The court has discretion in awarding interest in mortgage cases, and the maximum interest awardable is 6% as per S.34 of the Code of Civil Procedure.

A substantial question has been raised in this appeal. That relates to the right of mortgagee to claim interest provided in the mortgage deed from the date of the suit till the period fixed for redemption. The Life Insurance Corporation advanced a sum of Rs. 30,000/- to the respondents for the purpose of construction of a residential-cum-office building in the plaint schedule property which was mortgaged to the corporation. Respondents having committed default to repay the amount the corporation filed the suit O.S.547/83 before Sub Court, Trivandrum. The suit was for realisation of the amount together with interest at 161/2% per annum. On the total amount due as on the date of plaint further interest at the same rate was also claimed. Respondents admitted the transaction and their liability to pay the amount but contended that the interest is payable only at the rate of 6% from date of suit. A decree was therefore given in favour of the plaintiff for the amount claimed in the plaint. But interest from date of plaint was awarded only at the rate of 6% per annum. Aggrieved by the decree for interest at 6% per annum plaintiff has come up in appeal.

2. While passing a preliminary decree for sale the court shall take an account of the amount due to the plaintiff at the date of such decree. The amount to be taken is of what was due to the plaintiff towards principal and interest on the mortgage, the costs of suit if any awarded to him and other costs, charges and expenses properly incurred upio that date in respect of the mortgage security together with interest thereon. The law relating to payment of interest is contained in Rule 11 of Order XXXIV which reads thus:

"In any decree passed in a suit for foreclosure, sale or redemption, where interest is legally recoverable, the court may order payment of interest to the mortgagee as follows, namely:

(a) interest up to the date on or before which payment of the amount found or declared due is under the preliminary decree to be made by the mortgagor or other person redeeming the mortgage -

(i) on the principal amount found or declared due on the mortgage - at the rate payable on the principal, or, where no such rate is fixed, at such rate as the Court deems reasonable,

(ii)

(iii) on the amount adjudged due to the mortgagee for costs, charges and expenses properly incurred by the mortgagee in respect of the mortgage security up to the date of the preliminary decree and added to the mortgage money - at the rate agreed between the parties, or, failing such rate, at such rate not exceeding 6 per cent per annum as the Court deems reasonable and

(b) subsequent interest up to the date of realisation or actual payment on the aggregate of the principal sums specified in clause (a) as calculated in accordance with the clause at such rate as the Court deems reasonable".

Rule 11 deals with interest in respect of two periods, (i) Upto the date fixed under the preliminary decree for payment of the mortgage money and (ii) from such date till realisation. Rule 11 provides that the court may allow interest on the principal amount fixed or declared due on the mortgage at the rate payable on the principal or where no such rate is fixed at such rate as the court thinks reasonable. In addition the

court may also allow interest on costs, charges and expenses. Regarding the subsequent interest payable from the date fixed for payment and the date of realisation a discretion is given to the court to award interest at such rate as the court deems reasonable.

3. Interest cannot be claimed as a 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 interes