IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Ex.Petition No. 25 of 2010 Date of decision: 17.10.2011 Smt. Asha Kumari and another …Petitioners Versus State of H.P and others. …Respondents. Coram The Hon’ble Mr.Justice Deepak Gupta, J. Whether approved for reporting?1 No. For the petitioners: Mr. Anand Sharma, Advocate. For the respondent: Mr. Vivek Thakur, Addl. A.G. for respondent No.1 Deepak Gupta, J.(Oral) 1. By means of this Execution Petition the petitioners have prayed that as on 17.09.2010 the amount due in terms of the judgement and decree was Rs.6,65,825.72 paise whereas the State has only deposited a sum of Rs.5,61,641/-, that too, during the pendency of this petition vide draft dated 16th February, 2007 which was sent to the decree holders. It is claimed by Shri Anand Sharma, that an amount of Rs.1 lakh and odd is still due from the judgement debtors. 2. The whole case revolves around the interpretation of the operative portion of the decree, which reads as follows:- “It is further ordered that it shall be expedient and in the interest of justice that the plaintiffs are awarded 6% interest on the decretal amount of Rs.2,28,561/- with effect from 17.09.1996 up till 21.07.1994 i.e. the 1 Whether the reporters of the local papers may be allowed to see the Judgment? Yes. 2 date of the impugned judgement and decree and thereafter up till the actual date of realization thereof, if not already paid.” 3. The contention of Shri Anand Sharma is that interest on Rs.2,28,561/- was to be paid w.e.f. 17.09.1986 to 21.7.1994 @ 6% per annum and thereafter this interest calculated upto that date was to become a part of the decretal amount and the entire amount of Rs.3,36,175.13 was to carry future interest @ 6% per annum. The only question is what is the decretal amount in terms of the decree? According to Shri Anand Sharma, the decretal amount is Rs.2,28,561/- alongwith interest @ 6% per annum from 17.09.1986 to 21.7.1994. 4. I am unable to accept this contention. There is nothing in the decree of the Division Bench of this Court to indicate that the interest which accrued during the pendency of the suit was to be added to the decretal amount and form a part of the decretal amount. That would amount to granting of compound interest, which the Court can do in exceptional circumstances, normally only in commercial transactions. 5. The contention of Shri Anand Sharma is that there was no occasion for the Court to have bifurcated the interest into two separate components i.e. upto the date of decree and from the date of decree onwards. In case the Court only wanted to grant interest on the decretal amount of Rs.2,28,561/- then there was no need to grant 6% interest upto the date of decree and thereafter 6% again from the date of decree could have been passed straightway saying 3 that the amount would accrue interest @ 6% per annum from the date of institution of the suit till payment or deposit thereof. 6. Section 34(1) of the CPC reads as follows:- “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 percent 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 per cent 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 nationalized banks in relation to commercial transactions.” 7. A bare perusal of the Section shows that the Court which passes the decree is entitled to grant interest at the rate which it deems reasonable and this interest is to be paid on the principal sum adjudged by the Court. Therefore, the duty of the Court is to adjudge the principal sum and also the rate of interest. The interest can be granted from the date of filing of the suit to the date of decree and the Section provides that in addition thereto further interest can be granted on such principal sum for any period prior to the institution of the suit and also from the date of decree to the 4 date of payment to such earlier date as the Court deems fit. Therefore, in every case the Court is not bound to grant interest. This is a discretion which vests in the Court. Obviously, such discretion has to be exercised in a judicious manner in accordance with the well settled principle of law. The Court can in certain cases reduce the interest claimed even prior to the date of filing of the suit but once it adjudges the principal amount, the principal amount, will remain the same. No interest upon interest can be awarded unless the Court specifically states that the interest shall be at compound rates to be calculated on monthly, quarterly or yearly basis as the case may be. In case there is no clear cut stipulation the only inference which can be drawn is that the interest was granted at the simple rate on the principal amount so adjudged. 8. In the present case the principal amount so adjudged was Rs.2,28,561/- and therefore, this principal amount will earn simple interest both pendelite and in the future. If the interest is granted on the principal amount only, then as on 16th February, 2011 the total amount due to the decree holders along with costs was Rs.5,68,085.14 and thus there is only a shortfall of Rs.6441/-. The State is directed to pay this amount to the petitioners on or before 15th February, 2011. The petition is disposed of. 17th October, 2011. ( Deepak Gupta ) ™ Judge.