Report No. 178
7. Amendment of the Civil Procedure Code, 1908 (5 of 1908.-
In the Code of Civil Procedure 1908-
(a) for section 34 , the following section shall be substituted, namely:-
'"34.Interes.- (1) Where and in so far as a decree is for the payment of money, the Court may, in the decree order interest to be paid on the principal sum adjudged, from the date of the suit to the date of decree at a rate not exceeding twelve percent. per annum, 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 not exceeding twelve percent. per annum as the Court deems reasonable on such principal sum, from the date of the decree to the date of payment or to such earlier date as the Court deems fit:
Provided 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 twelve percent., per annum, but shall not exceed the contract rate of interest or where there is no contractual rate, the rate at which monies are lent or advanced by nationalized banks in relation to commercial transactions.
Explanation.- I In this sub-section, "nationalized bank" means a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980.
Explanation.- II A transaction is a commercial transaction, if it is connected with the industry, trade or business of the party incurring the liability.
(2) Where a judgment and decree are silent with respect to the payment of interest on such principal sum from the date of the decree to the date of payment or other earlier date, the decree holder may apply to the Court which passed the decree for an order in relation to the liability of the judgment debtor to pay interest for the said period and as to the rate at which interest is payable for the said period and the Court shall pass a reasoned order on the said application and in case interest is awarded, the Court shall amend the judgment and decree in accordance with the said order.
(3) The application referred to in sub-section (2) shall be filed within a period of 30 days of the date of judgment and decree in the suit and while computing the period for filing an appeal against the judgment and decree under the provision of Limitation Act, 1963, the period between the date of the application referred to in sub-section (2) and the date of passing of the order thereon, shall also be excluded, irrespective of whether any interest was awarded or not in such application."
(b) in the First Schedule-
(A) in Order 20-