CANARA BANK Vs. MAHADEO APPA PHADATARE

JUDGEMENT

(1.) THE appellant-Bank filed the suit, out of which the instant appeal arises, in the Court of the Civil Judge (Senior Division), Pune, for recovery of a sum of Rs. 54,679/- from the three respondents as balance due (including interest) on account of various agricultural loans given to respondent Nos. 1 and 2. The suit was ultimately decreed against respondent Nos. 1 and 2 and they were directed to pay the above amount with further interest at the rate of 5% per annum on the principal amount of Rs. 28,000/- from the date of the suit till the date of payment. The suit, however, was dismissed as against respondent No. 3. Aggrieved by the rate of interest allowed by the learned trial Judge the Bank has filed the instant appeal. Since no cross objection or cross appeal has been filed by the respondent Nos. 1 and 2 against the decree, the only question that falls for our decision in this appeal is whether the decree so far as it relates to the rate of interest is liable to be varied or not.

(2.) IT was contended on behalf of the appellant that having regard to the admitted fact that while taking the loans the respondent Nos. 1 and 2 undertook to pay interest at the rates referred to in the pro-notes executed by them, which varied from 11% to 13%, the learned trial Judge should have allowed interest at those rates from the date of the suit till date of the decree in accordance with section 34 (1) of the Code of Civil Procedure (Code for short ). Besides, the appellant contended that as the loans were agricultural loans and thus related to commercial transaction within the meaning of the proviso to the above section, the learned trial Judge should have also allowed contractual rate of interest from the date of the decree to the date of payment.

(3.) TO appreciate the contention of the appellant it will be appropriate at this stage to extract section 34 of the Code so far as it is relevant for our purposes :-