R.S.A.No. 3188 of 2008 (O&M) 1 In the High Court of Punjab and Haryana at Chandigarh R.S.A.No. 3188 of 2008 (O&M) Date of decision: 5.1.2011 Arvinder Singh ......Appellant Versus Kartar Kaur .......Respondent CORAM: HON'BLE MRS. JUSTICE SABINA Present: Ms.Rahish Pahwa Dudeja, Advocate, for the appellant. Mr.Hitesh Kaplish, Advocate, for the respondent. **** SABINA, J. Plaintiff-respondent filed a suit for recovery, which was decreed by the learned Civil Judge (Jr.Divn.), Ludhiana vide judgment and decree dated 22.10.2007. In appeal, the said judgment and decree were upheld by the learned Additional District Judge, Ludhiana vide judgment and decree dated 18.9.2008 and Hence, the present appeal by the defendant-. R.S.A.No. 3188 of 2008 (O&M) 2 Brief facts of the case, as noticed by the lower appellate Court in para Nos. 2 and 3 of its judgment, are as under:- “2. The brief facts are that plaintiff Kartar Kaur had been financially helping defendant Arvinder Singh and he had been returning the said loan amount to her. On 31.8.2002 on the request of the defendant the plaintiff has given a loan amount of ` 1,00,000/- to him and in lieu thereof he had issued two different receipts for ` 50,000/- each got scribed by his wife Arvind Kaur. Both these receipts are signed by the defendant. The defendant has agreed to repay back the loan amount after three months alongwith interest but he had failed to do so and thus the present suit for recovery has been filed. 3. The defendant after putting in appearance has filed the written statement and took up the preliminary objections that the suit of the plaintiff is false and the plaintiff is not a money lender and thus no cause of action accrued for filing the present suit. On merits, it is denied that the defendant has taken the loan of ` 1,00,000/- and executed two receipts in favour of the plaintiff. All other averments alleged in the plaint has also been denied.” On the pleadings of the parties, following issues were framed by the trial Court:- 1. Whether the plaintiff is entitled for recovery of R.S.A.No. 3188 of 2008 (O&M) 3 ` 1,00,000/- with interest as prayed for?OPP. 2. Whether the suit of the plaintiff is false, frivolous and vexatious to her own knowledge and liable to be dismissed with special costs under Section 35-A of CPC?OPD. 3. Whether the plaintiff is not a money lender?OPD. 4. Whether no cause of action has ever accrued to the plaintiff to file the present suit?OPD. 5. Relief.” The substantial question of law that arises in this case is “ whether the future interest allowed by the Courts below is contrary to Section 34 of the Code of Civil Procedure (CPC for short)?” During the course of arguments, learned counsel for the appellant has submitted that the rate of interest allowed by the Courts below, while decreeing the suit of the plaintiff was on the higher side. As per Section 34 CPC future interest could not be allowed @ more than 6% per annum. Learned counsel for the respondent, on the other hand, has very fairly conceded that, it was a case of advancement of friendly loan and as per Section 34 CPC, future interest could be allowed at such rate not exceeding 6% per annum. Section 34 CPC reads as under:- R.S.A.No. 3188 of 2008 (O&M) 4 .- (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 as the Court deems reasonable on the aggregate sum so adjudged, 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 money are lent or advanced by nationalised banks in relation to commercial transactions. (2) Where such a decree is silent with respect to the payment of further interest on such aggregate sum as aforesaid from the date of the decree to the date of payment or other earlier date, the Court shall be deemed to have refused such interest, and a separate suit therefor shall not lie.” R.S.A.No. 3188 of 2008 (O&M) 5 Plaintiff had filed a suit for recovery of ` 1,00,000/- on the allegation that the defendant had taken the said amount from her but had failed to return the same. The suit of the plaintiff was decreed by the Courts below. The plaintiff was allowed interest @ 10% per annum from the date of advancement of loan i.e. 31.8.2002 till realisation. As per Section 34 CPC, the rate of future interest shall be allowed not exceeding @ 6% per annum. Admittedly, the transaction between the parties could not be termed as a commercial transaction as the transaction between the parties was advancement of friendly loan. The substantial question of law in this appeal stands answered accordingly. In these circumstances, the impugned judgment and decrees of the courts below are modified to the extent that the plaintiff would be entitled to recover the amount of ` 1,00,000/- from the defendant along with interest @ 10% per annum from the date of taking of loan i.e. 31.8.2002 till the date of decree i.e. 22.10.2007 and thereafter i.e. from 22.10.2007, the plaintiff shall be entitled to claim interest @ 6 % per annum till realisation. Appeal stands disposed of accordingly. (SABINA) JUDGE January 05, 2011 anita