Courts have authority to determine appropriate interest rate, considering totality of facts and circumstances in accordance with law. That apart, Courts have discretion to decide whether interest is payable from date of institution of suit, a period prior to that, or from date of decree, depending on specific facts of each case. Court must ensure, while Claimant is fairly compensated, award does not become punitive or unduly burdensome on Judgement Debtor. Therefore, rate of interest should be determined in a manner that balances both fairness and financial impact, taking into account ‘loss of use’ principle and economic prudence.

– Hon’ble Justice R. Mahadevan, I.K. Merchants Pvt. Ltd. v. State of Rajasthan, [Civil Appeal Nos. 4560-4563 of 2025].