Durga Prasad Singh and Another vs Bhola Singh and Others

Dr. Satish Chandra, J.—Heard Sri Mayankar Singh, learned counsel for the appellants and Sri Sanjay Tripathi for National Insurance Co. Ltd., respondent No.3.

This First Appeal From Order has been filed under Section 173 of Motor Vehicles Act, 1988 against the judgment and order dated 19.8.2008 passed by VI Additional District Judge/M.A.C.T., Gonda in Claim Petition No.15 of 1993.

The matrix of the case is that the deceased Anand Singh, who was aged about 20 years at the time of death, was going to his field on 25.12.1992 around 4.00 p.m. when he reached near village Koilee Jungle, district Gonda, a Mahindra Tractor No.UP43/8328 coming from the back side hit the deceased due to reckless driving which resulted the death of the deceased. The tractor was insured with the respondent No.3 w.e.f. 4.31992 till 3.3.1993. The accident occurred on 25.12.1992. The driver Ishwar Nath s/o Sri Ram Pher was having valid driving license which was valid till 7.1.1999. An FIR was also registered against the driver.

The parents of the deceased (appellants) filed the claim petition before the Motor Accident Claims Tribunal, Gonda, who awarded, on 19.8.2006, the compensation for Rs.1,60,000/ and also awarded the funeral expenses and loss of estatea sum of Rs.2,000/ and Rs.2,500/ respectively which resulted the total compensation to Rs.1,64,500/. The interest @ 9% from the date of award was also provided by the Tribunal. The claimants/appellants being aggrieved have filed the present appeal against the insurance Company for the enhancement of the compensation.

During the course of arguments, both the parties have agreed regarding the facts as mentioned by the Tribunal in the impugned order. Accordingly, the deceased Anand Singh was aged about 20 years. In the postmortem report, the deceased''s age was shown as 19 years. He was a nonearning person, so the Tribunal has assessed his income as Rs.15,000/ per annum as per the II Schedule of the Motor Vehicles Act. The multiplier of ''16'' was rightly applied, hence, we find no reason to interefere regarding the quantum of compensation awarded by the Tribunal.

The main dispute in the present appeal is regarding interest on the award. The Tribunal has neither given the point of time from where the rate of interest can be calculated nor it has given any reason for not providing the time limit. However, on the application of the appellants, the Tribunal has provided that the rate of interest will be payable with effect from the date of judgment.

During the course of arguments, learned counsel for the appellants stated that the Tribunal has failed to give any reason for not providing the interest from the date of institution of the claim. He submitted that the interest may kindly be allowed from the date of claim petition filed before the Tribunal. He relied on the ratio given in the following cases where interest was awarded from the date of filing of petition before the Tribunal:

Kolla Venkateswarlu v. Abdul Kareem & another, 2004 (3) TAC 564 (AP)

U.P. State Road Transport Corporation v. Smt. Premwati & others, AIR 1992 Alld. 271.

On the other hand, learned counsel for the respondent No.3 National Insurance Company has justified the order of the Tribunal where the interest was allowed from the date of the judgment. He relied on the ratio laid down by this Court in the case of New India Assurance Company Ltd. v. Smt. Kiran Singh, 1998 (2) JCLR 1098 All, where the interest was given with effect from the date of judgment of the Tribunal. Learned counsel for the National Insurance Company has also referred the decision in the case of Jefford and another v. Gee, reported in (1970) All. E.R. 1202, where it has been indicated that the amount awarded is on account of loss of future earnings whereas the interest is payable on being kept out of the money. It is, therefore, submitted that the interest may be payable only on the loss of future earning. It became payable on the date of award. The interest is to be awarded on the amount which is payable on the date of award.

We heard both the parties at length and gone through the material available on record.

It may be mentioned that no rate of interest is fixed under Section 171 of the Motor Vehicles Act, 1988. Varying rates of interest are being awarded by Tribunals, High Courts and the Supreme Court. Interest can be granted even if claimant does not specifically plead for the same was it is consequential in the eye of law. Interest is compensation for forbearance or detention of money and that interest being awarded to a party only for being kept him out of the money which ought to have been paid to him. No principle could be deducted nor any rate of interest can be fixed to have a general application in motor accident claim cases having regard to nature of provision under Section 171 giving discretion to Tribunal in such matter. In other maters, awarding of interest depends upon the statutory provisions, mercantile usage and doctrine of equity. Neither Section 34 CPC nor Section 4A(3) of the Workmen''s Compensation Act are applicable in the matter of fixing rate of interest in a claim under the Motor Vehicles Act. The Courts have awarded the interest at different rates depending upon the facts and circumstances of each case, as observed in the case of Abati Bezbaruah v. Deputy Director General, Geological Survey of India & another, 2003 (2) TAC 18 SC.

The genetics of the interest may be traced from the Motor Vehicles Act, 1964. Erstwhile Section 110CC of that Act provides for awarding of interest where any claim was allowed, prior to that there was no statutory provision for awarding interest.The object of the interest is that claimants have been deprived of the compensation amount would have been paid forthwith they could have deposited in the bank and could have secured interest or could have utilized it much more usefully. The amount of compensation, in fact, became due on the date when the accident took place but Section 171 of the Motor Vehicles Act, 1988 provides that the interest cannot be awarded earlier than the date of claim made. The said Section runs as under:

�171. Award of interest where any claim is allowed Where any Claims Tribunal allows a claim for compensation made under the Act, such Tribunal may direct that in addition to the amount of compensation simple interest shall also be paid as such rate and from such date not earlier than the date of making the claim as it may specify in this behalf.�

In the case of Union of India v. P.S. Mahal, AIR 1976 J&K p.88, it was held that the interest should be payable from the date of the presentation of the claim before the Tribunal interest has normally to be awarded from the date of making the claim unless there are good reasons for making a deviation, as per the ratio laid down in Sonoo Keki v. Bishwanath Singh, 1987 ACJ, p.458460 (Alld.). Thus, now it is well settled position that the interest cannot be awarded from the date of accident but it can be awarded from the date of making the claim. The liability to pay interest is an independent liability and excluded from the liability to pay compensation. Payment of interest is allowable in view of Section 171, of the Act, if the Tribunal in its discretion so directs. Section 171 of the Motor Vehicles Act, 1988 subsequently empowers the Tribunal to award interest at such rate as it may specify in that behalf in the award, it cannot be said that Section 34 of the Code of Civil Procedure would govern the award Section 171 gives discretion to the Tribunal to award reasonable amount of interest after taking into consideration the facts and circumstances of each case. There is no prohibition that it shall not award interest at a particular rate. In this view of the matter, it cannot be said that the order passed by the Tribunal awarding interest from the date of making the claim is illegal and erroneous as per the ratio laid down in the case of Abati Bezbaruah (supra) identical ratio was laid down in the case of Kaushnuma Begum (Smt.) and others v. New India Assurance Company Ltd., reported in (2001) 2 SCC 9. The similar view was expressed by the Apex Court in the United India Insurance Co. Ltd. & others v. Patricia Jean Mahajan & others, reported in 2002 (2) TAC 721 (SC).

Awarding of interest depends upon the statutory provisions, mercantile usage and doctrine of equity as per the observation made by the Hon''ble Supreme Court in the case of Abati Bezbaruah. Further, the interest was awarded from the date of claimant''s application made before the Tribunal in the following cases too

Parkh Engineering and Body Building Company Ltd. v. Smt. Pramila Karwa & others, reported in 2005 (1) TAC 694 (Jhar.)

Smt. Chameli Wati & another v. Municipal Corporation of Delhi & others, reported in (1986) 4 Supreme Court Cases, 503 and

Bijoy Kumar Duggar v. Bidyadhar Dutta & others, reported in 2006 (1) TAC 969 (SC).

This view was also followed in the case of Smt. Kamla Devi & others v. Chandra Engineering Corporation, Faizabad & others (FAFO No.238/1994, decided on 4.11.2008 by this Court) where it was mentioned that the interest will have to be awarded from the date of filing of the claim petition. The inspiration may also be drawn from the Arbitration & Conciliation Act, 1996 whereby prereference and pendente lite period interest is directed to pay by the Apex Court in the case of B.L. Gupta Construction (P) Ltd. v. Bharat Cooperation Group Housing Society Ltd., 2003 (3) Arb. LR 570 (SC).

In the light of above discussions and by considering the totality of the facts and circumstances of the case, we are of the view that the interest will have to be awarded from the date of filing of the claim petition before the Tribunal. Hence, the impugned order passed by the Tribunal is modified accordingly.

The FAFO is party allowed accordingly.

(Appeal allowed partly)