United Commercial Bank vs Nirmal Singh Sandhu and Others

G.R. Majithia, J.—This revision petition is directed against the order of the executing court whereby he accepted the objections filed u/s 47 of the CPC (for short "the Code") by the judgment-debtor against the decree in Civil Suit No. 58 of January 28, 1984.

The sole objection taken by the judgment-debtor was that the decree holder was entitled to future interest only on the principal amount and not on the decretal amount. The executing court interpreting the provisions of Section 34 of the Code came to the conclusion that the decree holder was entitled to future interest on the principal amount and not on the decretal amount. The judgment-debtor had deposited the total amount payable under the decree. The executing court directed that the decree holder would be entitled to future interest on the principal amount and the excess amount deposited by the judgment-debtor be refunded to them.

The decree holder aggrieved against the order of the executing court has come up in revision petition to this court. Learned counsel for the decree holder submitted that the decree holder is entitled to claim future interest not only on the principal amount but on the decretal amount. According to him, the decree holder is the financial institution and the interest accrued on the principal amount due and in terms of Section 34 of the Code, the decree holder is entitled to future interest on that amount. The submission is not sustainable under law. The interest that may be awarded to the plaintiff in a suit for money can be divided into three heads, according to the period for which it is allowed, namely :

(i) interest accrued and due prior to the institution of the suit on the principal sum adjudged (as distinguished from the principal sum claimed),

(ii) additional interest on the principal sum adjudged, from the date of the suit to the date of decree, at such rate as the court deems reasonable,

(iii) further interest on the principal sum adjudged from the date of the decree to the date of the payment or to such earlier date as the court thinks fit, at a rate not exceeding 6 per cent. per annum.

Future interest can only be awarded on the principal sum adjudged and not on the principal and interest as on the date of the decree. Learned counsel for the petitioner could not bring to my notice any decision in which an exception has been carved out in favour of a banking institution. On a plain reading of Section 34 of the Code future interest can only be allowed on the principal sum adjudged. The revision petition is devoid of any merit and is accordingly dismissed.