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2008 Supreme(Cal) 269
BHASKAR BHATTACHARYA AND RUDRENDRA NATH BANERJEE, JJ.
Kohinur Begum and Ors.
versus
New India Assurance Co. Ltd. and Anr.
F.M.A.T. No. 2846 of 2007
Decided on : 6 -3 -2008
Amit Ranjan Roy, for Appellant; Saibalendu Bhowmik, for Respondent.
THE TRIBUNAL HAS THE DISCRETION TO AWARD INTEREST ON THE COMPENSATION AMOUNT FROM THE DATE OF FILING OF THE CLAIM APPLICATION, AND THE RATE OF INTEREST SHOULD BE THE PREVAILING BANK RATE FOR FIXED DEPOSITS FOR THE PERIOD THE APPLICATION WAS PENDING BEFORE THE TRIBUNAL.
Headnote:
MOTOR VEHICLES ACT - INTEREST - SECTION 171 - AWARD OF INTEREST - HELD, THAT IN CHAPTER XI OF THE ACT, THERE IS A SPECIFIC PROVISION, VIZ., SECTION 171, WHICH EMPOWERS THE TRIBUNAL TO GIVE INTEREST IN ADDITION TO THE AMOUNT OF COMPENSATION. THE SAID PROVISION IS QUOTED BELOW: "171. AWARD OF INTEREST WHERE ANY CLAIM IS ALLOWED. - 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 THAN THE DATE OF MAKING THE CLAIM AS IT MAY SPECIFY IN THIS BEHALF."
Fact of the Case:
THE CLAIMANTS IN THE PROCEEDINGS UNDER SECTION 166 OF THE MOTOR VEHICLES ACT, 1988 APPEALED AGAINST AN AWARD DATED JUNE 29, 2007 PASSED BY THE MOTOR ACCIDENT CLAIMS TRIBUNAL, 1ST COURT, ASANSOL IN M.A.C. CASE NO. 53 OF 2006/149 OF 2006. THE TRIBUNAL AWARDED RS. 7,50,000/- IN FAVOR OF THE CLAIMANTS WITH A DIRECTION UPON THE INSURANCE COMPANY TO MAKE PAYMENT OF THE SAID SUM WITHIN TWO MONTHS FROM THE DATE OF AWARD FAILING WHICH, IT WAS ORDERED, THE CLAIMANTS WOULD BE ENTITLED TO GET INTEREST AT THE RATE OF 9 PERCENT PER ANNUM TILL REALIZATION OF THE COMPENSATION IN FULL.
Finding of the Court:
THE COURT HELD THAT THE TRIBUNAL FAILED TO EXERCISE ITS DISCRETION VESTED IN IT BY LAW BY NOT CONSIDERING THE QUESTION OF GRANT OF INTEREST ON THE AWARDED SUM PARTICULARLY WHEN THE CLAIM-APPLICATION HAD SUCCEEDED. THE COURT FURTHER HELD THAT A DUTY IS CAST UPON THE TRIBUNAL TO CONSIDER THE QUESTION OF GRANT OF INTEREST ON THE SUCCESSFUL APPLICANTS BUT IT DOES NOT APPEAR FROM THE AWARD IMPUGNED THAT THE TRIBUNAL APPLIED ITS MIND TO THE AFORESAID QUESTION.
Issues: 1. WHETHER THE TRIBUNAL BELOW WAS JUSTIFIED IN NOT GRANTING ANY AMOUNT OF INTEREST IN FAVOR OF THE CLAIMANTS/APPELLANTS BY EXERCISING DISCRETION VESTED IN IT UNDER SECTION 171 OF THE ACT? 2. WHETHER THE TRIBUNAL EXERCISED ITS DISCRETION BY GRANTING INTEREST ONLY IN CASE OF DEFAULT OF PAYMENT OF THE AWARDED SUM WITHIN TWO MONTHS FROM THE DATE OF AWARD AND HAS DECIDED NOT TO GRANT ANY INTEREST ON THE AWARDED AMOUNT IN CASE NO DEFAULT IS MADE BY THE INSURANCE COMPANY?
Ratio Decidendi: THE COURT HELD THAT THE TRIBUNAL HAS BEEN VESTED WITH THE POWER TO DIRECT PAYMENT OF SIMPLE INTEREST AT SUCH RATE AND FROM SUCH DATE AS IT MAY SPECIFY IN THIS BEHALF WITH THE RESTRICTION THAT THE INTEREST SHOULD NOT BE PAYABLE FROM A DATE PRIOR TO THE DATE OF MAKING OF CLAIM-APPLICATION. THE STATUTE HAS NOT FIXED ANY RATE OF INTEREST AND THE MATTER HAS BEEN LEFT WITH THE DISCRETION OF THE TRIBUNAL.
Final Decision: THE COURT MODIFIED THE AWARD PASSED BY THE TRIBUNAL BY DIRECTING THE PAYMENT OF INTEREST AT THE RATE OF 9 PERCENT PER ANNUM BEING THE USUAL BANK RATE AT THE RELEVANT TIME ON DEPOSIT FOR ONE YEAR BY A NATIONALIZED BANK. THE COURT DIRECTED THE INSURANCE COMPANY TO PAY THAT AMOUNT FROM THE DATE OF FILING OF THE CLAIM APPLICATION TILL THE DEPOSIT OF THE AWARDED AMOUNT BEFORE THE TRIBUNAL; SUCH INTEREST BE PAID WITHIN ONE MONTH FROM THE DATE OF THE ORDER.
BHASKAR BHATTACHARYA, J. :- This appeal under Section 173 of the Motor Vehicles Act is at the instance of the claimants in the proceedings under Section 166 of the Motor Vehicles Act, 1988 and is directed against an award dated June 29, 2007 passed by the Motor Accident Claims Tribunal, 1st Court, Asansol in M.A.C. Case No. 53 of 2006/149 of 2006.
2. By the said award, the Tribunal below awarded a sum of Rs. 7,50,000/- in favour of the three claimants with a direction upon the New India Assurance Company Limited, the opposite party No. 2 therein, to make payment of the said sum within two months from the date of award failing which, it was ordered, the claimants would be entitled to get interest at the rate of 9 per cent per annum till realisation of the compensation in full.
3. Being dissatisfied, the claimants have come up with the present appeal.
4. The only question that has arisen for consideration in this appeal is whether the Tribunal below was justified in not granting any amount of interest in favour of the claimants/appellants by exercising discretion vested in it under Section 171 of the Act. We have already pointed out that the Tribunal granted interest at the rate of 9 percent, per annum only in case of default in making payment of awarded sum of Rs. 7,50,000/-within two months from the date of award and not otherwise.
5. Mr. Roy, the learned advocate appearing on behalf of the appellants has strenuously contended before us that the Tribunal below failed to exercise jurisdiction vested in it by law by not considering the question of grant of interest on the awarded sum particularly when the claim-application had succeeded. Mr. Roy submits that a duty is cast upon the Tribunal to consider the question of grant of interest on the successful applicants but it does not appear from the award impugned that the Tribunal applied its mind to the aforesaid question. He, therefore, prays for passing a direction for payment of interest on the awarded sum from the date of filing of the claim-application before the Tribunal till the actual payment. In support of his contentions, Mr. Roy places reliance upon the following decisions :
1. Bijoy Kumar Dugar v. Bidyadhar Datta, reported in 2006 (3) SCC 242 : 2006 (1) TAC 969 (SC) : AIR 2006 SC 1255;
2. National Insurance Company Ltd. v. Keshav Bahadur, reported in 2004 (2) TAC 1 (SC) : AIR 2004 SC 1581;
3. State of Uttar Pradesh v. Jogendra Singh, reported in AIR 1963 SC 1618.
6. Mr. Bhowmik, the learned advocate appearing on behalf of the Insurance Company, on the other hand, has vehemently opposed the aforesaid contentions advanced by Mr. Roy and has contended that in this case, the Tribunal has exercised its discretion by granting interest only in case of default of payment of the awarded sum within two months from the date of award and has decided not to grant any interest on the awarded amount in case no default is made by the Insurance Company. Mr. Bhowmik submits that in the matter of exercise of discretion by a Tribunal, an Appellate Court should not interfere.
7. In support of his contention, Mr. Bhowmik has relied upon the following decisions :
1. Abati Bezbaruah v. Deputy Director General Geological Survey of India, reported in 2003 (2) TAC 18 (SC) : AIR 2003 SC 1817;
2. National Insurance Co. Ltd. v. Keshav Bahadur, reported in AIR 2004 SC 1581;
3. National Insurance Co. Ltd. v. Mubasir Ahmed, reported in 2007 AIR SCW 1265 : AIR 2007 SC 1208;
4. Kaushnuma Begum v. New India Assurance Co. Ltd., reported in 2001 (1) TAC 649 (SC) : AIR 2001 SC 485;
5. Sify Limited v. First Flight Couriers Ltd., reported in 2008 (1) Supreme 167.
8. After hearing the learned counsel for the parties and after going through the provisions contained in the Motor Vehicles Act, 1988 we find that in Chapter XI of the Act, there is a specific provision, viz., Section 171, which empowers the Tribunal to give interest in addition to the amount of compensation. The said provision is quoted below :
"171. Award
