Interest Act 1839

This very short, very old 1839 Act gives courts discretion to award interest on debts and other sums of money owed to a creditor, in cases where interest was not already payable by another law or by the terms of a written agreement.

The Act's single substantive section allows a court hearing a case to recover a debt or a certain sum of money to award the creditor interest at a rate not exceeding the current rate of interest. If the debt was payable at a specific time under a written instrument, interest can run from that due date; if payable in some other way, interest can run from the time a written demand for payment was made, provided that demand told the debtor interest would be claimed from the date of the demand until payment. The Act preserves the position that interest remains payable in any case where it was already payable under existing law.

This is a very old statute (1839) predating Pakistan's independence, with amendment footnotes showing its short title and territorial application were formalized by later 19th and 20th century laws (the Short Titles Act, 1897 and the Laws Local Extent Act, 1874). It gives courts a general discretionary power to award interest and should be read alongside modern commercial and civil procedure law for how it is applied today.