. 382, also the right to capitalize defaulted interest is recognised as not affecting Sn. 31 C.P.C. of Travancore. But when interest is not capitalized and interest is calculated on such non-capitalized interest the accumulation of such unqualified interest alone will be easily hit by Sn, 31 C. P. C. of Travancore. In Norayana Kochu kunju and another v. John Joseph and others 1950 K. L.T. 487 interest on capitalized interest is allowed subject to Sn. 31 of the Travancore C. P. C. This code is not in force now and there is no corresponding section in the code now in force:

Further authorities for compound interest (interest on capitalized interest) is found in:-

(I). Paget's Law of Banking 5th Edition P. 67 and 68.

(II). Sheldon Practices & Law of Banking (V. P. Sheldon) 5th Edition (1946) P. 204 and 205.The banking practice of adding interest to principal to enable the bank to realize compound interest is dealt with by Sheldon. Sheldon says:- "Money advanced on mortgage to secure a fluctuating balance may be merged in the general account and compound interest charged".

(III). Tannan's Banking Law & Practice in India 7th Edition P. 241 and 242. He recognizes quarterly rests and compound interests. He also states the grounds to justify this compound interest.

(IV). Bashyam & Adigar, Negotiable Instruments Act iy50 Edition P. 278.

(V). Pollock & Mulla, Contract Act 1957 Edition at P. 490. Sundar Koer v. Eaisham Krishnan 1906. 34. LA. 9 at P. IS. Here it is held thus"Compound interest is in itself perfectly legal but compound interest at a rate exceeding the rate of interest on the principal moneys being in excess of and outside the ordinary and usual stipulations may well be regarded as in the nature of penalty". This Privy Council decision is quoted at P. 490 of Pollock & Mulla Contract Act, 1957 Edition.

At P. 492 of the same book we find thus: "A stipulation that interest in arrear shall be capitalized and added to the principal sum and that the whole shall carry interest at the contract rate is not by way of penalty" See also Sarya Prased v. BeniMadho (1883) All. W. N. 20S.

(VI) Grant on Bank & Banking. At P. 135 of this book it is found that taking of mortgage to secure fluctuating balance does not preclude ,'the banker from continuing to charge the customer with compound interest.

(VI1) Lee on Roman Law opines that Justinian was absurd in not allowing interest on interest.

(VIII) Hart's Law of Banking (Fourth Edition) P. 234, Compound interest, says Hart may become payable although the debt is the balance of a current account secured by mortgage. "In merchants' account when an annual account is made upon accounts current and a balance struck comprising both principal and interest due up to a certain day and that balance is carried to a new account bearing interest, compound interest is given in effect". See Attwood v. Taylor (1840) 1 M & G. 27. See also Exparte champion (1792). 3. Bro. C. C. 436 at 440; Parr's Banking Co v Yates [1898] 2. Q. B. 460. Where a mortgage is made by way of collateral security for such balance as may eventually be due from a customer to his bank it is no objection to charging the land with such balance that it has been partly composed of interest turned into principal by rests and interests on that interest according to the course of dealing between the two. See Lord Chancarty v. Latouche (1810) 1. Ball tfe BA20; Bufford v. Bishop (182A) 5. Mules 346.

(IX) Davar's Law & Practice of Banking 3rd Edition P. 228. Davar says that right to compound interest is based on special agreement or is acquired by acquiescence.

Lastly this right to compound interest will be lost by death or bankruptcy of either. -See Williamson v. Williamson (1869) 7. Eq. 542.

Fuddlled Crimination

(M. Marcus M. L., Advocate, Kottayam)

"Men only feel the smart but not the vice........."

"And certain laws by sufferers thought unjust..."

(Imitations of Horace by Alexander Pope)

The law makes provision for the admission of confession in evidence in "Criminal Proceeding" due to its anxiety to catch at the hilt of guilt. The presumption of innocence of an accused is deep rooted in law, that is why it ordains that the proof of guilt must be established "beyond the shadow of reasonable doubt" by permitted and legal means. The whole" frame work of the law of evidence is designed to ensure this legal proof.

The basis of admissibility of confession in "Criminal Proceedings" is that every person is the best guard of his own interests and therefore any statement made by a person against himself must contain truth. This is the reason why courts hold the view that a voluntary confession is best proof of guilt.

The Indian Evidence Act in S. 24 declares that a confession caused by inducement, threat or promise from person in authority and having reference to the charge against the accused is irrelevant in criminal proceedings if it "appears" to the court that the confession was precipitated in any of the aforesaid forbidden modes. The word "appears" gives the scope for judicial discretion in determining the voluntary nature of a confession. The quantum of proof evidencing inducement is lesser and it is brought forth in Re Ahmad AIR. (37) 1950 Mysore where their Lordships Ramayya and Mallappa observed: "S. 24 does not conte­mplate such strict proof as required by S. 3 for holding that a confession was caused by inducement, threat. Or promise". The same note is struck in a Calcutta Case Emperor v. Thakurdas Mala (ILR. 1943-1 Cal-467) holding "it is not necessary that it should be proved that the confession was brought about by improper inducement. It is quite sufficient if the circumstances are placed before the Court which would make it appear that the confession was so induced". These rulings are sufficient to indicate the caution with which a court would admit a confession in evidence. As a correlative of this principle the burden of proving that a confession is voluntary is saddled on the prosecution. S. 164 Clause 3 of the "Code of Criminal Procedure" while prescribing the mode of recording confession by a Magistrate makes it imperative that the Magistrate should have ''reason to believe" that the accused made the confession voluntarily. This prin­ciple is expressed by saying "it is only when an accused person speaks with animus confident that his utterance becomes a confession" page 152, Principles and Digest of the Law of Evidence by M. Monir. The Indian Penal Code while defining "reason to believe" says "a person is said to have reason to believe a thing if he has sufficient cause to believe that thing but not otherwise".

Various types of inducements used to eke out confessional statements are mentioned in the books but we are concerned with the specific case of inducement caused by supply of intoxicants to the accused and it is difficult to hold the view that a drunken confession could be admitted in evidence even if the liquor was administered to the accused without reference to the charge, Taylor in his "A Treatise on the Law of Evidence" 2nd Edition at Page 595 mentions the case of R. v. Spilsbury—7c—P.187 saying that a confession is admissible even if the prisoner is made drunk since the administration of liquor may not have any reference to the charge. In this connection it is pertinent to refer to "A treatise on the System of Evidence in Trials at Common law" Vol. I by Prof. Wig more at Page 922 where he observes "notice here, first that a confession in the language of Lord Hale is a conviction or in Sergant Hawkin's phrase "the highest conviction that can be made".

I do not think that we can with propriety make any discrimination between cases of liquor inducement made with or without reference to the charge. The modern development in mental science has revealed that the pronounced effect of alcohol is the lifting of the curtain of inhibition in man so much so his voluntary act of inhibiting a thing is struck at the root. In this circumstance how can we say that the confession of a drunk accused is voluntary simply because the inducement of drink was made without reference to the charge. It follows therefore that we cannot fix any hard and fast rule on the point. "Roscoe's Criminal Evidence" 15th Edition Page 41 treating of inducement of a temporal nature reveals "on this point there are but few authorities". Sexton in 1882 said "if you will give me a glass of gin I will tell you all about it" and the glass of gin was given to him. He then made the confession which Best J. refused to admit in evidence. Thus the pivot of a confessional statement is its voluntariness which is well illustrated by Phipson in his work on Evidence 8th Edition Page 249 explaining the principle to the effect that the voluntary act of confessing a crime is a "willful' act. When we examine the willfulness in the confession of a drunken accused we appreciate the fallacy of the strict interpretation of law on confession with the legal quibble that liquor offered to an accused without reference to the charge against him is productive of a blemish less confession. It may be mentioned that all other modes of inducement do allow the accused to use his intelligence to succumb to it or not but inducement by liquor stands on a different footing since liquor banished the reason of the accused. Let us cast an eye on Muslim Law on this matter. Principles of Mohammedan Jurisprudence by Abdur Rahim Page 362 reads "an admission must however be unconditional and it must be voluntary so that if obtained by coercion it is not binding nor if made in jest". I am more concerned with the terminal portion of the lines quoted. The drunken accused may even speak in a tone of jest and the Magistrate might not feel it as planted emotion. He may not find visible facial expression of fear in the accused but none-the-less the accused is incapacitated by the drink to appreciate what he speakes and its real consequence since his inhibition is wiped away by alcohol.

"The General Hindu Jurisprudence^” (Tagore Law Lecturers) by Priyanath Sen treating of the adjectival law on Page 373 observes 'A decision obtained by fraud, or force is liable to be vacated on proof that it was so obtained so also a litigation against a person not in sound state of mind by reason of intoxica­tion is void and is to be annulled."

To conclude it suffices to say that the state of law regarding inducement by liquor to confess as it exists today is liable to destroy the safety of an accused in a criminal trial lam of the opinion that legislative interference should take place to enable the medical examination of an accused including his blood test to appraise the quantum of alcohol in him with reference to his liquor tolerance prior to the recording of his confession by a Magistrate. This will avert unknowing injustice at the hands of judicial officers and at the same time give more moral support to a conviction by him. This will be a practical devise ensuring the safety of the prisoner at the dock and stability of judicial integrity. That is why Prof. G. D. Nokes of the University of London says "an admission must be a conscious act and if it is not it will have very little weight. The effect of anesthetics and drugs remain to be decided in England" 'An Introduction to Evidence' 2nd Edition Page 262.

The curt utterance of Justice Harlan Stone "The law itself is on trial in every case as well as the cause before it" (Barness and Teetters in their "New Horizons in Criminology") is most applicable to this state of Law of Evidence touching inducement of a temporal nature leading to confession of guilt, by the drunken accused 

GLEANINGS AND RAMBLINGS

(K.K. Sreedharan, B. Sc, B. L., Mavelikara)

With the most modest and sincere excuses for adopting this title which has found its place in some of the previous pages of this journal, I would try to tender the following few facts which really captivate the attraction of even an ordinary spectator in the profession. The writer would be greatly gratified if these lines are capable of successfully supplementing the original article under the title (1957 K. L. T. 73-75).

The point is beyond even the tinge of a doubt that the recent past has due to cyclonic channels of thought in spheres of law, politics and sociology mainly, produced a torrent of legislation which has left afloat manifold novel notions substantially transforming the foundations of law in many a field. True it is that in order to seek out the pearls of truth and justice among the deep wilderness as it seems of the realm of laws, many a naughty knot has to be untied and nobody can deny that the pressing necessity for extremely intimate and sincere cooperation between the Bench and the Bar in their joint quest of the illustrious treasure of justice is manifestly self-evident. Not only the lawyer, legislator and Judge but humanity in general it must be admitted stand on the verge of a transition and the need for adaptation to environments which is the essence of success is undeniable. But, can we say that the buoyancy of this transition has not already made its practical repercussions on the already existing relation between the lawyer and the Judge in the conduct of legal business? To my humble self, it seems that a remarkably ostentatious transformation has already settled in and as matters stand at present there is greatly existent the melody of the harmonious march of the Bench and the Bar hand in hand. The extreme formalities of humility, caution and distant respect which a counsel was wont to exhibit before the Bench is now no more than an indistinct, evanescent vision of the distant past. To realise the real existence of this harmony we must for a moment think of the extent and character of the cooperation and cordiality expected to exist as between the two and the practical scope and intent of Lord Lindhursts ''gentlemanliness" which he opines to be the most praiseworthy attribute of a Judge, even overriding good knowledge of law.

What really and in essence is this cooperation? What cooperation does the lawyer, the high priest before the temple of Justice expect of the Judge, the presiding deity? Is it a smiling face and exhibition of pleasant sentiments or dancing to his tune cajoled by his etherial eloquence, apparent fervour or coaxing demeanour? We would all unanimously agree in the negative. Does the austerity on the countenance of the poor Judge imply any want of cooperation? Nay, not in the least. We have only to give a moment's thought to comprehend the real position. The duties, nature and course of business of the Bar and the Bench are unmistakably diverse and practically divergent. Bubbling with enthusiasm to bring home to the Judge his standpoint, aided by blessed advocacy to array the facts and interpret the laws in support of his cause, swayed by the ardency of the profession, enamoured of success in his engagement, the lawyer on either side gives the most emphatic & impressive expression to his ideas, inevitably indulging in a little extravagance & endowing his case with dexterous and to some degree artificial colour and flavour. It is only too natural that, in spite of ordinary caution and diligence, the Judge at the consummation of the arguments on both sides finds himself fetched far away from the root of the case. It is for him to separate the grain from the chaff, digesting the complicated stuff as the case proceeds, duly exercising his best intellectual gifts in the meanwhile. Considering this severe aspect of the affair, it would be a more charitable and gentlemanly construction on our behalf to assimilate the gravity of the Judge's countenance to serenity rather than interpret it as inhumanity or lugubriousness and exhibition of non-cooperation.

The real and essential cooperation between the Bar and the Bench is born exactly at the point where advocacy and justice meet. Sincerity must be the life and soul of every enterprise. And so it is with the work of the Judge also. Sincerity here means the bold and unflinching tenacity of adherence to the belief which he had been able to conjure up before his inner eye, unperturbed by the influence of any individual prejudices or considerations which circumstances and surroundings have precipitated in his way.

It is not infrequent now-a-days that some of the younger generation of our lawyers either inadvertently or intentionally indulge themselves in the catastrophe of identifying themselves with the bench as though in compensation for their extricating themselves from the often impeached fault of identification with the party which has been vehemently protested against by the legal world. It may well be noted that the former is the graver offence against the sworn duties of a member of the bar, imposing upon the Bench erroneous suggestions creating unwholesome prejudices, not to speak of the unwelcome impressions which they might generate in the co-workers and parties in general. Such on authorised transgressions and trespasses into the Judges estate are naturally liable to be prevented by mild injunctions and repremands on the part of the party aggrieved. It is our duty to forget and forgive such reformatory reproof rather than endorse on it the colour of inhumanity or want of cooperation.

We must not forget that, groundless as the charge may be, many a presiding officer throws the blame of meagre disposals on the non-cooperation of the Bar. To whatever diverse other reasons it may be attributed, it is our duty to see that we partake not of the fault. In this era of general awakening, when reduction of litigation is one of the primary motives of all channels of political thought, it is a shame to the bar -- the bed of all well founded thought & leadership, the reins of all revolution and reformations, the mouthpiece of all cry for justice & humanity -- to stand in the way of achieving such ends, merely actuated by the trifling desire for individual advancement. Let us fully extricate ourselves from this undeserved charge. We will endeavour our best to bring about a just and speedy end to all pending litigation lending the warmest co-operation with the Judges whose sincerity we will put to the touchstone.