Commercial transaction test under Section 34 CPC excludes a hospital loan treated as a professional borrowing for future interest.

A loan advanced for construction of a hospital was held not to be a commercial transaction for purposes of future interest under Section 34 CPC. The proviso allowing interest above 6% per annum applies only where liability arises from a commercial transaction connected with industry, trade or business, and those expressions do not cover a profession or professional transaction. In the absence of evidence that the borrowing financed a profit-oriented commercial venture, the loan was treated as a professional loan. The award of future interest at 6% per annum was therefore upheld.

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Issues: Whether a loan advanced for construction of a hospital constituted a commercial transaction so as to justify future interest above 6% per annum under Section 34 of the Code of Civil Procedure.

Analysis: The proviso to Section 34 permits future interest exceeding 6% per annum only where the liability arises out of a commercial transaction connected with industry, trade or business. The Court held that the expressions "industry", "trade" and "business" do not include a profession or professional transaction. A hospital project is not necessarily profit-oriented and may be service-oriented. In the absence of evidence showing that the loan was taken for a commercial venture, the borrowing was properly treated as a professional loan and not as a commercial transaction.

Conclusion: The loan did not fall within the commercial transaction exception, and the award of future interest at 6% per annum was upheld.

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