Provisions of Section 34 not in violation of Article 74 of Constitution.

The petitioner herein claims to be one of the partners of Messrs.Raja-lakshmi Textiles, Madurai, a firm producing and dealing in handloom goods. In the course of its business as a manufacturer of handlooms, the firm Rajalakshmi Textiles had borrowed by way of various types of loans from the State Bank of India in the year 1950. Since there was delay in repayment of the loans taken from the State Bank, the Bank has filed a suit O.S.No.425 of 1983 on the file of the Sub-Court, Madurai. The claim consists of two amounts Rs.1,26,255.55 under the term Loan Account and Rs.6,64,217.34 under the cash credit Loan Account. The said suit is resisted by the petitioner and others as partners of the said firm on various grounds. When the suit is pending disposal, the petitioner has chosen to come before this Court by way of this writ petition seeking a writ of declaration declaring the provisions of section 34 of the Code of Civil Procedure (Act V of 1908) as unconstitutional in so far as it affects the petitioner. The three grounds urged in support of the petitioners case that section 34 of the Code of Civil Procedure is unconstitutional are these:

(1) The provisions of section 34 of the Code of Civil Procedure do not contain any guidelines subject to which the discretionary power given thereunder to the Court could be exercised; (2) In so far as the said section 34, C.P.C. makes a differentiation between a commercial transaction and a non-commercial transaction the provision should be taken to violate Article 14 of the Constitution of India;

(3) In any event the interest claimed in the plaint by the plaintiff if allowed by the court, will be hit by Usurious Loans Act 10 of 1918.

2. In this case as already stated the suit filed against the petitioner and others by the first respondent is pending and there is no knowing at this stage as to how the court will exercise the discretion available to it under the said section. Whether the discretion will be exercised in favour of the petitioner or against him will be a matter of guess at this stage. If the discretion were to be exercised by the Court in favour of the petitioner by way of reduction of interest, the petitioner cannot have any grievance at all. Therefore, the petitioner cannot be said to be an aggrieved person as on this date. Apart from this aspect of the matter, I am of the view that the grounds of attack made by the petitioner as against the provision of section 34 of the Code of Civil Procedure are not legally tenable. Section 34 contemplates three situations. Sub-section (1) of section 34 contemplates the application of the three rates of interest for three distinct periods, namely, (1) for any period prior to the suit, (2) for the period between the date of suit and the date of decree, and (3) for the period between the date of decree till the date of realisation. Section 34 provides that so far as the first period is concerned, that is, for the period prior to the suit, normally the contract rate of interest will have to govern the rights of parties. But the court is given the power to order interest on the principal sum adjudged at such rate not exceeding the contract rate if any, as the court deems reasonable. As regards the second period, that is, the period between the date of suit till the date of decree, a similar discretion is given to the Court to award interest at the reasonable rate on the principal sum. As regards the third period between the date of decree till the date of realisation, the Court has to grant interest at such reasonable rates of interest not exceeding the statutory rate of 6 per cent. It is no doubt true as pointed out by the learned counsel for the petitioner, a discretion is given to the court to fix the rate of interest for the three different periods. For the first period, the contract rate of interest should normally govern the rights of parties, but the court is given discretion to fix reasonable rate of interest not exceeding the con