( 1 ) THE appellant's suit for sale against the respondents was in respect of mortgaged property on foot of a mortgage dated September 2, 1956, for Rs. 17,000/-, and another mortgage dated July 6, 1947, for Rs. 5,000/ -. The agreed rate of interest under the former was 10 annas per cent per month and under the latter 12 annas per cent per month. The suit was instituted on April 19, 1957. The defendants resisted the suit. The trial Court passed a preliminary decree for sale for the entire claim of the plaintiff i. e. principal sum Rs. 22,000/- and interest at the stipulated rates from the date of the execution of the mortgages to the date of the institution of the suit. But from the date of the institution of the suit to the date of preliminary decree it allowed 3% per annum (4 annas per cent per month ).

( 2 ) IN this appeal the plaintiff's grievance is that there was no justification for not allowing interest pendente lite at the contractual rates as it was mandatory under order 34, Rule 11, C. P. C. Alternatively, it is argued that discretion has been exercised arbitrarily. Under Order 34, Rule 11 of the Code of Civil Procedure a court may order payment of interest upto the date on which payment of the amount found due or declared under the preliminary decree is to be made by the mortgagor at the rate payable on the principal.

( 3 ) THE provisions now contained in Order 34, Rule 11 C. P. C. were enacted by the c. P. C. Amendment Act No. 21 of 1929. Earlier, in Jagannath Prosad v. Surajmul jalal, 54 Ind App 1 = (AIR 1927 PC 1), the suit was to enforce by sale a mortgage bond which provided for interest at 12% per annum with quarterly rests. The subordinate Judge passed a decree in favour of the plaintiff and allowed interest at 9% per annum until the date of the institution of the suit and 6% per annum from that date until payment. The plaintiffs appealed as to the interest allowed. The high Court allowed the appeal and made a decree for interest at 12% per annum with quarterly rests, as stipulated in the bond, to the date fixed by the decree for payment, and thereafter at 6% per annum. The Privy Council took the view that till the period of redemption has expired, the matter remains in contract and the interest has to be paid at the rate and with the rests specified in the contract of mortgage.

( 4 ) AFTER the decision of the Privy Council the present Rule 11 in Order 34 of the code of Civil Procedure was enacted by Act No. 21 of 1929. This Rule makes a clear distinction between two periods: (i) from the date of the suit upto the date of redemption; and (ii) from the date of redemption to the date of realisation. For the former, the Court may allow interest on the principal amount at the rate payable on the principal, or where no such rate is fixed, at such rate as the Court deems reasonable. For the latter period the question has been left in the discretion of the court and interest may be allowed on the total amount due. In respect of interest pendente lite it is in the discretion of the Court whether to allow or not the contractual rate of interest.

( 5 ) SULAIMAN J. speaking for the Court observed in Jaigobind Singh v. Lachmi narain Ram, AIR 1940 FC 20. thus:-'' this special provision, which removes any conflict that there might have been between Section 34 and Order 34, Rules 2 and 4, gives a certain amount of discretion to the Court, so far as interest pendente lite and subsequent interest are concerned. It is no longer absolutely obligatory on the Courts to decree interest at the contractual rate upto the date of redemption in all circumstances, if there be no question of the rate being penal, excessive or substantially unfair within the meaning of the Usurious Loans Act. 1918. " his Lordship further observed:-"of course, whether the Court would or would not give relief in respect of interest in excess of nine per centum simple per annum, and if so to what extent, will depend on the special circumstances of each case.

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