T. N. VALLINAYAGAM, J. ( 1 ) THIS second appeal preferred by the life insurance corporation of India is confined only to rate of interest payable after filing of the suit in a mortgage deed. When the corporation paid contractual rate of interest 15% per annum i. e. , contractual rate of 12 1/2% plus 2 1/2% default interest from the date of suit till the date of payment. But the courts below have granted only 6% interest per annum from the date of suit till the date of payment. ( 2 ) THE question in this second appeal is therefore, whether the court has got power under Order 34 rule 11 of the CPC and what is the scope of interaction of under Order 34, rule 11 of the CPC. ( 3 ) ORDER 34, rule 11 gives a certain amount of discretion to the court so far as interest pendents lite and subsequent interest is concerned and it is no longer absolutely obligatory on the courts to decree interest at the contractual rates upto the date of redemption in all circumstances even if there is no question of the rate being penal, excessive or substantially unfair. (as held by the Supreme Court in Soli Pestonji Majoo v Gangadhar Khemka ). In another ruling reported in ILR 1985 kar. 2976, it is held as under. in another ruling reported in divisional manager, I/o of India v Bha-Gavathy Amma and others, it is held as under:3-a. On the question of interest under Order 34, rule 11 of the CPC the full bench of Bombay High Court in Union Bank of India v Dalpat Gaurishankar Upadyay, held. as payable on the date of the suit. But interest under Section 34 not payable only on the principal sum adjudged. No interest is payable on the amount of interest adjudged on such principal sum. Interest, whether simple or compound will remain 'interest' for the purpose of Section 34 and shall never merge in the principal. The legislature while using the expressionin Section 34 in contradistinction to the expression "principal sum" has not made any distinction between the interest computed by way of simple interest or compound interest. Hence, the "principal sum adjudged" used in Section 34 of the CPC means the original amount lent without the addition thereto of any interest whatsoever. The legislature while using the expressionin Section 34 in contradistinction to the expression "principal sum" has not made any distinction between the interest computed by way of simple interest or compound interest. Hence, the "principal sum adjudged" used in Section 34 of the CPC means the original amount lent without the addition thereto of any interest whatsoever. This will be the position notwithstanding any agreement between the parties or any prevailing banking or trade practice to the contrary". A division bench of Punjab and Haryana High Court in Jagdish Chan-Der v Punjab National Bank, has held. it is further held that under proviso to Section 34 so long as the loan is not a commercial loan and only an agricultural loan, interest exceeding 6% per annum is not proper. In N. M. Veerappa v Canara Bank, the Supreme Court while referring to Section 21-a of banking Regulation Act, observed as follows. ultimately, the Supreme Court has granted interest at the rate of 6% per annum from the date of suit till the date of realisation. In the division bench of this court to which I was a party in State Bank of India v M/s. Bangalore Sheet Metal Associates and others, it was held. ( 4 ) ANOTHER division bench of this Court in Bank of India v Karnamranga Rao, has held as follows :in the above case the bench has held that the court was justified in reopening the interest charged from the date of loan and allowed interest only at the reserve bank rate of 10%, however not compound but only a simple. ( 5 ) THE resultant effect of all the above dicta goes to establish. (i) if the loan is not of commercial transaction, then notwithstanding Section 21-a of the banking Regulation Act, the interest has to be charged by the banks at the rate prescribed by the reserve bank of India circular. But simple interest till the date of suit and subsequently if it be the mortgage, the provision of Order 34 will apply. I am of the view that court has discretion to award interest under Order 34, rule 11. The courts below have granted only 6% p. a. interest by exercising its discretion in favour of the defendants. ( 6 ) THE life insurance corporation of India, is a public oriented organisation which is created for the purpose of serving the general public. The courts below have granted only 6% p. a. interest by exercising its discretion in favour of the defendants. ( 6 ) THE life insurance corporation of India, is a public oriented organisation which is created for the purpose of serving the general public. In fact the money that is lent at comprehensively lower rate of interest is from and out of the money collected from the policy holders of the lic. Inasmuch as the public money involved, I feel that the discretion of the court must be held to be respected and complied with in the interest of the public at large. In this view, I direct that the interest payable in this particular case wherein the money involved is the money belonging to life insurance corporation of India, shall be 12 1/2% p. A. Simple interest and the claim of penal interest is disallowed. ( 7 ) IN this view, the second appeal is allowed modifying the rate of interest at 12 1/2% subsequent to the suit instead of 6% p. a. granted by the courts below. No costs. --- *** --- .