JUDGMENT R. L. Khurana, J.—The plaintiff-bank has directed the present Regular First Appeal against the judgment and decree dated 3U-9-1986 of the learned single Judge, passed in Civil Suit No. 84 of 1985. 2. Defendant No. 1 is a sole proprietorship firm of which the defendant No. 2 is the proprietor. A cash credit limit of Rs 1,00,000, as working capital for setting up a thresher, shelter and Chhakis was sanctioned in favour of defendants No. 1 and 2 by the plaintiff. The amount of cash credit limit was repayable alongwith interest at the rate of 12.5% per annum with quarterly rests Defendant No 3 stood as a guarantor for defendants No. 1 and 2. The facility was availed of by defendants No I and 2. They, however, failed to repay the same, as per terms and conditions agreed upon between the parties. After adjusting the various amounts received from the defendants from time to time, a sum of Rs. 1,43,185.53 P. towards principal and interest upto 26-9-1985 was due from the defendants. 3. The defendants No. I and 2 were also granted a medium term loan of Rs 1,00,000 by the plaintiff. The loan carried interest at the rate of 12 5% per annum with quarterly rests. Defendant No. 3 stood as a guarantor for the repayment of the loan amount as well. The defendants failed to repay the loan amount and the interest accrued thereon, as per the terms and conditions of the loan. After adjusting the amounts received from time to time, a sum of Rs 98,244.50 P. towards principal and interest as on 26 9-1985 was due from the defendants 4. The plaintiff accordingly filed the suit, being Suit No 84 of 1985, for the recovery of the amount of Rs. 2,41,430.03 P. being the outstanding amount of the two loans. 5. Though the suit of the plaintiff was being resisted and contested by the defendants initially, on 30-9-1986, the defendants admitted the claim and suit of the plaintiff and consented to a decree for Rs 2%41t430.03 P. with costs being passed in favour of the plaintiff. The also agreed to pay future interest at the rate of 12 5% per annum on the sum of Rs 1,60,000. They, however, prayed that they may be allowed to pay the decretal amount by quarterly instalments of Rs. The also agreed to pay future interest at the rate of 12 5% per annum on the sum of Rs 1,60,000. They, however, prayed that they may be allowed to pay the decretal amount by quarterly instalments of Rs. 15,000 each, payable in the months of January, April, July and October of each year, beginning from January, 1987. It was agreed that in the event of default in the payment of any one of the instalments within the stipulated period, the plaintiff would be entitled to recover forthwith the entire balance of the decretal amount from the defendants. 6. On the basis of the statements, made by the defendants, the learned single Judge decreed the suit vide the impugned judgment and decree dated 30-9-1986. A decree for Rs. 2,41,430-03 P , with costs, was passed in favour of the plaintiff and against the defendants. Future interest at the rate of 12.5% per annum was allowed on the amount of Rs. 1,60,000. The defendants were permitted to pay the decretal amount by instalments as prayed for by them. 7. The plaintiff by way of the present appeal has assailed the impugned judgment and decree on the following grounds : (a) Future interest should have been allowed on the entire decretal amount of Rs. 2,41,430.03 P, It could not have been restricted to Rs. 1,60,000. (b) Future interest should have been allowed from the date of the suit, The defendants No, 1 and 2, on the other hand have contended that under section 34, Code of Civil Procedure, future interest is payable/ awardable on the principal sum adjudged, which does not include any component of interest irrespective of agreement between the parties. It has further been contended that since the amount; of Rs 2,41,434.03 P. claimed by the plaintiff included the component of interest as well, the learned single Judge rightly awarded the interest on Rs. 1,60,000 only being the principal sum adjudged. In support of their contention, the defendants have placed reliance on Punjab National Bank v. Surender Singh Mandyal and others, AIR 1996 HP 1. Further, contention raised on behalf of the defendants is that award of interest is entirely in the discretion of the court and as such no fault can be found if future interest in the exercise of such discretion has been awarded from the date of the decree. 8. Further, contention raised on behalf of the defendants is that award of interest is entirely in the discretion of the court and as such no fault can be found if future interest in the exercise of such discretion has been awarded from the date of the decree. 8. We have heard the learned Counsel for the parties and have also gone through the record of the case. Section 34, Code of Civil Procedure, provides :— "34, Interests.— (1) Where and in so far as a decree is for the payment of money, the Court may, 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, with further interest at such rate not exceeding six per cent per annum as the Court deems reasonable on principal sum, from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit : 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 Undertakings) Act, 1970 (5 of 1970), Explanation II—For the purposes of this 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 therefore shall not lie.” 9. (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 therefore shall not lie.” 9. The words principal sum adjudged1 used in section 34, quoted above, came up for consideration before a learned single Judge of this Court in Punjab National Bank v Surender Singh Mandyal and others, (supra) After considering the dissenting views taken by various High Courts, the learned single Judge concurred with the view taken by the Full Bench of the Bombay High Court in Union Bank of India v Dalpat Gaurishankar Upadhyay, AIR 1992 Bom 482, and held that after the amendment was carried out in section 34 of the Code of Civil Procedure by the Amendment Act of 1956, the intention of the legislation of the legislature was made clear that the interest under section 34 is not payable on the aggregate amount of principal and interest, but on the principal sum adjudged. For the purpose of section 34 of the Code of Civil Procedure, the principal sum is required to be adjudged, which cannot include any interest whatever may be the agreement between the parties. 10. A contrary view has been taken by the Delhi High Court in Syndicate Bank v. West Bengal Cement Ltd, AIR 1989 Delhi 107, Gauhati High Court in United Bank of India v. Jorhei Fuel Briquetting Industry, AIR 1992 Gau 116 and Punjab and Haryana High Court in State of Punjab v. Scheduled Castes Coop. DOS ltd, AIR 1988 P & H 192. It has been held that when a bank advances loan with interest at quarterly rests, the interest is worked out at the close of every quarter. The interest so worked out at the close of every quarter is then added towards the outstanding balance and treated as principal sum for the next quarter for the purpose of computation of interest. Therefore, the term principal sum adjudged* would be the sum total of the original amount inclusive of unpaid interest 11. The interest so worked out at the close of every quarter is then added towards the outstanding balance and treated as principal sum for the next quarter for the purpose of computation of interest. Therefore, the term principal sum adjudged* would be the sum total of the original amount inclusive of unpaid interest 11. The law laid down by the learned single Judge of this Court Punjab National Bank v Surender Singh Mandyal and others (supra) and the Full Bench of Bombay High Court in Union Bank of India v, Dalpat Gaurishankar Upadhyay (supra) is no longer a good law in view of the decision of the apex Court in Bank of Barodav. Jagannath Pigment and Chemical and others, Is 96 (5) SCC 280. In the said case, the bank had filed a suit for the recovery of a sum of Rs. 1,66,759.29 P with interest and costs; The trial Court decreed the suit for the said amount with costs. Future interest was awarded at the rate of 13 5% per annum on the said amount of Rs. 1,66,759 29 P. from the date of suit till payment or realisation la the appeal carried before the High Court by the defendant-borrower, a contention was raised that the bank was not entitled to claim compound interest and convert the principal sum claim as inclusive of interest and that the trial Court was not justified in granting future interest on the said principal sum adjudged. The High Court accepted the contention and modified the decree and allowed future interest on the principal sum borrowed, that is, Rs. 1,20,675.59 P. The bank carried the appeal before the apex Court The decision of the High Court was reversed and that of the trial Court restored. In the view of the apex Court, the principal sum adjudged, therefore, would include the principal amount of loan and the amount of interest accrued thereon. 12. 1,20,675.59 P. The bank carried the appeal before the apex Court The decision of the High Court was reversed and that of the trial Court restored. In the view of the apex Court, the principal sum adjudged, therefore, would include the principal amount of loan and the amount of interest accrued thereon. 12. A contention was raised by the learned Counsel for the defendants that the decision of the apex Court in the case of Bank of Baroda v. Jagannath Pigment and Chemicals (supra) cannot be applied in the present case, since the question of liability of the borrower to pay interest on principal sum to include interest that became merged with the principal sum adjudged or principal sum lent, stands referred to be authoritatively laid down by a Bench of five judges in Central Bank of India v, Ravindra and others, 1996 (5) SCC 279. 13. There is no denying that the question as to interpretation of the words principal sum adjudged stands referred to a larger Bench of the apex Court. It is well settled that every decision is binding till the same is set aside, reversed or modified in appeal or otherwise. Therefore, till the ratio laid down by the apex Court in Bank of Baroda v. Jagannath Pigment Chemicals, 1996 (5) SCC 280, is set aside, reversed or modified by a larger Bench of the apex Court, the same would hold the field Following the said ratio, we hold that the principal sum adjudged would be inclusive of the amount of interest accrued on the principal amount of loan. The plaintiff is entitled to future interest on the total amount of Rs. 2,41,430 03 P claimed in the suit The learned single Judge has, therefore, erred in awarding the future interest on Rs. 1,60,000. While awarding future interest, the learned single Judged has not specified whether such interest stood awarded from the date of suit or from the date of decree. There is no denying that in the absence of such a specific direction, future interest will be deemed to have been allowed/ awarded from the date of the decree. 14. 1,60,000. While awarding future interest, the learned single Judged has not specified whether such interest stood awarded from the date of suit or from the date of decree. There is no denying that in the absence of such a specific direction, future interest will be deemed to have been allowed/ awarded from the date of the decree. 14. Though, section 34, Code of Civil Procedure, provides that the court may order interest at such rate as the court may deem reasonable to be paid on the principal sum adjudged from the date of suit to the date of decree, the High Court of Calcutta in West Bengal Financial Corporation and another v Bertram Scott (I) Ltd. (In Liquidation), AIR 1983 Cal 381 (DB), has held that the Court has no discretion as to whether pendente lite interest could be granted or not. The court is bound to grant such interest, The court has the discretion only as to the rate of the interest. We are in agreement with the said view and endorse the same. Even if it be assumed that the court has the discretion even with regard to the refusal or award of pendente lite interest, such a discretion has to be exercised on sound judicial principles. In the present case, no reasons have been recorded by the learned single Judge in not awarding future interest from the date of the suit. Therefore, it cannot be said that the discretion was exercised on sound judicial principles. We, therefore, hold that the plaintiff is entitled to future interest at the rate awarded by the learned single Judge, with quarterly rests, from the date of the suit, that is, 710-1985, till the date of payment or realisation, 15. Consequently, the present appeal is allowed. The impugned judgment and decree of the learned single Judge are modified and the plaintiffs are held entitled to future interest on the principal sum adjudged, that is, Rs 2,41,430 03 P. at the rate of 12.5% per annum with quarterly rests, from the date of suit, that is, 7-10-1985, till the date of payment or realisation of the amount. The plaintiff shall also be entitled to costs of the present appeal. Appeal allowed,