The defendants remained liable to pay interest as per the agreed terms, and the trial Court's decision resulted in injustice by allowing the defendants to avoid payment of interest for the period the suit remained pending.

Arun Kumar, CJ.-This batch of cases has been placed before us in view of a reference order made by the

learned single Judge. The following issue was referred to a larger Bench: “Whether the decision in S. B. Civil First Appeal No, 40 of 1998, Central Bank of India vs. Aman Travels & Ors., decided on August 9, 1988 correctly decides the question of payment of interest under Section 34 of the Code of Civil Procedure?”

2. When this matter had earlier been placed before this Court orders had been passed for issuance of notice to the High Court Bar Association, Jodhpur for assisting the Court in deciding the issue. However, at the time of hearing none has appeared for the High Court Bar Association or from the side of the respondents.

3. We have heard learned Counsel. The issue involved is of a purely legal nature and, therefore, individual facts of the cases are not material. The basic facts necessary for purposes of appreciating the controversy which are common in all the cases are that the appellants had filed suits for recovery of money against the respondents. The suits were filed by appellants on account of failure of the defendants/borrowers to repay the loans granted by the appellants by way of financial accommodation. The loans in all the cases were bearing interest though there may be variation in the rate of interest in individual cases. This is also a common factor that the suits were contested by the defendants and the trial in each suit had proceeded as per normal course. After some lapse of time, during the course of trial of the suits the defendants deposited the respective amounts claimed by the plaintiffs at the time of institution of the suits. In all the cases, the trial Court disposed of the suits in view of deposit of the suit amounts by the defendants. However, no decree was passed with respect to the pendente life and fliture interest. This was because the trial Court felt bound by a Single Bench decision of this Court in Civil First Appeal No. 40 of 1998 (Central Bank of India vs. Aman Travels & Ors.), decided on 9-8-1998 (1998 DNJ (Raj) 439), The said decision proceeds on the basis that Section 34 of the Code of Civil Procedure which deals with grant of pendente lite and future interest comes into play when a decree for payment of money is passed. The learned single Judge was of the view that since the defendant had paid the amount claimed in the plaint during the pendency of the suit no decree for payment of money was being passed by the Court and, therefore, Section 34 of the Code of Civil Procedure did not come into play. For this reason the claim of the Bank for pendente lite interest was rejected.

4. Learned Counsel appearing for the appellants argued that the suit was based on the fact that the defendant-respondents had borrowed money from the banks which they failed to repay in terms of the agreement with the Banks. The terms and conditions of grant of loan included a term regarding payment of interest on the amount remaining unpaid and, therefore, the defendants were liable to pay interest as per the agreed terms. Merely because the amount claimed in the plaint was paid during the pendency of the suit did not absolve the defendants of their liability to pay interest till the entire dues of the Banks were cleared. The loan transactions were in the nature of commercial transactions and the parties were bound to honour the agreed terms regarding payment of interest.

5. We have given careful consideration to the issue involved. A plaintiff who approaches the Court includes in the plaint the amount due up to the date of the institution of the suit and pays Court-fee accordingly. The plaint normally contains a prayer for award of pendente lite and future interest till the date of payment of the decretal amount because on the date of the institution of the suit no plaintiff is in a position to know as to when ultimately the decree is going to be passed in the suit and fpr how much amount. Pendente