Ponnusami alias Periana Kone and Others vs Palayathan and Another

Phillips, J.—This case is by no means identical with Ram Sarup Bhagat v. Bansi Mandar 60 Ind. Cas. 955 ; 42 C.P 742 ; 19 C.W.N. 1118

in which the debtor bound himself to serve until the debt was repaid and in default to pay exorbitant interest. Here the debtor only undertakes to

work for five years, and this undertaking is accepted by the creditor in lieu of interest. There is nothing to prevent the debtor leaving service at the

end of five years, and if he commits default he has to repay the advance with 25 per cent, interest. This can by no means be called a contract of

slavery, for the work done by the debtor is to be paid for at the ordinary rates and the agreement to continue in service is treated by the employer

as consideration equivalent to interest. Respondents are not unfortunately represented in this Court, but there seems to me very little difference

between such a contract and one of apprenticeship or indenture and, therefore, it cannot be treated as opposed to public policy. It appears that

respondents completed their contract so far as the labour was concerned and plaintiff can only claim his principal amount subject to limitation or

any subsequent contract. The decree is set aside and the suit remanded for disposal in the light of the above remarks. Costs will abide the result.