1. This first appeal has been preferred by the appellant/defendant under section 96 of Civil Procedure Code against the judgment and decree dated 13/07/2005 passed in Civil Suit No. 3-B/2004 by learned Third Additional District Judge, Gwalior.

2. The brief and admitted facts of the case are that respondent/plaintiff has supplied some electrical goods (Transformers) to the appellant/defendant company and appellant/defendant instead of making the instant payment, executed a promissory note for every bill to be paid on a future date after a period four years including the amount of interest as mentioned in the promissory note.

3. As the appellant/defendant has failed to make the payment of amount mentioned in the promissory note on due date and same has been paid after a delay of 6 months, the respondent/plaintiff has filed a suit for interest for the delayed period at the rate as mentioned in the promissory note on the total amount mentioned in the promissory note.

4. Learned trial Court has decreed the suit and ordered for payment of interest as claimed by the respondent/plaintiff.

5. The only objection or question raised by the appellant/defendant is that since the amount mentioned in the promissory note include the cost of goods supplied and interest thereon, therefore, on the amount of interest, plaintiff is not entitled to get any further interest. At the most, plaintiff is entitled to interest on the original amount of goods.

6. Learned counsel for the plaintiff has drawn attention of this Court towards the provision of section 79 of the Negotiable Instruments Act, 1881 (for short “the Act”) which reads as under:-

“79. 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 principal money due thereon, from 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.”

7. Section 79 of the Act relates to interest payable on principal money due on the promissory note. This provision cannot be applied where interest is to be calculated for delayed payment on the amount of promissory note. Since the appellant has executed a promissory note, in lieu of non-payment of the amount of goods purchased from the respondent/plaintiff, the amount of promissory note itself become the principal amount though it already include the interest on price of goods, therefore, the interest is to be calculated on the whole amount of promissory note, which has become principal amount, at the rate of interest which was agreed between the parties while executing the promissory note because the interest is awarded on the amount of promissory note by way of compensation for non-payment of amount on due date. Thus, learned trial Court is justified in awarding the interest on whole amount of the promissory note.

8. Learned counsel for the appellant has also challenged the rate of interest awarded after filing of the suit till its realization which is 18% per annum. He has drawn attention of this Court towards the section 34 of CPC which makes a provision for payment of interest in a money decree at the rate of 6% per annum. But proviso to section 34(1) makes it clear 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 six 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 nationalised banks in relation to commercial transactions.

9. Learned counsel for the respondent has drawn attention of this Court towards the provisions of section 80 of the Act which reads as under:-

“80. Interest when no rate specified.- When no rate of interest is specified in the instrument, interest on the amount due