- (1.) This judgment disposes of Civil Revision No. 1386 of 1991, Civil Revision No.4098 of 1991, Civil Revision No. 3871 of 1991 and Civil Revision No. 3548 of 1991. Civil Revision No. 1386 of 1991 came up for motion hearing before V. K. Jhanji, J. on 22-11-1991 and the learned Judge admitted the petition to Division Bench observing thus: - "Punjab National Bank filed a suit for recovery against the petitioners. The said suit was decreed with costs and interest. While awarding interest, it was granted at the contractual rate. In execution an objection was raised by the petitioners that the Court while passing the decree had no jurisdiction to grant more than six per cent future interest as the loan was a crop loan and an agricultural loan cannot be considered as commercial loan taken in connection with some industry, trade or business. Objections were dismissed by the executing Court as it was of the view that the Court cannot go beyond the decree. Learned counsel for the petitioner has impugned the order of the trial Court granting future interest beyond six per cent. In support of his arguments, he has relied upon a decision of this Court in Krishan Lal v. State Bank of Patiala, 1990 (1) 97 Pun LR 132. On the other hand, learned counsel for the respondents has relied upon a Division Bench judgment of this Court in Commr. of Wealth-tax, Patiala v. Hari Singh (1980)123 ITR 558 to contend that agricultural operations involve carrying on systematic entreprenurial activity with the help of capital and labour with a view to earn profits and in view of this the loan was purely commercial and moreover, once a decree has been passed, the executing Court cannot go beyond the same. Admitted. D.B. Recovery with regard to future interest beyond six per cent is stayed till further orders. In case, the amount with future interest at the rate of six per cent is not deposited by the judgment-debtors within 15 days from today, then it shall be open to the executing Court to auction the property of the judgment-debtors."
(2.) The precise question which arises for determination is whether an agricultural loan can be considered as commercial loan taken in connection with some industry, trade or business and the Court can award . future interest on the contractual rate of interest and if the contractual rate of interest is not established, at the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions. Future interest is allowable under S. 34 of the Code of Civil Procedure. The same reads thus:- Interest. (1) Where and in so far as a decree is for the payment of money, 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 1 (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 : 2 (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 Undertaking) Act, 1970. Explanation II.- For the purpose of the 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 therefor shall not lie.).'
(3.) The Division Bench of this Court while deciding R.S.A. No. 2665 on 4-6-1993 held thus:- For the reasons stated above, we hold that the plaintiff-Bank will be entitled to recover interest pendente lite and future interest to be determined as under :- (i) Interest pendente lite is payable on the principal sum adjuged, but no interest is payable on the amount of interest adjudged on such principal sum; (ii) Future interest will be awarded on the contractual rate of interest and if the contractual rate of interest is not established, at the rate at which the moneys are lent or advanced by the nationalised banks in relation to commercial transactions. In the present case, the loan was advanced by the bank and as such it is a commercial transaction. Consequently, the judgments and decree of the Courts below are modified and the case is remitted to the trial Court for passing a fresh decree in terms of the directions given above.' ;