RSA No.3831 of 2007 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA No.3831 of 2007 Decided on: November 21,2008. M/s. S. T. P. Ltd. ......Appellant Versus M/s. Nuchem Ltd. .....Respondent Coram Hon'ble Mr. Justice Kanwaljit Singh Ahluwalia Present Mr. Girish Agnihotri, Sr. Advocate with Mr. Vijay Pal, Advocate for the appellant. Mr. Sameer Rathore, Advocate for Mr. C. R. Goel, Advocate for the respondent. Kanwaljit Singh Ahluwalia, J ( Oral ) On December 10, 2007, this Court had passed the following order:- “ CM No. 10778-C of 2007 This is an application for condonation of delay of 98 days in re-filing the appeal. For the reasons mentioned in the application, delay of 98 days in re-filing the appeal is hereby condoned. CM stands disposed of. CM No. 10779-C of 2007 CM allowed as prayed for. Main Appeal When this file was taken up, Sh. Sameer Rathore, Advocate has appeared on behalf of the Caveator-respondent. Learned counsel for the appellant relies upon J. T 2001 (9) SC 101 Central Bank of India v. Ravindra and others and contends that the learned trial Court and the first Appellate Court have erred while granting interest at the rate of 18% on the Principal amount. RSA No.3831 of 2007 2 Notice of motion. Shri Sameer Rathore, Advocate, representing the Caveator-respondent accepts notice on its behalf. To come up on 21.12.2007 for arguments. Since at the time of motion hearing counsel for the appellant has restricted his claim only regarding variation of interest , therefore, records are not necessary and appeal is hereby decided. The counsel had relied upon judgment of Central Bank of India v. Ravindra and others J. T 2001 (9) SC 101 and has drawn my attention to para 55 of the judgment. Sub para 8 of para 55 reads as under:- “Award of interest pendente lite and post decree is discretionary with the Court as it is essentially governed by Section 34 of the CPC de hors the contract between the parties. In a given case if the Court finds that in the principal sub adjudged on the date of the suit the component of interest is disproportionate with the component of the principal sum actually advanced, the Court may exercise its discretion in awarding interest pendente lite and post- decree interest at a lower rate or may even decline awarding such interest. The discretion shall be exercised fairly, judiciously and for reasons and not in an arbitrary or fanciful manner.” On 14.3.2007, Additional District Judge, Gurgaon in para 17 of impugned judgment held as under:- “ It is clear from the dispute between the parties that it was a commercial transaction. Therefore, 6% per annum interest as per Section 34 ibid was not required to be given, rather either the contractual rate of interest was to be given or the market rate. This transaction is pertaining to the year 1997. There was no contractual rate of interest agreed between the parties but at that time the commercial rate of transaction was certainly around 18% per annum and the Court can take judicial notice of this fact. Therefore, the learned lower Court awarded 18% per annum RSA No.3831 of 2007 3 interest, it cannot be said to be either excessive or exorbitant or in violation of Section 34 ibid. There is absolutely no infirmity in grant of 18% per annum interest by the learned lower Court. The issue no.2 decided by the learned Court is also affirmed.” It has been noticed by the Appellate Court below that there was no contractual rate of interest agreed between the parties. As to how , the Court found commercial rate of interest 18% prevailing at that time is not made out. Interest at the rate of 18% is highly excessive and therefore, cannot be sustained. Accordingly, judgment of Courts below and decree passed in favour of the respondent/plaintiff is modified to the extent that plaintiff/respondent shall be entitled to 6% interest. With these modifications, the appeal is disposed of. November 21, 2008 (Kanwaljit Singh Ahluwalia ) mamta Judge