JUDGMENT Mahesh Grover, J.:- The suit filed by the plaintiff-respondent for recovery was decreed by both the Courts below. In the Regular Second Appeal the sole question which was raised by the appellant was that interest @ Rs.17.25% per annum was exorbitant considering the nature of loan which was for agricultural purposes. 2. This Court on 27.10.2006 noticed this contention and stayed the recovery of the amount provided the appellant deposits the entire principal loan amount along with simple interest at the rate of 6% per annum within a period of six months from the said date. The appellant has failed to deposit the amount and during the course of proceedings on 4.9.2008 the aforesaid interim directions were vacated. After more than 1-1/2 years of the passing of the aforesaid order the appellant has not deposited the entire amount. 3. A perusal of the impugned judgments shows that the appellant had agreed to the contractual rate of interest @ 17.25% per annum but at the same time these terms necessarily need not govern the grant of interest pendente lite. The question of law which arises for the consideration of this court is “as to whether in the proceedings initiated for recovery, the contractual rate of interest would govern the terms of recovery including the award of interest pendente lite, or the award of interest pendente lite would be granted as per the discretion of the Court in accordance with the provisions of the Civil Procedure Code?” The matter is squarely covered by the judgments of this Court in Jagdish Chander v. Punjab National Bank, 1994(1) P.L.R. 211 and UCO Bank v. Bhagwant Singh and others, 1996(1) P.L.R. 570, wherein it was held that the grant of interest pendente lite is not a hostage to the terms of the contract but the court can grant interest at a rate which is at variance with the contractual rate but is in consonance with the provisions of the Civil Procedure Code. Therefore, the question is answered in favour of the appellant. 4. Consequently, the appeal is partially accepted and it is directed that the appellant shall be liable to pay the principal loan amount along with contractual rate of interest till the filing of the suit. The grant of pendente lite interest @ 17.25% per annum awarded by the first Appellate Court is set aside. 4. Consequently, the appeal is partially accepted and it is directed that the appellant shall be liable to pay the principal loan amount along with contractual rate of interest till the filing of the suit. The grant of pendente lite interest @ 17.25% per annum awarded by the first Appellate Court is set aside. The remaining amount from the filing of the suit till the date of recovery shall be paid @ 6% per annum. The appeal stands disposed of. ----------