OM PRAKASH, J. ( 1 ) THIS is an appeal against the judgment and decree dated May 31, 1984, passed by the learned vith Additional District Judge, Ghaziabad, decreeing, inter alia, pendente lite and future interest at the rate of 6 per cent. per annum. ( 2 ) BRIEFLY, the facts are that the term loan of Rs. 4,00,000 was sanctioned to the respondent-firm, but actually the loan to the extent of Rs. 3,20,000 was taken by the firm. The loan was advanced with interest at the rate of 16 per cent. per annum. ( 3 ) A suit for recovery was filed by the appellant against the respondent-firm, partners thereof and the guarantors, which was decreed by the order dated May 31, 1984. The trial court awarded pendente lite and future interest, i. e. , from the date of filing the suit till the date of recovery, at the rate of 6 per cent. per annum only. The interest at the rate of 6 per cent. per annum was awarded taking into consideration the plea advanced by the respondents that the respondent-firm suffered huge losses. The short contention of learned counsel for the appellant before the court is that no cogent evidence was produced by the respondents to show that the respondent-firm suffered huge losses and, therefore, the trial court erred in awarding interest at the rate of 6 per cent. per annum only. ( 4 ) WE have carefully gone through the findings recorded by the trial court. It appears that the trial court accepted the contention of the respondents that the respondent-firm suffered huge losses. No copy of the profit and loss account, copy of income-tax return, copy of income-tax assessment or of an order passed by any income-tax authority was filed before the trial court to show that the respondent-firm, in fact, suffered huge losses. We, therefore, find force in the submission of learned counsel for the appellant that the trial court erred in accepting the contention of the respondent and the trivial evidence. A list of documents was furnished by the respondents to the trial court, but there is no reason as to why the cogent evidence was not produced. We, therefore, find force in the submission of learned counsel for the appellant that the trial court erred in accepting the contention of the respondent and the trivial evidence. A list of documents was furnished by the respondents to the trial court, but there is no reason as to why the cogent evidence was not produced. ( 5 ) WE are, therefore, of the considered view that the trial court should not have accepted the bare contention of the respondents that the respondent-firm suffered huge considerable losses and, therefore, it was not in a position to pay the contractual rate of interest. ( 6 ) OUR attention has been drawn by counsel for the appellant to the proviso to Sub-section (1) of section 34 of the Code of Civil Procedure which was inserted by the Act of 1976 with effect from July 1, 1977, which states 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. Whereas Sub-section (1) of Section 34 relates to the transaction other than the commercial transaction, the proviso to Sub-section (1) of Section 34 of the Code of civil Procedure refers to the commercial transaction. For the commercial transaction, the limit of interest is not confined to 6 per cent. per annum as stated in Sub-section (1) of Section 34 of the civil Procedure Code, as the proviso to Sub-section (1) of Section 34 clearly states that where the liability arises out of the commercial transaction, the rate of interest may exceed 6 per cent. per annum, but that shall not exceed the contractual rate of interest. The trial court has clearly found that the contractual rate of interest as per the agreement entered into between the parties was 16 per cent. per annum. In the instant case the contractual rate of interest is 16 per cent. per annum, but that shall not exceed the contractual rate of interest. The trial court has clearly found that the contractual rate of interest as per the agreement entered into between the parties was 16 per cent. per annum. In the instant case the contractual rate of interest is 16 per cent. per annum only, and, therefore, in the absence of any cogent evidence that the respondent-firm suffered huge losses and for that reason it was unable to pay higher rate of interest, the trial court should have awarded appropriate rate of interest, i. e. , the contractual rate of interest. In the matter of agreement, both parties are expected to adhere to the terms of agreement strictly, unless there are cogent reasons not to do so. When there is a contract to pay interest at the rate of 16 per cent. per annum, we see no good reason to reduce the same in the absence of any evidence. ( 7 ) NO other contention was raised by counsel for the appellant before us. ( 8 ) THE appeal is, therefore, allowed with costs to the extent that the appellant will be entitled to the interest at the rate of 16 per cent. per annum from the date of filing the suit till the date of recovery. .