Sakina Bewa & Ors. vs United India Insurance Co. Ltd.

CAN 3419 of 2017 is an application filed in FMA 1344 of 2015, being an appeal under section 173 of the Motor Vehicles Act, 1988 (hereafter the

Act) at the instance of the claimants in MACT Case No.444 of 2004 on the file of the Motor Accident Claims Tribunal, 4th Court, Berhampore,

Murshidabad (hereafter the tribunal). The prayer in the application, which is at the instance of the claimants/appellants, is for early disposal of the

appeal upon dispensing with the requirement of service of notice upon the respondent no.2 herein, i.e. the owner of the offending vehicle.

Having regard to the short point involved in the appeal, the application is disposed of by taking up the appeal for hearing here and now, treating it as on

day’s list, dispensing with all formalities. The tribunal by its award dated July 25, 2013 allowed an application under section 163A of the Act

grating compensation to the claimants in a sum of Rs.2,73,500/-. It is not in dispute that the award has been satisfied by the insurer, the respondent

no.1 herein. The appeal is confined to the issue of nonawarding of any interest by the tribunal.

Mr. Rahaman, learned advocate appearing for the claimants/appellants submits that in terms of section 171 of the Act, it is settled law that award of

interest, on the compensation determined to be payable by the tribunal, is the rule and denial/refusal is an exception. He has pointed out that the

tribunal has not assigned any reason as to why the claimants/appellants were not entitled to interest on Rs.2,73,500/- from December 18, 2004 i.e. the

date on which the claim application was filed. He has, accordingly, prayed for suitable interest on the compensation awarded by the tribunal.

Mr. Bhattacharjee, learned advocate appearing for the respondent no.1/insurer submits that the claim for interest is not tenable because the

proceedings were not prolonged unnecessarily by the respondent no.1/insurer. It is submitted by him that although the claimants/appellants had prayed

for Rs.1,60,000/- as compensation, the tribunal proceeded to award Rs.2,73,500/and this could have been the reason as to why interest was not

awarded by it. He has, accordingly, prayed for dismissal of the appeal.

We have heard learned advocates for the parties and perused the materials-on-record. There is no finding in the judgment and award impugned before

us that it was because of dilatory tactics adopted by the claimants/appellants that the claim application could not be decided at an early date. Section

171 of the Act enables the tribunal to exercise discretion and award simple interest on the compensation awarded by it. In Alok Shankar Pandey

â€"vs.- Union of India reported in AIR 2007 SC 1198, the Supreme Court has held that:

“9.*** there is misconception about interest. Interest is not a penalty or punishment at all, but it is the normal accretion on capital. For example, if

A had to pay B a certain amount, say 10 years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount.

Had A paid that amount to B 10 years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept

that amount with himself and earned interest on it for this period. Hence, equity demands that A should not only pay back the principal amount but also

the interest thereon to B.â€​

The claimants/appellants acquired the right to receive compensation on the death of the victim in an accident arising out of use of a motor vehicle. The

liability of the respondent no.1/insurer was fixed upon the award being pronounced. The respondent no.1/insurer thus could be said to have pocketed

the interest on the sum payable as compensation to the claimants/appellants. Section 171 of the Act is an enabling provision to take care of a situation

where the proceedings have continued for a long time without the delay being attributable to the claimants.

It has thus been rightly held by this Court in its decision in Kohinur Begum â€"vs.- New India Assurance Co. Ltd. & Anr. reported in AIR 2008 CAL

84 that award of interest is the rule and refusal is an exception. Without assigning any specific reason as to why interest was declined, the tribunal

misdirected itself and we are of the considered opinion that the appeal should be allowed by providing to the claimants/appellants appropriate sum on

account of interest.

We, accordingly, direct that the claimants/appellants shall be entitled to interest @ 8% per annum on Rs.2,73,500/- from the date of filing of the claim

application i.e. December 18, 2004 till payment is made in terms of this order. The respondent no.1/insurer is directed to compute the sum payable on

account of interest and credit the bank account of the claimant/appellant no.1 by electronic fund transfer. The claimant/appellant no.1 shall, within a

week from date, inform the respondent no.1/insurer the particulars of her bank account in which the interest is to be credited. The appeal stands

allowed, without any order for costs. Photostat certified copy of this order, if applied for, be furnished expeditiously.