The present appeal is filed by the appellant/Insurance Company being aggrieved of award dated 5.5.2025 passed by the learned Member, Motor Accident Claims Tribunal, Harda in M.A.C.C. No.64/2024 mainly on two grounds. The first ground relates to the direction to pay and recover in the post-amendment legal framework, while the second ground is with regard to the award of penal interest.

As regards the award of penal interest, the Apex Court in National Insurance Company Limited v. Keshav Bahadur & Others, (2004) 2 SCC370 has deprecated the practice of awarding penal interest. Accordingly, in view of the law laid down by the Apex Court in National Insurance Company Limited v. Keshav Bahadur & Others (supra), the direction for payment of penal interest is hereby set aside and to this extent, this appeal is allowed.

Learned counsel for the appellant/Insurance Company submits that issue post- amendment of Motor Vehicles Act in regard to directions to be issued to the insurance company to pay and recover is pending before the Hon'ble Supreme Court in SLP (C) No.8269/2025 ( ICICI Lombard GIC Vs. Arti Devi ), that is to say, whether the Claims Tribunal can issue directions to the insurance company to pay and recover or not. The controversy herein is that since this issue is pending and the claimant(s) has/have filed an application seeking encashment of fixed deposit receipt in his/her/their favour, it may prejudice the interest of the insurance company.

Learned counsel for the claimant(s) submits that some via-media can be applied so that the interest of the claimant(s) is also not prejudice and the interest of Insurance Company too is protected.

The present appeal can be disposed of by modifying the impugned award to the extent that the amount of compensation may be invested in the name of the Tribunal in a monthly income scheme of a Nationalized Bank/Scheduled Bank/Indian Post Office instead of a Fixed Deposit Receipt and monthly interest, which may be earned to such application of claim compensation in such a monthly income scheme be allowed to be drawn by the claimant every month from the Claims Tribunal. The claimant(s) would be required to furnish undertaking to the effect that the amount received by him/her/them under this arrangement would be returned back by him/her/them if the issue is decided in favour of the Insurance Company by the Hon'ble Supreme Court.

It is made clear that after settlement of the issue by the Hon'ble Supreme Court, if the issue is decided in favour of the claimant(s) then the claimant will be entitled to withdraw the whole amount and invest the amount of compensation in a monthly income scheme in his/her/their own name so that he/she/they may earn interest thereafter.

However, if the issue is decided in favour of the Insurance Company then the Insurance Company will be free to seek withdrawal of the amount deposited by them alongwith the interest received by the claimant(s) in accordance with the directives of the Hon'ble Supreme Court.

In above terms, this appeal is disposed of.