K. Ramaswamy, J.
1. The appellant-bank lent to the respondents as sum of Rs. 35,000 on the foot of a promissory note, exhibit A-1, dated September 18, 1975, a letter of guarantee, exhibit A-2, of even date executed by the second defendant and an equitable mortgage executed by the first defendant by depositing of title deeds, exhibit A-4, dated July 19, 1967, and July 14, 1973m respectively. The trial court granted a money decree against both the defendants for Rs.35,000 with 12 per cent. simple interest thereon per annum from the date of the suit till date of realisation. The contracted rate is 16 1/2%. The appellant is aggrieved against the rate of interest scaled down by the trial court from the contractual rate. Sri Harnath, learned counsel for the appellant, has relied on section 79 of the Negotiable Instruments Act, 1881 (26 of 1881) (for short, 'the Act'), which postulates thus:
'When interest at a specified rate is expressly made payable on a promissory note or bill of exchange, interest shall be calculated at the rate specified, on the amount of the principal money due thereon, from the date of the instrument, until tender or realisation of such amount, or until such date after the institution of a suit to recover such amount as the court directs.'
2. Learned counsel contends that in a suit on a negotiable instrument the court is given power under section 79 of the Act to fix the outer date from which the rate of interest is to be charged but now power to reduce the contractual rate of interest. Till a date after the suit is fixed, the contractual rate of interest shall be chargeable and the appellant is entitled to the contractual rate of interest. Any other contraction would fly in the face of the mandatory language of section 79. He further contends that section 79 of the Act prevails over section 34 of the Code of Civil Procedure, 1908 (for short, 'the Code'). The first question, therefore, is whether section 79 of the Act prevails over section 34 of the Code. Both are Central Acts covering the same field, viz., the power or discretion given to the court to fix a date for payment of interest pendent lite. In addition, section 34 of the Code does give power to fix the rate of interest also. Section 34(1) of the Code reads thus:
'34(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 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.'
3. A reading thereof clearly indicates that the court is given discretion to award rate of interest:
(i) if there is a contractual rate of interest, interest on the principal sum so adjudged as directed between the parties till date of suit;
(ii) from the date of the suit till the date of the decree, discretion is given to award interest on the principal sum so adjudged at such rate as the court deems reasonable; and
(iii) from the date of the decree till the date of realisation at such rate not exceeding 6% per annum or till such earlier date as the court thinks fit.
4. Section 34(1) engrafts language taking within its ambit not only the money due on a negotiable instrument but also any claim for payment of money. The Act is of 1881, whereas the Code is of 1908. Further, it was amended from time to time up to the Act of 1986. The Legislature is aware of the existence of section 79 of the Act, but no exception has been engrafted in section 34(1) of the Code with regard to the rate of interest in respect of the claims based on negotiable instruments. Therefore, the later Act prevails over the earlier Act. Moreover, section 34 prescribes not only in respect of the period but also the rate of interest. Accordingly, section 34 also applies to the claims based on negotiable instruments as well. No exception by judicial interpretation could be engrafted. The second contention is rejected.
5. It is next contended that section 79 applies to the negotiable instruments and the rate of interest shall be charged till the date of realisation or until such date after the institution of the suit as fixed by the court. Therefore, the court ought to grant interest at the contractual rate. I express my inability to accept the contention of learned counsel. It is undoubtedly true that section 79 operates in respect of rate of interest on the principal sum due under negotiable instruments and it empowers interest when the rate is specified from the date of the institution until the amount is tendered or realised or until such date so fixed after the institution of the suit to recover the amount, the subject-matter of the suit. Section 34 of the Code equally gives power to the court in respect of all money claims. It was already held that money claims. It was already held that money claims include claims based on negotiable instruments. In those circumstances, section 79 of the Act and section 34(1) of the Code are to be harmoniously construed. What is the meaning of the clause 'until such date after the institution of a suit'? Any date from the date of the institution of a suit is the intendment of section 79. If they are so harmoniously construed, it may be construed to be the dae of the suit and the rate of interest charged on a negotiable instrument shall be from the date of the institution of the suit pendent lite. The reason is that both section 79 and section 34(1) give discretion to court to award such rate from a date and such rate as is reasonable depending upon the facts and circumstances obtainable in a given case. Otherwise, the Legislature would have expressly made an express provision section 34(1) itself in regard to the rate of interest pertaining to the claim based on negotiable instruments. The Legislature having left the discretion to the civil court, it cannot be construed that the power is, by implication, taken away as contended by Mr. Harnath.
6. It is no doubt true that in Utsav Lal Gupta v. Firm Mohan Bros., , the learned judge has held that section 79 of the Act prevails over section 34 of the Code, but, with all due respect to the learned judge, I express my inability to agree with his ratio. If section 79 of the Act is strictly construed and applied, then, to that extent, it amounts to judicial legislation of cutting down the operation of section 34 relating to claims on negotiable instruments which are advisedly not engrafted. In Piara Lal Khanna v. S. Herchand Singh Jaiji, the Bench has held that section 34 of the Code applies for fixation of rate of interest pendente lite. With due respect, I agree with the ratio in the above case. Though the ratio in Lehru Narain v. Kanhaiyalal, , was relied upon by Sri Harinath with regard to the power of the court to grant rate of interest even higher that the contractual rate of interest, with great respect, I express my inability to accede to the ratio laid in the above case. The court cannot grant a higher rate of interest than what was contracted for between the parties even pendente lite. The area is covered by contract or statute. Section 34(1), Civil Procedure Code, regulates the gray area. By implication, it is either the contractual rate or less, but not in excess thereof. Accordingly, I hold that the grant of rate of interest at 12% from the date of institution till the date of realisation is in consonance with section 34 of the Code. In fact, the rate of interest at 12% from date of decree till date of realisation is contrary to section 34(1) of the Code. But no appeal or cross-objection was filed by the respondent. Therefore, it does not warrant interference.
7. The appeal is, accordingly, dismissed, but in the circumstances, I direct each party to bear its own costs.