IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA No.2452 of 2008 Date of Decision: 31.10.2008 State of Haryana and others .... Appellants vs. Mehar Chand .... Respondent Coram: Hon'ble Mr. Justice Rajive Bhalla. Present: Mr. Ajay Chaudhary, Deputy Advocate General, Haryana. Mr. B.S. Mittal, Advocate for the respondent. Rajive Bhalla, J, (Oral) The short point that requires adjudication in the instant appeal is whether the courts below could have granted future interest at the rate of 12% per annum on delayed payment of leave encashment and provident fund. The respondent filed a suit claiming the service benefits from the period 27th April, 1999 to 16th April, 2001, as in the pay scale of a Superintendent and as a consequence the other benefits attendant thereto. The trial court decreed the suit and granted future interest at the rate of 12% per annum to months from the date of his retirement till the date of actual payment. The first appellate court affirmed this finding and dismissed the appeal filed by the State of Haryana. Notice in the instant appeal was issued on the short point namely, whether future interest could have been awarded at a rate of 12% per annum. I have heard counsel for the parties and perused the impugned judgments. Civil suits are governed by the Code of Civil Procedure. Interest to be awarded in a civil suit is prescribed under Section 34 of the Code which reads as follows :- RSA No.2452 of 2008 -2- 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 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 nationalised banks in relation to commercial transactions.” A perusal of Section 34 of the Code leaves no manner of doubt that further or future interest beyond six per cent per annum can only be awarded in case of a commercial transaction. Admittedly, the present case is not one of a commercial transaction and no rule or regulation has been cited which would require future interest to be paid at a rate above the rate set out under Section 34 of the Code of Civil Procedure. As a result, the appeal is allowed and the impugned judgments and decrees granting future interest at a rate of 12% per annum being contrary to the Code of Civil Procedure are modified to the extent that the relief granted to the respondent shall be payable with RSA No.2452 of 2008 -3- future interest at the rate of 6% per annum. The appeal is allowed. Decree sheet be drawn up accordingly . 31.10.2008 (Rajive Bhalla) sk Judge