Section 34 of CPC : Section 34: Interest

Explanation using Example

Imagine that Raj filed a lawsuit against a contractor, Suresh, for not repaying a loan of ₹500,000 that was due on January 1, 2022. Raj's suit was filed on March 1, 2022, and the court delivered its decree on December 1, 2022. The court found Suresh liable to repay the loan with interest. Applying Section 34 of the Code of Civil Procedure, 1908, the court ordered Suresh to pay interest at 7% per annum on the principal sum of ₹500,000 from March 1, 2022 (the date of the suit) to December 1, 2022 (the date of the decree). Additionally, the court ordered further interest at 6% per annum from December 1, 2022, until the date Suresh actually makes the payment. Since the loan was a commercial transaction, the court could have considered a rate higher than 6% for the post-decree interest, but chose not to exceed the standard limit.