Discretion of the court in granting interest, interim interest, interest on judgment and instalments in money suits.

BIMAL CHANDRA BASAK, J.

( 1 ) THESE appeals are directed against a decree passed in favour of various banks, mostly nationalised banks, in various suits instituted by them for money decrees on account of amounts lent or advanced by them and for other reliefs.

( 2 ) SOME important questions of law are raised before us in connection with these suits which also arise in various other proceedings of this nature from time to time. The questions involved relate to (a) the interest for the period prior to the institution of the suit ; (b) interim interest, that is, interest from the date of the institution of the suit till the date of the decree ; (c) further interest, i. e. , interest on judgment ; and (d) instalments to be granted, if any, for payment of the decretal amount.

( 3 ) VARIOUS suits were instituted in this court by different nationalised banks for recovery of huge amounts due from their constituents on account of moneys lent and/or advanced by the banks. In these cases, money decrees were passed. The court also directed interest to be paid under three headings as specified above. The courts have also granted instalments. In all these cases, it is the banks who have preferred appeals, though the decrees have been passed in their favour, being aggrieved by the court's directions regarding interest and also the instalments granted for payment of the decretal dues. All these appeals involve such common questions of law relating to the same.

( 4 ) AT the request of learned advocates for the parties, all these appeals were set down for hearing together and learned advocates appearing for different parties in different appeals have made submissions before us on these points very thoroughly. It was agreed that we should first lay down the general principles applicable in respect of the aforesaid questions after hearing the interested parties, as a form of guideline which would be common to all these cases and, thereafter, we shall deal with each and every individual case depending on the facts and circumstances of each case. Accordingly, these appeals were heard together for a considerable time and judgment was reserved.

( 5 ) WE may, however, make one thing clear. We are dealing with general principles applicable to money suits relating to all these questions where, in some cases, there are also prayers for declaration of charge relating to movables with a prayer for sale of the same. We are not, in this judgment, dealing with mortgage suits where a preliminary decree is passed or redemption suits. We are not also dealing with these questions in respect of other proceedings, e. g. , arbitration proceedings.

( 6 ) THE main submission on behalf of the appellant-banks was made by learned advocate, Mr. Pratap Chatterjee. His submission was to the following effect. He has submitted at first that, so far as interest for the period prior to the suit is concerned, it must be directed to be paid at the agreed rate and the court has no option or discretion in the matter. So far as interim interest is concerned, our attention has been drawn to the relevant provisions of Section 34 of the Civil Procedure Code (hereinafter referred to as "the Code"), the Usury Laws Repeat Act, 1855 (hereinafter referred to as "the 1855 Act") and Section 21a of the Banking Regulation Act, 1949. At the first instance, it was submitted by Mr. Chatterjee that the court must grant interim interest at the agreed rate in view of the provisions of the 1855 Act. It was submitted that Section 34 of the Civil Procedure Code applies only when there is no rate of interest agreed upon. He has admitted that the proviso to Section 34 applies only in respect of interest on judgment and that it is not attracted in the case of interim interest. He has submitted that if there is any agreement regarding interest, the 1855 Act would apply and not Section 34 but if there is no such agreement, Section 34 of the Code would apply. It was conceded that Section 3 of the 1855 Ac

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