FAO No.265 of 1990 1 In the Punjab and Haryana High Court,at Chandigarh. Decided on 04.3.2009. M/S.Gurcharan Singh & sons and another --Appellants Vs. Punjab Financial Corporation and others -- Respondents CORAM: HON'BLE MR.JUSTICE RAKESH KUMAR JAIN Present: Mr.Akshay Bhan,Advocate, with MrSantosh Sharma,Advocate,for the appellants None for the respondents. Rakesh Kumar Jain,J: (Oral) This appeal is directed against the order dated 16.12.1989, passed by the Addl.District Judge, Gurdaspur on an application under Section 31 of the State Financial Corporation Act, 1951 (for short,'the Act'). The only contention raised by learned counsel for the appellants in this appeal is pertaining to penal interest charged @ 15½% and 17½%. per annum. Learned counsel for the appellants submits that under Section 34 of the Code of Civil Procedure,( for short, 'CPC') interest pending suit and future interest can only be awarded @ 6% per annum on the principal amount so adjudged by the Court in the judgment and decree. He places reliance upon the judgment reported as Soli Pestonji Majoo v. Ganga Dhar FAO No.265 of 1990 2 Khemka, AIR 1969 S.C. 600 and Makhan Singh v. Union Bank of India and others 1989 P.L.J. 329. I have heard learned counsel for the appellants and have perused the record with his assistance. The contention raised by learned counsel for the appellants has already been discussed in detail by the Court below while deciding issue No.2. This Court has also relied upon a decision of the Supreme Court in the case of M/S.Everest Industrial Corporation and others v. Gujarat State Financial Corporation (1987) 3 Supreme Court Cases 597, and two decisions of this Court in the cases of Man Singh Vs. Punjab Financial Corporation,Chandigarh and others, AIR 1985, Punjab and Haryana 149 (1) and Punjab Financial Corporation,72- 73, Bank Square,Chandigarh vs. K.B.Industries, H-8,Textile Colony,Industrial Area-A, Ludhiana and another (1986-2)P.L.R. 624. The judgments relied upon by learned counsel for the appellants are in respect of Civil Suits which are pertaining to recovery and redemption, whereas in the case reported as M/S. Everest Industrial Corporation (Supra), it has been held that interest shall be paid as stipulated in the contract. The observations FAO No.265 of 1990 3 made by the Apex Court in this regard are as under:- “If as held by this Court the proceedings instituted under Sectuin 31 (1) of the Act is something akin to an application for attachment of property in execution of a decree at a stage posterior to the passing of the decree no question of passing any order under Section34 of the Code would arise since Section 34 of the Code would be applicable only at the stage of the passing of the decree and not to any stage posterior to the decree. It may also be mentioned here that even under the Code the question of interest payable in mortgage suits filed in civil courts is governed by Order 34 Rule 11 of the Code and not by Section 34 of the Code which may be applicable only to cases of personal decrees passed under Order 34 Rule 6 of the Code. The High Court was right in holding that interest would be payable on the principal amount due in accordance with the terms of the agreement between the parties till the entire amout due was paid as per the order passed under Section 32 of the Act. We hold that the decision of the Karnataka High Court, referred to above, which has applied Section 34 of the code to a proceeding instituted under Section 31 (1) of the Act is not correcty decided.” Similar is the position in the cases of Man Singh and Punjab Financial Corporation Cases (Supra). FAO No.265 of 1990 4 No other point has been raised by the learned counsel for the appellants in this appeal. In view of the above, I do not find any merit in this appeal and the same is hereby dismissed. 04.3.2009 (Rakesh Kumar Jain) RR Judge