The court has discretion to award interest after the institution of a suit on a negotiable instrument, and the contractual rate of interest is not mandatory.

1. Suit filed by the plaintiff for the recovery of Rs. 35145.94 with costs and pendentilite interest at the agreed rates was decreed by the learned Single Judge of this court to the extent of Rs. 27600/-alongwith pendentilite and future interest at the rate of 4% per. annum with proportionate costs. It was further directed that in case the aforesaid amount was not liquidated together with the interest and costs within three months from the date of decree, the decretal amount together with interest and costs shall be realised from the sale proceeds of the property mortgaged/hypothicated with the plaintiff-appellant-Bank. Feeling aggrieved by the judgment and decree of the trial Judge, by which he had partially disallowed certain claims of the appellant and refused to grant the pendentilite interest at the agreed rates, this appeal has been filed with the allegations that the judgment and decree of the Single Judge to that extent was liable to be quashed as the same was contrary to the provisions of law and based upon wrong appreciation of evidence produced by the appellants. It is submitted that the learned Single Judge committed an error in holding that the appellant had not proved the expenditure amounting to Rs. 2400/- on account of taxi charges and TA/DA paid to the go-down keeper. It is further submitted that the finding of the Single Judge in so far as it relates to the payment of salary to the Chowkidar is concerned, is also contrary to the weight of the evidence on the record.

2. We have heard the learned counsel for the parties and perused the record.

3. Mr. Thakur the learned counsel appearing for the appellant-Bank has submitted that the learned Single Judge was not justified in not allowing the appellants to claim the pendentilite interest on the contractual rates. He has referred to the provisions of section 79 of the Negotiable Instrument Act. & urged that in a case based upon a negotiable instrument, the court has no option but to award interest at the contractual rates even for the period commencing from after the institution of the suit. It is submitted by him that the provisions of section 34 of the C.P.C., are controlled by the provisions of section 79 of the Negotiable Instrument Act.

4. Section 34 of the C.P.C. provides:

(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 principle sum adjudged, from the date of the suit to the date of 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 as the court deems reasonable on the aggregate sum so adjudged, from the date of the decree to the date of payment, or to such earlier date as the court thinks fit.

(2) Where such a decree is silent with respect to the Payment of further interest on such aggregate sum of aforesaid form the date of the decree to the date of the payment or other earlier date, the court shall be deemed to have refused such interest, and a separate suit therefore shall not lie.

5. Section 79 of the Negotiable Instrument Act, provides :

Interest when Rate specified: - when interest at a specified rate is expressly made payable on a promissory note or bill of exchange, interest shall be calculated at the rate specified, on the amount of the principle money due there on, form the date of the instrument, until tender or realization of such amount, or until such date after the institution of a suit to recover such amount as the court directs.

6. While dealing with a similar case a Division Bench of this court held in Jammu and Kashmir, Bank Ltd. Vs. Bashir Ahmed Qazi, 1987 SLJ 249 that:

The grant or refusal to grant interest pendentilite is governed by the provision of section 34 of the CPC which provides that where and in so far as the decree is for payment of money, the court may, in the decree, order interest at such rate as