LexSHREE BHARAT LAXMI WOOL STORE, PANIPAT AND ORS. versus PUNJAB NATIONAL BANK AND ANR.
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SHREE BHARAT LAXMI WOOL STORE,PANIPAT AND ORS. A ' : . ' ' . v .. PUNJAB NATIONAL BANK AND ANR.: NOVEMBER-28, _ 1991 [K. JAGANNATHA SHETTY AND R.M. SARAI, JJ.] Civil Procedure Code, 1908--Section 34-Award ofinierest on decretal sum-Rate of-Institution of suit prior to coming into force of the C.P.C. (Amendment) Act, 1976-Amended provisions applicable-Held interest pay- able at 6% from the date of decree till payment . . The respondent-bank instituted a suit in the Court of S~b-Judge for recovery of Rs. 81,137.39 against the appellants. The suit was. decreed allowing contract_ual rate of interest at 10 1/2 per annum from the date ot' suit till the date of _re~lisation. - B c The appeal against the decree ~as dismissed by m_odifying the . D interest payable~ · ' - - . The High Court .ill .second appeal restored _the rate of interest allowed by the Sub-Judge. Disposlng of the appeal. by special leave .filed by th ti jUdginent- debtor, this Court, · · ·· · ·· · · · · · E HELD : 1. The provisions of Section 34 as amended shall not affect the rate at w~ich inte~est may be allowed on a decree in any suit instituted before the commencement of the amendment and interest on a. decree F passeciin such suit shalfbe ordered in accor~ance with the provisions of Section 34 as they stood before the ameildm~~t.( 29A-B ') . . - ' ... 2. Section 34 has two parts, first part covering the period f,rom the date of suit till the date of decree and second covering the period from the - date of decree till the date payment. The second part is applicable to the G case . .[ 29B-C ] · 3. In the-instant case, the suit was filed on 20.4.1972. The amendmenJ of' Section _34 is not applicable. [ 29B ] -- 4. The decree of the trial court is modified allowing interest on the . H decretal suni only as 6% from the date of decree ti.ll payment.[29D] 27 28 SUPREME COURT REPORTS [1991) ·SUPP. 3 S. C.R. A CIVIL APPELLATE JURISDICTION: Civil Appeal No: 2488 of 1982. B · From the Judgment and Order dated 28.1.1982 of the Punjab and Haryana High Court in Regullil Second Appeal No. 2039 of 1981. A.K. Goel for the Appellant. S.K. Mehta, Dhruv.Mehta and Aman Vachher for the Respondents. The Judgment of the Court was delivered by · K. JAGANNATHA SHETTY, J. The· respondent bank instituted a suit C in the Court of Sub-Judge, Panipat, for recovery of Rs. 81,137.39 against the appellants herein. The Subordinate Judge decreed the suit allowing contractual rate of interest at 10-1/2 per annum from the date of suit till the date of realisation. The appeal against the decree was dismissed by modifying the D E F G interest payable as follows : · · · • - "That the future interest payable on the .amount in suit is reduced to 6% per annum from the date of suit till realisation." The High Court in second appeal did not agree with the modification made by the District Judge and it restored the rate of interest allowed by the Sub-Judge. The award ofinterest from the date of suit" till the date of payment is regulatedby Section 34 of the Civil Procedure:Code.·Section"'.34 before the. 1977 amendment provided that the court' may award interest as it deems rea~onable on the principal sum adjudged from the date of suit to the date of . the decree and further interest at such rate not exceeding 6% as the court deems reasonable from the date of decree to the date of payment Section 34 was affiende·d by CPC (Amendment) Act 194 of 1976 and Section i 3 of the· Amend- ing Ac~ has a·dded a proviso, which reads as follows : "Provided that where the liability in relation to the 'sum so ad- judged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent per annum, but shall not exceed the contractual rate of interest or where there is no contrac- tual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions." H This amendment was brought into force with effect from 1.2.1977 and by ... WOOL STORE v. P. N.B. [SHETIY, J.] 29 Section 97(e) of the A.mending Act it has been made clear that the provisions A of Section 34 as amended shall not affect the rate at which interest may be allowed on a decree in any suit instituted before the commencement of Section 13 and interest on a .decree passed in such suit shall be ordered in accordance with the provisions of Section 34 as they stood before the am
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