The court has the discretion to fix a date up to which interest at the contractual rate is to be allowed in a suit on the basis of a negotiable instrument, but after that date, the grant of interest is regulated by Section 34 of the Code of Civil Procedure and not by Section 79 of the Negotiable Instruments Act.

1. This second appeal arises out of a suit for recovery of Rs.4844/10/6, principal and interest, on the basis of two hundis executed on 9-9-1946, and the 20th of September, 1946, for a sum of rs.2400/- and Rs.1600/- respectively by Dewan Chand on behalf of the joint Hindu family firm dewan Chand Nand Kishore, and a pronote executed by Dewan Chands son Nand Kishore for a sun of Rs.500/- on behalf of the firm carrying interest at the rate of 71/2 per cent per annum. The aforesaid hundis and the pronote were executed in favour of Ram Singh. On the 28th of december, 1946 an acknowledgment was executed relating to the first two hundis both by diwan Chand and his son Nand Kishore. After the death of Diwan Chand the present suit was filed on 21-2-1948, for recovery of Rs.4844/10/6 with interest against the debtors, Nand Kishore major and Ranbir Kumar minor, sons of diwan Chand, and their mother Chand Rani. The defence set up to this suit was that there was no consideration for the hundis and the pronote. The trial Court on 26-2-1949 passed a decree in the following terms: "i grant plaintiff a decree for Rs.484410/6 and costs against defendants to the extent of the property of Diwan Chand deceased in their hands. Nand Kishore defendant is personally responsible for the payment of Rs.543/- due on the writing Exhibit P.3 (Pronote ). "

2. Against this decision, no appeal was preferred by the judgment-debtors but an appeal was taken to the District Judge by the plaintiff-decree-holder. He claimed that a personal decree should be passed against Nand Kishore for the entire amount in dispute and future interest should have been allowed to the plaintiff. The learned District Judge came to the conclusion that nand Kishore had taken full liability for the entire amount and it was established that the hundis, exhibits P.1 and P.2 and the pronote Exhibit P.3, were for consideration. The claim of future interest was disallowed. In the operative part of his judgment, it is stated as under: "the appeal is partially accepted, the judgment of the lower Court is modified to the extent that the decretal amount will be realisable from the firm Diwan Chand Nand Kishore as a personal debt due from the said firm. So far as the personal liability of Ranbir Kumar minor and Shrimati chand Rani widow of diwan Chand was concerned they will not be personally liable except to the extent of the firms property in their hands. The appellants claim for future interest is rejected. "

3. Dissatisfied with this decision, the plaintiff has come up in second appeal to this Court. The contentions of Mr. Bahri, learned counsel for the appellant, are: (a) that the plaintiffs claim to future interest could not be rejected in view of the imperative provisions of S.79 of the negotiable Instruments Act of 1881; and (b) that a personal decree should have been passed against Nand Kishore.

4. As regards the claim to future interest, reliance is placed on S.79 of the Negotiable instruments Act. The Section is in these terms: "79. 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 principal money due thereon, from the date of the instrument, until tender or realisation of such amount, or until such date after the institution of a suit to recover such amount as the Court directs. " It will be clear from the language of S.79 that in a suit field on the basis of Negotiable instruments Act, no option is left with the Court to cut down the contractual rate of interest unless the Court comes to the conclusion that the rate of interest is [penal or exorbitant. (See bishan Das V/s. Gurdasmal, AIR 1930 Lah 148 ). If the rate is proper, the Court has to allow the contractual rate from the date of the instrument to the date to be fixed by it. In the present case, no date was fixed by the Court. It is not disputed by Mr. Bahri that we can fix a date but he contends th