Judgment :- 1. Plaintiff in the court below is the appellant herein. The appellant advanced money to the first defendant on the guarantee of late N. J. Thomas whose legal representatives are defendants 2 to 13. A decree was claimed for the amount actually due on the charge of the property secured by N. J. Thomas and certain amounts due to the first defendant from Government on account of contract work. The defendants raised various contentions. The court ultimately passed a decree for the amount claimed. In doing so the court awarded future interest at 9 per cent per annum. The court also directed that before proceeding against the assets of the deceased, which are in the possession of defendants 2 to 13, plaintiff has to exhaust his remedies against the first defendant. Being dissatisfied with the decree plaintiff has preferred this appeal. 2. The first contention urged is that the court has committed an error in directing that the appellant should exhaust his remedies against the first defendant before proceeding against the assets of the guarantor, which are in the bands of defendants 2 to 13, or properties in plaint A schedule. We do not think the equitable relief granted is unjustified and uncalled for. But apparently the court committed a mistake in thinking that all the items of properties in plaint A schedule belonged to the guarantor. It is agreed that items 1 and 2 of plaint A schedule belong to the first defendant. Therefore in pursuance of the direction given by the court below, to exhaust the remedies against the first defendant, it is open to the appellant to proceed first against items 1 and 2 of plaint A schedule, 3. It is next pointed out that though the court directed that the appellant is entitled to collect the amount due to the first defendant by the Government under the bills mentioned in plaint B schedule that has been omitted in the decree. This is only an omission in the decree. Decree will by amended by incorporating schedule B also. 4. The more important contention urged by the counsel for the appellant is against the rate of future interest awarded by the court below. The contract rate for advances by the bank was 171/2 percent per annum. The appellant claimed 18 per cent per annum being the current bank rate for advances. 4. The more important contention urged by the counsel for the appellant is against the rate of future interest awarded by the court below. The contract rate for advances by the bank was 171/2 percent per annum. The appellant claimed 18 per cent per annum being the current bank rate for advances. This was objected to by the defendants. The court below awarded future interest from the date of decree till payment at rate of 6 per cent per annum. 5. Under S.34 of the CPC as it originally stood, the court could award interest at such a rate not exceeding 6 per cent per annum as the court deems reasonable. Sub-section (1) of S.34 has been amended by amendment Act of 1979 incorporating the proviso which reads thus: "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." 6. Even now the ordinary rule is to award future interest at a rate not exceeding 6 per cent per annum. The proviso contains an exception in the case of decrees to be passed in relation to claims arising out of commercial transactions. According to the proviso in such a case rate of future interest may exceed 6 per cent per annum but shall not exceed the contractual rate of interest or in the absence of contractual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions. The proviso thus gives a discretion to the court. Under sub-section (2) discretion has to operate subject to ceiling of 6 per cent per annum. Under the proviso discretion can operate between 6 per cent to contractual rate or in the absence of contractual rate at the rate adopted by nationalised banks in relation to commercial transactions. The discretion granted to court has to be exercised judicially and not arbitrarily, on sound judicial principles and not for any extraneous or irrelevant reasons. 7. Admittedly the transaction is a commercial transaction, which would attract the operation of the proviso to S.34(1). The discretion granted to court has to be exercised judicially and not arbitrarily, on sound judicial principles and not for any extraneous or irrelevant reasons. 7. Admittedly the transaction is a commercial transaction, which would attract the operation of the proviso to S.34(1). There is no dispute that the first defendant borrowed money for the purpose of executing contract work for the Government. The lower court declined to award anything more than 6 per cent per annum for the following reason: "The plaintiff has stated that the loan is taken for the commercial purpose. It has been brought out that the amount was received for executing some contract work. However I think that it is only just and proper that the future interest is allowed at 6 per cent per annum and not at the rate specified by the bank." 8. Parties agree and this was conceded in the court below that the liability dealt with in the suit arose in relation to a commercial transaction. That being so, the court when called upon to award higher interest above 6 per cent per annum had a duty to consider the matter in all its aspects and exercise its discretion judicially, after adverting to relevant reasons. The lower court instead of doing so came to an arbitrary conclusion without giving any reason for arriving at that conclusion or justifying the manner in which it exercised the discretion. 9. Learned counsel for the contesting respondents points out that his clients are not the borrowers but only the legal representatives of the guarantor and some of them are minors. We do not think this can have much bearing in deciding the manner in which discretion has to be exercised under the proviso to S.34(1). They are the legal representatives of the original guarantor and they would have inherited the assets of the guarantor; naturally, they are responsible for his liabilities. We do not think that any particular inference arises from the fact that they are only the heirs of the guarantor. The appellant-bank would not normally have advanced money to the first defendant without a guarantor or without the security offered by the guarantor. Therefore the responsibility of the guarantor cannot be brushed aside 10. Plaintiff-appellant is a bank. Its main business consists of receiving deposits and making advances. The appellant-bank would not normally have advanced money to the first defendant without a guarantor or without the security offered by the guarantor. Therefore the responsibility of the guarantor cannot be brushed aside 10. Plaintiff-appellant is a bank. Its main business consists of receiving deposits and making advances. Currently the maximum interest payable on deposits is 11 per cent, and the maximum interest chargeable is 18 per cent depending on type of advances. Perhaps the rate was slightly less at the time of the transaction and at the time of the suit. Contract rate of interest is 171/2 per cent. Considering the nature of business and the bank, it is clear that the business can be carried forward only when recoveries of advances are effected. In other words, recoveries are vital to the future existence of the bank. We are of the opinion that all these circumstances are relevant for arriving at a conclusion in regard to the rate of interest to be awarded. Taking all these facts and circumstances into consideration, we are of the opinion that future interest should be awarded at the rate of 12 per cent. 11. In the result, decree and judgment of the court below are modified as follows: (a) Future interest on the principal amount payable will be at the rate of 12 per cent per annum. (b) Decree-holder may proceed against items 1 and 2 of plaint A schedule before proceeding against items 3 to 7 of plaint A schedule. (c) Decree-holder is at liberty to collect the amount due to the first defendant under the transactions referred to in plaint B schedule. (d) Plaint B schedule shall be incorporated in the decree. The appeal is allowed in this manner, but in the circumstances without costs.