Md. Sagir Mistry v. Shatyendra Narain Singh

Patna High Court MA No.344 of 2012 (6) dt.19-07-2013 prayer is allowed, the delay is condoned. This interlocutory application is allowed. M.A. No. 344 of 2012 This is an appeal under Section 173 of the Motor Vehicles Act 1988 (hereinafter referred to as the „Act‟). Heard Mr. S. Parasmani, learned counsel for the appellants, Mr. Sheojee Mishra, learned counsel for the respondent Nos. 1 and 2 i.e. owner and the Driver of the Vehicle and Mr. Ram Chandra Lal Das, learned counsel for the United India Insurance Company Ltd. The claimants as appellants before this Court are aggrieved by that part of the judgment and award dated 24.1.2012/1.2.2012 passed by Additional District Judge-II-cum- Motor Vehicle Accident Claim Tribunal, Vaishali at Hajipur in Claim Case No. 97 of 2000/77 of 2011 whereby the learned Tribunal while allowing the claim case has refused to award interest pendente lite to the claimants inter alia on grounds that no application had been filed by the claimants before the Insurance Company for grant of compensation. A very short submission has been made by Mr. S. Parasmani while questioning the award. It is contended that the reason assigned by the Tribunal to refuse the interest claimed by the claimant is unsustainable and contrary to the legal position inasmuch as the claimants were not at all required to approach the Insurance Company for grant of compensation. The claimants have not questioned the award on any other ground except on the ground of refusal of interest. 3 Patna High Court MA No.344 of 2012 (6) dt.19-07-2013 The arguments of Mr. S.Parasmani has been contested by Mr. Das appearing for the Insurance Company to submit that the provisions of Section 171 of the Motor Vehicles Act 1988 vests the Tribunal with discretionary power to award interest. It is submitted that the power vested in the Tribunal being discretionary, no legal infirmity can be found in the award impugned in so far as the Tribunal has refused to grant interest. Mr. Das has relied upon a judgment of this Court reported in 2010(1) BLJ 181 (Md. Sadaquat Hussain & Ors. versus Sri Surendra Singh & Ors.). Mr. Das has further submitted that entire compensation amount in terms of the award has already been paid to the claimants and which position has not been disputed by Mr. S. Parasmani. I have heard learned counsel for the parties and have perused the materials on record. Section 171 of the Act runs as follows:- “171……..where any Claims Tribunal allows a claim for compensation made under this Act, such Tribunal may direct that in addition to the amount of compensation simple interest shall also be paid at such rate and from such date not earlier then the date of making the claim as it may specify in this behalf……...” The provision no doubt confers discretionary power on the Tribunal to award interest from such date not earlier to the date of filing 4 Patna High Court MA No.344 of 2012 (6) dt.19-07-2013 of the claim case. In so far as the case in hand is concerned, the only ground assigned by the Tribunal to refuse the grant of interest is that the claimants failed to approach the Insurance Company for compensation. The ground assigned to refuse interest is patently illegal for the reason that the claimants are not required to approach the Insurance Company directly for such compensation rather in terms of Section 166 of the Act they are to prefer an appropriate application in this regard before the Tribunal concerned constituted under Section 165 of the Act. The only issue that requires answer from this Court is whether keeping in view of the discretion vested in the Tribunal under Section 171 of the Act, the refusal of interest by the Tribunal on the compensation amount is sustainable and whether the award suffers from any legal infirmity on this count. An issue relatable to non payment of interest under the Railway Claims Tribunal Act 1987 came up for consideration before the Supreme Court in the case reported in (2009)7 SCC 372 (Thazhathe Purayil Sarabi & Ors.Vs. Union of India & Anr.). In the said case the Railway Claims Tribunal had granted 45 days time to the Railways to comply with the order of payment of compensation to the claimants failing which the claimants were made entitled to interest at the rate of

6.5% per annum from the date of default. The award of the Tribunal in so far as it made the award of interest conditional upon a default by the Railways in payment of the compensation amount, was questioned by the claimants before the High Court and the High Court taking into 5 Patna High Court MA No.344 of 2012 (6) dt.19-07-2013 consideration the discretionary power vested in the Tribunal to award interest, dismissed the appeal, which judgment and orders were questioned before the Supreme Court. The Supreme Court after examining the provisions of Section 3 of the Interest Act 1978 and the provisions of Section 34 of the Code of Civil Procedure upheld the claim of the claimants for interest. It was held by the Supreme Court that an award passed on a claim application is in a nature of a money decree and the element of interest on such award is essentially in the nature of compensation payable on account of denial of the right of the claimant to utilize the same. Interest thus becomes an integral part of a compensation amount allowed under an award. The issue as regarding the date of accrual of interest has been discussed in paragraph 28 of the judgment and it has been held that though there has been a consistent view that interest on the principal sum would be payable from the date of institution of the proceeding but there would be exceptional cases in which interest could also be awarded for the period prior to the institution of the proceedings. Where as neither the Railways Act 1989 nor the Railway Claims Tribunal Act 1987 provides for payment of interest on compensation amount but so for as the Motor Vehicles Act is concerned, the provisions underlying Section 171 does empower the Tribunal to award interest. The law laid down by the Supreme Court on the issue of interest in matters relatable to claim cases would apply with all force even to claim case arising from the Motor Vehicle Act, 6 Patna High Court MA No.344 of 2012 (6) dt.19-07-2013 Workmen Compensation Act and the likes. There thus remains no further issue that the appellants were indeed entitled to the interest amount from the date of filing of the claim application until the date of payment of the compensation amount which admittedly has been made over to the appellants. For the reasons aforementioned, the impugned award in so far as the Tribunal has refused to grant interest, is set aside and it is held that the appellant shall be entitled to payment of interest at the rate of 6% as determined by the Tribunal, payable to the appellants from the date of filing of the claim application until the date of payment of the compensation amount. This appeal is allowed. The award stands modified to the extent discussed hereinabove. Bibhash/- (Jyoti Saran, J)