PUNJAB NATIONAL BANK Vs. DARSHAN SINGH

JUDGEMENT

(1.) THE plaintiff is the appellant.

(2.) THE plaintiff-Bank filed the suit for recovery of Rs. 1,24,009/- from the defendant. The trial Court decreed the suit for Rs. 1,24,009/- with interest @ 12 p. a. from the date of filing of the suit till realisation of the decretal amount. The appellant filed an appeal before the Additional District Judge, Ferozepur in Civil Appeal No. 8 of 1994 claiming future interest @ 15 p. a. with half yearly rests. The lower Appellate Court dismissed the appeal. The Bank filed the second appeal against the award of future interest @ 12 per p. a. on the principal amount. According to the plaintiff-Bank, it is entitled to interest @ 15% p. a. towards future interest on the amount decreed. Thus the controversy in this appeal is regarding the rate of future interest payable by the defendants on the amount decreed. According to the learned counsel for the appellant, the defendants agreed to pay penal interest at the rate of 2% p. a. over and above the normal rate for the period of default on the defaulted amount and the rate of interest stipulated by the Reserve Bank of India is 12% p. a. Therefore, the plaintiff is entitled to future interest @ 15% p. a. Further according to the learned Counsel for the appellant, the letter of request which is marked as Annexure P-7, contains a clause stipulating that the defendants shall be liable to pay additional interest at the rate of 3% p. a. over and above the normal rate.

(3.) IT is, thus, clear that Section 34 of the Civil Procedure Code provides the minimum rate of interest pendente lite can be awarded at 6% and the maximum is the rate of interest agreed upon by the parties. It is not as though the Court is bound to grant future interest at the rate agreed upon. Awarding of interest of pendente lite is within the discretion of the Court and no party can insist for the grant of interest at the contractual rate as held by this court in Piara Lal v. Harchand Singh, A. I. R. 1961 Pb. 442. When both the Courts below awarded future interest @ 12% p. a. it is for the appellant-bank to show that this discretion has been wrongly exercised. On the facts and circumstances of this case, I do not find that the Courts below wrongly exercised the discretion.