R. S. A. No. 3978 of 2008 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Case No. : R. S. A. No. 3978 of 2008 Date of Decision : May 05, 2010 Satnam Singh .... Appellant Vs. Malkiat Singh .... Respondent CORAM : HON'BLE MR. JUSTICE L. N. MITTAL * * * Present : Mr. Munish Gupta, Advocate for the appellant. Mr. Harjot Singh Bedi, Advocate for Mr. M. S. Bal, Advocate for the respondent. * * * L. N. MITTAL, J. (Oral) : This is second appeal by defendant Satnam Singh, who has been unsuccessful in both the courts below. Suit was filed by respondent Malkiat Singh against appellant Satnam Singh for recovery of Rs.5,25,000/- with interest thereon @ 1% per month since 05.04.2004 (due date) till recovery of the amount. It was alleged that the defendant, as attorney of the plaintiff, sold plaintiff's land for Rs.5,25,000/- to Sukhjinder Kaur, vide sale deed dated 05.04.2004, but did not pay the said sale consideration to the plaintiff. Defendant, however, R. S. A. No. 3978 of 2008 2 pleaded that General Power of Attorney dated 29.03.2004 was executed by the plaintiff in favour of the defendant after receiving Rs.6,00,000/- from the defendant at the time of execution of Power of Attorney. Learned Additional Civil Judge (Senior Division), Balachaur, vide judgment and decree dated 20.07.2007, decreed the plaintiff's suit for recovery of Rs.5,25,000/- with interest thereon @ 1% per month from the date of filing suit i.e. 05.09.2006 till recovery. First appeal preferred by the defendant stands dismissed vide judgment and decree dated 01.10.2008. Feeling aggrieved, the defendant has preferred the instant second appeal. I have heard learned counsel for the parties and perused the case file. The only contention raised on behalf of the appellant is regarding rate of interest awarded by the courts below. It was contended that in view of Section 34 of the Code of Civil Procedure (in short – CPC), future interest from the date of decree of the trial court till recovery could not exceed 6% per annum because the transaction between the parties was not commercial. It was also contended that pendente lite interest @ 1% per month is also excessive as there was no contract or agreed rate of interest between the parties. On the other hand, learned counsel for the plaintiff-respondent contended that the courts below have awarded interest at moderate and R. S. A. No. 3978 of 2008 3 reasonable rate, which does not require reduction. I have carefully considered the rival contentions. In so far as rate of pendente lite interest is concerned, Section 34 CPC confers discretion on the trial court to grant interest at reasonable rate. Interest @ 1% per month granted by the courts below from the date of filing of suit till date of decree of the trial court cannot be said to be excessive so as to warrant reduction in second appeal. The said rate of interest is a very reasonable and moderate rate of interest. Contention of counsel for the appellant regarding future interest, however, deserves to be accepted. Section 34 CPC lays down in mandatory terms that future interest from the date of decree of the trial court can be awarded at such rate not exceeding 6% per annum, as the court deems reasonable, provided that in commercial transaction, future rate of interest may exceed 6%, but shall not exceed contractual rate of interest or in absence thereof, bank rate of interest. In the instant case, the transaction between the parties was not commercial. Consequently, future interest cannot exceed 6% per annum in view of mandatory provision of Section 34 CPC. Hence, judgments and decrees of the courts below require to be modified to this extent, being illegal. Substantial question of law, whether future interest exceeding 6% per annum could be awarded by the courts below, arises for determination in the instant second appeal and the same is answered in negative. R. S. A. No. 3978 of 2008 4 In view of aforesaid discussion, the instant second appeal is allowed partly and judgments and decrees of the courts below are modified to the extent that the plaintiff-respondent shall be entitled to future interest on the decretal amount @ 6% per annum from the date of decree of the trial court till recovery, whereas judgments and decrees of the courts below regarding the remaining relief are affirmed. May 05, 2010 ( L. N. MITTAL ) monika JUDGE