Gujarat High Court
New India Assurance Co. Ltd. vs Surtaji Panchaji Sodha on 21 September, 1999
Equivalent citations: 2001ACJ609
Author: D.P. Buch
Bench: D.P. Buch
JUDGMENT
Bhatt and Buch, JJ.
1. This is an appeal filed by the insurance company professed to be under Section 173 of the Motor Vehicles Act, 1988. The appellant herein challenges the order dated 30.1.1999 passed by the Motor Accidents Claims Tribunal (Aux.), Kachh, below Exh. 19 in Motor Accident Claim Petition No. 641 of 1995.
2. In the context of the appeal, it must be noted that the original claimants had filed Motor Accident Claim Petition No. 641 of 1995 as substantive petition for compensation under the provisions of Section 166 of the Motor Vehicles Act, 1988 (hereinafter referred to as 'the said Act'). It is during the pendency of this petition under Section 166 of the Act, the present application Exh. 19 is preferred for interim compensation on the basis of structured formula, the said application Exh. 19 having been preferred under Section 163-A of the said Act.
3. It is also pertinent to note that this application Exh. 19 also makes it clear that although the applicants had preferred application under Section 140 of the said Act, that application is not pressed. It would, thus, appear that the claimants pressed the present application Exh. 19, as an application for interim compensation pending adjudication of the main petition under Section 166, and that they now claim compensation on the basis of the structured formula in accordance with Section 163-A of the said Act. The Tribunal, after appreciating the available evidence on record on a prima facie basis, determined the compensation payable by the insurer to the claimants on the basis of the structured formula in accordance with Section 163-A.
4. Learned counsel for the appellant has first of all sought to contend that the structured formula contemplated in the Second Schedule to the Motor Vehicles Act would not be applicable in application for interim compensation, as in the instant case. However, this contention has been negatived by an earlier decision of the Division Bench of this court in the case of Ramdevsing V. Chudasma v. Hansrajbhai V. Kodala 1999 ACJ 1129 (Gujarat).
This decision lays down that application under Section 163-A is an interim application deciding compensation only on two heads, that of pecuniary loss and general damages. It, therefore, follows that grant of such an application, even on the basis of the structured formula contemplated by the Second Schedule to the Act, is necessarily an interim decision, and subject to the final decision on the substantive claim preferred by the claimants under Section 166 of the said Act. This decision further emphasised that a claim for higher compensation under Section 166 of the said Act is not barred even if an application under Section 163-A is moved. We are further informed by the learned counsel for the appellant that this decision has been challenged before the Hon'ble Supreme Court, but to the best of his knowledge, no stay in respect of this decision has been granted. Thus, so far as we are concerned, this is the law applicable under the present circumstances.
5. As already set out hereinabove, the application below Exh. 19 itself makes it clear that the applicant has chosen not to press the application under Section 140, and has further more reserved his right to obtain compensation in the main claim petition under Section 166 of the said Act. Thus, even in the facts of the case, it becomes apparent that the application below Exh. 19 is by way of obtaining the interim compensation. Obviously, any interim compensation granted by an order of this court would be subject to adjustment as against the final award which may be awarded in a substantive application under Section 166.
6. Learned counsel for the appellant also urged that the interest granted by the Tribunal at the rate of 15 per cent per annum from the date of application till the date of realisation is excessive, He further urged that so far as the rate of interest payable on the amounts of awards of compensation is concerned, the uniform figure of 12 per cent has been adopted by this court as also by the Hon'ble Apex Court. First of all, it must be noted that there is no dispute even on the part of the learned counsel for the appellant that there is no statutory limit and/or indication as to the rate of interest, which is obviously discretionary. No doubt, discretion has to be exercised within the well defined parameters of judicial discretion, and under the guise of discretion, no rate of interest should be awarded which can be considered to be highly unreasonable or which would shock the conscience of the court. By merely claiming that a consistency has been arrived at or achieved, is merely another way of saying that a certain degree of rigidity has crept in by practice. We cannot accept this principle. Furthermore, no decision has been pointed out to us on a question of principle that a rate of interest only at 12 per cent per annum can be considered to be reasonable and that any other rate of interest on principle would be unreasonable. The test for reasonableness on the question of rate of interest which we would adopt, is only to consider whether the rate of interest actually awarded by the Tribunal should not be so unreasonable or excessive or opposed to common commercial practice so as to exceed all norms of prudericy, or should not be so excessive as to shock conscience of the court. The question we ask ourselves is whether the rate of interest at 15 per cent per annum awarded by the Tribunal can be said to be excessive or considered to be so excessive so as to demand interference by us? In this context, we are of the opinion that the rate of interest at 15 per cent per annum is not so excessive so as to compel interference for the sake of interference, particularly since this is only an interim order, and is subject to adjustment in the final award that may be determined under Section 166 of the said Act.
7. For the aforesaid reasons, we do not find any substance in the present appeal and the same is, therefore, summarily dismissed.
The amount of Rs. 25,000 (Rs. twenty-five thousand only) deposited in this court in the present appeal shall be transmitted by the Registry to the Tribunal forthwith.