IN THE HON’BLE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. RFA 55 of 2002. Date of decision 19.3.2008. State Bank of India ….Appellant/Plaintiff Versus Prem Singh and another ….Respondent/Defendant. Coram: The Hon’ble Mr. Justice Dev Darshan Sud, J. Whether approved for reporting?1 No. For the appellant: Mr. K.D.Sood, Advocate with M/S. Sanjeev Sood and Haresh Sood, Advocates. For the respondent: None. Dev Darshan Sud, J. (Oral). This is the plaintiff’s appeal against the judgment and decree of the learned District Judge decreeing the suit of the plaintiff awarding interest @ 9% per annum from the date of suit till the date of payment. The plaintiff is aggrieved by the decree to the extent that interest has not been awarded at the agreed rate 1 Whether Reporters of Local Papers are allowed to see the judgment? Yes. - 2 - which according to the plaintiff is 16.32% per annum with quarterly rests. I have heard the learned counsel for the appellant and gone through the record. It is undisputed that under Section 34 of the Code of Civil Procedure, in case of a commercial transaction the interest allowed is to be at the contractual rate as agreed to by the parties. Learned counsel appearing for the appellant submits that Ex.PW-2/B and Ex. PW-2/C which are agreements entered into between the parties provide for interest at the minimum rate of 16.32% per annum. The submission made by the counsel cannot be accepted in totality. Ex.PW- 2/C which is the agreement of hypothecation, does provide for interest to be charged at 16.32% per annum. It does not state whether the interest is to be charged with monthly, quarterly, half yearly or other rests. The clause states that the interest is to be charged at the rate 3.32% above the State Bank of India lending rate subject to a minimum of 16.32%. Ex.PW-2/B provides for interest at 16.32% with quarterly rests. Two other proved documents Exs. PW-1/B and - 3 - PW-1/D are notices which incorporate yet another rate. These are notices issued by the plaintiff to the defendant claiming interest @ 14.26% per annum and 14.28% per annum. In the circumstances, it becomes difficult to accept the contention of the learned counsel for the appellant that interest was to be charged @ 16.32 % as it is the admission of the plaintiff that the loan amount was debited with interest @ 14.26% per annum (Ex.PW-1/D). The evidence of the plaintiff itself shows that the interest is being charged at different rates. In these circumstances, the submission made by the appellant that 16.32% was the proved rate of interest cannot be accepted. Learned District is wrong in awarding interest @ 9% per annum, as there is no factual basis on the record for this finding. In the circumstances, this appeal is partly allowed. The judgment and decree of the learned District Judge is modified to the extent it awards 9% per annum as interest to the plaintiff. It is held that the plaintiff will be entitled to the interest @ 14.26% per annum - 4 - instead of 9% per annum. There shall be no order as to costs. March 19, 2008 (PC). (Dev Darshan Sud), J.