JUDGMENT : 1. The present appeal under Section 100 of the Code of Civil Procedure, 1908 (for short ‘C.P.C.’) was filed by State of Gujarat through Home Department with Gujarat Small Industries Corporation Ltd. as appellant No.2, challenging the judgment and decree dated 13.12.2005, passed by the Presiding Officer, Fast Track Court, Rajkot in Regular Civil Appeal No.43 of 2005. By the impugned judgment, the learned Judge, dismissed the appeal and confirmed the order dated 05.09.2000 passed by learned 5th Joint Civil Judge (S.D.), Rajkot in Civil Suit No.217 of 1988, and allowed the Cross Objections filed by the respondent, M/s.Regal Scale Industries – original plaintiff. The plaintiff's decretal amount for Rs.1,89,317.51/- was ordered to be recovered from the present appellants – original defendants with 22.25% compound interest with monthly interest (after 30 days expiry period from date of delivery i.e., 11.11.1983 and 05.02.1984). The rest of the judgment and decree was confirmed. 1.1 The ground inter alia raised are that the appellate Court had no jurisdiction to entertain the suit, and further ground was raised that the Interest On Delayed Payments to Small Scale And Ancillary Industrial Undertakings Act, 1993 would not be applicable to the facts of the case, as it has come in force on 23.09.1992 and would have no retrospective effect. It is also inter alia contended that the respondent firm has tried to derive a double benefit out of the observations of the trial Court, and that in addition to the interest at the rate of 22.25% included in the decree passed by the trial Court, the appellate Court again awarded interest at the rate of 22.25% under 1993 Act on the entire decretal amount, which is erroneous. 2. The facts of the case in nutshell are as under: 2.1 The present respondent – original plaintiff is a partnership firm registered as small scale industries by the State and Central Governments, manufactures ‘Lion Brand Weigh Bridge and Scale’. The appellant no.2 - Gujarat Small Industries Corporation, under Government of Gujarat, provides marketing and other support to small scale industries in the government and other organization as per inquiry. The appellant no.2 - Gujarat Small Industries Corporation, under Government of Gujarat, provides marketing and other support to small scale industries in the government and other organization as per inquiry. 2.2 It was the case before the trial Court that respondent was asked to provide complete technical details and specifications etc., and on 31.05.1982, two Weigh Bridge of capacity of 60 M.T. were supplied to ARTO at Bhilad and the cost of the same was fixed at Rs.3,77,500/-. All documents for 90% payment regarding supply of weigh bridges were sent through bank, but due to lapse of time, the bank had charged Rs.6,054/-, which was deducted from the account of respondent. 2.3 After repeated reminder, the appellant had paid 3% amount of Rs.22,650/- on 26.08.1985. The respondent had sent a notice to the appellant under section 80C of C.P.C. claiming that 18% interest per annum will be payable as per the bill condition on delayed payment. Thereafter, the respondent had filed Special Civil Suit No.217 of 1988 against the appellant, as on filing of the suit dated 03.10.1988, as stated, the amount of Rs.1,15,000/- was outstanding. 2.4 It is stated that on enactment of the new Act being Interest on Delayed Payment to Small Scale and Ancillary Industrial Undertaking Act, 1993, the trial Court had permitted the respondent to amend the original suit, where as per new Act, the rate of interest was 17.25% + 5% = 22.25%, and the amount was calculated as Rs.1,89,317.51/-. 2.5 The suit of the respondent – plaintiff came to be decreed with costs and the appellants were directed to make the payment of decretal amount of Rs.1,89,317.51 with 12% interest per annum from the date of filing of the suit till realization of the decretal amount. However, the same was not complied with and therefore the respondent had filed Special Execution Petition No.301/2000 before the Civil Court, Rajkot on 16.11.2000. 2.6 Being aggrieved by the same, the appellants filed First Appeal No.3144 of 2000 along with stay application, and against that the respondents had filed cross objection, and after the enactment of Gujarat Civil Court Act, 2005, the matter was transferred to District Court of Rajkot, whereby it was numbered as Regular Civil Appeal No.43 of 2005. 2.6 Being aggrieved by the same, the appellants filed First Appeal No.3144 of 2000 along with stay application, and against that the respondents had filed cross objection, and after the enactment of Gujarat Civil Court Act, 2005, the matter was transferred to District Court of Rajkot, whereby it was numbered as Regular Civil Appeal No.43 of 2005. After hearing, the appellate Court dismissed the appeal and allowed the cross appeal of the respondent, directing the appellants to pay the decretal amount of Rs.1,89,317.51 with 22.25% amount interest with monthly rest (after 30 days expiry period from the date of delivery i.e. 11.11.1983 and 05.02.1984). 2.7 The appellants have challenged the judgment and order of the appellate Court before this Court by preferring the present appeal with Civil Application No.2962 of 2006 for stay. In the meanwhile, the respondent had filed Special Execution petition No.12/2006 in the Civil Court, Rajkot on 03.03.2006, for execution of the order of the appellate Court. The appeal was admitted and the Civil Application No.2962 of 2006, came to be rejected on 01.05.2006. 2.8 Against the rejection of the Civil application No.2962 of 2006, the appellants had approached the Hon’ble Supreme Court by preferring Special Leave to Appeal (Civil) No.11586 of 2006, wherein the Apex Court while disposing the same vide order dated 03.12.2007 directed to stay the decree passed by the first appellate Court on the condition that the appellant deposits Rs.1,83,317.51/- along with interest at the rate of 12% with effect from the date of decree i.e. 05.09.2000, which was to be deposited before the appellate Court within two months from the date of order, and this Court was directed to decide the appeal expeditiously preferably within a period of six months, and the amount which have been deposited by the appellant was ordered to be adjusted in the amount, which the appellant was required to deposit. 2.9 The respondent in the said Special Leave to Appeal (Civil) No.11586 of 2006 had preferred I.A. No.3 of 2007 for clarification of the order dated 03.12.2007, and vide order dated 22.01.2008, the Hon’ble Supreme Court substituted the words “at the rate of 12% with effect from the date of decree i.e. 05.09.2000” with the words “interest at the rate of 12% as per the decree”, and disposed of the said I.A. 3. Mr. Mr. Aakash Gupta, learned AGP for the appellants relying on the judgments of Rampur Fertiliser Ltd. Vs. Vigyan Chemicals Industries, decided on 18.02.2009 by the Hon’ble Supreme Court in Civil Appeal No.1101 of 2009 (Arising out of SLP (C) No.17893 of 2007), submitted that the judgment of Assam Small Scale Ind. Dev. Corp. Ltd. and Ors. Vs. J.D. Pharmaceuticals and Ors. decided on 07.10.2005 by the Hon’ble Supreme Court in Civil Appeal No.6324 of 2005 (Arising out of S.L.P. (C) No.3950 of 2005), were considered by the Apex Court, and the Act, called as Interest on delayed payment to Small Scale and Ancillary Industrial undertaking Act, 1993, was examined along with Section 34 of the Code of Civil Procedure, 1908, where in the case the appellant had claimed interest at the rate of 18% per annum, and when subsequent to the Act w.e.f. 23.09.1992, an amendment was sought in the plaint, which was allowed by the trial Court. 3.1 Learned AGP submitted that the Apex Court in the judgment had very categorically observed that such amendment ought not to have been allowed, as the said provision of Act was not applicable to the facts and circumstances of the case. Mr. Gupta, learned AGP, thus stated that the rate of interest which the appellant was considered to be entitled was in accordance to the provision of Section 34 of C.P.C., and, thus stated that in relation to the transaction made prior to coming into force the Delayed Payment Act, simple interest at the rate of 9% per annum was granted, taking the same to be the Bank rate at the relevant time, therefore, in view of the legal proposition, it was held therein that the High Court was not justified in granting interest at the rate of 18% per annum with monthly rest. Mr. Gupta, learned AGP, stated that considering the facts and circumstances, the Apex Court had, thus, directed that pendente lite and future interest at the rate of 9% shall be paid. 4. Countering the arguments, Mr. Mr. Gupta, learned AGP, stated that considering the facts and circumstances, the Apex Court had, thus, directed that pendente lite and future interest at the rate of 9% shall be paid. 4. Countering the arguments, Mr. Sandip M.Patel, learned advocate for the respondent submitted that the respondent had carried out production work of Weigh Bridge, as per acceptance of Tender, however, the appellant had changed the specification from the ‘Self Indication Dial Recorder’ machine to technically better ‘Unit Weight Type Dial Recorder’ machine, without raising the price, and changed the delivery of place, one Weight Bridge at Bhilad check post and the other Weigh Bridge at Shamlaji Check Post was informed on the last date of 20.12.1983, which has been accepted by appellant no.2 in the trial Court in its written argument at Exh.11. 4.1 Advocate Mr. Patel stated that first Weigh Bridge Bill (Exh.88) dated 10.11.1983 for the goods supplied at Bhilad Check Post, which was accepted by delivery challan dated 13.11.1983 (Ex.73), and after the inspection, verification and checking, the Second Weigh Bridge Bill dated 05.02.1984 (Ex.89) for the goods supplied at Shamlaji Check Post, was also accepted by delivery Challan dated 07.02.1984 (Ex.74). Advocate Mr. Patel submitted that the bills clearly states “Jurisdication Rajkot”, with specific condition that 18% annual interest will be charged on the outstanding amount. Mr. Patel stated that by accepting the specific conditions, the appellant had accepted the goods with endorsement “Goods received in good condition”. Advocate Mr. Patel stated that till now, neither these two bills nor any of its conditions had been challenged by the appellants. 4.2 Advocate Mr. Patel further submitted that all the documents for 90% payment regarding supply of Weigh Bridges sent by respondent to appellant were through Bank, but because of the departmental process of government department, the appellants took more time to release that bank document, therefore, Bank had charged an additional amount of Rs.6,054/-, which should have been paid by the appellants, as, on suggestion of appellants, the Bank deducted the amount of Rs.6,054/- from the account of respondent. Mr. Patel stated that the trial court as well as the appellant Court have also accepted that the amount of Rs.6,054/- should be recovered from the appellants, as was the consignee faults. 4.3 Advocate Mr. Mr. Patel stated that the trial court as well as the appellant Court have also accepted that the amount of Rs.6,054/- should be recovered from the appellants, as was the consignee faults. 4.3 Advocate Mr. Patel submitted that the appellants had to complete the Civil Work through its P.W.D. department as per the drawing supplied by the respondent, and then respondent had to install the Weigh Bridge, and the remaining 10% amount was to be given to respondent, but for other motives and reasons, despite the completion of the warranty period of the Weigh Bridge, the civil work was not done for a long time, and the Weigh Bridge was not fitted, though the respondent was ready to install with new parts. This aspect, the appellant no.2 made it clear to appellant no.1 by its correspondence, Ex.82 and other Exhibits. 4.4 Mr. Patel, learned advocate, thus, submitted that the total amount of Rs.81,554/- i.e. remaining 10% amount as Rs.75,500/- and Rs.6,054/- bank charges, was held for a long time. Mr. Patel submitted that after repeated request, 3% of Rs.22,650/- was paid on 26.08.1985; however, remaining amount of Rs.52,850/- was not received, despite repeated demands of the respondent from appellant no.2 to appellant no.1. Mr. Patel stated that finally under section 80 C.P.C., notice was sent by respondent to the concerned department of Government on 23.06.1988, in which it was stated that 18% interest per annum will be payable as per the bill condition on delayed payment. 4.5 Advocate Mr. Patel submitted that thereafter Civil Suit No.217 of 1988, on 03.10.1988 was filed by the respondent to get the remaining amount with 18% interest as per the bill condition from appellants. Mr. Patel submitted that in the said suit, 10% amount i.e. Rs.75,500/- plus bank charges Rs.6,054/- amounting to Rs.81,554/- as the remaining amount from 07.02.1984 till 26.08.1985, with 18% interest as per bill condition, which as calculated for this period, was Rs.22,835/-, and therefore, the outstanding amount on 26.08.1985 was Rs.1,04,389/-, however, on the same day i.e. on 26.08.1985, the appellant had paid Rs.22,650/-, and, therefore remaining outstanding amount on 27.08.1985 was Rs.81,739/-. Mr. Patel stated that from 27.08.1985 till 03.10.1988 i.e. the date of filing of the Suit, with 18% interest as per bill condition as Rs.33,839/- and Rs.422/- correspondence and telegram charges, the outstanding amount was Rs.1,15,000/-. 4.6 Advocate Mr. Mr. Patel stated that from 27.08.1985 till 03.10.1988 i.e. the date of filing of the Suit, with 18% interest as per bill condition as Rs.33,839/- and Rs.422/- correspondence and telegram charges, the outstanding amount was Rs.1,15,000/-. 4.6 Advocate Mr. Patel submitted that during the pendency of the suit, Central Government had enacted the ‘Interest on delayed payment to Small Scale and Ancillary Industrial undertaking Act, 1993’ (for short ‘Delayed Payment Act’) to get statutory interest on its outstanding amount, and on enactment of this Act, the trial Court had permitted the respondent to amend their old suit. Mr. Patel stated that in view of sections 3, 4 and 5 of the Delayed Payment Act, the rate of interest was 17.25% + 5% = 22.25% with monthly calculated rates, and, accordingly the amount of amended suit came to Rs.1,89,317.51/-. 4.7 Advocate Mr. Patel further submitted that the amount of Rs.22,835/- at the rate of 18% was from 07.02.1984 to 26.08.1985, and Rs.32,839/- was the amount from 27.08.1985 to 03.10.1988; thus, total interest was Rs.55,674/- calculated as per bill condition in the original suit. After the Delay Payment Act came in force, Mr. Patel submitted that the interest of Rs.34,971.35/- was at the rate of 22.5%, from 27.02.1984 to 26.08.1985 and Rs.95,020.16/- was the interest amount from 27.08.1985 to 03.10.1988, thus, total interest as per the Delayed Payment Act was Rs.1,29,991.51/-. 4.8 Advocate Mr. Patel submitted that by admitting the applicability of the Delayed Payment Act in the suit, the learned trial Court granted permission for addition of one para being 12-A in the original plaint, adding Rs.1,29,991.51/- as per the Delayed Payment Act, continuing the remaining interest of Rs.22,835/- + Rs.32,839/- plus difference of interest as Rs.74,317.51/-. 4.9 Learned advocate Mr. Patel further stated that during the proceeding of the suit, submissions, written arguments and testimony of the representatives of the parties, issue of limitation and jurisdiction were arose, and the learned trial Court accepted the jurisdiction of Rajkot, and also found the suit as within the prescribed time limit. Mr. Patel submitted that an employee of the State-appellants has been cross examined, wherein he has admitted of a circular issued by the State dated 16.08.1984, Ex.118. 4.10 It has been submitted by Advocate Mr. Mr. Patel submitted that an employee of the State-appellants has been cross examined, wherein he has admitted of a circular issued by the State dated 16.08.1984, Ex.118. 4.10 It has been submitted by Advocate Mr. Patel that when the buyer-cum-debtor himself has not completed the civil work of the Weigh Bridge for many years, even after completion of the warranty period, and due to their own defects and incompetency, they could not install the Weigh Bridge, and with ulterior motive withheld 10% of money and, therefore, Mr. Patel submitted that any party in pari-delicto cannot claim damages from another party, and when Government debtor is defaulter and compels the plaintiff creditor to file the suit, then they have to make good by paying the statutory interest. 4.11 Advocate Mr. Patel submitted that institution of the Suit should not deprive the creditor for the interest, and the trial Court has awarded the interest as per statute, but in spite of that, the trial Court has permitted the difference of interest as per the Delayed Payment Act, but since the defendants are government agency, so instead of higher rate of interest, only 12% rate of interest was allowed on the decreetal amount of Rs.1,89,317.51/-. 4.12 Advocate Mr. Patel further submitted that in spite of the order of 5th Civil Judge, Senior Division, Rajkot, on 05.09.2000, the buyer-cum-debtor failed to deposit the money, and, therefore, the plaintiff as supplier-cum- creditor filed the Special Execution Petition No.301 of 2000 before the Civil Court, Rajkot on 16.11.2000, but the said has not been complied with; however, the challenging the judgment and order of the trial Court, the buyer-cum-debtor, appellant no.1 and GSIC (Corporation) - appellant no.2 had filed First Appeal No.3144 of 2000 before this Court, and in the said appeal, the supplier-cum-debtor filed the Cross Objection under Order 41 Rule 22 of C.P.C. making a prayer for allowing 22.25% interest as per the Delayed Payment Act. 4.13 Advocate Mr. Patel stated that by Civil Application for (Stay) No.1266 of 2001, the execution petition came to be stayed and the Division Bench on 25.12.2000, as per section 7 of the Delayed Payment Act insisted the appellant State to deposit 25% of the amount of the execution proceeding. 4.14 Advocate Mr. 4.13 Advocate Mr. Patel stated that by Civil Application for (Stay) No.1266 of 2001, the execution petition came to be stayed and the Division Bench on 25.12.2000, as per section 7 of the Delayed Payment Act insisted the appellant State to deposit 25% of the amount of the execution proceeding. 4.14 Advocate Mr. Sandip Patel submitted that the issue with respect to the interest payable is still not decided and in view of the provision of Section 15(1)(a) of Gujarat Civil Court Act, 2005, by the order of this High Court on 28.06.2005, the First Appeal No.3144 of 2006 was transferred to District Court with direction to decide the same within a period of four months. On receiving the appeal, it was renumbered as Regular Civil Appeal No.43 of 2005 before the District Court, Rajkot, where both the parties have submitted the written and oral arguments and in the process, buyer-cum-debtor raised the question of jurisdiction and limitation, and the learned appellate Court after considering the contract, goods inspection-supply, payment of money etc., which being accepted and signed by supplier-cum-creditor at Rajkot, where Exh.88 and 89 of the bills assumed Rajkot jurisdiction, hence, the challenge of jurisdiction was not accepted, and even the issue of limitation was found not tenable, and, therefore, the appellate Court refused to accept the said submission. 4.15 Advocate Mr. Patel stated that appellant no.1 had signed and accepted Exh.88 and 89 and the interest was agreed to be paid as 18% per annum on the outstanding amount, while these bills were not challenged before the learned trial Court nor any other court. 4.16 Advocate Mr. Patel submitted that Weigh Bridges could not be installed due to the fault of the buyer-cum-debtor and money came to be withheld for more than 90 days. The Government Circular dated 16.08.1984, Exh.117, where under the heading of ‘Extension of facilities to the Small Scale Industries in Purchase Programme’ clarifies that, no payment should remain pending beyond a limit of 90 days; and further states that such circular was issued to encourage the Small, Village and Cottage Industries Sector. The Government Circular dated 16.08.1984, Exh.117, where under the heading of ‘Extension of facilities to the Small Scale Industries in Purchase Programme’ clarifies that, no payment should remain pending beyond a limit of 90 days; and further states that such circular was issued to encourage the Small, Village and Cottage Industries Sector. Government of India, as well as State Government have been extending various facilities to Small Scale Units in the matter of Government purchase programme, to ensure that all the facilities are extended to small scale units clarifying that there should be no cause for complaint, specifying that no payment should remain pending for more than 90 days. 4.17 Advocate Mr. Patel stated that in case, where the trial Court reduces the rate of interest and lower down even to the limit below the statutory rate of interest, then has to give special reason for reducing the rate of interest from the statutory rate of interest as provided. Advocate Mr. Patel, thus, stated that this fact was brought to the notice of the appellate Court, and, therefore the appellate Court dismissed the Regular Appeal of the State Government and the Gujarat Small Industries Corporation Ltd., and the Cross Objection was allowed in toto, and the decreetal amount of Rs.1,89,317.51 was ordered to be recovered with 22.25% compound interest with monthly rest (after 30 days expiry period from date of delivery i.e. 11.11.1983 and 05.02.1984). 4.18 Advocate Mr. Patel, thus, stated that the State was required to adhere to the order of the appellate Court and deposit the amount accordingly, instead had challenged the same by way of filing the present Second Appeal. 4.19. Thus, Advocate Mr. Patel stated that in the proceeding before Hon’ble Supreme Court, it was made clear that it was not making any observation with regard to the application. Advocate Mr. Patel stated that the Supreme Court ordered the interest at the rate of 12% to be payable from the date of decree i.e. 05.09.2000 till realization. 4.20 Advocate Mr. Patel, thus, states that the rate of interest payable should be as per the order of the appellate Court in Regular Appeal No.43 of 2005, which is 22.25% per month. 5. Patel stated that the Supreme Court ordered the interest at the rate of 12% to be payable from the date of decree i.e. 05.09.2000 till realization. 4.20 Advocate Mr. Patel, thus, states that the rate of interest payable should be as per the order of the appellate Court in Regular Appeal No.43 of 2005, which is 22.25% per month. 5. The following substantial questions of law were formulated by the earlier bench: (1) Whether the Interest On Delayed Payments to Small Scale And Ancillary Industrial Undertakings Act, 1993 is applicable to the transactions taken place prior to the coming into force i.e. 23.09.1992, specially when the Hon’ble supreme Court has specifically held that “The 1993 Act came into effect with effect from 23.09.1992 and will not apply to transactions which took place prior to that date” in 2005 (13) SCC 19 ? (2) Whether the respondent can claim interest on delayed payment both under the Interest Act as well as under the 1993 Act? (3) Whether Section 2(b) of the 1993 Act can be interpreted to give retrospective effect to the Act? (4) Whether the respondent having once received interest under the 1993 Act is entitled to claim interest again under the said Act on the decretal amount? 6. In case of Assam Small Scale Ind. Dev. Corp. Ltd. and Ors. Vs. J.D. Pharmaceuticals and Ors. decided on 07.10.2005 by the Hon’ble Supreme Court in Civil Appeal No.6324 of 2005 (Arising out of S.L.P. (C) No.3950 of 2005), the Hon’ble Apex Court has referred to the applicability of the Interest on Delayed Payment to Small Scale and Ancillary Industrial Undertaking Act, 1993, where it was observed that 1993 Act came into force with effect from 23.09.1992, which would not apply to the transactions, which took place prior to the date, and, thus had clarified that 1993 Act will have no application in relation to the transaction entered into prior to that date. Hence, it was considered that the trial Court as well as the High Court has committed manifest error in directing payment of interest at the rate of 23% upto June, 1991 and 23.5% thereafter. 7. Here, in the present matter, the transaction, which had occurred, was with the bills vide Exh.88 and 89 dated 14.11.1983. Hence, it was considered that the trial Court as well as the High Court has committed manifest error in directing payment of interest at the rate of 23% upto June, 1991 and 23.5% thereafter. 7. Here, in the present matter, the transaction, which had occurred, was with the bills vide Exh.88 and 89 dated 14.11.1983. The terms and conditions as has been agreed upon clarifies that interest at the rate of 18% per annum will be charged on all bills not paid on presentation. 8. Learned AGP has submitted that in case of Rampur Fertiliser Ltd. (supra), the Hon’ble Apex Court has considered the provision of Section 34 of the C.P.C. in view of the fact that the Interest on delayed payment to Small Scale and Ancillary Industrial undertaking Act, 1993 would not have its retrospective effect, thus, stated that, having considered the facts of the case, the Apex Court had held that 18% per annum interest granted was not justified and in the facts and circumstances of the case directed the interest at the rate of interest 9% to be paid; thus, learned AGP urged of considering the same. 9. It is to be noted that it is a commercial transaction of Weigh Bridge and Self Indication Dial Recorder Weigh Bridge. After the delivery was made, the installation could not be done, which was to be done by the State. The bills, Exh.88 and 89 lays down the rate of interest of 18% per annum, and accordingly, part payment was done. The remaining amount, which has been asked is Rs.75,500 + 6,054 (Bank Charges), thus, total Rs.81,554/-, and according to the evidence on record, the Bank Charges of Rs.6,054/- was levied on the supplier. The bill condition lays down 18% interest. 10. Section 34 of the C.P.C. reads as under: “(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 Subsection, "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 therefor shall not lie.” 11. The proviso clarifies that when the liability is in relation to the sum, so adjudged, arises from the commercial transaction, then the rate of interest further more than the 6%, but would not exceed the contractual rate of interest, and in case, when no contractual rate is decided the rate at which the money are lent or advanced by the nationalized bank in relation to the commercial transaction. 11.1 Admittedly, it is commercial transaction. The rate agreed upon is 18%, hence, considering the admitted fact of the bills, the supplier would be entitled to receive the interest of 18% per annum. The trial court has not assigned any reason to decrease the rate of interest to 12% and the appellate Court order would not be sustainable in view of the proportion of law that interest as per Interest on Delayed Payment to Small Scale and Ancillary Industrial Undertaking Act, 1993, would not be applicable retrospectively. 12. Learned AGP Mr.Aakash Gupta submitted that the amount, which has been claimed is penal interest in the form of interest, therefore, Mr. 12. Learned AGP Mr.Aakash Gupta submitted that the amount, which has been claimed is penal interest in the form of interest, therefore, Mr. Gupta, learned AGP, stated that such payment is not warranted in view of the judgment of Rampur Fertiliser Ltd. (supra) and Assam Small Scale Ind. Dev. Corp. Ltd. and Ors. (supra). 12.1 In response to the argument, learned advocate Mr. Sandip M.Patel, has relied on the judgment of Central Bank of India Vs. Ravindra, reported in 2002 (1) SCC 367 , and submitted that the issue has been set at rest by the final conclusion of the constitution Bench, referred by three Judges’ Bench of the Supreme Court of India. 12.2 In Central Bank of India (supra), the question that arose for consideration was about the meaning to be assigned to the phrases “the principal sum adjudged” and “such principal sum”, as occurring in section 34 of the Code of Civil Procedure, 1908. The meaning of ‘penal interest’ has been distinguished in paragraph No.34, which reads as under: “34. However 'penal interest' has to be distinguished from 'interest'. Penal interest is an extraordinary liability incurred by a debtor on account of his being a wrong-doer by having committed the wrong of not making the payment when it should have been made, in favour of the person wronged and it is neither related with nor limited to the damages suffered. Thus while liability to pay interest is founded on the doctrine of compensation, penal interest is a penalty founded on the doctrine of penal action. Penal interest can be charged only once for one period of default and, therefore, cannot be permitted to be capitalised. ? Thus while liability to pay interest is founded on the doctrine of compensation, penal interest is a penalty founded on the doctrine of penal action. Penal interest can be charged only once for one period of default and, therefore, cannot be permitted to be capitalised. ? 12.3 Mulla on the Code of Civil Procedure (1995 Edition) was referred to observe that it sets out three divisions of interest, as dealt in section 34 of C.P.C. The division is according to the period for which interest is allowed by the court, was observed in following terms: “(1) interest accrued due prior to the institution of the suit on the principal sum adjudged; (2) additional interest on the principal sum adjudged, from the date of the suit to the date of the decree, at such rate as the Court deems reasonable; (3) further interest on the principal sum adjudged, from the date of the decree to the date of the payment or to such earlier date as the Court thinks fit, at a rate not exceeding 6 per cent per annum. Popularly the three interests are called pre-suit interest, interest pendente lite and interest postdecree or future interest. Interest for the period anterior to institution of suit is not a matter of procedure; interest pendente lite is not a matter of substantive law (See, Secretary, Irri-gation Department, Government of Orissa & Ors. v. G.C. Roy, [1992] 1 SCC 508, Pr. 44-iv). Pre-suit interest is referable to substantive law and can be sub-divided into two sub-heads; (i) where there is a stipulation for the payment of interest at a fixed rate; and (ii) where there is no such stipulation. If there is a stipulation for the rate of interest, the Court must allow that rate upto the date of the suit subject to three exceptions; (i) any provision of law applicable to money lending transactions, or usury laws or any other debt law governing the parties and having an overriding effect on any stipulation for payment of interest voluntarily entered into between the parties; (ii) if the rate is penal, the Court must award at such rate as it deems reasonable; (iii) even if the rate is not penal the Court may reduce it if the interest is excessive and the transaction was substantially unfair. If there is no express stipulation for payment of interest the plaintiff is not entitled to interest except on proof of mercantile usage, statutory right to interest, or an implied agreement. Interest from the date of suit to date of decree is in the discretion of the Court. Interest from the date of the decree to the date of payment or any other earlier date appointed by the Court is again in the discretion of the Court - to award or not to award as also the rate at which to award. These principles are well established and are not disputed by learned counsel for the parties. We have stated the same only by way of introduction to the main controversy before us which has a colour little different and somewhat complex. The learned counsel appearing before us agreed that pre-suit interest is a matter of substantive law and a voluntary stipulation entered into between the parties for payment of interest would bind the parties as also the Court excepting in any case out of the three exceptions set out hereinbefore.” 12.4 Section 34(1) of the CPC was dealt with and the concept of “principal sum adjudged” thus clarified would also include amount of interest on periodical rest according to the contract between the parties, or established banking practice and is considered to have stood capitalised. The concept is extracted of paragraph no.37, which is reproduced hereinbelow: “37. A few points are clear from a bare reading of the provision. While decreeing a suit if the decree be for payment of money, the Court would adjudge the principal sum on the date of the suit. The Court may also be called upon to adjudge interest due and payable by the defendant to the plaintiff for the pre-suit period which interest would, on the findings arrived at and noted by us hereinabove, obviously be other than such interest as has already stood capitalised and having shed its character as interest, has acquired the colour of the principal and having stood amalgamated in the principal sum would be adjudged so. The principal sum adjudged would be the sum actually loaned plus the amount of interest on periodical rests which according to the contract between the parties or the established banking parties has stood capitalised. The principal sum adjudged would be the sum actually loaned plus the amount of interest on periodical rests which according to the contract between the parties or the established banking parties has stood capitalised. Interest pendente lite and future interest (i.e. interest post-decree not exceeding 6 per cent per annum) shall be awarded on such principal sum i.e. the principal sum adjudged on the date of the suit. It is well settled that the use of the word 'may' in Section 34 confers a discretion on the Court to award or not to award interest or to award interest at such rate as it deems fit. Such interest, so far as future interest is concerned may commence from the date of the decree and may be made to stop running either with payment or with such earlier date as the Court thinks fit. 12.5 The Apex Court, while further dealing with the provision of section 34(1) has held that interest once capitalised ceases to be interest and becomes a part of principal sum or capital. That being so the interest forming amalgam with the principal, in view of having been capitalized, is principal sum and therefore the question of awarding interest on interest does not arise at all. 12.6 The Apex Court further clarifies the expression ‘the principal sum adjudged’ and has observed that the, recognition of the method of capitalisation of interest does not offend the sense of reason, justice and equity. Such a system has a long established practice and a series of judicial precedents upholding the same. It has been clarified that the principle as noticed in several decisions is that when interest is debited to the account of the borrower on periodical rests, it is debited because of its having fallen due on that day. Nothing prevents the borrower from paying the amount of interest on the date it falls due, and, thus it was observed that if the amount of interest is paid there will be no occasion for capitalising the amount of interest and converting it into principal. If the interest is not paid on the date due, from that date the creditor is deprived of such use of the money which it would have made if the debtor had paid the amount of interest on the due date. The creditor needs to be compensated for deprivation. If the interest is not paid on the date due, from that date the creditor is deprived of such use of the money which it would have made if the debtor had paid the amount of interest on the due date. The creditor needs to be compensated for deprivation. Thus, the Apex Court was of the opinion that the expression "the principal sum adjudged" may include the amount of interest, charged on periodical rests, and capitalised with the principal sum actually advanced, so as to become an amalgam of principal in such cases, where it is permissible or obligatory for the Court to hold so. Where the principal sum (on the date of suit) has been so adjudged, the same shall be treated as "principal sum" for the purpose of "such principal sum" - the expression employed later in Section 34 of C.P.C.. The expression "principal sum" cannot be given different meanings at different places in the language of same section i.e. section 34 of C.P.C. 12.7 Concluding the reference, it has been finally answered in Paragraph No.54, which reads as under: “(1) Subject to a binding stipulation contained in a voluntary contract between the parties and/or an established practice or usage interest on loans and advances may be charged on periodical rests and also capitalised on remaining unpaid. The principal sum actually advanced coupled with the interest on periodical rests so capitalised is capable of being adjudged as principal sum on the date of the suit. (2) The principal sum so adjudged is 'such principal sum' within the meaning of Section 34 of the Code of Civil Procedure Code, 1908 on which interest pendente lite and future interest i.e. post-decree interest, at such rate and for such period which the Court may deem fit, may be awarded by the Court. (3) Corporation Bank v. H.S. Gowda and Anr., [1994] 5 SCC 213 and Bank of Baroda v. Jagannath Pigment & Chem. have been correctly decided.” 13. In view of the above, the Second Appeal is required to be dismissed answering the substantial questions of law to the reasons given above. 14. In the result, Second Appeal is dismissed modifying the appellate court’s order with direction to pay the following amount to the respondent: A. From total outstanding of Rs.75,500/-, the amount, what remains to be paid is Rs.52,850/-, as the last payment was made of Rs.22,650/- on 26.08.1985. 14. In the result, Second Appeal is dismissed modifying the appellate court’s order with direction to pay the following amount to the respondent: A. From total outstanding of Rs.75,500/-, the amount, what remains to be paid is Rs.52,850/-, as the last payment was made of Rs.22,650/- on 26.08.1985. (i) Thus, the appellants would have to pay interest at the rate of 18% per annum on Rs.75,500/- from 07.02.1984 till the date of 26.08.1985. (ii) Thereafter, from 26.08.1985 till the date of suit as 03.10.1988, interest of 18% will be capitalised and added on the amount of Rs.52,850/-. (iii) On the amount capatalised on the date of suit, the principal sum adjudged, which would include interest amount on such principal sum, the respondent would be entitled to 18% interest from the date of suit till the date of decree. (iv) After the decree, on the decretal amount, the respondent is made entitled to recover the same at 6% per annum interest till realization. B. Further, Rs.6,054/- has been, the bank charges burdened on the respondent owing to the delayed payment, which the respondent is entitle to recover. (i) For Rs.6,054/- the present respondent would be entitle to recover at the rate of 6% per annum from the date of the charge by the Bank, till the date of suit. (ii) On the said amount of Rs.6,054/, the respondent would be entitled to the interest at the rate of 6% per annum from the date of the suit till realization. 14.1 The decree to be drawn accordingly. Record & Proceeding be sent back to the concerned Court forthwith. 15. Mr. Aakash Gupta, learned AGP, submits that in view of the fact that the stay is still in operation because of the Hon’ble Supreme Court order, urged for extending the same so as to challenge the order before the Hon’ble Apex Court. 15.1 The request is not acceded to, considering the rigmarole of the litigation between the parties, and further in compliance to the order of the Hon’ble Supreme Court, the amount has already been deposited by the State, and now only difference amount is to be paid. Hence, the request of stay is rejected.