THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
VIJAY BISHNOI, CJ., N. UNNI KRISHNAN NAIR, J.
United India Insurance Company Ltd (Subsidiary Of General Insurance Corporation Of India), Represented By The Administrative Officer – Appellant
Versus
Smti. Nizara Goswami, W/o. Late Tutul Sarma – Respondent
WA No.330 Of 2024
Decided On : 05-05-2025
JUDGMENT :
(Vijay Bishnoi, CJ.)
Heard Ms. R.D. Mozumdar, learned counsel appearing for the appellant Insurance Company. Also heard Mr. H.J. Tamuli, learned counsel appearing for the respondent.
2. This writ appeal is preferred against the judgment and order dated 11.08.2023 passed by the learned Single Judge in WP(C) No.7117/2017, whereby the learned Single Judge has allowed the writ petition filed on behalf of the respondent herein and directed the appellant Insurance Company to deposit an amount of Rs.7,27,548/- along with 9% interest with effect from 02.03.2017 till due payment before the Registry of this Court. The learned Single Judge has further ordered that the respondent herein would be entitled to Rs.2,52,796/- on account of interest and Rs.1,000/- towards cost. The appellant Insurance Company has been directed to deposit the said amounts within 60 days from the date of passing of the judgment. The learned Single Judge has also granted liberty to the respondent to move appropriate application for release of the said amount and the Registry was directed to release the said amount so deposited to the Bank Account of the respondent after necessary verification and identification.
3. The brief facts of the case are that the Member, Motor Accident Claims Tribunal, Sonitpur, Tezpur passed an award dated 20.08.2013 in M.A.C. Case No.230/2009 directing the appellant Insurance Company to pay compensation to the respondent to the tune of Rs.19,27,548/- along with the interest at the rate of 9% per annum from the date of institution of the claim before the MACT, i.e. 07.07.2009 till realisation. A cost of Rs.1,000/- was also imposed upon the appellant Insurance Company.
4. Almost 2(two) years after passing of the award dated 20.08.2013, the appellant Insurance Company preferred an appeal before this Court, being MAC Appeal No.50/2015. This Court had admitted the said MAC appeal and as an interim measure direction was given to deposit 50% of the said awarded compensation vide order dated 27.02.2015 passed in Misc. Case No.490/2015 arising out of MAC Appeal No.50/2015.
5. Pursuant to the said direction, the appellant Insurance Company deposited an amount of Rs.12,00,000/- on 23.04.2015 before the Registry of this Court. Ultimately, MAC Appeal No.50/2015, preferred on behalf of the appellant Insurance Company, was disposed of in Lok Adalat held on 12.11.2016 on withdrawal by the Insurance Company. However, while withdrawing the appeal, the Insurance Company sought a little clarification to the effect that the amount already paid by the Insurance Company, pursuant to the interim order passed by this Court, should be deducted by computing the interest amount.
6. The Lok Adalat clarified in the order dated 12.11.2016 that the amount already paid to the claimant would not be taken into consideration while computing the interest amount.
7. As per the order passed by the Lok Adalat on 12.11.2016, an amount of Rs.11,15,000/- was paid to the respondent in March, 2017, claiming that the same is paid as full and final settlement pursuant order passed by the Lok Adalat.
8. The respondent, being dissatisfied with the same, approached the appellant Insurance Company with a prayer to pay the full amount as per the order passed by the Lok Adalat. However, when the appellant Insurance Company did not redress the grievances of the respondent, she preferred WP(C) No.7117/2017, which was allowed by the learned Single Judge vide impugned judgment and order dated 11.08.2023.
9. The learned Single Judge, after hearing the counsel for the parties and on perusal of the material available on record, has recorded the following findings:
“6. I have heard the learned counsels for the parties and have perused the materials on record. Taking into account the contesting stand so taken by the Petitioner as well as the Respondents, this Court deems it proper to take note of the order dated 12.11.2016 which has already been reproduced hereinabove. This order in the opinion of
The court affirmed that accrued interest prior to an interim order must be honored, and the calculations regarding compensation were upheld.
The main legal point established is that the amount already paid pursuant to an interim order should not be considered while computing interest, as per the principles established in Gurpreet Singh Vs....
Interest on compensation under the Motor Vehicles Act is limited to the principal amount, and not applicable on amounts already settled.
Interest on decreed amounts will not cease upon deposit in a court other than the executing court; actual payment to the decree holder is required to stop interest accrual.
The petitioner's restraint order for payment of compensation should not prejudice the claimants' entitlement to interest on the compensation awarded till the date of actual receipt.
Decree holders cannot re-calculate interest after the decree has been satisfied, ensuring the appropriated amounts are first allocated to interest, then to costs, and lastly to principal under the es....
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