Section 34 CPC - Code of Civil Procedure - Interest


(1) Where and in so far as a decree is for the payment of money, the Court may, in the decree, Order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, 2[with further interest at such rate not exceeding six per cent, 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 thinks fit:

1[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 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.

Explanation I.-In this sub-section, "nationalised bank" means a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 (5 of 1970).

Explanation II.-For the purposes of this section, a transaction is a commercial transaction, if it is connected with the industry, trade or business of the party incurring the liability.]

(2) Where such a decree is silent with respect to the payment of further interest 3[on such principal sum] from the date of the decree to the date of payment or other earlier date, the Court shall be deemed to have refused such interest, and a separate suit therefore shall not lie.


(i) General provision of section 34 would authorise the Redressal Fora and Commissions to also grant interest appropriately under the circumstances of each case; Sovintorg (India) Ltd. v. State Bank of India, AIR 1999 SC 2963.

(ii) The claimants have been allowed interest on the decretal amount from the date of the decree though the amount of compensation was quantified only from the date of the passing of the decree. In such circumstances the direction of the Division Bench in the matter of award of interest is also not liable to be interfered; Municipal Corporation of Delhi v. Sushila Devi, AIR 1999 SC 1929.

1. Added by Act No. 104 of 1976, sec. 13 (w.e.f. 1-7-1977).

2. Subs. by Act 66 of 1956, sec. 2, for certain words (w.e.f. 1-1-1957)

3. Subs. by Act 66 of 1956, sec. 2, for "on such aggregate sum as aforesaid" (w.e.f. 1-1-1957)


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