Deduction of compensation amount for lump sum payment must be justified, and interest may be awarded from the date of the claim.

Headnote:
Compensation - Motor Accident - Deduction of Compensation Amount - Interest
Fact of the Case:

Two persons died in a motor accident and their widows filed claims for compensation. The Tribunal determined the compensation amounts but deducted 1/3rd of the amounts for lump sum payment. The High Court affirmed the Tribunal's decision.
Finding of the Court:

The Supreme Court found that the deduction of 1/3rd of the compensation amount was not justified and awarded interest at 12% p.a. from the date of the claim. The appeals were allowed, and the direction for deduction of 1/3rd of the compensation amount was set aside.
Issues: Deduction of compensation amount for lump sum payment, correctness of the Tribunal's decision, award of interest
Ratio Decidendi: The deduction of 1/3rd of the compensation amount was not justified, and interest at 12% p.a. from the date of the claim was awarded. The Tribunal's decision was corrected by the Supreme Court.
Final Decision: The appeals were allowed, and the direction for deduction of 1/3rd of the compensation amount was set aside. The compensation amounts were determined without any deduction, and interest at 12% p.a. from the date of the claim was awarded.

ORDER

1. Leave granted.

2. Two persons namely, Hussain Ali and Khagon Chandra Kalita died in a motor accident on 10-12-1986 when the bus in which they were travelling met with an accident. Their widows, Nizita Bibi and Renu Bala Kalita, respectively, filed separate claims for award of compensation before the Motor Accidents Claims Tribunal. The Tribunal determined the amount of Rs 51,000 as compensation payable to the widow of Hussain Ali and Rs 1,05,000 as compensation payable to the widow of Khagon Chandra Kalita. However, the Tribunal deducted 1/3rd of the amount of compensation determined in each case on account of lump sum payment. The claimants preferred appeals to the Guwahati High Court which has affirmed the Tribunals award. Hence, these further appeals by special leave.

3. In our opinion, in the facts and circumstances of the case, the amount of compensation determined in each case was at the figure which did not call for any further deduction thereon for any reason. The deduction of 1/3rd of the amount in each case is not, therefore, justified. The High Court did not correct that error. Accordingly, we correct that error and in addition, we award interest 12% p.a. on the amount of compensation from the date of the claim. This modification in the Tribunals award has to be made in these appeals.

4. Consequently, the appeals are allowed to the extent that the direction of the Tribunal for deduction of 1/3rd of the amount of compensation determined in each case is set aside. The result is that the compensation payable to Smt Nizita Bibi, widow of Hussain Ali is Rs 51,000 and the compensation payable to Smt Renu Bala Kalita and the other heirs of Khagon Chandra Kalita is Rs 1,05,000 without any deduction being made from that amount. In addition, in each of these cases, the claimants would also be paid interest on the amount of compensation @ 12% p.a. from the date of the claim. The Tribunal would ensure payment of the entire amount in each of these cases through a nationalised bank. Parties to bear their own costs.

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