JUDGMENT
Hari Shankar Prasad, J.
1. This appeal has arisen out of the judgment dated 24.7.1995 and decree signed and sealed on 5.8.1995 passed in Money Suit No. 13/89, whereby and whereunder the learned Sub-Judge III, Jamshedpur decreed the suit on contest against the defendant, who is appellant here.
2. The only point taken in this appeal by the learned counsel for the appellant is that rate of interest has been charged at a very heavy rate and the learned Court below has been pleased to allow interest at that very rate, which is a contractual rate but has also simultaneously awarded the same rate of interest pendente lite and future. The learned counsel further submitted that though an agreement in between the plaintiffs-respondents and appellant-defendant arrived at and some loan amount was sanctioned to the appellant and some amount was even paid to the appellant and at the time of agreement, rate of interest was also agreed upon @ 12-1/2%. The appellant filed written statement but did not produce any evidence and after filing of the written statement stopped taking interest in the case. He has disputed the claim of the plaintiff-respondent No. 1 and has stated that his signature was obtained on a blank paper, so far as rate of interest is concerned and he has agreed to pay the dues but has stated that he would pay rate of interest @ 6% per annum.
3. No body appears on behalf of the respondents to controvert the submission of the learned counsel for the appellant.
4. The learned counsel submits that the appellant agrees that amount of loan was paid to the Bank but submitted that rate of interest is very high and that amount should be reduced. In this connection Section 34 of the Code of Civil Procedure is very clear, which is quoted hereinbelow :–
“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 of 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 nationalized banks in relation to commercial transactions.
Explanation I.–In this Sub-section, “nationalized bank” means a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 (5 of 1970).
Explanation II.–For the purposes of this section, a transaction is a commercial transaction, if it is connected with the industry, trade or business of the party incurring the liability.
(2) Where such a decree is silent with respect to the payment of further interest on such principal sum 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 therefore shall not lie.”
5. When there is an agreement between the parties, the Court will grant rate of interest as agreed upon between the parties and in this case rate of interest appears to have been agreed upon between the parties @ 12-1/2% per annum and, therefore, contractual rate cannot be reduced. But so far as interest pendente lite and future is concerned, rate of interest awarded 12-1/2% is reduced to 10-1/2% and with this modification, this appeal is dismissed. However, no order as to costs. Appeal dismissed.