MS. KAMLESH SHARMA, J.—These appeals (RFAs No. 26/91, 183/91, 224/91, 173/92, 174/92, 175/92, 270/92, 304/92, 314/ 92, 380/92 and 2 1 of 1996) are being disposed of by a common judgment as these pertain to the same questions of law. However, on facts each appeal will be dealt with separately. The common questions of law are as under:

1. Whether in the case of commercial loan and the Courts have the discretion to award lesser rate of interest than the contractual rate of interest for the period prior to the institution of the suit?

2. Whether in the case of commercial loan the Courts have the discretion to grant a lesser rate of interest than the contractual rate of interest for the period from the date of institution of the suit to the date of payment?

2. In order to reply these questions of law, reference to Section 34 of the Code of Civil Procedure as well as the judgments of the Supreme Court and Division Benches of this Court in respect thereof is necessary. Section 34, Civil Procedure Code empowers : "34. Interest—(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 6 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 6 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 Nationalized Banks in relations to commercial transactions. Explanation-L—In this sub-section "nationalized bank" means a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970). Explanation-IL—For the purposes of this section, 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."

3. From the language of Section 34 (1), it is clear that the Court has been given powers to award interest at reasonable rate on the principal sum adjudged for the period (i) prior to the institution of the suit (ii) during the pendency of the suit: and at the rate not exceeding 6% per annum and (Hi) from the date of decree to the date of payment or to such earlier date as the Court thinks fit By adding the proviso and Explanation I, in commercial transactions the maximum rate of interest for the post-decretal period has been fixed as the contractual rate of interest, and where there is no contractual rate, at the rate at which loans are advanced by the Nationalized Banks.

4. In Corporation Bank v. D.S. Gowda and another (1994) 5 SCC 213, the learned Judges of the Supreme Court have held that in case where there is no agreement between the Banker and the customer in regard to the payment of interest, the claim for interest has to be supported on the ground of universal custom of Bankers or on the basis of implied agreement but where the loan or advance is made on certain terms reduced to writing, the parties would be governed by those terms and there would be no question of falling back on practice or custom. Referring to Sections 21 and 35-A of the Banking Regulation Act (hereinafter called "the Act") it is further held