Report No. 55
24. Discretion under old section supported.-
Another comment on the Bill opposed the amendment of section 34, for these reasons1:-
"The present section 34 which enables the Civil Courts to award interest does not impose a maximum limit. The amendment proposes to limit the rate of interest which the Court can award on the decretal amount. at 4% per annum2. The proposed amendment usurps the discretion vested in the Court in so far as the award of interest is concerned. There are no reasonable grounds for supposing that Courts have been harsh upon litigants in the matter of saddling them with interest, and there is no reason to think that the wise discretion given to the Court in the award of interest has been misused.
There is no valid reason to fetter the discretion of the Court in such matter. Moreover, the rate of interest would vary at different times, also according to the local conditions prevailing in different districts. The proposed amendment would fossilize the discretion of the Court and prevent it from modulating interest so as to meet the needs of the time or to suit local conditions. I submit that the proposed amendment is not proper."
1. Comment of a District Judge (later High Court Judge).
2. The original proposal was for a maximum of 4 per cent.