Chapter VI - Of Payment and Interest
Section 79
Section 79: Interest expressly specified in a note or bill
Section 79 sets the interest rule where a promissory note or bill expressly makes interest payable at a specified rate.
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Need advice on Section 79?
This article is for general information. Refer to the Negotiable Instruments Act, 1881 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
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.
Key rule and applicability
The specified rate applies to the principal money due on the note or bill from the instrument’s date. The text identifies tender or realisation, or a post-suit date directed by the court, as the relevant endpoint.
Limits and related provisions
Confirm the rate is expressly payable on the stated instrument rather than importing it from an unrelated document. Section 79 does not itself prescribe compounding or remove the court’s stated role after suit; legal restrictions or disputes about the transaction need separate assessment.
Hypothetical business example
Hypothetical: a note expressly states an interest rate. The holder prepares a calculation showing principal due, the instrument date, rate and the asserted tender or realisation date, while separately identifying any period governed by a court direction.
Practical decision flow
Read the original note or bill for the express interest term and specified rate.
Identify the principal due, instrument date and payment or tender evidence.
Separate the pre-suit calculation from any period governed by the court’s direction and document the calculation basis.
Practical checklist
Do
- Read the original note or bill for the express interest term and specified rate.
- Identify the principal due, instrument date and payment or tender evidence.
- Separate the pre-suit calculation from any period governed by the court’s direction and document the calculation basis.
Avoid
- Confirm the rate is expressly payable on the stated instrument rather than importing it from an unrelated document. Section 79 does not itself prescribe compounding or remove the court’s stated role after suit; legal restrictions or disputes about the transaction need separate assessment.
Glossary
- Specified rate
- The interest rate expressly made payable on the note or bill.
- Tender or realisation
- The payment-related endpoints referred to by the provision.
Frequently asked questions
Does section 79 state one fixed percentage for all instruments?
No. It applies the rate expressly specified in the qualifying note or bill.
What principal base does it identify?
The amount of the principal money due on the instrument.
Does the section itself direct compound interest?
It does not prescribe compounding in its wording; the lawful calculation basis must be assessed from the relevant instrument and law.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026