Synopsis

The plaintiff (appellant) had given a friendly loan of ₹5 lakhs at a contractual interest of 3% per month (36% p.a.). the trial court decreed the suit for ₹5.60 lakhs (including pre‑suit interest) but awarded pendente lite and future interest at only 8% p.a., instead of the claimed 3% per month. the plaintiff appealed, arguing that the court cannot rewrite the contract. the high court dismissed the appeal, holding that under section 34 cpc, the court has discretionary power to award pendente lite and future interest at a rate it deems reasonable. the contractual rate of 3% per month was considered unconscionable and penal in nature. the decretal amount already included pre‑suit interest, and the plaintiff’s own description of the loan as “friendly” contradicted the claim of a commercial transaction.

Court: High Court of Delhi at New Delhi

Coram: Hon’ble Ms. Justice Neena Bansal Krishna (Single Judge)

Date of Judgment: 18th May 2026

Citation: RFA (Regular First Appeal) No. ... (2026:DHC:4411)

Core Law: Code of Civil Procedure, 1908 – Section 34 (interest on decrees); Contract law – interest rate, penalty, court’s discretion.

1. Heading of the judgment

High court of delhi at new delhi

Rfa (regular first appeal) no. ... /2025

M/s sethi leasing and finance co. through its proprietor sh. des raj sethi (appellant) vs. Shiv kumar pasrija & anr. (respondents)

Coram: hon’ble ms. justice neena bansal krishna

Date: 18th may, 2026

2. Legal framework

Major laws and provisions involved:</p

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