1 SA(st)2829/10 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE, BENCH AT AURANGABAD SECOND APPEAL (STAMP) NO. 2829 OF 2010 Mohammad Ikbal Mohammad Iliyas Ansari @ Ikbal Dollar, aged 60 years, Occupation Business, Resident of Islampura, Deopur, Dhule Appellant V E R S U S Noor Mohammad Jan Mohammad (deceased), through legal representatives Respondents a Jaibunnisa Noor Mohammod Ansari, Age 50 years, Occupatioin Household, b Rafik Noor Mohammod Ansari, Age 41 years, Occupation Labour c Anis Noor Mohammod Ansari, Age 38 years, Occupation Labour c Kurban Noor Mohammod Ansari, Age 34 years, Occupation Labour All Resident of Gafur Nagar, Vadjai Road, Dhule Shri B.R. Warma, Advocate for the appellant Shri S.P. Shah, Advocate for respondent Nos. 1-a to 1-d CORAM : A.V. NIRGUDE, J. DATED : 2nd August, 2011 ORAL JUDGMENT : 1. Heard. 2. Following substantial question of law arisen in this appeal : “Whether the Courts below erred in awarding 12% interest on the sum due from the date of the decree till its realization ? 3. Admit. 4. By consent, the appeal is heard finally. The facts leading to this litigation in short can be narrated as under : 2 SA(st)2829/10 5. The appellant is the defendant. The respondent / plaintiff filed suit for recovery of Rs.1,35,000/-. He said, this amount represented principal sum of Rs.1,00,000/- and Rs.35,000/- as interest from the date of the cheque till the date of filing of the suit. It is amply proved in the Courts below that the appellant / defendant had issued the cheques in his personal capacity. He agreed to repay Rs.1,00,000/- to the respondent / plaintiff, because he could not give employment to the respondent / plaintiff. The Courts below held that the appellant / defendant was liable to repay this sum of Rs.1,35,000/-, the Courts below awarded interest @12% from the date of the suit till the amount is realized. This apparently is erroneous in view of Section 34 of the Code of Civil Procedure, which reads as under : 34. Interest – (1) Where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate not exceeding six per cent per annum as the Court deems reasonable on such principal sum, from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit : Provided that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six percent, per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions. Explanation I – In this sub-section, “nationalised bank” means a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. Explanation II – For the purposes of this section, a transaction is a commercial transaction, if it is connected with the industry, trade or business of the party incurring the liability. (2) Where such a decree is silent with respect to the payment of further interest on such principal sum from the date of the decree to the date of payment or other earlier date, the Court shall be deemed 3 SA(st)2829/10 to have refused such interest, and a separate suit therefor shall not lie.” 6. Admittedly, this was not a commercial transaction and nor there was an agreement of rate of interest. So, the learned Judge of the trial Court was free to grant 12% interest on the sum due from the date of filing of the suit till the date of the decree, but from the date of the decree till the amount is realized, interest @6% is permissible, and to that extent, the decree deserves to be corrected. The date of the decree shall be the date of the decree passed by the Civil Judge, Senior Division, Dhule, i. e. 12th December, 2005. In view of above, second appeal (stamp) stands disposed of. In view of disposal of second appeal (stamp), civil application No. 9499 of 2010 stands disposed of. ( A.V. NIRGUDE, J. ) SRM/sast/2829/10/2/8/11