80. Interest when no rate specified.—When no rate of interest is specified in the instrument, interest on the amount due thereon shall, [notwithstanding any agreement relating to interest between any parties to the instrument], be calculated at the rate of [eighteen 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.
Explanation.—when the party charged is the indorser of an instrument dishonoured by non-payment, he is liable to pay interest only from the time that he receives notice of the dishonour.
Section 80 of the Act provides for cases where no rate of interest is mentioned in the instrument. This section governs a case where, in a negotiable instrument, payment of interest is mentioned but no rate is stipulated and also a case where there is no interest mentioned at all in the instrument. Any agreement between the parties contemporaneous with or subsequent to the date of the negotiable instrument, as to interest will not have any effect and such agreement will not be enforceable, K.Rajgopal v. M. Thiagarajan, (1999) 95 Comp Cas 286.