Gujarat High Court
National Insurance Company Ltd vs Chintan Arunkumar Raval & on 16 September, 2014
Bench: M.R. Shah, K.J.Thaker
C/FA/2440/2014 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
FIRST APPEAL NO. 2440 of 2014
With
FIRST APPEAL NO. 2441 of 2014
TO
FIRST APPEAL NO. 2442 of 2014
With
CIVIL APPLICATION NO. 7974 of 2014
In
FIRST APPEAL NO. 2440 of 2014
TO
CIVIL APPLICATION NO. 7976 of 2014
In
FIRST APPEAL NO. 2442 of 2014
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE M.R. SHAH sd/
and
HONOURABLE MR.JUSTICE K.J.THAKER sd/
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1. Whether Reporters of Local Papers may be NO
allowed to see the judgment ?
2. To be referred to the Reporter or not ? NO
3. Whether their Lordships wish to see the fair copy NO
of the judgment ?
4. Whether this case involves a substantial question NO
of law as to the interpretation of the constitution
of India, 1950 or any order made thereunder ?
5. Whether it is to be circulated to the civil judge ? NO
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NATIONAL INSURANCE COMPANY LTD.....Appellant(s)
Versus
CHINTAN ARUNKUMAR RAVAL & 1....Defendant(s)
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Appearance:
MR VIBHUTI NANAVATI, ADVOCATE for the Appellant(s) No. 1
MR. YOGENDRA THAKORE, ADVOCATE for the Defendant(s) No. 2
NOTICE SERVED BY DS for the Defendant(s) No. 1
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Page 1 of 8
C/FA/2440/2014 JUDGMENT
CORAM: HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE K.J.THAKER
Date : 16/09/2014
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.0. As common question of question of law and facts arise in this group of appeals and the dispute is only with respect to rate of interest to be awarded on the compensation, all these appeals are decided and disposed of by this common judgment and order.
2.0. Feeling aggrieved and dissatisfied with the impugned common judgment and award passed by the learned Motor Accident Claims Tribunal (AuxiIV) dated 31.3.2014 passed in Motor Accident Claim Petition Nos.937 to 2009 to 939 of 2009 in so far as awarding compensation along with interest at the rate of 12% interest per annum, common appellant Insurance Company has preferred present appeals.
3.0. By the impugned common judgment and award, the learned Tribunal has directed the original opponent - Insurance Company to pay the compensation determined and awarded with interest at the rate of 12% per annum from the date of claim petition till its realization.
4.0. Shri Vibhuti Nanavati, learned advocate for the appellant Insurance Company has heavily relied upon the decision of the Hon'ble Supreme Court in the case of Meera Devi and Another vs. Himachal Road Transport Corporation and Others reported in 20014 ACJ 1012 as well as decision of the Division Bench in the case of National Insurance Company Limited vs. Sureshbhai @ Sureshchandra Maganbhai Parmar reported in 2007(14) GHJ 134 as well as decision Page 2 of 8 C/FA/2440/2014 JUDGMENT of the learned Single Judge of this Court dated 18.2.2014 rendered in First Appeal No.73 of 2014. He has also relied upon the decisions of the Hon'ble Supreme Court in the case of Vimal Kanwar and others vs. Kishore Dan and others reported in 2013 ACJ 1441 as well as in the case of Dharampal and others vs. U.P. State Road Transport Corporation reported in (2008) 12 SCC 208. No other submissions have been made. Relying upon the above decisions, it is requested to allow the present appeals and modify the impugned judgment and award passed by the learned Tribunal to the extent awarding the interest at the rate of 9% per annum.
5.0. Shri Yogendra Thakore, learned advocate for original claimants has tried to oppose the present appeals. It is submitted that the learned Tribunal has awarded the compensation with interest at the rate of 12% per annum considering the decision of the Hon'ble Supreme Court in the case of Neerupam Mohan Mathus vs. New Indian Assurance Co. Ltd reported in AIR 2013 SC 3378. It is submitted that therefore, when the learned Tribunal has relied upon the decision of the Hon'ble Supreme Court and has awarded compensation with interest at the rate of 12% per annum, the same is not required to be interfered with by this Court. No other submissions have been made.
6.0. Heard the learned advocates for the respective parties at length. At the outset, it is required to be noted that as such the dispute involved in the present appeals is with respect to the interest awarded by the learned Tribunal. Shri Nanavati, learned advocate for the appellant Insurance Company has also stated at the bar that present appeals are restricted to the rate of interest awarded by the learned Tribunal. Therefore, what is required to be considered by this Court is whether the learned Tribunal is justified in awarding compensation with interest at Page 3 of 8 C/FA/2440/2014 JUDGMENT the rate of 12% per annum or not. As such the issue involved in the present appeals is not res integra. In the case of Dharampal and others (supra), the only issue involved was regarding enhancement of the rate of interest awarded by the Tribunal and the High Court which was awarded and maintained at 6% per annum and to the aforesaid Hon'ble Supreme Court has observed that as per Section 171 of the Motor Vehicles Act, 1988 where the claim for compensation made under the Act was allowed by the Claims Tribunal, the Tribunal may direct that in addition to the amount of compensation, simple interest shall also be paid at such rate from such date not earlier than the date of making the claim. Identical question also came to be considered by the learned Single Judge in First Appeal No. 73 of 2014 and after considering the various decisions of the Hon'ble Supreme Court on the point, more particularly, with respect to the rate of interest to be awarded by the learned Claims Tribunal, in para 5 to 8 it is observed and held as under:
5. From the facts and contentions noted hereinabove, it is clear that the scope of the present appeal is very limited, viz., as to whether the Tribunal was justified in awarding interest at the rate of 12% per annum on the awarded amount. In this regard, reference may be made to the decision of the Supreme Court in the case of Dharampal v. U.P. State Road Transport Corporation (supra), wherein the only issue involved was regarding enhancement of rate of interest awarded by the Tribunal and the High Court, which was awarded and maintained at 6% per annum. The Supreme Court observed that as per section 171 of the Motor Vehicles Act, 1988 where the claim for compensation made under the Act was allowed by the Claims Tribunal, the Tribunal may direct that in addition to the amount of compensation, simple interest shall also be paid at such rate from such date not earlier than the date of making the claim. The court referred to its earlier decision in the case of National Insurance Co.
Ltd. v. Keshav Bahadur, (2004) 2 SCC 370, wherein it was held that the provisions require payment of interest in addition to the compensation already determined. Even though the expression may is used, a duty is laid on the Tribunal to consider the question of interest separately with due regard to the facts and circumstances of the case. The Page 4 of 8 C/FA/2440/2014 JUDGMENT court observed that it was clearly held in the said decision that the provision of payment of interest is discretionary and is not and cannot be bound by rules. The court held that interest is compensation for forbearance or detention of money which ought to have been paid to the claimant. No rate of interest is fixed under section 171 of the Act and the duty has been bestowed upon the court to determine such rate of interest. In order to determine such rate, the court made reference to the observations made by the Supreme Court over the years in the case of Kaushnuma Begum v. New India Assurance Co. Ltd., (2001) 2 SCC 9, United India Insurance Co. Ltd. v. Patricia Jean Mahajan, (2002) 6 SCC 281, Abati Bezbaruah v. Geological Survey of India, (2003) 3 SCC 148 and T.N. State Transport Corpn. Ltd. v. S. Rajapriya, (2005) 6 SCC 236. With reference to the legal position as stated in the above decisions, the court observed that the accident in the said case had taken place on 1st September, 2004 and the Tribunal had passed the award on 18 th May, 2005. The rate at which the interest is to be awarded would normally depend upon the bank rate prevailing at the relevant time. Since in T.N. State Transport Corporation Ltd. (supra) decided in the month of April, 2005, the prevailing rate of interest on bank deposits was found and held to be 7.5% per annum, the court considered it appropriate to award the same rate of interest as the same was the prevailing rate of interest on the date of passing the award i.e. 18th May, 2005 in the said case. The court, accordingly, held that the appellants therein would be required to be paid interest at the rate of 7.5% per annum from the date of the application till the date of payment.
6. From the above decision, it can be culled out that the rate of interest as prevailing on the date of passing of the award by the Tribunal is required to be taken into consideration. In the facts of the present case, the award has been made on 11 th September, 2013. Under the circumstances, the rate of interest prevailing at the relevant time of passing the award is required to be taken into consideration. A perusal of the impugned award reveals that before the Tribunal, no evidence had been led to establish as to what was the prevailing rate of interest at the relevant time. However, before this court, the learned advocate has placed reliance upon various decisions of the Supreme Court as referred to hereinabove. In the subsequent decisions, the Supreme Court has placed upon its earlier decision in the case of Municipal Corporation of Delhi v. Association of Victims of Uphaar Tragedy (supra) wherein the interest awarded from the date of the writ petition on the awarded amount at the rate of 9% per annum Page 5 of 8 C/FA/2440/2014 JUDGMENT had been affirmed. The learned advocate for the respondents claimants has also placed on record a statement indicating the Revision in Interest Rates on Domestic Term Deposits which reveals that the prevailing rate of interest in the year 2013 is 9% per annum. The Revised Term Deposit Interest Rates with effect from 28th March, 2012 of the State Bank of India has also been placed on record which reveals that the rate of interest varies from 8% to 9.25%.
7. In the light of the fact that in the case of Josphine James v. United India Insurance Co. Ltd. (supra), the Supreme Court has held that there was no justification for the Tribunal and the High Court in not applying the ratio of the decision of Association of Victims of Uphaar Tragedy and has awarded interest at the rate of 9% per annum, the court is of the view that the Tribunal was not justified in determining the rate of interest at 12% without any basis. Under the circumstances, the rate of interest is required to be reduced to 9% by following the decision of the Supreme Court in the case of Municipal Corporation of Delhi v. Association of Victims of Uphaar Tragedy (supra).
8. In the light of the above discussion, the appeal partly succeeds and is accordingly allowed to the following extent. The impugned judgment and award dated 11th September, 2013 passed by the Motor Accident Claims Tribunal (Auxiliary), Patan in Motor Accident Claim Petition No.377/2004 is hereby set aside to the extent the same awards interest at the rate of 12% per annum on the awarded amount. Accordingly, the interest is granted at the rate of 9% per annum on the compensation amount awarded by the Tribunal.
7.0. Even the Division Bench of this Court in the case of Sureshbhai@ Sureshchandra Maganbhai Parmar (supra) had an occasion to consider the issue with respect to fixation of rate of interest and after considering the various decisions of the Hon'ble Supreme Court referred to in the said decisions, the Division Bench has awarded interest at the rate of 9% per annum.
8.0. Now, so far as reliance placed upon the decision of the Hon'ble Supreme Court in the case of Neerupam Mohan Mathus Page 6 of 8 C/FA/2440/2014 JUDGMENT (supra) by learned advocate for the claimants in support of his submission that learned Tribunal has not committed any error in awarding interest at the rate of 12% per annum is concerned, on considering the decision of the Hon'ble Supreme Court as such it cannot be said that there is absolute proposition of law laid down by the Hon'ble Supreme Court in the said decision that in all claim petition the claimants shall be entitled to interest at the rate of 12% per annum. From the facts of the case before the Hon'ble Supreme Court, it appears that in the facts and circumstances of the case, more particularly, when claim petition was of the year 1989 and the amount of compensation came to be enhanced after number of years, in the facts and circumstances of the case, Hon'ble Supreme Court has awarded compensation with interest at the rate of 12% per annum. On the contrary, in the case of Puttamma and others vs. Narayan Reddy and Another reported in AIR 2014 SC 706, the Hon'ble Supreme Court in para 61 and 62 has observed and held as under:
61. In Supe Dei v. National Insurance Co. Ltd.& Anr. (2009) 4 SCC 513 this Court held that proper interest would be 9% per annum.
62. In view of the aforesaid provisions of the Act, 1988 (Section
171) and the observation of this Court, as noticed above, we keep this question open for Tribunals and Courts to decide the rate of interest after taking into consideration the rate of interest allowed by this Court in similar case and other factors such as inflation, change in economy, policy adopted by the Reserve Bank of India from time to time and the period since when the case is pending.
9.0. Considering the aforesaid law laid down by the Hon'ble Supreme Court in catena of decisions referred to herein above as well as decision of the Division Bench of this Court in the case of Sureshbhai@ Sureshchandra Maganbhai Parmar (supra) as well as decision of the learned Single Judge in the case of Rajkumar Dharamsing & others (supra) and consisting prevalent rate of interest, we are of the opinion Page 7 of 8 C/FA/2440/2014 JUDGMENT that the claimants shall be entitled to compensation with interest at the rate of 9% per annum instead of 12% per annum as awarded by the learned Tribunal. Under the circumstances to the aforesaid extent, impugned common judgment and award passed by the learned Tribunal is required to be modified.
10. In view of the above and for the reasons stated above, all these appeals succeed in para. The impugned common judgment and award passed by the learned Motor Accident Claims Tribunal (AuxiIV) dated 31.3.2014 passed in Motor Accident Claim Petition Nos.937 to 2009 to 939 of 2009 is hereby modified and it is held that the claimants shall be entitled to compensation determined and awarded by the learned Tribunal with interest at the rate of 9% per annum from the date of claim petition till its realization. All these appeals are partly allowed to the aforesaid extent. No costs. It is reported that the Insurance Company has not deposited any amount of compensation till date. Under the circumstances, it is directed that the appellant - Insurance Company shall deposit the entire amount of compensation as as awarded by the learned Tribunal with interest at the rate of 9% per annum from the date of claim petition till its realization within a period of four weeks from today. With this, all these appeals are partly allowed.
11. In view of disposal of the appeals, Civil Applications stand disposed of.
sd/ (M.R.SHAH, J.) sd/ (K.J.THAKER, J) Kaushik Page 8 of 8