Judgment D. P. Wadhwa, C. J. 1. These four appeals arise out of a common judgment dated September 23,1988 of the learned single Judge. The judgment of the learned Single Judge arises out of two appeals filed by M/s Agro Art Industries and its partners (collectively Agro Art industries) against the preliminary decree passed on July 8, 1982 by Sub judge, Saharsa in mortgage suit filed by the Central Bank of India (for short central Bank or Bank) under Order xxxiv of the Code of Civil Procedure. The learned Single Judge while dismissing the appeals filed by the plaintiff agro Art Industries reduced the rate of interest both pendente lite and future as granted by the learned trial Judge. Hence two appeals by the Agro Art Industries against the dismissal of their two appeals and then two appeals by the central Bank on account of modification of the decree relating to payment of interest. 2. Agro-art Industries has nothing to do with agriculture as the name suggests. It is running a cinema at Saharsa known as Prashant Chitralaya. On being approached the Central Bank sanctioned a loan of Rs.1,75,000.00 on July 20, 1973 to Agro-Art Industries. This was for purchase of different types of machineries used in the cinema business. Agro-Art Industries created an equitable mortgage in favour of Central bank by depositing the title deeds of certain properties and also agreed to pay interest on the principal sum at the rate of 5% over and above the Reserve bank of India rate subject to a minimum of 12% per annum with monthly rests. Agro-Art Industries also hypothecated their furniture in cinema hall. After the execution of the documents a term loan account was opened in the name of Agro-Art Industries in the central Bank and a sum of Rs.1,74,433.00 was advanced to them. Agro-Art Industries, however, failed to clear the dues as stipulated in the documents and instead executed other set of documents on July 25, 1976; renewed the loan now for Rs.1,90,000.00 and agreed to pay interest at the rate of 18% per annum with quarterly rests. Again agro Art Industries defaulted and the central Bank filed a suit for Rs.3,18,317.88, the amount as on August 3, 1981. 3. Again agro Art Industries defaulted and the central Bank filed a suit for Rs.3,18,317.88, the amount as on August 3, 1981. 3. Agro Art Industries raised various pleas including that certain blank papers were got signed by the bank without they being told the nature and scope and content of those documents; the suit having been barred by limitation; or that as framed it was not maintainable. On the pleadings of the parties, the following issues were framed:- (i) Is the suit as framed maintainable (ii) Has the plaintiff any cause of action for the suit (iii) Is there any defect of parties in the suit (iv) Whether the plaintiff is entitled to get mortgage decree in the suit? (v) Whether the rate of interest as claimed by the plaintiff is correct and according to the contract (vi) Whether the plaintiff is entitled to get the decree for the amount claimed (vii) To what relief or reliefs, is the plaintiff entitled ? 4. The learned Trial Court after considering the whole aspect of the matter passed a preliminary decree in favour of the Central Bank and against agro-Art Industries for a sum of Rs 2,01,855.08 with compound interest both pendente lite and future at the rate of 16 1/2% with six monthly rests. The decretal amount was ordered to be paid in monthly instalments of Rs 20,000.00 and was to be the first charge on the mortgaged property. 5. In the two appeals filed against preliminary decree dated July 8, 1982 and final decree dated October 7, 1983 the learned Single Judge noted that three points had been raised by the appellants Agro Art Industries and these were:- (a) The loan was advanced on simple interest and therefore, the bank was not entitled to charge compound interest (b) The present suit having been filed in September, 1981 for non-payment of the loan advanced in 1973 the same is barred by limitation (c) In any event, a mortgage decree cannot be passed against the appellants at best, there can be a money decree only in respect of that part which is not barred under the law of limitation 6. Yet another point was noted as to whether the rate of interest was to be governed by the provisions of the money Lenders Act and this is how the learned Single Judge dealt with this point:- "another point which arose for consideration is as to whether the rate of interest is to be governed by the provisions of the Money Lenders Act for want of notification exempting Sec.9 in relation to the Bank, but that point, when heard, was not found to be applicable in view of the notification and therefore, this point is accordingly disposed of in the initial stage that the provisions of the Money Lenders act are not applicable in this suit The other three points raised are now taken up for consideration in the manner they are placed before the Court" 7. The learned Single Judge did not find merit in the appeals, but, as noted above, while upholding the decree passed by the Trial Court modified the decree relating to payment of interest by granting simple interest pendente lite and future at the rate of 6% per annum. The learned Single Judge noted that though the loan was for the sum of Rs.1,74,433.00 the defendants Agro Art Industries by that period had paid Rs.4,56,464.20 to the Central Bank which was more than two and half times the principal amount. 8. Against the modification of decree for reduction of interest the central Bank felt aggrieved and has appealed while Agro-Art Industries have appealed against dismissal of the appeals and upholding of the decrees for the principal amount and interest as modified. 9. When these letters patent appeals came up for admission it was noted that the only point involved was the question of interest which depended on the applicability of the Bihar Money lenders Act, 1939. The Appellate bench also noticed that one of the questions which had to be decided in the appeals was that though there was an order of exemption under the provisions of Bihar Money Lenders Act, 1974 , the bank was taking advantage of the same before the exemption orders came into force and that the further question was whether there was any similar notification regarding exemption in respect of the earlier Bihar Money Lenders Act. Parties were also directed to file affidavit in terms of the Bench decision of calcutta High Court in Vijaya Bank V/s. An Trend Exports [a. I. R.1992 Cal.12]. It will be thus seen that the questions now raised before us in these letters patent appeals were never raised either before the Trial Court or the learned single Judge. 10. Mr. Jha, learned Counsel for the Agro-Art Industries submitted that the main question in these appeals was the applicability of the Bihar Money lenders (Regulation of Transactions)Act, 1939. This question in such a form was never raised either in the Trial court or before the learned Single judge, but then the Bench while admitting the appeals did refer this question as involving in the appeals filed by agro-Art Industries. The other question raised in the appeals filed by the Central bank was if the interest could be reduced by the learned Single Judge under the provisions of Order XXXIV rule 11 of the Code of Civil Procedure (for short the Code ). The question of interest as raised by Mr. Jha could be said to be covered under Issue No.5 which pertains to claim of interest by the Central Bank if that was correct and according to the contract. 11. The first Act regulating the money lending in the State of Bihar was enacted in 1938 and it was Bihar Money lenders Act of that year. This 1938 Act was repealed by Bihar Money Lenders (Regulation of Transactions) Act, 1939 (for short 1939 Act ). The preamble to 1939 Act said that certain doubts had been expressed about the validity of the 1938 Act. This 1939 Act was replaced by the Bihar Money Lenders Act, 1974 . That Act also repealed the Act of 1938. We are not concerned with the Act of 1938 as the transaction in the present case appertains to the year 1973 where loan of about 1.74 lacs was granted and of the year 1976 when fresh documents were executed renewing the loan now in the sum of Rs.1,90,000.00. Mr. Jha said that though the joint stock companies were exempted from the operation of the Act of 1938, no such exemption was granted in the 1939 Act. Referring to section 6 of 1939 Act he said that the agreement for grant of compound interest would be void. As a matter of fact, mr. Mr. Jha said that though the joint stock companies were exempted from the operation of the Act of 1938, no such exemption was granted in the 1939 Act. Referring to section 6 of 1939 Act he said that the agreement for grant of compound interest would be void. As a matter of fact, mr. Jhas grievance has been the charging of compound interest by the Central bank. Sec.6 of 1939 Act is as under:- "6. Agreement for payments of compound interest void.-Notwithstanding anything to the contrary contained in any other law or in any contract, an agreement entered into by a debtor for the payment of compound interest entered on loans advanced after the commencement of this act shall be void. " If we refer to Sec.3 of 1974 Act it, in relevant part, states that the State government may by notification exempt any class of moneylenders or any class of loans in the whole or any part of State of Bihar from the operation of all or any of the provisions of the Act. The definition of money-lender is almost the same in all these three Acts of 1938, 1939 and 1974- a money lender means a person advancing loan includes a Hindu undivided family. It was not disputed that the Central Bank would come within the definition of money lender: it being a person as defined under the General Clauses Act, 1897. Sec.3 of 1939 Act is similar to that of 1974 Act. We could not be shown any notification either under Sec.3 or section 6 of the 1939 Act. However, Mr. Ajay Kumar Sinha, learned Counsel for the Central Bank, drew our attention to a Bench decision of this Court in Life insurance Corporation of India V/s. Shri hiralal Jalan and others [1963 B. L. J. R.887] and particularly to Para 9 of the judgment which reads as under:- "with regard to the stipulation for compound interest being void under the provisions of the Bihar Money Lenders (Regulation of Transactions) Act, 1939 (hereinafter referred to as the Act), Mr. Gupta, appearing for the appellant, has drawn our attention to a notification No. D/ml-2-0-5/53-10567-R, dated the 7th of november, 1953 published in the Bihar gazette, dated the 18th of November, 1953, which exempts the application of section 6 of the Act to Joint Stock Banks registered under the Indian Companies act, 1913. . . . . Gupta, appearing for the appellant, has drawn our attention to a notification No. D/ml-2-0-5/53-10567-R, dated the 7th of november, 1953 published in the Bihar gazette, dated the 18th of November, 1953, which exempts the application of section 6 of the Act to Joint Stock Banks registered under the Indian Companies act, 1913. . . . . " In this view of the matter Mr. Jha, perhaps, had nothing more to say on the validity of the agreement between the parties charging compound interest. 12 In Sec.3 of 1974 Act there is a specific notification exempting various categories of money lenders throughout the State of Bihar from all the provisions of the Act. There are as many as 16 categories of moneylenders and some of these are- (1) a banking company as defined in the Banking regulation Act, 1949, (2) the State bank of India constituted under the state Bank of India Act, 1955 and (3) a corresponding new bank constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. The notification which exempts these categories of moneylenders is dated March 24, 1976. There are two acts touching on interest we may now notice. One is the Banking Regulation act, 1940 and the other is the Banking companies (Acquisition and Transfer of undertakings) Act, 1970 (for short, bank Nationalisation Act ). Under the later Act, the Central Bank, the plaintiff, no longer remained a Joint Stock company and all its banking business was taken over by the new Undertaking though of the same name. Prior to the bank Nationalisation Act there was central Bank of India Ltd. , a Joint stock Company, also a banking company doing the business of banking. This business of banking was taken over by the corresponding new undertaking under the same name, i. e. , Central Bank of India which under sub-section (4) of section 3 became a body corporate with perpetual succession and a common seal with power to acquire, hold and dispose of property and to contract and may sue and be sued in its name. The Central bank before us is, therefore, Corporation constituted under the Bank nationalisation Act and is not a Joint stock Company registered under the companies Act of 1913 or 1956. banking Company is defined in the Banking regulation Act and means any company which transacts the business of banking in India. The Central bank before us is, therefore, Corporation constituted under the Bank nationalisation Act and is not a Joint stock Company registered under the companies Act of 1913 or 1956. banking Company is defined in the Banking regulation Act and means any company which transacts the business of banking in India. company under this Act has been defined to mean any company as defined in Sec.3 of the Companies act, 1956. corresponding new bank means a corresponding new bank constituted under Sec.3 of the Bank nationalisation Act. From these definitions as given in Sec.5 of the Banking Regulation Act, 1949 , it transpires that corresponding new bank cannot mean a banking company as the former would be a corporation constituted under the Bank Nationalisation Act and the latter, a company registered under the Companies Act. 13. During the course of arguments we were also referred to Sec.21-A of the Banking Regulation Act and it was inserted by the amending Act of 1984 and came into force with effect from february 15, 1984. This Sec.21-A is as under:- "21-A. Rates of interest charged by banking companies not to be subject to scrutiny by courts.-Notwithstanding anything contained in the Usurious Loans Act, 1918 (10 of 1918) or any other law relating to indebtedness in force in any State, a transaction between a banking company and its debtor shall not be reopened by any Court on the ground that the rate of interest charged by the banking company in respect of such transaction is excessive. " Yet another question arises if Sec.21-A could apply to corresponding new bank as it refers only to a banking company. Thus, if the Central Bank, the plaintiff, is not a Joint Stock Company, its agreement to charge compound interest would be void under Sec.6 of the 1939 Act. It cannot even be argued that this agreement would get revived either from 1976 when notification under Sec.3 of the 1974 Act came to be issued exempting the provisions of 1974 Act to various categories of money lenders as mentioned above. As a matter of fact, the notification aforementioned would show that a banking company as defined in the Banking regulation Act, 1949 is different than a corresponding new bank under the bank Nationalisation Act. As a matter of fact, the notification aforementioned would show that a banking company as defined in the Banking regulation Act, 1949 is different than a corresponding new bank under the bank Nationalisation Act. Sec.21-A of the Banking Regulation Act, however, does come to the rescue of the plaintiff Bank by virtue of Sec.51 of that Act as in that case Sec.21-A could apply to corresponding new bank as well. We have, therefore, to hold that the Central Bank could charge compound interest. 14. If we refer to the renewed loan document of July 25, 1976, in the judgment of the Trial Court rate of interest mentioned is 18% and that is also the rate mentioned in the judgment of the learned Single Judge. This is again on the principal amount of Rs.1,90,000.00. The Trial Court granted compound interest both pendente lite and future at the rate of 16 1/2% with six monthly rests which, as noted above, has been modified bv the learned Single Judge in the exercise of discretion under rule 11 of Order XXXIV of the Code. The learned Trial Court on issue No.5 came to the conclusion that originally the agreed rate of interest was 5% over and above the Reserve Bank of India rate subject to the minimum of 12% per annum with monthly rests. After the renewal of the loan the agreed rate of interest was 16 1/2% compound interest. In the list of documents, Ext.3/a is a letter of agreement of hypothecation dated July 25, 1976. In this it is mentioned in para 10 as under:- "compound interest at the rate of per cent over the Bank rate subject to a minimum of 16 1/2 per cent per annum or at such other rate or rates as may from time to time be fixed by the Bank by notice in writing to the borrowers with quarterly rests calculated according to the Banks usual practice shall be paid on daily balance in Banks favour in the said loan account and shall be paid by the borrowers as and when demanded by the bank" 15. The agreed rate of interest after the renewal of the loan presents somewhat a confusing scene if we refer to the pleadings, documents and the judgements of the Trial Court as well as of the learned Single Judge. The agreed rate of interest after the renewal of the loan presents somewhat a confusing scene if we refer to the pleadings, documents and the judgements of the Trial Court as well as of the learned Single Judge. Perhaps, it is better to go back what the Trial Court held and that was 16 1/2% compound interest with six monthly rests on the amount of Rs.1,90,000.00. As a matter of fact parties entered into a new agreement of loan on July 25, 1976 for Rs.1,90,000/-with a different rate of interest. Notification issued under Sec.3 of the 1974 Act would exempt this transaction as the Act does not apply to the plaintiff Bank. Charging of compound interest of 16 1/2% with six monthly rests has to be upheld. It is not necessary for us to go into the question of charging of penal interest by the plaintiff Bank as that claim has already been declined by the Trial Court and not challenged by the plaintiff Bank in appeals. 16. Coming now to the provisions of Order XXXIV, rule 11 of the Code, could it be said that the learned Single judge exercised a sound judicial discretion in altering the interest both pendente lite and future at the rate of 6% per annum. The learned Single Judge, it appears, was impressed by the fact that agro-Art Industries had by that time paid over Rs.4.56 lacs against a loan of about Rs.1,74,000/- and further that the agro-Art Industries had been depositing rs.20,000/- per quarter for a long period. But, at the same time, one should not lose sight of the fact that the money was advanced as far back as in the year 1973 and the defendants had always committed breach of the term of the agreement and did not repay the loan. It was only in 1981 that the plaintiff Bank had to file the present suit. It is true that in a suit of mortgage under order XXXIV, it is the provision of rule 11 which would apply and not Sec.34 of the Code. It was only in 1981 that the plaintiff Bank had to file the present suit. It is true that in a suit of mortgage under order XXXIV, it is the provision of rule 11 which would apply and not Sec.34 of the Code. Rule 11, in relevant part, is as under:- "11 Payment of interest.-In any decree passed in a suit for foreclosure, sale or redemption, where interest is legally recoverable, the Court may order payment of interest to the mortgage as follows, namely (a) interest up to the date on or before which payment of the amount found or declared due is under the preliminary decree to be made by the mortgagor or other person redeeming the mortgage- (i) on the principal amount found or declared due on the mortgage, - at the rate payable on the principal, or where no such rate is fixed, at such rate as the court deems reasonable, xxx XXX XXX (b) subsequent interest up to the date of realisation or actual payment on the aggregate of the principal sums specified in clause (a) as calculated in accordance with that clause at such rate as the Court deems reasonable" The learned Single Judge has allowed interest at the agreed rate upto the institution of the suit, but for the subsequent period, i. e. , interest pendente lite and future, he granted interest at the rate of 6% per annum which, according to him, would meet the ends of justice. No doubt, the word may in Rule 11 gives discretion in the Court, but as it has been held, this discretion has to be judicial discretion exercised on sound principles, though these principles cannot be fitted into any straight jacket and would depend upon case to case. Broadly speaking, the Court has to see the conduct of the defendant; that the breach committed by him was not due to his own fault and he suffered set back because of some natural calamity or on account of circumstances over which he had no control. In the present case, the defendant Agro-Art Industries had defaulted although and it is only on account of court orders that payments were being made. They are running the cinema and it is not their case that they suffered any loss on any account whatsoever beyond their control. In the present case, the defendant Agro-Art Industries had defaulted although and it is only on account of court orders that payments were being made. They are running the cinema and it is not their case that they suffered any loss on any account whatsoever beyond their control. The grant of loan by the plaintiff Bank for purchase of machineries for running the cinema would certainly be a commercial transaction. Though Sec.34 in term may not apply, but one can certainly get guidance from that section. As per the section, if liability had arisen out of a commercial transaction, the rate of interest both pendente lite and future may exceed 6% but shall not exceed the contractual rate of interest, or where there is no contractual rate, the rate at which moneys are lent by nationalised banks in relation to commercial transactions. A nationalised bank is what has been described as corresponding new bank in the Bank Nationalisation Act. In the present case, therefore, we see no ground to reduce the rate of interest as agreed to between the parties to merely 6% per annum. Nevertheless considering the fact that it is a very old transaction going back to year 1973 though renewed in 1976 we are inclined to grant interest both pendente lite and future at the rate of 12% per annum. As a matter of fact, when the transaction was originally entered into the parties had agreed that minimum rate of interest would be 12% per annum though with monthly rests. 17 Accordingly, while upholding the decree for Rs.2,01,865.08 we will direct that the plaintiff Bank will be entitled to interest both pendente lite and future on this amount at the rate of 12% per annum. Parties shall bear their cost in these appeals. Order Accordingly.