Interest
- The question of interest on a claim in an Admiralty suit is dealt with
in accordance with the provisions of Section 34 of the Code of Civil
Procedure, 1908, which provides as follows: -
"(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
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:
Provided that where the liability is in relation to a sum so adjudged
which 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 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."
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- BCAS: 2102-1013
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