Code of Civil Procedure Notes By Deovrat Wade1
• The Code of Civil Procedure is divided into Sections and Orders to separate the general
principles from the detailed procedures.
• Sections contain the substantive procedural law, laying down the broad framework for how
civil cases should be handled.
• Orders and Rules, which are part of the First Schedule, deal with the practical steps and
specific procedures to be followed in court.
• Sections remain fixed and uniform across the country, the Orders can be modified by High
Courts to suit local needs.
Section 34 CPC: Interest
• This section deals with the power of the court to award interest in a money decree.
• This interest can be awarded at three stages:
Pre-suit interest:
Interest for the period before the suit was filed can be awarded if it is:
• Contractually agreed upon,
• Statutorily provided,
• Or permitted under the Interest Act, 1978.
Pendente Lite Interest:
• Interest from the date of filing the suit till the date of the decree can be granted at a rate
the court deems reasonable.
• It is the interest granted to parties during the pendency of litigation.
Post-decree interest:
Interest from the date of the decree till the date of payment can also be awarded. This interest
should not exceed 6% per annum. Higher Interest than 6% is allowed in commercial cases up
to: -
• The contractual rate of interest, or
• The rate charged by nationalised banks in commercial transactions, if no contract exists.
Additionally, sub-section (2) of section 34 clarifies that if the decree is silent about future
interest, it is presumed that the court has refused to grant it. A separate suit to claim such interest
is not maintainable.
1
[Link]
Case Laws, S. 34, CPC
Sr. Case Name & Citation Judgment
No.
1. UOI v. Manraj Enterprises • An Arbitral Award was set aside.
2021 SCC OnLine SC 1081 • Herein, Arbitrator had awarded
Pendente Lite and Future Interest
when there was a contractual bar
present.
• Arbitrator only has the power when no
interest rate i.e. no contractual bar is
present.
2. Ramnik Vallabhdas Madhvani v. Section 34 CPC deals with the question of
Taraben Pravinlal Madhvani, interest in three stages: -
(2004) 1 SCC 497.
• First is, interest prior to the date of
institution of suit,
• Second stage is interest from the date
of institution of suit till the date of
decree
• Third stage is from the date of decree
till realisation of the decretal amount.
3. Kerala SEB v. Kurien E. • Future interest is not payable unless
Kalathil, (2018) 4 SCC 793 the court specifically directs it under
Section 34(2) CPC.
• If the decree is silent about future
interest on the principal amount,
• It is deemed that the court has refused
to grant such interest.
4. Rubi (Chandra) Dutta v. • The Consumer Protection Act does not
expressly provide for the grant of
United India Insurance Co. Ltd.,
interest.
(2011) 11 SCC 269
• SC has held that interest may still be
awarded by applying Section 34 CPC.
• This is done to ensure complete justice
between the parties.
5. State Bank of India v. Yasangi • Section 34 CPC does not apply when
Venkateswara Rao (1999) the rate of interest is governed by a
contract.
• If the parties have agreed to a specific
rate, the court must respect it for:
➢ Pre-suit interest,
➢ Pendente lite interest.
• Exception: The court may interfere
only if the agreed rate is
unconscionable.
