THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO A.S.NO.3617 OF 1992 Dated. 19-11-2010 Between: Indian Bank, Tirupati …Appellant Vs. M/s.General Engineering Works, Tirupati, rep. by sole proprietor M.Kailasa Rao and others ..Respondents THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO A.S.NO.3617 OF 1992 JUDGMENT The plaintiff in O.S.No.192 of 1982 on the file of the Court of Additional Subordinate Judge, Tirupati, is the appellant herein. The suit was filed for passing of a Preliminary Decree on the basis of a loan transaction. The lower court had passed a preliminary decree, which reads as under:- “a preliminary decree is passed against defendants 1 and 3 personally and against the estate of deceased 2nd defendant in the hands of defendants 4 to 7 with costs and with interest at 6% per annum from the date of suit till the date of realisation. Time for redemption two months.” The defendants have not questioned the liability in the Preliminary Decree. The plaintiff filed the appeal contending that the future interest at 6% per annum granted by the lower court from the date of suit till date of realisation is not legal and this being a commercial transaction, the interest should have been granted on the contractual rate by applying Section 34 CPC. The points for consideration are:- (1) Whether the judgment of the lower court in granting interest @ 6% per annum from the date of suit till the date of realisation is legal; and (2) Whether the plaintiff is not legal and whether the plaintiff is entitled to the subsequent interest at contractual rate? POINTS:- Ground No.6 of the grounds of appeal is as follows:- “the learned judge should have seen that under section 34 CPC no discretion is conferred on the court to grant the interest at 6%. As per the said provision the nationalised Banks, in case of Commercial transactions, are entitled to claim the interest at contractual rate only till the date of realisation.” Learned counsel for the appellant fairly conceded that this being a suit based on an equitable mortgage, the benefit of Section 34 CPC does not apply and according to Order XXXIV, Rule 11 CPC interest has to be granted. When there is no mandate of granting a particular rate of interest, naturally it is the discretion of the court that has to be taken into consideration. The lower court has granted interest @ 6% p.a which is even the rate of interest provided under Section 34 CPC after the decree in regular suits for money and further there being security for the debt. Therefore, it cannot be said that the decree passed by the lower court is not legal and that the plaintiff is entitled for the commercial rate of interest under Section 34 CPC. In this connection, the decision of the Apex Court in M.M.Veerappa Vs. Canara Bank([1]) will answer the point. Therefore, the points are answered accordingly. Accordingly, the Appeal Suit is dismissed. No order as to costs. _______________________ N.R.L.NAGESWARA RAO,J 19-11-2010 TSNR [1] AIR 1998 SC 1101