1. The only question for decision in this appeal is as to the rate of interest payable on a negotiable instrument where the instrument itself does not specify any rate. The dispute in this case relates to the interest due under a promissory note Ext.Al. The promissory note is dated 27-10-1984 and it is for a sum of Rs.2,00,000/-. The instrument does not specify the rate of interest. The court below has found that there was a collateral agreement between the parties as per which the defendant had agreed to pay interest at 16% per annum, and interest is decreed at that rate. S.80 of the Negotiable Instruments Act 1881 as it stood on the date on which the court below passed its decree reads:

"80. Interest when the rate specified: When no rate of interest is specified in the instrument, interest on the amount due there on shall, notwithstanding any agreement relating to interest between any parties to the instrument, be calculated at the rate of six per centum per annum, from the date at which the same ought to have been paid by the party charged, until tender or realization of the amount due thereon, or until such date after the institution of a suit to recover such amount as the court directs."

This Section has been amended by the Banking, Public Financial Institutions and Negotiable Instruments (Amendment) Act, 1988 (Central Act 66 of 1988) and the rate of interest is enhanced to 18% with effect from 1-4-1989. S.80 excludes collateral agreements relating to interest and the interest payable on an instrument which does not specify the rate is as provided for in the Section. We are, therefore, of the view

that interest payable on Ext. Al is only at the rate of 6% per annum till 31-3-1989 and at 18% per annum from 1-4-1989 until realisation.

2. Learned counsel for the respondent Sri P. Sukumaran Nair relies on the decision of the Supreme Court in Mithilesh Kumari 7 another v. Prem Behari Khare (1989 (1) KLJ 424) in support of the proposition that the plaintiff is entitled to interest at 18% as provided for in S.80 of the Act as amended by Act 66/1988. Mithilesh Kumari's case related to the interpretation of Ss.2 and 4 of the Benami Transactions (Prohibition) Act 1988 and the Supreme Court held that Benami Transactions have become unenforceable by virtue of S.4 of the Act. The Supreme Court observed at page 434:

"When an Act is declaratory in nature the presumption against retrospectivity is not applicable. Acts of this kind only declare. A statute in effect declaring the benami transactions to be unenforceable belongs to this type. The presumption against taking away vested right will not apply in this case inasmuch as under law it is the benamidar in whose name the property stands, and law only enabled the real owner to recover the property from him which right has now been ceased by the Act. In one sense there was a right to recover or resist in the real owner against the benamidar. Ubi jus ibi remedium. Where there is a right, there is a remedy. Where the remedy is barred, the right is rendered unenforceable. In this sense it is a disabling statute. All the real owners are equally affected by the disability provision irrespective of the time of creation of the right. A right is a legally protected interest. The real owners's right was hitherto protected and the Act has resulted in removal of that protection".

It is for the reason that the statute is declaratory and it takes away the remedy of the real owner, the Supreme Court held that the Act applies also to past transactions. The amendment of S.80 of the Act has provided for a higher rate of interest with effect from 1-4-1989 and the higher rate is applicable to past transactions also with effect from that date. The rate of interest applicable to the period prior to the amendment can only be at 6% as provided for in the Section as it stood prior to the amendment. The amendment of S.80 of the Act is not retrospective nor is it declaratory of a higher rate of interest ap