Andhra HC (Pre-Telangana)
The A.P.S.R.T.C., Rep. By Its Managing ... vs B. Vijaya And Ors. on 31 July, 2002
Equivalent citations: 2002ACJ1846, AIR2002AP441, 2002(4)ALT525, AIR 2002 ANDHRA PRADESH 441, 2002 A I H C 4464, (2002) 4 ANDHLD 862, (2002) 4 ANDH LT 525, (2002) 3 ACC 330, (2002) 3 ACJ 1846, (2003) 1 TAC 48, (2002) 3 RECCIVR 744
Author: Ar. Lakshmanan
Bench: Ar. Lakshmanan, Ramesh Madhav Bapat, B. Sudershan Reddy, G. Rohini
JUDGMENT Ar. Lakshmanan, C.J.
1. What is the reasonable interest payable on the amount of compensation awarded to a claimant in a motor accident claim case is the issue involved in these matters referred to by a Division Bench of this Court for an authoritative pronouncement.
2. The awards passed by the respective Tribunals, out of which, the present appeals arose, were challenged on various grounds including the ground that the Tribunals ought not to have granted interest at 12% per annum on the amount of compensation awarded. When the appeals came up for admission together with the interlocutory applications for stay of the awards, on a consideration of the decisions of the Supreme Court in S. KAUSHNUMA BEGUM vs. NEW INDIA ASSURANCE CO. LTD., 2001 SCW 85, and the Full Bench decision of this Court in GENERAL MANAGER vs. SANGUM BHAGYAMMA, wherein it was held that the claimants are entitled to interest at 9% per annum, on one hand, and the decisions of the Supreme Court in SMT. CHAMELI WATI vs. DELHI MUNICIPAL CORPORATIOIN OF DELHI, , JAGBIR SINGH vs. GENERAL MANAGER, PUNJAB ROADWAYS, , Dr. K.R. TANDON vs. OM PRAKASH, and a Division Bench decision of this Court in SHOBHA RANI vs. NEW INDIA ASSURANCE COMPANY LTD., wherein interest at 12% p.a. was granted, on the other hand, a Division Bench of this Court opined that there is some uncertainty in granting interest on the compensation amount and the matter requires consideration by a Larger Bench of this Court. While admitting the appeals, the Bench granted stay of the award of the Tribunals on condition of appellants depositing 3/4th of the compensation amount with costs and interest at 9 per annum. At this stage, the matters are referred to the Larger Bench for appropriate decision on the question of interest.
3. We have heard Smt. Nanda R Rao, learned Standing Counsel appearing for the appellants - A.P. State Road Transport Corporation and Sri V. Tulsi Reddy, Sri Kota Subba Rao, Sri K. Mahender Reddy, Mr. K.L.N. Rao and Mr. Sairam Goud, learned counsel appearing for the respondents-claimants.
4. Smt. Nanda R Rao, learned Standing Counsel appearing for the A.P. State Road Transport Corporation would submit that lending rate of interest by the Banks is different from the interest paid on deposits and the Court cannot grant lending rate of interest on the compensation amount. She would submit that in Kaushnuma Begum's case, taking notice of the change in economy and the policy of the Reserve Bank of India being adopted in matter of interest from time to time, the Apex Court came to the conclusion that interest at the rate of 9% per annum would be reasonable one. She has also placed reliance on the Full Bench decision of this Court in General Manager vs. Sangum Bhagyamma, wherein this Court held that rate of interest on compensation amount should not exceed 9%. She has also placed reliance on the recent decisions of the Apex Court in H.S. Ahammed Hussain vs. Irfan Ahammed, 2002(3) Decisions Today (SC) 185 and United India Insurance Co., Ltd. vs. Patricia Jean Mahajan, 2002(3) Decisions Today (SC) 189 wherein the Apex Court has granted interest only at 9% per annum. She has also placed reliance on various decisions of the Apex Court wherein interest was granted only at 6% per annum.
5. She further submits that in view of the change in the economy and the policy being adopted by the Reserve Bank of India from time to time in matter of interest to be followed by the nationalised banks, the rate of interest at 9% per annum granted by the Apex Court in Kaushnuma Begum vs. The New India Assurance Co. Ltd., and H.S. Ahammed Hussain vs. Irfan Ahammed, United India Insurance Co., Ltd. vs. Patricia Jean Mahajan which was followed by the Full Bench this Court in General Manager vs. Sangum Bhagyamma and it being the latest decision of the Supreme Court on the issue should be taken as the reasonable rate of interest. Reliance has also been placed on the decision of the Apex Court in Karnataka State Road Transport Corporation vs. R. Sethuram, wherein the Supreme Court reduced the interest from 12% granted by the High Court to 6%.
6. Sri Tulsi Reddy, learned counsel appearing for one of the claimants placing reliance on the decision of the Apex court in Chameli Wati vs. Delhi Municipal Corporation submitted that 12% is the reasonable rate of interest.
7. Sri Kota Subbarao, learned counsel appearing for the claimant-respondent has strongly relied upon the decision of the Apex court in Dr.K.R. TANDON vs. OM PRAKASH wherein the Apex court taking notice of the inflation rate, granted interest at 12% per annum. Reliance has also been placed on the observation of the Apex Court in RAMESH CHANDRA vs. RANDHIR SINGH, that addition of interest to the compensation, by judicial discretion, is sequential in the eye of law and not dependant on any pleading. Reliance has also been placed on the decisions in RL Gupta vs. Jupiter General Insurance Company, , Jagbir Singh vs. General Manager, Punjab Roadways wherein Chameli Wati's case was followed, Devi Dayal Kansal vs. Raj Roop, wherein interest was granted at 12% on the enhanced amount of compensation.
8. Referring to Rule 473 of the A.P. Motor Vehicles Rules, 1989, the learned counsel would submit that certain provisions of the Code of Civil Procedure were made applicable to the proceedings before the Claims Tribunal and, therefore, Section 34 CPC, which provides for interest is applicable to the proceedings before the claims Tribunal.
9. Mr. K.L.N. Rao, learned Counsel appearing for one of the respondents-claimants submitted that where the death of, or bodily injury to any person gives rise to claim compensation under the provisions of the M.V. Act and also under the provisions of Workmen's Compensation Act, 1923, Section 167 of the M.V. Act provides an option to claim compensation under either of the two Acts, without prejudice to the provisions of Chapter X. In this context, he refers to sub-section 3(a) of Section 4-A of the Workmen's Compensation Act and submits that where the employer is in default in paying the compensation due under the provisions of Workmen's Compensation Act within one month from the date it fell due, the Commissioner has power to award simple interest thereon at 12% per annum or at such higher rate not exceeding maximum of the lending rates of any scheduled bank as may be specified by the Central government by notification, and, therefore, when option is given to claim compensation under either of the Acts, even under the provisions of the M.A. Act also, interest shall be granted at the rate of 12% on the compensation amount awarded.
10. Learned counsel appearing for the respondents-claimants have also placed reliance on the decisions of the Apex Court in SHANTI BAI vs. CHARAN SINGH, , MUTHAIAH SEKHAR vs. NESAMONY TPT. CORPORATION LTD., , the decision of the Madras High Court in M.D.THANTHAI PERIYAR TRANSPORT CORPN. Vs. SUNDARI AMMAL, wherein interest was granted at 12% per annum on the amount of compensation as also the decision of the Supreme Court in TARA KAKATI vs. GENERAL INSURANCE CO. LTD., wherein interest was granted at 15% per annum from the date of accident till the date of payment awarded by the Supreme Court. It was also argued that loss sustained to claimants cannot be compensated in terms of money.
11. Before we delve deep into the matter, it is necessary to refer to various decisions of the Apex Court.
12. In Chameli Wati vs. Delhi Municipal Corporation case, the Supreme Court found fault with the decision of the Division Bench of the High Court of Delhi in wrongly exercising its discretion under section 110-CC of the Motor Vehicles Act, 1939 which is in pari materia with Section 171 of the M.V. Act, 1988, in not awarding interest on the amount of compensation finally determined by it from the date of the application. In this case, when the learned single Judge enhanced the amount of compensation, he awarded interest on the enhanced amount at 6% per annum from the date of the judgment and the Division Bench also when it further enhanced the amount of compensation, directed that interest at the rate of 6% be paid on the enhanced amount from the date of its judgment. The Supreme Court held that when the learned single Judge as well as the Division Bench enhanced the amount of compensation, the learned single Judge and the Division Bench totally ignored the fact that the enhanced amount of compensation awarded by them was in their judgment was the correct amount of compensation payable to the appellants therein on account of the death of deceased resulting from the accident and the learned single Judge and the Division Bench should have therefore awarded interest on the enhanced amount of compensation from the date of application. The Supreme Court accordingly set aside the Judgment of the Division bench as also the judgment of the learned single Judge in so far as the said judgments direct that interest shall be payable on the enhanced amount of compensation from the date of receipt of the judgments. Instead, the supreme Court directed that interest shall be payable on the enhanced amount of compensation as finally determined by the Division Bench of the High court at the rate of 12% per annum from the date of the application for compensation.
13. In Jagbir Singh v. General Manager, Punjab Roadways (supra) the Supreme Court held thus:
In regard to the interest, however, we think the petitioners are entitled to a higher rate of interest than that awarded by the Tribunals and confirmed by the High Court. We find that in Narcinva V. Kamat vs. Alfredo Antonio Doe Martins, 1985 ACJ 397 (SC), this Court awarded interest at 12 per cent from the date of the accident up to the date of payment. Subsequently in Chameli Wati vs. Delhi Municipal Corporation, 1985 ACJ 645 (SC), a larger Bench of this Court awarded compensation (sic. Interest) at 12 per cent per annum from the date of the application for compensation. We are of opinion that the petitioners should be entitled to interest at 12 per cent per annum from the date of the application for compensation to the date of payment.
14. In the above case, the Supreme Court noticed that in Narcinava V. Kamat vs. Alfredo Antonio Doe Martins's case, the Supreme Court awarded interest at 12% per annum from the date of the accident upto the date of payment. However, taking notice that a larger bench of the Supreme Court Chameli Wati's case awarded interest at 12% per annum from the date of the application, it awarded interest at 12% per annum from the date of the application for compensation to the date of payment.
15. In S. Ahammed Hussain vs. Maqbool Pasha (supra) the Apex Court held that the High Court was not justified in upholding award of interest at the rate of 6% per annum granted by the Tribunal and the same should have been awarded at the rate of 9% per annum. Reliance in this connection was placed upon the decision of the Apex Court in Kaushnuma Begum's case.
16. In United India Insurance Co. vs. Patricia Jean Mahajan (supra) the Supreme Court reduced the rate of interest from 12% to 9%. It was observed:
In our view the reason indicated in the case of Kaushnuma Begum (supra) is a valid reason and it may be noticed that the rate of interest is already on the decline. We, therefore, reduce the rate of interest to 9% in place of 12% as awarded by the High Court.
17. In United India Insurance Co., Ltd. vs. Narendra Pandurang Kadam, the Apex Court held that interest could not be allowed from a date earlier than the date of the claim. But, in this case, considering the facts and circumstances, interest allowed from the date of accident was not interfered with as the same would have the effect of further reducing the quantum of compensation, which is not on the high side. The Supreme Court, in that case, considering the enormity of the suffering underwent by the claimant and also the permanent injuries sustained by him as well as loss of future income and enjoyment of life, was disinclined to interfere with the order directing payment of interest. Further, taking notice of the fact that the claim was not settled promptly and dragged on mercilessly, awarded Rs.5,000/- by way of costs.
18. In Dr. K.R. Tandon vs. Om Prakash, the Apex Court held that the reduction of rate of interest from 6% per annum as awarded by the claims Tribunal to 3% by the High Court was improper. The Supreme Court enhanced the rate of interest to 12% from the date of application and also held that the omission on the part of the courts below to award interest, irrespective of its rate, from the date of the application was unjustified. The Supreme Court further observed:
We also see no justification by the courts below of not having awarded interest, whatever be its rate, from the date of application. The way inflation has galloped in the past two decades and the value of the rupee eroded, we see no justification why interest at the rate of 12% per annum was not awardable in the instant matter. We, therefore, order that the interest on the sums modifyingly awarded by us, shall be payable from the date of application itself and at the rate of 12% per annum.
19. In Karnataka State Road Transport Corporation v. R. Sethuram (supra) the rate of interest has been enhanced by the High Court from 6% to 12%. The claimant therein who was a Mechanical Engineer at Houston Texas in USA drawing a monthly salary of $ 2000 ie. Rs.15,000/- per month suffered fractures and serious injuries. The Tribunal awarded Rs.23,32,900/-. The award was upheld in appeal and confirmed by the Apex Court. The Tribunal allowed interest at 6% per annum, which was enhanced in appeal to 12% per annum. The Apex Court taking notice of certain factual aspects observed thus:
We are of the opinion that there is no scope for interfering with the total amount which has been assessed to be payable to the respondent as compensation ie Rs.23,32,900/-. However, so far the enhancement of interest is concerned, we are of the opinion that as this accident took place in 1982 and an amount of Rs.23,32,900 had been awarded by the Tribunal as compensation for the injuries sustained by the respondent, there was no justification on the part of the High Court to enhance the rate of interest from 6 per cent to 12 per cent. Accordingly, that part of the direction of the High Court is set aside. (emhasis supplied).
20. In United India Insurance Co. Ltd. v. Heera (supra) Singh the Supreme Court was considering the issue whether claimants therein should be awarded interest on the enhanced amount granted by the High Court. The Supreme Court held that they are entitled interest on the enhanced amount at the rate of 12% per annum from the date of claim petition till date of realisation.
21. In Tasnimtaj vs. Managing Directror, KSRTC, the Tribunal awarded a sum of Rs.1,86,800/- which was enhanced to Rs.2,11,200/- in appeal by the High Court but the interest was reduced from 9% to 6%. The deceased therein was a liaison officer and tour agent and used to accompany foreign tourists and ha d a lucrative future career. Taking into account the facts and circumstances of the case and also the future economic prospects of the deceased had he survived, the Supreme Court further enhanced the amount to Rs.3,00,000/-. However, as regards the interest it was observed:
Learned counsel for the appellant is right when she contended that there was no reason for the High Court to abruptly reduce the interest from 9 per cent to 6 per cent only because the High Court was enhancing the compensation amount. However, in our view, once interest of 6 per cent is granted on the awarded amount, for the enhanced amount of Rs.88,800/- pursuant to our order also there should be 6 per cent interest from the date of the application till payment of additional amount of Rs.88,800/- by the respondent.
22. In Muthaiah Sekhar vs. Nesamony Pvt. Corpn. Ltd. (supra), the claimant therein who was pursuing his ML Course in Madras University suffered loss of 60% vision in the left eye and 50% hearing in the left year and there was also dislocation of the right hip permanently. The Apex Court on a consideration of the facts and circumstances of the case, awarded a sum of Rs.3 lakhs in addition to the amount of Rs.1,76,000/- granted by the Tribunal with interest thereon at 12% from the date of the petition till date of payment.
23. In M.D., Thanthai Periyar Transport Corporation vs. Sundari Ammal, , a learned single Judge of the Madras High Court held that the Appellate Court can enhance the quantum of compensation if the facts justify in an appeal filed by the Insurance Company even if the claimants have filed no cross-objections and awarded interest at 12% per annum on the compensation amount from the date of the petition till the date of realisation.
24. In Municipal Committee, Tauru vs. Harpal Singh (supra) the Supreme Court directed the Insurance Company to deposit the additional amount of Rs.1,00,000/- with interest at 12% per annum from the date of the claim petition till actual deposit.
25. In RL. GUPTA vs. JUPITER GENERAL INSURANCE COMPANY, observing that there have been several orders of the Supreme Court in recent cases in compensation disputes where the court has awarded 12 per cent interest, enhanced the interest compensation amount at 6 per cent granted by the High Court to 12 per cent per annum.
26. Ramesh Chandra vs. Randhir Singh is a case where neither the claimant claimed any interest in his claim petition nor was it awarded by the Tribunal. The Supreme Court was considering the question whether interest could be awarded even when the same has not been claimed. While answering the question in the affirmative, the Supreme Court held that addition of interest to the compensation, by judicial discretion, is sequential in the eye of law land no claim in that regard specifically need to be laid in the claim petition. The Court further held that the amount of interest is not dependant on any pleading in that regard and can even be orally asked if the contingency arises. Interest was granted at the rate of 6% per annum.
27. In Tara Kakati vs. Oriental Insurance Co. Ltd., (supra) the Tribunal adopting the multiplier of 20 awarded compensation of Rs.70,000/- plus Rs.5,000/-. The Tribunal declined to grant any interest. The High Court reduced the amount of compensation. The High Court set aside the order of the High Court and restored the award of the Tribunal with interest at 12% per annum from the date of the accident till the date of payment.
28. Nagappa Mahadev Doddaamani vs. new India Assurance Co. Ltd., (1998) SCC 271 is a case of injury resulting in shortening of one leg by approximately two inches. Compensation of Rs.1,00,000/- was awarded by the Tribunal which was reduced to Rs.80,000/- by the High Court by a non-speaking order. The Supreme Court held that compensation of Rs.1,00,000/- for such injury was not too excessive and that the order reducing the compensation was improper. The Supreme Court while allowing the appeal affirmed the award of the tribunal together with interest at 6% per annum with costs throughout.
29. In Institute of Chartered Accountants of India vs. L.K. Ratna, the Supreme Court held that the compensation, which was determined by the Tribunal, was on the basis of the material on record and therefore reduction of the same by the Court was not proper and restored the award passed by the Tribunal and granted interest at 12% per annum.
30. In S. Kaushnuma Begum v. The New India Assurance Co. Ltd., it was observed:
Section 171 of the MV Act empowers the Tribunal to 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 may be specified in this behalf. Earlier 12% was found to be the reasonable rate of simple interest. With a change in economy and the policy of the Reserve Bank of India the interest rate has been lowered. The nationalised banks are now granting interest at the rate of 9% on fixed deposits for one year. We, therefore, direct that the compensation fixed hereinbefore shall bear interest at the rate of 9% per annum from the date of the claim made by the appellants.
31. In Shoba Rani vs. New India Assurance Co. Ltd. (supra), a Division bench of this Court had an occasion to consider the decisions of the Apex Court in Kaushnuma begum's case wherein the Supreme Court granted interest at 9% per annum and Chameli Wasti's case where the Supreme granted 12% interest on the amount of compensation awarded. The Bench followed the decision of the Apex Court in Chameli Wati's case taking the view that the same is binding on the High Court as it was rendered by three Judges Bench whereas the judgment in Kashunama Begum's case was rendered by two Judges Bench and accordingly awarded interest at the rate of 12% per annum.
32. In General Manager vs. Sangum Bhagyamma, a Full Bench of this Court presided over by S.B. Sinha, CJ (as he then was) following the judgment in Kaushnuma Begum's case held that the rate of interest should not exceed 9% per annum from the date of award till realisation.
33. In R. Sulochana v. Ullgannal, the Apex Court confirmed the rate of interest of 6% fixed by the Tribunal.
34. We have carefully perused the Judgments cited by either party. No ratio has been laid down in any of the Judgments including the Full Bench Judgment of this Court in General Manager vs. Sangum Bhagyamma. A reading of the Judgments would only show that Courts have awarded interest at different dates depending on the facts and circumstances of each case viz., the nature of injury sustained, mental agony undergone and other attendant circumstances and in particular the question of delay and also taking into account the amount of compensation awarded.
35. Section 171 of the Motor Vehicles Act, 1988 provides for interest on the award amount where any claim is allowed. It reads thus:
Where any Claims Tribunal allows a claim for compensation made under this Act, such Tribunal may direct that in addition to the amount for 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.
36. Section 34 of the Code of Civil Procedure reads as follows:
34. Interest: (1) Where and in so far as a decree is for the payment of money, the Court may in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate not exceeding six per cent per annum as the Court deems reasonable on such principal sum, from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit;
Provided that where the liability in relation to the sum so adjudged had arisen out of commercial transaction, the rate of such further interest may exceed six per cent per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions.
37. Section 2(b) of the Interest Act, 1978 (Act No.14 of 1978) defines "current rate of interest" as under:
"Current rate of interest" means the highest of the maximum rates at which interest may be paid on different classes of deposits (other than those maintained in savings account or those maintained by charitable or religious institutions) by different classes of scheduled banks in accordance with the directions given or issued to banking companies generally by the Reserve Bank of India under the Banking Regulation Act, 1949.
38. Under the Interest Act, interest can be allowed only if the amount claimed is a sum certain payable at certain time by virtue of a written instrument.
39. Section 171 provides that where any claims Tribunal allows a claim for compensation made under the M.V.Act, such Tribunal in addition to the amount of compensation may direct 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 deem specify in this behalf. Thus, it is seen that though a provision was made in the Act for payment of simple interest on the amount of compensation awarded, it has not specified at what rate it should be paid. Thus, discretion is given to the Tribunal to award reasonable rate of interest in addition to the amount of compensation awarded. The section also stipulated that simple interest alone shall be paid at such and from such date not earlier than the date of making the claim. The section prohibits award of interest from a date anterior to the date of the claim petition. The Tribunals in certain cases have awarded interest from the date of the petition and in certain cases interest was awarded from the date of the award. We have earlier noticed that in two cases the compensation was awarded from the date of the accident. In United India Insurance Co., Ltd. vs. Narendra Pandurang Kadam though the Apex Court held that interest could not be allowed from a date earlier than the date of the claim, however, considering the facts and circumstances of the case, interest allowed from the date of accident was not interfered with as the same would have the effect of further reducing the quantum of compensation, which is not on the high side.
40. In Ramesh Chandra vs. Randhir Singh, M.M. Punchi J, was of the view that addition of interest to the compensation by judicial discretion is sequential in the eye of law. In that case, interest was neither claimed by the claimant in the claim petition nor was it awarded by the Tribunal. The Supreme Court held that the grant of interest is not dependant on any pleading in that regard and can even be orally asked if the contingency arises.
41. Thus, it is seen that different views are taken on the issue and interest was being granted depending upon the facts and circumstances of each case. In this context, we may also usefully notice section 167 of the M.V. Act, which is reproduced hereunder:
167. Option regarding claims for compensation in certain cases: Notwithstanding anything contained in the Workmen's Compensation Act, 1923 (8 of 1923) where the death of, or bodily injury to any person gives rise to claim for compensation under this Act and also under the Workmen's Compensation Act, 1923, the person entitled to compensation may without prejudice to the provisions of Chapter X claim such compensation under either of those Acts but not under both.
42. The Section, therefore, gives an option to the claimant to claim for compensation in certain cases, either under the Workmen's Compensation Act, 1923 or under the Motor Vehicles Act.
43. Rule 473 of the Motor Vehicle Rules, 1989 reads as follows:
473. Code of Civil Procedure to apply in certain cases: The following provisions of the First Schedule to the Code of Civil Procedure, 1908 (Central Act 5 of 1908), shall so far as may be, apply to proceedings before the Claims Tribunal, namely, Order V, Rules 9 to 13 and 15 to 30; Order IX, Order XIII, Rules 3 to 10; Order XVI, Rules 2 to 21; order XVII and Order XXVIII; Rules 1 to 3.
44. We have earlier quoted Section 34 of the Code of Civil Procedure which provides for interest. The section provides for the payment of interest where the decree is for payment of money. In the decree in a suit for payment of money, the Court has discretion to grant interest at such rate on the principal sum adjudged from the date of suit to the date of the decree and also from the date of the decree till the date of realisation. Such further interest, however, should not exceed six per cent per annum unless the case is covered by the proviso as inserted by the Amendment Act of 1976. Section 34 can be looked into and considered under three headings, namely, (1) interest prior to the institution of the suit on the principal sum adjudged; (2) interest on the principal sum adjudged from the date of the suit to the date of the decree; and (3) interest on the principal sum adjudged from the date of the decree to the date of the payment.
45. The term "interest" is neither defined in the Code nor in the Interest Act, 1978. According to West's Legal Thesaurus, "interest" may mean "a charge that is paid to borrow for use of money". In the Concise Oxford Dictionary, the term has been defined as " money paid for the use of money lent". According to Chamber's Twentieth Century Dictionary, the word "interest" literally means 'premium paid for the use of money'. In Black's Law dictionary, the expression "interest" has been defined thus:
Interest is the compensation allowed by law or fixed by the parties for the use of forbearance or detention of money.
46. Therefore, it is a charge made for the use of money given by one person and taken by another. When a person claims a certain amount to be due from another and he is found entitled to it, he may be awarded a further sum called 'interest' depending on the circumstances of each case and the law or custom or usage having the force of law. Interest is the amount payable by the borrower to the lender for forbearance or detention of the amount lent to him. The rate of interest may either be by agreement or by operation of statutory provisions where it specifically provides for such payment.
47. There is difference between the amount borrowed for specific purpose and the amount to be granted in a motor accident claim case. The amount in the former case is on account of contractual obligation whereas in the latter case it is a variable one and not based on any agreement but has occasioned on account of the death of or injury caused to any person resulting from an accident arising out of the use of a motor vehicle or motor vehicles due to negligence.
48. The natural conception of the word "interest" is the ordinary or normal profit, which the person entitled to the principal money, might have made had he used the said money, or his expected loss under usual or ordinary circumstances due to the non-payment of the same at the proper time.
49. It is seen that interest prior to the date of filing of the suit is a matter of substantive law and is outside the scope of Section 34. This section applies to the award of interest from the date of the suit to the date of decree ie interest pendete lite and also from the date of decree till the date of payment. Interim interest as well as future interest on judgment rests entirely in the discretion of the Court. Such discretion is not limited to rate of interest only. It applies to award of interest as well. It is no doubt true that the discretion, however, must be exercised judicially, reasonably and on sound legal principles. No rule of universal application can be laid down and each case will be decided on its own merits. It is well established that the Court will award interest for the period prior to the date of the suit if there is an agreement to pay interest. Likewise, where there is a stipulation to pay interest at a particular rate, the court must allow that rate, however, high it may be. The question of exercise of discretion by the Court does not arise in such cases. The Court has no power to deviate from the agreement by disallowing the interest or by allowing interest at a rate other than agreed by the parties. Such agreement may be express or implied.
50. Awarding of interest also depends upon statutory provisions, mercantile usage, interest on equitable grounds etc. Section 80 of the Negotiable Instruments Act, 1881 enacts that where no rate of interest is specified in a negotiable instrument, the court shall award interest at the rate of six per cent per annum irrespective of the agreement between the parties. Similarly, under section 61 of the Sale of Goods Act, even in the absence of a stipulation in the contract to pay interest, the vendor will be entitled to interest at a reasonable rate. Likewise, the Interest Act, 1978 makes provision for payment of interest prior to the institution of the suit. In so far as mercantile usage is concerned, in the absence of an agreement to pay interest prior to the institution of the suit, the court may grant interest if it is payable by usage or trade having the force of law. In such cases, the transaction can be said to have been entered into in the light of mercantile usage. Courts have held that interest can also be awarded by a Court of equity. In order to invoke the doctrine of equity, it is necessary in the first instance to establish the existence of circumstances which attract equitable jurisdiction, such as non-performance of a contract of which equity requires specific performance, or where the owner is deprived of his property without paying price thereof, or where money has been improperly detained and not paid to the person who is entitled to it, or where an employer withholds terminal benefits of an employee even after retirement without any valid reason etc.
51. As regards interest as damages, the law is well settled. Normally, interest cannot be awarded by way of damages. A mere detention of debt will not entitle the creditor to interest by way of damages. Such interest may, however, be awarded in cases where money due is wrongfully withheld and there are equitable grounds for awarding interest. Interest by way of damages can be claimed only from the date of written demand. Grant of interest pendente lite is, no doubt, in the discretion of the court but the discretion is judicial and has to be exercised properly, judiciously and on sound legal principles. Normally, the Court should allow interest pendente lite and the successful party should not be deprived of it except for sufficient reasons.
52. Thus, it is seen that the Court while passing a decree for payment of money is expected to award interest to a successful party from the date of suit to the date of decree but it cannot be said that the court has no discretion in the matter of granting interest. If the discretion is properly exercised, an appellate court may not interfere with that order. But, if the discretion is not exercised at all or is not exercised on sound and established legal principles, the appellate court may interfere with such order and may pass appropriate order in accordance with law.
53. The award of interest from the date of decree to the date of payment is also in the discretion of the court. Whether future interest should be awarded or not in a particular case must be decided on the facts of each case and no rigid rule can be laid down. Normally, if interest is awarded during the pendency of the suit, interest from the date of decree to the date of payment also should be awarded unless there are reasons for not awarding such interest.
54. We may now notice the liability of a person to pay interest under commercial transactions. By the Amendment Act of 1976, a proviso has been inserted in sub-section (1) of Section 34 which enables the court to grant interest from the date of the decree till the date of payment or an earlier date as the court deems fit where the liability arises out of a commercial transaction at a rate exceeding six per cent per annum but not exceeding the contractual rate of interest, and in the absence of a contract, not exceeding the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions. Thus, the proviso to Section 34 carves out an exception and declares that if the transaction is a commercial transaction, the rate of future interest may exceed six per cent, but shall not exceed the contractual rate of interest. The object of introduction of the proviso is to prevent commercial operators from exploiting the situation by lending money at a rate higher than six per cent and earning profits therefrom. If the said object behind insertion of the proviso is kept in mind, ordinarily, the court would not refuse to grant future interest at the contractual rate.
55. However, loan taken for agricultural crop or for agricultural implements cannot come within the connotations "commercial transaction" and, hence, proviso would not apply to agricultural loans. The Court has, therefore, no jurisdiction to grant interest exceeding six per cent per annum on such loans.
56. In Corporation Bank vs. D.S. Gowda, the Supreme Court was called upon to decide whether the Bank was entitled to claim compound interest on agricultural advances. The High Court after considering English and Indian decisions in the light of Section 21-A of the Banking Regulations Act, 1949 as also circulars issued by the Reserve Bank of India held that the concept of compound interest was strange to agricultural financing and the Bank had no power to charge compound interest. Dismissing the appeal and upholding the decision, the Supreme Court agreed with the law laid down by the High Court that "Banks cannot charge compound interest with quarterly rests on agricultural advances".
57. In appropriate cases, interest can be awarded by the Supreme Court or by the High Court in exercise of the writ jurisdiction under Article 226 of the Constitution of India.
58. Where the decree is reversed or modified the successful appellant is entitled to claim interest on the sum deposited by him and withdrawn by the other side from the date of deposit till the date of repayment or redeposit. Section 144 C.P.C. expressly provides refund of interest.
59. Rate of interest: Grant of interest at a particular rate is in the discretion of the Court. A party is not entitled as of right to get interest at agreed rate and the court is not bound to grant interest at such rate even if it is mentioned in the agreement. At the same time, however, the Court cannot ignore and overlook the agreement and generally adhere to it unless there are reasons not to do so. When such party is a bank, or a financial institution, the rate of interest must be as agreed by the parties or should be such on which advance is ordinarily made.
60. Inflation is an economic financial condition of general application. Its impact on any particular party has been neither more nor less than other persons. There is nothing special about it. Interest is not awarded as damages, it is awarded to the party only for being kept out of the money which ought to have been paid to him.
61. We shall now analyse the provisions of Section 4-A of the Workmen's Compensation Act, 1923, which reads as under:
Section 4A(3) of the Workmen's Compensation Act reads as follows:
4A. Compensation to be paid, when due and penalty for default: (1) Compensation under section 4 shall be paid as soon as it falls due.
(2) In cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the extent of liability which he accepts, and, such payment shall be deposited with the Commissioner or made to the workman as the case may be, without prejudice to the right of the workman to make any further claim.
(3): Where any employer is in default in paying the compensation due under this Act within one month from date it fell due, the Commissioner shall -
(a) direct that the employer shall, in addition to the amount of the arrears, pay simple interest thereon at the rate of twelve per cent per annum or at such higher rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central Government, by notification in the Official Gazette, on the amount due; and
(b) if, in his opinion, there is no justification for the delay direct that the employer shall, in addition to the amount of the arrears and interest thereon, pay a further sum not exceeding fifty per cent of such amount by way of penalty.
Provided that an order for the payment of penalty shall not be passed under Clause (b) without giving a reasonable opportunity to the employer to show cause why it should not be passed.
Explanation: For the purposes of this sub-section "Scheduled Bank" means a bank for the time being included in the Second Schedule to the Reserve Bank of India Act, 1934.
3-A: the Interest and the penalty payable under sub-section (3) shall be paid to the workman or his dependent, as the case may be.
62. A reading of the above section would show that it is a mandatory provision. If the compensation is not paid within one month, the claimant shall be entitled to simple interest at the rate of 12% per annum and in the pinion of the Commissioner, there is no justification for the delay, he may also direct the employer to pay a further sum not exceeding fifty per cent of such amount by way of penalty. Therefore, the employer is bound to deposit compensation suo motu as soon as it falls due and non-deposit of the same within the stipulated period would make him liable to pay interest and penalty. Courts have held that it is the primary duty of the employer either to deposit the compensation amount within one month from the date of accident or to inform the Insurance Company about its liability. If the employer fails to establish that the Insurance Company was duly informed about the accident before the statutory period then the employer shall be liable for payment of interest and penalty for the period till the date of the factum of accident comes to the notice of the Insurance Company. Thus, it is seen that compensation falls due within the meaning of Section 4-A of the Act on the happening of the accident and liability of payment of interest and penalty arises, if so directed, when a default is made by the employer in payment of compensation within one month due from the date it falls due. The section clearly says that where any employer is in default in payment of compensation under the Act within one month from the date it fell due, the Commissioner shall direct that the employer shall, in addition to the amount of the arrears, pay simple interest thereon at the rate of twelve per cent per annum or at such higher rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central government, by notification in the Official Gazette on the amount due. Thus, the payment of simple interest at the rate of 12% per annum is mandatory and therefore, there is no question of discretion left with the court to award interest less than 12% per annum. At the same time, the Commissioner can award higher rate of interest not exceeding the maximum of lending rates of any scheduled bank as may be specified by the central Government. Thus, discretion is vested with the Commissioner. The award of interest is consequence of default to deposit the compensation amount. It has been held by Courts that Section 4-A(3) is not ultra vires of the Constitution and the scheme of the Act and the provisions under the Act provide sufficient guidelines for exercise of power to impose penalty. In our opinion, Section 4-A(3) is a beneficial provision for the benefit of employer and the provisions for payment of interest and penalty have been enacted with a view to deter the employer from taking baseless and unreasonable pleas to avoid rightful payment of compensation to the poor workman. The amendment to Section 4-A(3) enhancing the interest to 12% per annum indicates that whatever was specified before the Amending Act was not adequate considering the value of rupee and sky-rocketing prices of the goods.
63. The Interest Act, 1839 was replaced by Interest Act, 1978 which remained in force for over a century presented many difficulties and in order to remove those difficulties it was replaced by the Interest Act, 1978 which came into existence on 19th August, 1981. Claims of interest may arise in many types of cases, namely, dues of employees, amount illegally recovered, amount of tax, mortgage property, sale of immovable property, claims on life policies, maintenance, accident claims, detention of money, railway claims, mesne profits etc. In a suit for compensation for death in accident the court has discretion to grant interest on the amount of compensation. In a fatal accident there are economic losses and non-economic losses, which form the component parts of compensation. Interest must be allowed on sums actually spent or lost upto the date of trial such as medical charges, loss of earnings and out of pocket expenses. Future earnings and loss dependency are paid in advance and do not qualify for interest. The Court should fix a composite rate of interest keeping in view the size of ach of the two components.
64. As already noticed, different courts have adopted different views on the issue of awarding interest. Some courts awarded from the date of accident, some awarded from the date claim, some awarded from the date of the award. In some cases, where the Appellate Court enhanced the amount of compensation, they allowed interest on the enhanced amount of compensation from the date of application and not from the date of its order enhancing the amount.
65. Interest is also allowed under the enactments, namely, Contract Act, 1872. Section 73 of the Contract provides for payment of compensation for breach of contract. It does not provide for payment of interest on such damages or compensation. A claim for interest on such damages or compensation, therefore, comes within the mischief of section 3 of Interest Act, 1978 and can be allowed under the provisions if conditions laid down therein are fulfilled.
66. Section 31 of the Sale of Goods Act, 1930 empowers the Court to award interest to either party for breach of a contract of sale of goods. But such power can be exercised by the court if there is no contract to the contrary and if the contract itself bars payment of interest, no interest can be allowed.
67. Section 3(3)(i) of Interest Act, 1978 expressly lays down that the provisions of the section shall not affect the compensation recoverable for the dishonour of a bill of exchange, promissory note or cheque, as defined in the Negotiable Instruments Act, 1881.
68. Rent Acts: Certain Rent Acts provide for payment of interest on arrears of rent. But, if there is no specific provision with regard to interest on arrears in any Act, the case will be governed by the provisions of the Interest Act.
69. Section 23 of the Trusts Act, 1881 provides for payment of interest by the trustees in cases of breach of trust in certain circumstances.
70. Where the claim is filed before an arbitrator or a suit is filed in court the matter passes from the domain of contract to the domain of judgment. Interest for the period after the institution of proceedings cannot be awarded under the Interest Act, which ceases to apply. Interest for such period can be allowed under Section 34 C.P.C. or in case of arbitration proceedings, under section 29 of Arbitration Act, 1940 for the period after the decree till realisation. Section 5 of Interest Act, 1978 expressly saves the application of Section 34 C.P.C.
71. Decree for payment of money: A decree may be for specific performance of a contract, for recovery of possession, a declaratory decree etc. Where the decree is for payment of money with or without any other relief, it is a money decree and the court can allow interest on the principal sum adjudged for the period after the institution of the suit under section 34 C.P.C. It is entirely a matter for the court's discretion under Section 34 C.P.C. whether to award interest from the date of filing of suit, where the decree is for the payment of money.
72. Pendente lite interest in mortgage suits: Provisions of Section 34 C.P.C. are not applicable to mortgages. Under Order 34 Rule 11 C.P.C. the plaintiff is entitled to get interest at the agreed rate till the period of redemption expires. As regards pen dente lite and future interest, the ordinary rule is that interest from the date of suit to the date of redemption should be awarded at the contract and not a different rate unless there are circumstances which justify doing so.
73. Future interest in cases other than arbitration proceedings can be allowed by the court under section 34 C.P.C. Under Order 34 Rule 11 CPC plaintiff is entitled to interest at agreed rate on mortgage.
74. Section 34(2) CPC provides that where the decree is silent with respect of payment of future interest, the Court shall be deemed to have refused such payment.
75. Thus, in our opinion, there is a discernible tendency in some judicial pronouncements that hazards of inflation must be mitigated by a generous rate of interest. The Courts have started taking judicial notice of all in money value.
76. The caption of the section 171 of the MV Act is "Award of interest where any claim is allowed". In our view, the question of interest is dependent on the claim being allowed. Should the claim be not allowed, the question of grant of interest would not arise, and if awardable, it is in addition to the amount of compensation. The grant of interest is not dependent on any pleading in that regard and can even be orally asked if the contingency arises. In Ramesh Chandra v. Randhir Singh (supra) it was noticed by the Supreme Court that Section 110-CC as it stood on the date of the accident in the case provided that where any Court or Claims Tribunal allows a claim for compensation made under the Act such court or 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. The present section 171 is in pari materia with the old section 110-CC of the Old Act, 1939. As already noticed, the Supreme Court held that the question of interest is dependant on the claim being allowed. Therefore, the Court or Tribunal, in the circumstances, should determine, in the first instance, claim for compensation and in the event of its being allowed can further exercise the discretion to grant simple interest in terms thereof, but as an additive to the amount of compensation. Therefore, the addition of interest to the compensation, by judicial discretion, it was held is sequential in the eye of law and no claim in that regard specifically need be laid in so many words in the claim petition.
77. In these appeals, we are concerned with regard to payment of interest on the compensation amount awarded by the Tribunal. Ideally a claim should be settled as soon as it is made. Because of the delay in settlement of the claim by legal process or otherwise interest may have to be awarded. But, such interest may not be from a date earlier than the date of the claim. The language of section 171 of M.V. Act is very clear and unambiguous that interest can be awarded by the Court or Tribunal at such rate as it thinks fit but the same cannot be made earlier than the date of the claim. As already seen from the judgments cited by both the parties, no ratio has been laid down in any of the decisions in regard to payment of interest. Therefore, discretion vests with the Tribunal or the Court, as the case may be, under section 171 of the Act to award interest at such rate, which is reasonable, and from such date not earlier than making the claim as it may specify in this behalf.
78. Further, as can be seen from Section 167 of the MV Act, option is given to the parties regarding claims for compensation in certain cases. Section 4-A(3) provides that where the employer is in default in paying the compensation under the Act within a period of one month from the date it fell due, the Commissioner shall direct the employer that in addition to the amount of arrears of amount, pay simple interest at the rate of 12% per annum or at such rate higher rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central Government by notification in the Official Gazette on the amount due. A close scrutiny of the said sub clause 4-A)3) provides that payment of simple interest at the rate of 12% per annum or at the discretion of the Commissioner at such higher rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central Government by notification in the official gazette on the amounts due. As already seen under section 167 of the MV Act, option is given to the claimant either to move the Commissioner under the Workmen's Compensation Act or to seek for compensation under the provisions of the M.V. Act. When option is given to the party, the party can exercise his discretion and claim for compensation under either of the Acts ie. either before the Commissioner for Workmen's Compensation Act or before the Claims Tribunal under the provisions of the M.V. Act. Under Section 171 of the M.V Act the Tribunal is given the discretion to award only simple interest in addition to the amount of compensation at such rate and from the date of claim. If the party opts for compensation under the provisions of the Workmen's Compensation Act, the Commissioner under the Workmen's compensation Act has no other option except to award interest on the compensation amount at 12% per annum or at such higher rate not exceeding the maximum of lending rates of scheduled banks as may be specified by the Central government in this behalf. Under the provisions of the M.V. Act, discretion is given to the Tribunal to award a reasonable rate of interest on the compensation amount awarded. We have already noticed several judgments of the High Court and also the Judgments of the Apex Court and all those cases were decided on their own merits or demerits. No court has laid down any ratio. The Courts have awarded the interest at different rates depending upon the facts and circumstances of each case. Therefore, there cannot be any hard and fast rule in awarding interest and the award of interest is solely at the discretion of the Tribunal or the High Court, as the case may and on the facts and circumstances of each case.
79. It is well settled that discretion conferred by statute must be exercised judicially on the basis of the facts and circumstances of a particular case. When a specific provision has been made under the statute such provision has to govern the field. When the statute has not fixed any rate of interest to be awarded on the award of compensation amount, it is not open for the Court to read into the provision and fix certain rate of interest. Section 171 of the M.V. Act in unequivocal terms conferred discretion on the Tribunal to grant interest on the amount of compensation awarded at such rate as it may specify in that behalf. Therefore, Court has to take all the relevant factors into consideration while awarding the rate of interest on the compensation. The factors may include inflation, change of economy, policy being adopted by the Reserve Bank of India from time to time, how long the case is pending for determination of compensation, permanent injuries suffered by the victim, enormity of the suffering, loss of future income, loss of enjoyment of life etc. If any rate of interest is imported into the section by the Court, it would be contrary to the intent of the Act. The Legislature in its wisdom thought it fit to confer such discretion only on the Tribunal or the Court with the object that the Tribunal or the Court while awarding the rate of interest will take into account the facts and circumstances of each case and other relevant guiding factors prevalent at the time of awarding compensation. In the nature of the provision made under section 171 giving discretion to the Tribunal to award interest at such rate as it may specify in that behalf, in our considered opinion, no principle could be deduced or any interest can be fixed to have a general application in all motor accident claim cases arising under the MV Act.
80. It may also be noticed that even under section 34 CPC, no rate of interest has been fixed in respect of the interest payable prior to the institution of the suit on the principal sum adjudged and the interest payable on the principal sum adjudged from the date of the suit to the date of the decree. It is only in regard to further interest payable on the principal sum adjudged from the date of the decree to the payment, 6% interest has been fixed. Further, in cases where the liability had arisen out of a commercial transaction, the rate of such interest may exceed six per cent per annum but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions. Therefore, under section 34 CPC discretion has been given to the Court at what rate interest should be paid on the sum for the different stages except in the case of further interest to be awarded from the date of the decree to the date of payment.
81. Under Rule 473 of the A.P. Motor Vehicles Rules, only certain provisions were made applicable to proceedings before the Claims Tribunal. Section 34 CPC is not one such provision, which was made applicable to the cases arising under the M.V. Act.
82. The factors relevant for grant of interest under section 34 CPC are different from the factors to be taken note of under section 171 of the M.V Act. Grant of interest in both the cases arise entirely in different context. It may not be possible to compare one with the other. The interest payable under section 34 CPC is on account of contractual obligation, whereas the interest payable under section 171 of the M.V. Act is on account of death or injury caused to any person arising out of a motor vehicle accident caused due to negligence. Since the matter arises out of civil litigation, discretion is given to the Court under Section 34 C.P.C. to grant interest at such rate the Court deems reasonable for different stages viz., interest prior to the institution of the suit on the principal sum adjudged, interest on the principal sum adjudged from the date of the suit to the date of the decree and interest on the principal sum adjudged from the date of the decree to the date of the payment. Only the future interest payable for the period from the date of the decree to the date of payment on the principal sum adjudged was specified as 6% per annum and for other stages discretion was conferred on the Court to arrive at the reasonable rate of interest on an appreciation of the evidence on record. Whereas under section 171 of the M.V. Act discretion has been given to the Tribunal to grant interest at such rate the Tribunal may deem fit and appropriate in the facts and circumstances of each case. In cases under section 34 C.P.C the principal sum, in most of the cases, is a determined one based on the agreement or contract. Whereas in the cases arising under the M.V. Act, the amount of compensation has to be determined taking into account various factors such as loss of earnings, percentage of disability suffered, permanent injuries, enormity of the suffering, loss of future income, loss of enjoyment of life etc.
83. Section 4-A(3) of the Workmen's Compensation Act also may not have any application. The compensation to be awarded to a workman under the said provisions arises in a different context. It is only when the employer has defaulted in depositing the amount determined under the provisions of the Act in the proceedings before the Commissioner for workmen's Compensation Act, interest will be awarded at twelve per cent per annum or at such higher rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central government, by notification in the Official gazette. When compared to the provisions of the M.V. Act, the provisions of the Workmen's Compensation Act have stricter application. Further, in the opinion of the Commissioner, if there is no justification for the delay in depositing the compensation, in addition to the amount of arrears and interest thereon, the Commissioner may direct the employer to pay a further sum not exceeding fifty per cent of such amount by way of penalty.
84. It may be that in certain cases, under section 167 of the M.V. Act, a claimant will have an option to opt for compensation under either of the Acts. If the claimant opts to seek compensation under the provisions of Workmen's Compensation Act, he will be governed by the said provisions subject to any other provisions of the said Act and in case he opts to seek compensation under the provisions of the M.V. Act, the provisions of the said Act will only govern his case. Interest of 12% provided under Section 4-A(3), therefore, may not be a guiding factor for awarding the interest at 12% per annum or at such higher rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central Government, by notification in the Official Gazetted, in a case arising under the provisions of the M.V. Act.
85. We have earlier noticed that in many cases interest has been awarded at 12% and in one case the Supreme Court has awarded interest at 15% per annum. In some cases, interest has been reduced from 12% to 9%, 9% to 6% and in some cases it was enhanced from 6% to 12% or 6% to 9% which would only show that the Courts have exercised their discretion in reducing or enhancing the rate of interest depending upon the facts and circumstances of each case. In our considered opinion, while granting interest on the compensation amount awarded, the Tribunal or the Court shall award the rate of interest, which is just and reasonable on an analysis of the facts and circumstances obtaining in the case.
86. In the result, we remit the matters to the appropriate Bench to consider the other grounds raised in the appeal challenging the award of the Tribunal and dispose of the same in accordance with law. The rate of interest on the compensation amount shall be awarded by the Tribunal or the Court depending upon the facts and circumstances of each case and the relevant guiding factors as observed as above. We make it clear that if the compensation amount is enhanced, interest can be awarded at the discretion of the bench either from the date of the petition or from the date of the award, as the case may be.
87. We answer the reference accordingly. The matters are remitted back to the Division Bench for disposal in accordance with law.
88. It was held in the instant case that the grant of interest is dependant on the facts and circumstances of each case and at the sole discretion of the Tribunal or the Court. But, in the present cases, the High Court on appellate side has not so far gone into the issue whether the compensation awarded is justified. Unless that is gone into, it may not be possible to come to any conclusion at what rate the compensation should carry interest.