JUDGMENT Hon’ble Mrs. Poonam Srivastava, J.—The appeal is listed for admission. Learned Counsels for the respective parties have agreed that the appeal may be decided finally since the record of the lower Court is available. 2. Heard Sri S.N. Verma, Senior Advocate assisted by Sri Sarad Malviya, Counsel for the State Bank of India and Sri A.K. Singh, learned Counsel for the plaintiff/respondents. 3. This is defendant’s second appeal against the judgment and decree dated 5.2.1999 passed by the District Judge, Deoria, in civil appeal No. 42 of 1998 arising out of original suit No. 49 of 1980, which was decreed in part by the trial Court vide judgment and decree dated 6.1.1998. 4. According to the plaint case, M/s Jamuna Prasad Jaiswal and sons is a partnership firm. Certain goods such as metallic scraps were sold to M/s Saraiya Sugar Mills Pvt. Ltd. which was also arrayed as defendant/respondent. A sum of Rs. 1,00,000/- (Rupees one lakh) towards the sale consideration of the aforesaid goods was issued by M/s Saraiya Sugar Mills Pvt. Ltd. by means of the Bank draft dated 5.7.1977, being draft No. TL/AA080566 issued by the State Bank of India, Sardar Nagar, Gorakhpur. Firm M/s Jamuna Prasad Jaiswal and sons presented the draft to its banker Allahabad Bank, Deoria, for collection. The draft was presented by the plaintiffs before the appellant Bank, which stopped the payment of the aforesaid amount of the Bank draft on the ground that signature of Issuing Officer was different and consequently the draft was returned to the collecting Bank i.e. Allahabad Bank. This draft was presented once again for payment to the appellant Bank after verification of signature of the Issuing Officer but no payment was paid on the ground that Firm Jamuna Prasad Munni Lal Jaiswal, which was a proprietorship firm, and Jamuna Prasad Jaiswal was proprietor, he had given an undertaking on behalf of the Firm before this Court in F.A.F.O. No. 217 of 1977, Jamuna Prasad Jaiswal v. State Bank of India, arising out of another suit No. 25 of 1977 contested with the State Bank of India. This undertaking was given on account of the reason that assets of the Firm Jamuna Prasad Munni Lal Jaiswal were attached before judgment in a previous suit No. 25 of 1977. This undertaking was given on account of the reason that assets of the Firm Jamuna Prasad Munni Lal Jaiswal were attached before judgment in a previous suit No. 25 of 1977. The order of attachment before the judgment was challenged in F.A.F.O. and since the property sold to M/s Saraiya Sugar Mills Pvt. Ltd. was one of the assets belonging to the other firm, which was under attachment, therefore, the appellant Bank refused to make the payment. After return of the Bank draft for the second time on 16.7.1977, the present original suit No. 49 of 1980 for recovery of the draft amount to a tune of Rs. 1,00,000/- and also interest on the aforesaid amount at the rate of 15% was instituted by the plaintiff/respondent. The written statement was filed and the stand taken by the appellant Bank was that Firm Jamuna Prasad Munni Lal Jaiswal approached the Bank for grant of certain credit facility and the Firm availed cash credit facility but failed to repay the Bank outstanding dues despite repeated request and reminder. A recovery suit was instituted by the State Bank of India, being original suit No. 25 of 1977, which was decreed vide judgment and decree dated 21.2.1998. The Bank moved an application for attachment of the property and assets of the Firm before judgment, consequently assets of the Firm was attached. An Advocate Commissioner was appointed for effecting service of the attachment order and for preparation of the inventory but the Firm created hindrance and did not permit the Advocate Commissioner to complete his job. Due to obstruction created by the Firm, a criminal proceedings was initiated under Section 340, Cr.P.C. The plaintiffs Firm was established only to circumvent the order of attachment and thereafter goods were sold to Saraiya Sugar Mills Pvt. Ltd. regarding which draft of Rs. 1,00,000/- was presented before the Bank and it is for the reason the Bank refused the payment. 5. After exchange of pleadings in the original suit No. 49 of 1980, the trial Court decreed the suit of the plaintiff/respondent in part vide judgment and decree dated 6.1.1998. The decree was to the effect that the amount payable towards bank draft i.e. Rs. 1.00,000/- shall be paid by the Bank to the plaintiff within a period of one month. 6. The decree was to the effect that the amount payable towards bank draft i.e. Rs. 1.00,000/- shall be paid by the Bank to the plaintiff within a period of one month. 6. The appellant filed an appeal against the judgment and decree in civil appeal No. 42 of 1998 before the District Judge and the plaintiff/respondent also filed a civil appeal No. 56 of 1998 in respect of interest, which the trial Court refused to decree. Both the appeals were consolidated and decided by a common judgment and decree dated 5.2.1999 by the District Judge, Deoria. Appeal filed by the plaintiff/respondent was allowed for an amount of Rs. 1,43,500/- alongwith 12% per year interest for the period during pendency of the suit and also future interest. The defendant/appellant was directed to deposit the entire amount within a period of one month, thereafter the plaintiff will be entitled for compound interest. Appeal filed by the appellant was dismissed. 7. A number of substantial questions of law are raised by the Counsel for the appellant in the instant second appeal but only questions of law i.e. being considered are : “(1) Whether the lower appellate Court was justified in awarding compound interest upon the Bank draft whereas the trial Court refrained from awarding any interest? (2) Whether the lower appellate Court was justified in awarding compound interest at the Bank rate, which they claimed as commercial transaction?” 8. Learned Counsel appearing for the State Bank of India submits that execution of the decree in the instant appeal has been filed by the plaintiff/respondent for an amount of Rs. 55,00,000/- (Rupees Fifty five lakh) whereas original principal amount is Rs. 1,00,000/- (Rupees one lakh) and remaining amount of Rs. 54,00,000/- (Rupees fifty four lakh) was towards interest. This interest is calculated at the rate prevalent in the Nationalised Bank relating to commercial transaction whereas this is not a case which false within the commercial transaction. The question revolves only around rate and payment of interest whether it should be at the commercial rate or in view of Section 34, C.P.C. the Bank is entitled to pay interest, which may not exceed 6%. Section 34, C.P.C. is enumerated below : “34. The question revolves only around rate and payment of interest whether it should be at the commercial rate or in view of Section 34, C.P.C. the Bank is entitled to pay interest, which may not exceed 6%. Section 34, C.P.C. is enumerated below : “34. Interest.—(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 such 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, 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 therefor shall not lie." 9. Learned Counsel for the appellant has persuaded and emphasized that previously it was Imperial Bank, which subsequently merged in the State Bank. The State Bank of India Act, 1955 was enacted with a view to transfer the undertaking of the Imperial Bank of India to the State Bank and to provide for other matters connected therewith or incidental thereto. Learned Counsel for the appellant has persuaded and emphasized that previously it was Imperial Bank, which subsequently merged in the State Bank. The State Bank of India Act, 1955 was enacted with a view to transfer the undertaking of the Imperial Bank of India to the State Bank and to provide for other matters connected therewith or incidental thereto. This is not a nationalized Bank, besides, it is not a commercial transaction within the meaning of explanation to the proviso to Section 34, C.P.C. It is a case, where a demand draft was presented and there was a refusal on the part of the Bank, therefore, the plaintiffs are only entitled to interest @ of 6% and not at the rate awarded after the institution of the suit. 10. Learned Counsel for the Bank has submitted that the Bank is ready to pay the decreetal amount of Rs. 1,43,500/- as well as interest at the rate of 12% per annum during pendency of the litigation and in future till the date of payment but the demand of compound interest at the commercial rate is not admissible and the claim made by the plaintiff is disputed. 11. Learned Counsel appearing on behalf of the plaintiff/respondents emphatically disputes the stand taken by the Bank. After original suit No. 49 of 1980 was instituted by the respondents and partly decreed for the principal sum of Rs. 1,00,000/- and thereafter the first appeal filed by the plaintiff/respondents was decided in favour of the firm, the bank realized its fault and stand withholding the amount of Rs. 1,00,000/- towards the payment of the draft issued by Saraiya Sugar Mills Pvt. Ltd., presented by the respondents firm could not be adjusted towards any decreetal amount of a previous suit. The bank had no option but to concede. The Bank had no other option and, therefore, stand taken by the Bank regarding rate of interest is also without any substance. An affidavit was filed on behalf of the Bank for one time settlement, a scheme floated by the Reserve Bank of India, which was in fact not available to the Bank. The Bank had no other option and, therefore, stand taken by the Bank regarding rate of interest is also without any substance. An affidavit was filed on behalf of the Bank for one time settlement, a scheme floated by the Reserve Bank of India, which was in fact not available to the Bank. However, even on the basis of the aforesaid agreement, the amount has not been paid till date and the Bank chose to keep quite and the suit was instituted only after lapse of more than two years on the ground that the firm had practiced fraud, which was admittedly not accepted by the Courts below. 12. Reliance has been placed by the Counsel for the appellant on a decision of the Apex Court in Sovintorg (India) Ltd. v. State Bank of India, New Delhi, AIR 1999 SC 2963 , head note-B. Submission is that in the said case, award of 12% interest was held to be inadequate, the appellant had to suffer the winding up proceedings under the Companies Act, allegedly on the ground of financial crunch and, therefore, interest awarded was at the rate of 15% per annum. 13. In fact, proceeding in the said case arises out of the proceedings instituted under the Consumer Protection Act and not regular civil suit. No doubt, the Apex Court awarded interest at the rate of 15% in the aforesaid case but it was a case, which had absolutely separate procedure. Provision of Section 34 was not specifically made applicable to the proceedings under the Consumer Protection Act and the amount of 12% was awarded at the rate of 15% taking into consideration the Company had to face the winding up proceedings only on account of non-payment of the amount by the Bank. 14. Facts of the present case are altogether different. The respondents firm was a judgment-debtor in the previous original suit No. 25 of 1977 and the property of the firm stood attached. No doubt the Bank had no right to withhold the amount in favour of another proprietorship firm but since the subject matter that was sold to Saraiya Sugar Mill was scraps belonging to the old firm, which was already under attachment, therefore, the bank stalled the payment, which it could not do legally. Original suit was decreed for the principal amount only. The lower appellate Court awarded compound interest for an amount of Rs. Original suit was decreed for the principal amount only. The lower appellate Court awarded compound interest for an amount of Rs. 1,43,500/- alongwith 12% interest treating the transaction to be a commercial transaction. Pleadings in the said suit do not indicate that there was any such assertion made by the respondents firm that the transaction was commercial one on the contrary the admitted case is that the bank refused to encash the demand draft presented by the firm on account of certain dues, which was not paid to the bank in a previous suit, in which the Bank was decree-holder. 15. Thus, in absence of anything on record to establish a commercial establishment between the plaintiffs and defendants, the lower appellate Court could not have awarded compound interest as it has been done in the instant case. The judgment of the trial Court decreeing the suit only for the draft amount appears to be on sound reasoning. Also I cannot overlook the provisions of the Code vis-a-vis the rate of interest and, therefore, the exorbitant amount at an extraordinary rate of interest cannot be granted. I am of the view that the firm also suffered loss for a considerable length of period on account of withholding of the draft amount, which legally could not be done. The decree of the Court below was confirmed at the same time. 16. Taking into consideration all aspects and submission made by Sri S.N. Verma, learned Senior Advocate, appearing on behalf of the Bank that the Bank is ready to pay interest to the payee at the rate of 12% but not as a compound interest as transaction cannot be said to be a commercial transaction. Rate of interest is altered and the suit is decreed for the amount of draft alongwith interest at the rate of 12% per annum till the date of payment. Substantial question of law that arises in this appeal is the rate of interest. Error pointed out by the Counsel for the Bank is apparent as it is neither pleaded nor any claim made in the plaint for awarding compound interest treating it to be a commercial transaction. Therefore, I conclude and hold that the lower appellate Court exceeded its jurisdiction while granting relief of compound interest at the rate it is done in a commercial transaction. Part of the decree is set aside. Therefore, I conclude and hold that the lower appellate Court exceeded its jurisdiction while granting relief of compound interest at the rate it is done in a commercial transaction. Part of the decree is set aside. However, the Bank is also liable to pay the cost. The execution Court shall calculate the interest at the rate of 12% as held above and ensure payment by the Bank. The appeals partly succeed to the extent of interest alone alongwith cost. ————