Madhya Pradesh High Court
Oriental Insurance Co.Ltd. vs Deepti on 8 April, 2022
Author: Anil Verma
Bench: Anil Verma
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Misc. Appeal No.1487/2021
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE ANIL VERMA
ON THE 8th OF APRIL, 2022
MISC. APPEAL No. 1487 of 2021
Between:-
ORIENTAL INSURANCE CO. LTD.,
4th FLOOR, IDA BUILDING,
7 RACECOURSE ROAD,
INDORE (MADHYA PRADESH)
.....APPELLANT
(BY SHRI AKSHANSH MEHRA, ADVOCATE)
AND
1. DEEPTI W/O LATE VIJAYSINGH TOMAR,
AGED ABOUT 27 YEARS, OCCUPATION: HOUSEWIFE,
R/O HOUSE NO. 51, LAXMIBAI MARG,
SONKATCH, DISTRICT DEWAS (MADHYA PRADESH)
2. VIDIT SINGH S/O LATE VIJAY SINGH TOMAR,
THROUGH NATURAL GUARDIAN MOTHER SMT. DEEPTI,
AGED ABOUT 2 YEARS, OCCUPATION: HOUSE WORK,
R/O HOUSE NO. 51, LAXMIBAI MARG,
SONKACH DISTRICT DEWAS (MADHYA PRADESH)
3. SMT. KIRAN W/O SHANKAR SINGH,
AGED ABOUT 27 YEARS, OCCUPATION: HOUSE WIFE,
R/O HOUSE NO. 51, LAXMIBAI MARG,
SONKACH DISTRICT DEWAS (MADHYA PRADESH)
4. SHANKAR SINGH S/O DEVISINGH,
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Misc. Appeal No.1487/2021
AGED ABOUT 58 YEARS, OCCUPATION: HOUSE WORK,
R/O HOUSE NO. 51, LAXMIBAI MARG,
SONKACH. DISTRICT DEWAS (MADHYA PRADESH)
5. KRISHNA S/O RAMESH MOCHI,
AGED - MAJOR, OCCUPATION: DRIVER,
R/O SATYASAI BAGH, BHAMORI BANGANGA,
INDORE (MADHYA PRADESH)
6. GHANSHAYAM S/O MANGLA KHAUSHAL,
OCCUPATION: OWNER,
R/O 308, NARWAR SANWER ROAD,
NEAR MAUNI BABA MANDIR,
INDORE (MADHYA PRADESH)
.....RESPONDENTS
(R. NO.1 TO 4 BY SHRI HIMANSHU PALIWAL, ADVOCATE )
This Misc. Appeal coming on this day, the court passed the
following:
O R D E R
The Insurance Company has filed this appeal being aggrieved by the impugned award dated 05/10/2020 passed in Claim Case No.1109/2018 by the XIII Motor Accident Claims Tribunal, Indore (M.P.), whereby the claim case filed by the respondents No.1 to 4 for compensation on account of death of Vijay was allowed and compensation of Rs.46,78,008/- with interest of 9% per annum was awarded.
The facts in brief are that respondents No.1 to 4 herein presented claim petition under Section 166 of the Motor Vehicles -3- Misc. Appeal No.1487/2021 Act seeking compensation of Rs.70 Lacs on account of accidental death of deceased Vijay, who died in a motor accident occurred on the intervening night of 30/09/2017 while deceased was travelling from Ujjain to Indore on his motorcycle bearing registration number MP-09-NF-1079. At that time respondent No.5 driver of the offending vehicle bearing registration number MP-09-GE-5453 was driving rashly and negligently and subsequently offending vehicle rammed into deceased, due to which deceased sustained grievous injuries and succumbed to death during the treatment. Accordingly offence has been registered under Section 279 and 304-A of the IPC against the respondent No.5. Respondent No.6 is the owner of the vehicle and vehicle was insured with the appellant - Insurance Company at the time of incidence.
Appellant in his written statement denied their liability to pay compensation with contention that accident was occurred due to sole negligence on the part of the deceased. Respondent No.2 has also disputed his liability to pay compensation with contention that there was breach of policy condition on the part of the insured. Respondent No.5 and 6 also denied their liability by claiming that they are not liable for the said accident. Vehicle was insured with the appellant and appellant Insurance Company is liable for the payment of compensation.
The below Tribunal after considering the evidence of both the -4- Misc. Appeal No.1487/2021 parties on record passed the impugned award of Rs.46,78,008/- with interest @ 9% per annum till payment is made as compensation of the death of Vijay against the owner, driver and Insurance Company (appellant), which was payable jointly and severally. Hence, this appeal is preferred before this Court.
The submissions put forth by learned counsel for the Insurance Company are that the below Tribunal has grossly erred while awarding interest @ 9% per annum on the amount of compensation awarded, which seems to be awarded on higher side. As according to Section 171 of Motor Vehicles Act, 1988 which depicts about the "award of interest where any claim is allowed". It is stated that where any Claims Tribunal allows a claim for compensation made under this Act, such 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 be specified in this behalf. Therefore, the Tribunal shall award simple interest in reliance of current bank interest rate. Claims Tribunal has erred in awarding interest @ 9% per annum no the award of compensation, which shall be reduced to @ 6% per annum.
On the other hand, learned counsel for the respondents No.1 to 4 supported the award passed by the below Tribunal. The reason recorded by the Tribunal cannot be termed as perverse so as to call -5- Misc. Appeal No.1487/2021 for interference in exercise of the appellate jurisdiction of this Court.
I have carefully considered the rival submissions and perused the record of the Tribunal.
Section 171 of the Motor Vehicles Act deals with the award of interest where any claim is allowed, it reads as follows:-
"171. Award of interest where any claim is allowed
-- Where any Claims Tribunal allows a claim for compensation made under this Act, such 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."
Under the said provision no rate of interest has been fixed and its duty is bestowed upon the Tribunal to fix the rate of interest.
The grant of interest is a discretion vested in the Court and according to the well settled principles, this discretion must be exercised judicially on the basis of the facts and circumstances of a particular case. Where it was admitted that the delay caused in the disposal of the claim was due to the claimants, keeping in view the peculiar circumstances of the case and also keeping in view the fact that the claimant has been allowed a handsome amount of compensation which completely met the ends of justice, it will be wrong use of discretion to allow interest at high rate in such cases.
The Hon'ble apex Court in the case of Puttamma and -6- Misc. Appeal No.1487/2021 Others Vs. K. L. Narayana Reddy and Another reported in (2013) 15 SCC 45, has held as under:-
"61. This Court in Kaushnuma Begum v. New India Assurance Co. Ltd. 2001 2 SCC 9 noticed that the nationalised banks are granting interest @ 9% on fixed deposit for one year and held as follows: (SCC p. 16, para
24) "24. Now, we have to fix up the rate of interest.
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 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 amount fixed hereinbefore shall bear interest at the rate of 9% per annum from the date of the claim made by the appellants. The amount of Rs 50,000 paid by the Insurance Company under Section 140 shall be deducted from the principal amount as on the date of its payment, and interest would be recalculated on the balance amount of the principal sum from such date."
62. This Court in Abati Bezbaruah v. Geological Survey of India 2003 3 SCC 148 noticed that varying rates of interest are being awarded by the Tribunals, the High Courts and this Court. In the said case, this Court held that the rate of interest must be just and reasonable depending on the facts and circumstances of the case and should be decided after taking into consideration relevant factors like inflation, change in economy, policy being adopted by Reserve Bank of India from time to time, how long the case is pending, loss of enjoyment of life, etc."
-7- Misc. Appeal No.1487/2021On the basis of the aforesaid contention it is crystal clear that it is for the Tribunal and for the Courts to decide the rate of interest after taking into consideration the rate of interest allowed by this Court in similar cases and other factors such as inflation, change in economy, policy adopted by Reserve Bank of India from time to time and the period since when the case is pending.
In the present case the deceased was a young person aged about 30 years. He was working as a District Sales Manager at Home Credit India Finance Pvt. Ltd., Gurgaon. His salary was Rs.3 Lacs per annum. On the basis of the above, Tribunal has awarded compensation of Rs.46,78,008/- with interest of 9% per annum. At present, the normal bank interest is about 5-6% per annum, therefore, 9% interest awarded by the Tribunal appears to be at very high rate.
It was held in the case of Divisional Manager, Oriental Insurance Co. Ltd., Cuttack Vs. Kalbalatha Mohaaapatra reported in 2005 (1) TAC 569 that the rate of interest must be just and reasonable depending upon the facts and circumstances of each case taking all relevant factors including inflation, change of economy and policy adopted by Reserve Bank of India and accordingly reduced the rate of interest from 9% to 6%.
In the present case, appellant did not challenge the awarded amount and has challenged only the rate of interest. The Tribunal -8- Misc. Appeal No.1487/2021 has imposed 9% per annum interest upon the appellant without assigning any specific reason. Keeping in view the present interest rate of the national Bank, 9% per annum interest rate is very high and it is required to be reduced.
This Court is of the considered view that 9% per annum interest rate awarded by the Tribunal is perverse and contrary to the evidence available on record. Therefore, impugned award passed by the Tribunal deserves to be modified and is hereby modified to the extent interest part is concerned. Interest rate of 9% per annum on the awarded amount is hereby reduced to 6% per annum.
With the aforesaid, miscellaneous appeal is allowed. Certified copy as per rules.
(ANIL VERMA) JUDGE Tej Digitally signed by TEJPRAKASH VYAS Date: 2022.04.20 18:12:30 +05'30'