Kamala v. K. A. Kunjithapatham — 1999 DIGILAW 960 (MAD)

Judgment :- Additional defendants 2 and 4 to 7 who are legal heirs of deceased defendant in O.S. No. 699 of 1990, on the file of Subordinate Judges Court at Tiruchirappalli are the appellants. Third defendant who is also a legal heir has been impleaded as second respondent in this Appeal. 2. Plaintiff filed the suit for recovery of a sum of Rs. 1,97,033-34.p on the basis of promissory notes Exs. A-1 to A-7 executed by deceased defendant. The allegation in the plaint is that as per Ex. A-1 dated 7.2.1986, the deceased defendant executed a promissory note in favour of one Mangayarkarasi for a sum of Rs. 35,000/-, as per ExA-2 dated 5.3.1986, he executed another promissory note in favour of one Rajeshwari for Rs. 20,000/-; as per Ex. A-3 dated 25.7.1986, he borrowed a sum of Rs. 20,000/- from one Tara; and, as per Exs. A-4, A-5 and A-6, he had borrowed Rs. 20,000/-Rs. 5,000/- and Rs. 15,000/- respectively by executing promissory notes in favour of one Eswari on 10.8.1986, 13.8.1986 ana 3.9.1986. Defendant borrowed a further sum of Rs. 10,000/- on 5.10.1986 by executing a promissory note Ex. A-7 in favour of plaintiff. It is said that as per Exs. A-8 to A-14, defendant himself has made endorsements of payment in the various promissory notes. It is further said that the plaintiff is now the holder of Exs. A-1 to A-6, and the persons in whose name the promissory notes were executed, assigned the same for collection as evidenced by Exs. A-15 to A-20. It is further said that the defendant has paid interest upto the end of August 1987, Defendant had further agreed to pay interest at 18% per annum on each and every promissory note. Since there was default in payment of interest, a demand notice was issued on 1.8.1990 asking the defendant to settle the transactions, and the notice was served on the defendant on 6.8.1990. In that notice, the date of assignment was wrongly given as 29.7.1986. So, the further notice was sent to the defendant intimating the correct date of assignment. That notice was also served on the defendant on 6.8.1990. But the defendant did not send any reply. The suit was, therefore, laid for recovery of a sum of Rs. 1,97,033-34.p. with future interest at the rate of 24% per annum, and costs. 3. So, the further notice was sent to the defendant intimating the correct date of assignment. That notice was also served on the defendant on 6.8.1990. But the defendant did not send any reply. The suit was, therefore, laid for recovery of a sum of Rs. 1,97,033-34.p. with future interest at the rate of 24% per annum, and costs. 3. Defendant who died pending suit, filed a written statement. According to him, even though the promissory notes stand in the name of various persons, he knows only the plaintiff. He admitted that he executed the promissory notes. According to him, these promissory notes are not supported by any consideration. According to him, he was employed in Southern Railway, and retired in 1984. At that time, he got large sums of money by way of gratuity, provident fund, etc. Plaintiff introduced to the defendant one Santhanam as his loyal friend and advised him to do money lending business along with Santhanam. Plaintiff also used to advance money to Santhanam on fabulous rate of interest at 86% per annum. Plaintiff also used to get promissory notes from defendant through the said Santhanam for the amount advanced to Santhanam to the tune of Rs. 2 lakhs. On this ground of understanding alone, all the promissory notes have been executed and they have come into existence. It is said, that plaintiff has been receiving Rs. 6,000/- per mensem by way of interest from Santhanam for the amounts advanced to him till November 1987. Thereafter, Santhanam stopped payment of interest and filed I.P. 51 of 1987, on the file of Sub Court, Trichirappalli, and absconded ever since that date. Plaintiff was also unable to trace the said Santhanam, and has filed the suit with a view to blackmail the defendant to recover the amount. According to defendant, he was not at all benefited from out of the suit borrowings, and in fact he did not receive any amount from plaintiff. There was also (no?) (sic.) necessity to borrow such huge amount, and the actual borrower was Santhanam. It is also said in the written statement that plaintiff had assured the defendant that he would not betray him by filing any suit against him, but, contrary to the assurance, plaintiff has filed the suit. It is also contended that plaintiff is not entitled to interest at more than 9% per annum. It is also said in the written statement that plaintiff had assured the defendant that he would not betray him by filing any suit against him, but, contrary to the assurance, plaintiff has filed the suit. It is also contended that plaintiff is not entitled to interest at more than 9% per annum. He prayed for dismissal of the suit. 4. After filing the written statement, defendant died on 27.7.1994 and additional defendants 2 to 7 were impleaded as his legal heirs. Additional fourth defendant filed a written statement, which has been adopted by other defendants. In the additional written statement, execution of the suit promissory notes is not admitted, and passing of consideration is also denied. Assignment in favour of plaintiff is also denied. It is said that the father was financially sound, and there was no necessity for him to borrow any amount from plaintiff. The allegation that the promissory notes were executed by defendant (who is now no more) is also denied. 5. On the above pleadings, the trial Court took oral and documentary evidence. On the side of plaintiff, Exs. A-1 to A-30 were marked, and on the side of defendants, Ex. B-1 was marked. P.W.I is plaintiff and D.W.I is the fourth defendant. After evaluating the entire evidence, the trial Court has held that the plaintiff is entitled to a decree as prayed for. The trial Court has further held that when deceased defendant himself has admitted execution of the promissory notes, the legal heirs cannot take a different stand. It also held that once the deceased defendant has admitted the execution, it is for him to prove that there was no passing of consideration. Defendants have failed to discharge that burden. It also held that plaintiff has taken assignment of Exs. A-1 to A-6 and he is, therefore, competent to file the suit. The suit was decreed as prayed for.- 6. Against that judgment, the present appellants filed A.S. No. 144 of 1997, on the file of Principal District Judge, Tiruchirappalli. The decree of the trial Court had not allowed full costs to the plaintiff. Challenging the same, plaintiff filed cross-objection. As per judgment dated 12.10.1998, the lower Appellate Court dismissed the appeal with costs, and allowed the cross-objection with costs. The concurrent judgment is assailed in this Second Appeal. 7. The decree of the trial Court had not allowed full costs to the plaintiff. Challenging the same, plaintiff filed cross-objection. As per judgment dated 12.10.1998, the lower Appellate Court dismissed the appeal with costs, and allowed the cross-objection with costs. The concurrent judgment is assailed in this Second Appeal. 7. Since caveat was entered by plaintiff/respondent No. 1, the Second Appeal itself was heard for final disposal when it came up for admission. 8. The following questions of law have been raised in the Memorandum of Appeal:— “1) Whether the Courts below are correct in law in decreeing the suit filed by the respondent who claims to be an assignee for collection without there being any proof of the assignment? 2) Whether in law the respondent can maintain a suit in his capacity as the assignee for collection against the legal representatives of the deceased 1st defendant who is said to be the promisor? 3) Whether the Courts below are correct in law in not drawing an adverse inference against the plaintiff for not examining the assignors viz., the alleged promisees especially when the assignment is not admitted and stoutly denied by the appellant? 4) Whether, on the facts and circumstances of the case, the Courts below are correct in law in applying the presumption under Sec. 118 of the Negotiable Instruments Act when there is a total denial that the first defendant had borrowed money from the assignors of Exs. A-1 to A-6 and under Sec. 118 of the Negotiable Instruments Act there is no presumption that the amount was borrowed from the promisee stated in the promissory note? 5) Is it not necessary in law for the plaintiff to prove that the amount was lent by the promisee especially when the said fact is stoutly denied by the defendant that there was no borrowing from the promisees named in the promissory note Ex. A-1 to A-6? 6) Whether the Courts below are correct in law in totally eschewing from consideration the usurious nature of the rate of interest charged under Exs. A-1 to A-7? 7) Whether the judgment and decree of Courts below are sustainable in law especially when there is a total non-consideration of the principles enshrined in Sec. 34 of the Civil Procedure Code?” 9. Learned counsel for appellants submitted that the plaintiff should not have been granted a decree on the basis of Exs. A-1 to A-7? 7) Whether the judgment and decree of Courts below are sustainable in law especially when there is a total non-consideration of the principles enshrined in Sec. 34 of the Civil Procedure Code?” 9. Learned counsel for appellants submitted that the plaintiff should not have been granted a decree on the basis of Exs. A-1 to A-6 promissory notes since the assignment has not been proved. Ex. A-7 alone stands in the name of the plaintiff. It is further argued by learned counsel that the persons in whose name the promissory notes have been executed are none other than the wife, daughter-in-law, and daughter of plaintiff, and even though the plaintiff is an advocate, he is doing money lending business in their names and the transactions of the defendant were only with the plaintiff. Learned counsel submitted that in paragraph 17 of the written statement, the assignments have been specifically denied, and, so long as that is not proved, Courts below should not have passed a decree in favour of plaintiff. The assignors have not been examined in this case. It is also said that the fourth defendant has raised a contention that he is not aware of any of the persons in whose names the promissory notes Exs. A-1 to A-6 stand, which, really amounts to denial of execution of promissory notes in their favour and, therefore, there is no scope for applying Section 118 of the Negotiable Instruments Act. Alternatively, it is contended that the interest awarded by the Courts below is exorbitant. At least in regard to the rate of interest, this Court should interfere under Section 100, C.P.C. 10. As against the said contention, learned counsel for first respondent submitted that when the promissory notes were marked by the trial Court, no objection was taken, and in regard to the assignment, there was no cross-examination also. Learned counsel also submitted that the defendant has admitted execution of all these promissory notes, but has only pleaded that they are not supported by consideration and that he was not benefited by the execution of those promissory notes. It is argued that before the Court below the rate of interest was not challenged, and consequently, this Court should not interfere with the discretion exercised by the Lower Appellate Court. 11. It is argued that before the Court below the rate of interest was not challenged, and consequently, this Court should not interfere with the discretion exercised by the Lower Appellate Court. 11. In paragraph 5 of the written statement, the defendant has said thus:— “The plaintiff took all the suit pronotes from this defendant, and excepting the plaintiff the other promisee never advanced any amount to this defendant. In fact, they did not know this defendant at all, nor have seen him.” Paragraph 6 reads thus:— “Under the above circumstances, the promisee excepting the plaintiff did not advance any amount to this defendant as alleged in the plaint”. In paragraph 9, it is further said thus:— “The plaintiff introduced one Santhanam to this defendant, introducing him to be his loyal friend and advised this defendant to do money lending business along with the said Santhanam. The plaintiff used to advance money to the said Santhanam on fabulous rate of interest at 36% p.a. The plaintiff used to get promissory note from this defendant through the said Santhanam for the amount advanced by the plaintiff, to the said Santhanam to the tune of Rs. 2 lakhs. In this view alone, all the suit promissory notes and some other promissory note came into existence.” (Emphasis supplied) 12. From these contentions in the written statement, it is clear that the deceased defendant admitted the execution of the promissory notes which are Exs. A-1 to A-7 in the case. His only defence is that in regard to Exs. A-1 to A-6, he did not know who the drawee is, and the same are not supported by consideration. Exs. A-1 to A-7 have been admittedly written by defendant in his own hand. Thereafter, as per Exs. A-8 to A-14, defendant himself has endorsed on the back of Exs. A-1 to A-7, acknowledging his liability. All these assignments were marked by the trial Court as Exs. A-15 to A- Again, in regard to the execution of the promissory notes, plaintiff has said that he was also present at the time when the defendant executed the promissory notes, and he saw the defendant signing the same on receipt of the amount. On none of these points, there was cross-examination by defendant. Even with respect to the assignments, there was no objection at the time of marking them as exhibits. On none of these points, there was cross-examination by defendant. Even with respect to the assignments, there was no objection at the time of marking them as exhibits. When the defendant himself has admitted the execution of the promissory notes in his written statement, the legal heirs have taken an inconsistent stand denying the execution. 13. Exs. A-1 to A-6 have been assigned only for the purpose of collection. Plaintiff is only a holder of the Negotiable instruments, and he has been authorised only to institute the suit in that capacity. 14. The contention of learned counsel for appellants that the assignment has not been proved and, therefore, the suit should not have been decreed by the Courts below, is rejected. 15. The only other contentions that requires consideration is, whether the defendants have proved that the suit promissory notes are not supported by consideration. 16. In a recent decision of the Honourable Supreme Court reported in (1999) 3 SCC 35 = 1999 3 L.W. 237 ( Bharat Barrel and Drum Manufacturing Company v. Amin Chand Payrelat ), the entire law on that subject has been considered. Their Lordships have said that when the execution of promissory notes is admitted, there is a presumption under Section 118(a) of the Negotiable Instruments Act that there are supported by consideration. Such a presumption is rebuttable, and in paragraph 12 of the judgment, Their Lordships have summarised the entire case-law and held thus:— “Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that one execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbably or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. The burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence let in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The Court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible for contemplated and even if led, is to be seen with a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption, the defendant has to bring on record such facts and circumstances upon consideration of which the Court may either believe that the consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist “ (Emphasis supplied). On a reading of the evidence adduced in this case, I do not think that the defendants have adduced a prima facie case rebutting the presumption under Section 118 of the Negotiable Instruments Act. The only argument that was advanced before the Courts below seems to be that the defendant was in possession of sufficient funds and there was no necessity for him to execute the suit promissory notes. A submission was made that the interval between some of the promissory notes is only 20 days, and within such a short time, there was no necessity for the defendants to borrow huge amounts. I am unable to accept this contention of the legal representatives of deceased defendant, when he (i.e., the deceased defendant) himself had admitted the execution of the promissory notes. Merely because the interval between two promissory notes is only few days, that may not be sufficient to hold that the documents are not supported by consideration. I am unable to accept this contention of the legal representatives of deceased defendant, when he (i.e., the deceased defendant) himself had admitted the execution of the promissory notes. Merely because the interval between two promissory notes is only few days, that may not be sufficient to hold that the documents are not supported by consideration. The finding of the Court below that all the promissory notes were executed by defendant, and the same are supported by consideration, and the plaintiff is the holder of Exs. A-1 to A-6 promissory notes is, therefore, confirmed. 17. The only other question that requires consideration is, whether the rate of interest awarded by the Courts below is correct, and whether interference is called for under Section 100 of the Civil Procedure Code. 18. In Exs. A-1 to A-7, defendant has agreed to pay interest at the rate of 24% p.a. on the principal amount borrowed. Learned Counsel for respondent No. 1 submitted that under Section 79 of the Negotiable Instruments Act, the Court has no other option but to award interest at the rate till recovery. 19. As against the said contention, learned counsel for appellants submitted that under Section 34, C.P.C., the Court has got the discretion to fix the rate of interest which it feels reasonable, and that the power of the Court is not taken away by Section 79 of the Negotiable Instruments Act. It is further submitted that these appellants are; only the legal heirs of the deceased defendant, and if the contract rate of interest is allowed, they will be put to great hardship. Even with respect to commercial transactions, the Court can exercise its discretion whether to award interest at the contract rate. It is further argued that even in mortgage suits, to which Section 34, C.P.C. will not apply, the Courts have held that the Court can exercise its own discretion, whether to award future interest at the contract rate and it is not bound by the contract between the parties. Awarding interest at rate of 24% per annum is excessive and unfair. 20. In (1998) 2 SCC 317 = 1998-2-L.W. 26 ( N.M. Veerappa v. Canara Bank ), Their Lordships have held that with respect to mortgage suits, Section 34, C.P.C. will not apply, and a Special Provision under Order 34, Rule 11, C.P.C. alone is applicable. Awarding interest at rate of 24% per annum is excessive and unfair. 20. In (1998) 2 SCC 317 = 1998-2-L.W. 26 ( N.M. Veerappa v. Canara Bank ), Their Lordships have held that with respect to mortgage suits, Section 34, C.P.C. will not apply, and a Special Provision under Order 34, Rule 11, C.P.C. alone is applicable. In spite of the Special Provision, regarding rate of interest, Their Lordships of the Supreme Court have declared in paragraph 18 of the judgment that it is not obligatory to award interest at the contract rate after the date of suit. 21. In A.I.R. 1961 Punjab 442 ( Piara Lal v. S. Herchand Singh ), it has been held as follows:— “Under S. 79 (of the Negotiable Instruments Act) the award of interest after the date of a suit is within the discretion of the Court. Where the debtor had already paid practically twice the amount originally advanced to him on a pronote and in a suit brought on the basis of the pronote, the trial Court did not allow interest at the contractual rate from the date of the suit onwards, it could not be said that the discretion had, in any way, been wrongly exercised.” 22. In AIR 1989 Andhra Pradesh 211 ( Union Bank of India v. P. Krishnaiah ), K. Ramaswamy, J., as he then was, has considered the question whether Section 79 of the Negotiable Instruments Act bars the Court from exercising its discretion. In AIR 1989 Andhra Pradesh 211 ( Union Bank of India v. P. Krishnaiah ), K. Ramaswamy, J., as he then was, has considered the question whether Section 79 of the Negotiable Instruments Act bars the Court from exercising its discretion. After taking into consideration Section 34, C.P.C. and Sec. 79 of the Negotiable Instruments Act, the learned judge has held thus:— “Sec. 34 (1) C.P.C; where and in so far as 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 such principal sum), from the date of the decree to the date of payment, or to such earlier date at the Court thinks fit.” A reading thereof clearly indicated that the Court is given discretion to award rate of interest (i) if there is a contractual rate of interest, interest on the principal sum so adjudged as directed between the parties till date of suit; (ii) from the date of the suit till the date of the decree, the discretion given to award interest on the principal sum so adjudged at such rate as the Court deems reasonable; and (iii) from the date of the decree till the date of realisation at such rate not exceeding 6% per annum or till such earlier date as the Court thinks fit”. Section 34 (1) engrafts language taking within its ambit not only the money due on a negotiable instrument but also any claim for payment of money. The Act is of 1881 whereas the Code is of 1908. Further it was amended from time to time up to the Act of 1976. The Legislature is aware of the existence of S. 79 of the Act, but no exception has been engrafted in S. 34(1) of the Code with regard to the rate of interest in respect of the claims based on negotiable instruments. Therefore the latter act prevails over the earlier Act. Moreover S. 34 prescribing not only in respect of period but also rate of interest. Therefore the latter act prevails over the earlier Act. Moreover S. 34 prescribing not only in respect of period but also rate of interest. Accordingly S. 34 also applies to the claims based on negotiable instruments as well. No exception by judicial interpretation could be engrafted. The second contention is rejected. It is next contended that S. 79 applies to the negotiable instruments and the rate of interest shall be charged till the rate of realisation or until such date after the institution of the suit as fixed by the Court. Therefore the Court ought to grant interest at the contractual rate. I express my inability to accept the contention of the learned counsel. It is undoubtedly true that S. 79 operates in respect of rate of interest on the principal sum due under negotiable instruments and it empowers interest when rate is specified from the date of the institution until the amount is tendered or realised or until such date so fixed after the institution of the suit to recover the amount, the sub-matter of the suit; S. 34 of the. Code equally gives power to the Court in respect of all money claims. It was already held that money claims include claims based on negotiable instruments. In those circumstances S. 79 of the Act and S. 34(1) of the Code are to be harmoniously construed. What is the meaning of the clause ‘until such date of the institution of a suit? Any date from the date of institution of a suit is the intendment S. 79. If they are so harmoniously construed, it may be construed to be the date of the suit and the rate of interest charged on a negotiable instrument shall be from the date of the institution of the suit pendente gives discretion to Court to award such rate from a date and such rate as is reasonable depending upon the facts and circumstances obtainable in a given case. Otherwise, t he Legislation would have expressly made an express proviso in S. 34(1) itself in regard to the rate of interest pertaining to the claims based on negotiable instruments. The Legislature having left the discretion to the Civil Court, it cannot be construed that the power is by implication taken away as contended by Mr. Harnath. It is no doubt true that in Utsav Lal v. Mohan Bros. The Legislature having left the discretion to the Civil Court, it cannot be construed that the power is by implication taken away as contended by Mr. Harnath. It is no doubt true that in Utsav Lal v. Mohan Bros. , AIR 1975 Raj 236 the learned Judge has held that S. 79 of the Act prevails over S. 34 of the Code, but with all due respect to the learned Judge I express my inability to agree with the ratio. If S. 79 of the Act is strictly construed and applied, tthen to that extent it amounts to judicial legislation of cutting down the operation of S. 34 relating to claims on negotiable instruments which are advised not engrafted. In Piara Lal v. S. Herchand , AIR 1961 Punj 442, the bench has held that S. 34 of the Code applies for fixation of rate of interest pendente lite . With due respect, I agree with the ratio in the above case. Though the ratio in Lehru Narain Kanhaiyalal, AIR 1973 Raj 316 was relied upon by Sri Harinath with regard to the power of the Court to grant rate of interest even higher than the contractual rate of interest, with great respect, I express my inability to accede to the ratio laid in the above case. The Court cannot grant higher rate of interest than what was contracted between the parties even pendente lite . The area is covered by contract or statute. Section 34(1), C.P.C. regulates the gray area. By implication it is either contractual rate or less, but not in excess thereof”. (Emphasis supplied) 23. The Court cannot grant higher rate of interest than what was contracted between the parties even pendente lite . The area is covered by contract or statute. Section 34(1), C.P.C. regulates the gray area. By implication it is either contractual rate or less, but not in excess thereof”. (Emphasis supplied) 23. In AIR 1989 Jammu Kashmir, page 28 ( United Commercial Bank v. M/s. Hans Raj Sarafand others), Their Lordships of a Division Bench followed an earlier Division Bench decision of that High Court, and held as follows in paragraphs 6 to 8:— “While dealing with a similar case, a Division Bench of this Court held in Jammu and Kashmir Bank Ltd. v. Bashir Ahmed Quazi , 1987 Srinagar LJ 249 that: The grant of refusal to grant interest pendente lite is governed by the provisions of S. 34 of the C.P.C. which provides that where and in so far as the decree is for 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 decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit. It is well settled proposition of law that interest payable to the date of suit is a matter of substantive law and is outside the scope of S. 34 of C.P.C. The Court has a discretion to award or refuse to award the interest after the institution of the suit. Future interest after the institution of the suit is generally granted by the Court according to the agreements of the parties and can be refused if the circumstances of the case so warrant. The plaintiff is not entitled as of right to claim the contract rate of interest after the institution of the suit and the Court has full discretion in the matter of granting or refusing to grant the contracted rate of interest after the filing of the suit. The Court is not bound to award interest in all cases at the contracted rate. The Court is not bound to award interest in all cases at the contracted rate. As the awarding of interest from the date of the decree to the date of the payment is in exercise of the Courts power conferred by S. 34 of the C.P.C. and not under the terms of the contract between the parties, it has to be seen as to whether the discretion exercised is in accordance with the settled proposition of law and based upon the facts of the case or not. Once it is proved that the discretion has been exercised on sound judicial principles, the same cannot be interfered with in an appeal’. A Division Bench of Punjab High Court Inpiara Lal v. Harchand Singh , AIR 1961 Punj. 442, also held that the payment pf the pendente lite interest was in the discretion of the Court and the plaintiff in such case cannot insist for the payment of the interest at the contractual rates. It was held that, a bare reading of S. 79 of the Negotiable Instruments Act shows that the awarding of interest after the date of the suit is within the discretion of the Court. The same view was taken another Bench of Punjab High Court reported in AIR 1960 Punj. 287. A Full Bench of Pat na High Court in Deo Nandan v. Ram Prasad reported in AIR 1944 Pat. 303 held that S. 79 of (tie Negotiable Instruments Act was not absolute and could be subject to other statutory provisions enacted for the particular purpose. In that case, it was held that Ss. 7 and 8 of the Money Leaders Act had an overriding effect upon S. 79 of the Negotiable Instruments Act. A perusal of S. 79 of the Negotiable Instruments Act would also show, thart discretion is vested in the Court to grant interest even from the date of the instrument, until tendered or realisation as the Court may deem fit and direct in that behalf. There is no obligation cast upon the Court to award the contractual rate of interest even after the institution of the suit would be against the public policy and amount to depriving the Court of its right to ascertain as to whether the rate of interest was excessive and exorbitant. There is no obligation cast upon the Court to award the contractual rate of interest even after the institution of the suit would be against the public policy and amount to depriving the Court of its right to ascertain as to whether the rate of interest was excessive and exorbitant. The learned single Judge has allowed the interest at 4% per annum in this case by keeping in view of the facts and circumstances of the case and we do not find any ground to interfere with the discretion exercised in that behalf,” In AIR 1990 Allahabad 218 ( Kalyanpur Cold Storage v. Sohanlal ) a Division Bench of that High Court has held thus:— “It is true that under S. 34, C.P.C.,”the Court has right to award interest upto 6% on the principal sum adjudged but at the same time it cannot be said that the Court should award interest at the rate in every case. Where the plaintiff has already charged a very heavy interest, on the initial amount of loan (24% in the present case), if the Court has thought it proper to award only 3% interest in future, the same cannot be said to be unreasonable”. (Emphasis supplied) 24. In AIR 1992 Kerala 329 ( Divisional Manager, LIC of India v. Bhagavathy Amma ), in paragraph 3 of the judgment, commenting on Section 34, C.P.C., it was held thus: “Interest cannot be claimed as matter of course, interest is recoverable provided there is an express or implied agreement to pay interest or interest can be recovered under any statutory provision. When there is an agreement to pay interest, interest is liable to be paid at the agreed rate unless it is penal or the rate of interest is excessive or the transaction is substantially unfair. In any of these cases, it is open to the Court to decree interest at the rate it considers reasonable. But in so far as the decree is for payment of money, the Court has a discretion to grant interest at such rate on the principal sum adjudged from the date of suit to the date of the decree and from the date of decree to the date of payment but such further interest shall not exceed 6% per annum. The maximum interest awardable under S. 34 of the Civil P.C. is 6%. The maximum interest awardable under S. 34 of the Civil P.C. is 6%. In proper cases the Court has a discretion to award interest at a lessor rate but in any case it should not exceed 6%. But Section 34 is applicable only in case of a decree being passed for payment of money”. 25. In AIR 1992 Calcutta 12 ( Vijaya Bank v. Art. Trend Exports ), a Division Bench has held thus:— (para 9.36) “We are of the opinion that under S. 34 of the code, the question of interim interest is entirely a matter of discretion of the Court. Further, as the question of interest is a matter of discretion of the Court, such discretion is not and cannot be limited to the question of rate or amount of interest only, but it applies also to the question as to whether any interest is at all to be granted. It cannot be said that as far as the rate or the amount of interest is concerned, it is a matter of discretion whereas on the question whether interest is to be granted at all, the Court has no discretion but it must grant some interest”. 26. In 1993 (1) A.L.T. T34(DB) ( Andhra Bank, Sultan Bazar, Hyderabad v. M/s. Manney Industries and others ), the case was regarding mortgage. In that case, it was held as follows:— “ The discretion can be exercised on the basis of the proviso by granting interest from 6% p.a., to the contractual rate that has been entered into between the parties, concerned. In this case, sufficient reasons have been given by the Court below as to why interest at 6% p.a., from the date of the suit till the date of realisation was granted. In the decision reported in P.G. Rao v. Andhra Bank Limited (AIR 1973 A.P. 265), a Division Bench of this Court is of the view that: ‘in suit for redemption the courts are under no obligation to award interest at the contractual rate after the date of redemption, even though that rate is not penal or excessive. Award of interest for period subsequent to the date of the suit is discretionary with the Courts’. Award of interest for period subsequent to the date of the suit is discretionary with the Courts’. The Division Bench relied upon the Supreme Court decision in S.V. Majoo v. Gangadhar ( AIR 1969 SC 600 ) “The Supreme Court in turn relied upon the decision reported in Jaigobind Singh v. Lachminarain (AIR 1940 FC 20) wherein they have held that it is not absolutely obligatory on the courts to decree interest at the contractual rates after the date of redemption in all circumstances even if it is not penal, excessive or substantially unfair and the Courts have got discretion so far as interest payable subsequent to the date of the suit is concerned”. (Emphasis supplied) 27. From the above decisions, it is clear that the Court has to exercise its own discretion in awarding the rate of interest from the date of suit. It is admitted in the plaint itself that interest at the rate of 24% per annum has been paid by defendant till August, 1987. On the date of suit, the suit amount claimed is nearly Rs. 1,98,000/-. As on this date, the rate of interest calculated at 24% per annum from the date of plaint till date of the lower Appellate Court decree alone comes to nearly Rs. 2,25,000/-. The borrower is also no more. The claim of interest at 24% per annum is far in excess of the normal rate and it is also unfair. Under these circumstances, I feel that direction to the defendants to pay interest at 24% per annum will put them to great hardship. From the date of suit till date of recovery, plaintiff is entitled to interest at the rate of 6% p.a. 28. At this juncture, learned counsel for first respondent submitted that the discretion exercised by the Courts below in awarding interest at the contractual rate is not a substantial question of law and therefore, interference under Section 100, C.P.C. is not warranted. The submission seems to be attractive at the first blush. But on further probing into the matter, I do not find that the submission could be accepted. Under Sec. 34, C.P.C. the Court will have to exercise its discretion regarding payment of future interest. The submission seems to be attractive at the first blush. But on further probing into the matter, I do not find that the submission could be accepted. Under Sec. 34, C.P.C. the Court will have to exercise its discretion regarding payment of future interest. Once it is found that Sec. 79 of the Negotiable Instruments Act is not a bar for invoking Sec. 34, C.P.C., the court will have to exercise the discretion one way or the other. In this case, the Courts below have not exercised the discretion under S. 34, C.P.C. Even without a pleading or request, the Court is duty-bound to invoke the provisions of S. 34, C.P.C. and exercise the discretion. If the Courts below had exercised their discretion one way or the other, this Court cannot disturb those findings unless the discretion exercised is arbitrary or against well settled legal principles. When the Courts below have not exercised the discretion at all, and they have ignored the provisions under S34, C.P.C., altogether, this Court is only correcting that illegality under S. 100 C.P.C. It cannot be doubted that Section 34 CP.C. has also been incorporated in the Statute book only to meet the ends of justice, though the same could be invoked only by substantial question of law. When the Courts below have not discharged their statutory duty, in considering Section 34, C.P.C, I feel that is also a substantial question of law, which entitles this Court to correct the same. To that extent, the Second Appeal stands allowed. 29. In the result, the Second Appeal is partly allowed by reducing the rate of interest from 24% p.a. to 6% p.a. simple interest from the date of suit till date of recovery. Parties are directed to suffer their own costs in the Second Appeal.