JUDGMENT
Hari Shankar Prasad, J.
1. The appeal has asisen out of the judgment dated 7.8.1995 and decree signed and sealed on 26.8.1995 passed in Money Suit No. 15/89. whereby and whereunder the learned Sub-Judge III. Jamshedpur decreed the suit on contest against the defendants, who are appellants here.
2. The only point taken in this appeal by the learned counsel for the appellants 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 Ute and future. The learned counsel further submitted that though an agreement In between the plaintiff-respondent and appellants-defendants arrived at and some loan amount was sanctioned to the appellants and some amount was even paid to the appellants and at the time of agreement, rate of interest was also agreed upon @ 12-1/2%. The appellants filed written statement but did not produce any evidence and after filing of the written statement stopped taking interest in the case. Appellants have disputed the claim of the plaintiff-respondent and have stated that their signatures were obtained on a blank paper, so far as rate of interest is concerned and they have agreed to pay the dues but have stated that they would pay rate of interest @ 6% per annum.
3. No body appears on behalf of the plaintiff-respondent to controvert the submission of the learned counsel for the appellants.
4. The learned counsel submits that the appellants agree 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 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.
Explanation I.-in this sub-section, “nationalised bank” means a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) 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.