Punjab-Haryana High Court
Sikander Singh vs Union Of India on 22 September, 2009
Author: Nirmaljit Kaur
Bench: Nirmaljit Kaur
F.A.O No.690 of 2009 1
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH.
F.A.O No.690 of 2009
Date of Decision: 23.09.2009
Sikander Singh
....Appellant
Versus
Union of India
...Respondent
CORAM : Hon'ble Ms. Justice Nirmaljit Kaur
Present:- Mr. D. Khanna, Advocate
for the appellant.
Mr. Kulvir Narwal, Advocate
for the respondent.
*****
1. Whether Reporters of Local Newspapers may be
allowed to see the judgment ?
2. To be referred to the Reporters or not ?
3. Whether the judgment should be reported in the
Digest ?
**
NIRMALJIT KAUR, J.
All connected FAOs bearing nos. 4137, 4138, 5407, 2838, 2835, 3713, 4105, 4563, 4807, 4797 of 2008, 100, 653, 1246, 1384, 1385, 1386, 1448, 2408, 4266, 4267, 4268, 4269, 1045, 1451, 1452, 1660, 2359 and 2547 of 2009, shall stand disposed of by this common order, being passed in the present appeal, as the prayer in all these appeals is for modification of the impugned order, whereby, the Railways Tribunal, while deciding the award, granted compensation but without any interest.
For the facility of reference, facts are being taken from FAO No.690 of 2009. As mentioned above, the prayer in the present appeal is for grant of interest from the date of filing of the claim petition. In some F.A.O No.690 of 2009 2 other cases, the prayer is for grant of interest @ 18% from the date of filing of the claim petition. A number of similar appeals, where the same question with respect to the rate of interest and the date from which it was to be granted was involved, were disposed of by this Court vide its order dated 17-07-2009, passed in FAO No.110 of 2009, titled as Des Raj vs. Union of India. In all those cases, learned Senior counsel appearing on behalf of the respondent, did not dispute the claim to the extent of paying interest on the awarded amount from the date of filing of the claim petition till its realization. However, he expressed his strong reservation on the rate of interest at which the same was to be granted. In view of the fair stand taken by learned counsel for the respondent, in all those cases, the appeals were allowed by holding as under :-
" Taking into account the observations of the Apex Court made in the cases of Uttaranchal Transport Corporation, Tamil Nadu State Transport Corporation and the Managing Director, TNSTC (supra), wherein, the interest was fixed at the rate of 7.5% per annum instead of 9% and also, at the same time, without losing sight of the fact that in the case of N. Parameswaran Pillai and Rathi Menon (supra), relating to claim under the Railways Act, 1989 and Railway Accidents and Untoward incidents (Compensation) Rules, 1990, entitling the appellant interest at the rate of 12% per annum, as also keeping in view the interest given by the Banks and other financial institutions, interest at the rate of 9% per annum on the compensation amount so awarded by the Tribunal from the date of filing of the claim petition till its actual realization would be just and fair."
Although, the present appeal is covered by the judgment passed in FAO No.110 of 2009, Mr. Kulvir Narwal, learned counsel appearing on behalf of the respondent submitted three fold arguments. First and foremost, he argued that there is no provision under the Railways F.A.O No.690 of 2009 3 Act or Rules regarding the payment of interest. It was further stated that where the legislature wished to give interest, special provision was added as it was provided in the Motor Vehicles Act under Sections 171 and 149 for grant of interest but there was no such provision in the Railways Act. He relied on the judgment of Hon'ble the Apex Court, rendered in the case of Rathi Menon vs. Union of India reported in 2001 ACJ 721, to substantiate that the Motor Vehicles Act and the Workmen Compensation Act, is materially different from the scheme indicated in the Railways Act and as such, no interest can be granted.
Learned counsel for the respondent while raising the second question submitted that under Section 4-A of the Workmen Compensation Act, the interest, if at all, is payable only from the date of the accident as that is the date when compensation becomes due. In order to support his argument, reliance was placed on the judgment of Hon'ble the Apex Court, rendered in Rathi Menon's case (supra), wherein, in the last paragraph, it was mentioned as under :-
"36. We direct the railway administration to pay the amount awarded by the Claims Tribunal to the appellant (if not already paid) within three months from today together with interest at the rate of 12 per cent per annum from 27.6.1997 (the date of the order passed by the Claims Tribunal)."
Learned counsel while asserting his third argument on the rate of interest submitted that the judgment rendered by Hon'ble the Apex Court in the case of Pratap Narain Singh Deo vs. Shrinivas Sabata (1976) ACJ 141 (SC) cannot be relied upon for granting interest @ 9% as the issue of interest was not directly dealt with by the Hon'ble Apex Court while granting the same @ 12% from the date of the application.
Learned counsel for the appellant, on the other hand, submitted that the stand of the respondent was not fair, in view of the fact F.A.O No.690 of 2009 4 that the Courts have consistently held that the interest has to be granted from the date of the application.
Learned counsel for the parties have been heard.
I do not find any merit in the first argument raised by learned counsel for the respondent, in view of Section 3 of the Interest Act, which reads as under :-
"3. Power of Court to Allow Interest. (1) In any proceedings for the recovery of any debt or damages or in any proceedings in which a claim for interest in respect of any debt or damages already paid is made, the court may, if it thinks fit, allow interest to the person entitled to the debt or damages or to the person making such claim, as the case may be, at a rate not exceeding the current rate of interest, for the whole or part of the following period, that is to say-
(a) if the proceedings relate to a debt payable by virtue of a written instrument at a certain time, then, from the date when the debt is payable to the date of institution of the proceedings;
(b) if the proceedings to not relate to any such debt, then, from the date mentioned in this regard in a written notice given by the person entitled or the person making the claim to the person liable that interest will be claimed, to the date of institution of the proceedings Provided that where the amount of the debt or damages has been repaid before the institution of the proceedings, interest shall not be allowed under this section for the period after such repayment.
Section 2(a) of the Act defines the "Court" as under :-
" Section 2(a) of the Act provides that the word "Court" includes a tribunal and an arbitrator."
The old Act did not contain any definition of the word "Court" and as such, it was confined in its import to civil courts only. Special F.A.O No.690 of 2009 5 tribunals and arbitrators, as distinct from civil courts, had no general power to grant interest under that Act unless it could be granted under any substantive law, or any custom or usage having the force of law, or under agreement of the parties.
From the perusal of the reading of the above provisions provided under the Interest Act, it is evident that the interest can be granted in proceedings with respect to the recovery of damages or compensation duly awarded by the Court and the `Court' under the Interest Act now includes the `Tribunal'.
With respect to the question as to the date from which interest is to be levied, learned counsel pointed out to Section 126 of the Railways Act to show that the interim relief to the victims is immediately granted after the accident, in case, an application for compensation under Section 125 is made. In fact, in my opinion, it would be highly unjust and unfair to conclude that a person will be denied the interest from the date of filing of the claim petition before the Tribunal, when in any case, the victim or the claimants are liable to get the interim relief under Section 126 of the Railways Act even as early as immediately after the accident. The judgment rendered by the Hon'ble Apex Court in the case Rathi Menon (supra) rather supports the case of the appellant. The Apex Court while referring to the judgment of the Division Bench of the Kerala High Court and relying on four-Judge Bench decision in Pratap Narain Singh Deo's case (supra), held as under :-
"The employer therefore became liable to pay the compensation as soon as the aforesaid personal injury was caused to the workman by the accident which admittedly arose out of and in the course of the employment. It is therefore futile to contend that the compensation did not fall due until after the Commissioner's order dated 06-05-1969 under Section
19."F.A.O No.690 of 2009 6
On the aforesaid order this court further held that the Commissioner under the Act was fully justified in making the order for payment of interest and penalty." and finally granted interest @ 12 per cent per annum from 27- 06-1997. The date 27-06-1997 is the date when the application was moved.
The judgment rendered by the Division Bench of Kerala High Court, rendered in the case of Nalini vs. Union of India (2008) ACJ 2214, held as under :-
" Standing counsel for the Railways submits that no interest is provided under the Railways Act or Rules and, therefore, no interest is payable. In Motor Vehicles Act, there is provision for payment of interest. But, the Hon'ble Supreme Court has held that interest is payable from the date of application. Taking that analogy, we are of the view that interest is payable from the date of application."
Reliance was also placed by the learned counsel for the Railways on the judgment of Bombay High Court, rendered in the case of Sanjay Sampatrao Gaikwad vs. Union of India (2006) ACJ 656, wherein, it was held that the interest should be from the date of the judgment and not from any date prior to that. The judgment of Delhi High Court in the case Union of India v. Bani Lal (2005) ACJ 1763, while disagreeing with the judgment of Bombay High Court in the case Sanjay Sampatrao Gaikwad (supra), observed as under :-
"3. With due respect to Hon'ble Judge who has delivered the said judgment, I am unable to agree with the same. The provisions of the Interest Act were not brought to the notice of Bombay High Court when the aforesaid judgment was given. Under Section 3 of Interest Act in any proceedings for the recovery of any debt or damages or in any proceedings in which a claim for interest in respect of any debt or damages F.A.O No.690 of 2009 7 already paid is made, the court may, if it thinks fit, allow interest to the person entitled to the debt or damages or to the person making such claim, as the case may be, at a rate not exceeding the current rate of interest, for the whole or part of the following period, that is to say-(a) if the proceedings relate to a debt payable by virtue of written instrument at a certain time, then, from the date when the debt is payable to the date of institution of the proceedings; and (b) if the proceedings do not relate to any such debt, then, from the date mentioned in this regard in a written notice given by the person entitled or the person making the claim to the person liable that interest will be claimed, to the date of institution of the proceedings. Under section 5 of the Interest Act nothing in the Act shall affect the provisions of section 34 of the Civil Procedure Code. The court is defined in section 2(a) of the Act and includes a `Tribunal' and an `Arbitrator'. Since the court has been defined in the Interest Act to include a `Tribunal' and an `Arbitrator', in my opinion, the Tribunal while deciding damages payable to a person under the provisions of the Railways Act, has the jurisdiction to award interest under section 3 of the Interest Act."
Thus, it has been the consistent view of the Hon'ble Apex Court as well as the different High Courts that interest is payable from the date of application.
No doubt, in the judgment rendered by Hon'ble the Apex Court in the case N. Parameswaran Pillai and another vs. Union of India and another (2002) ACJ 841, the issue of interest was not directly involved, nevertheless, while ordering enhancement of compensation, held the appellants entitled to the interest @12% from the date of the application. The same cannot be ignored.
In view of the above discussion and taking into account the fact that there is no prohibition under the Railways Act or in the Railways F.A.O No.690 of 2009 8 Claim Tribunal Act to the awarding of interest, Section 3 of the Interest Act enables the Court, which includes a `Tribunal' and an `Arbitrator', to grant recovery of interest on the debt or damages in any proceedings, the same being a beneficial legislation, similar appeals already having been allowed by this Court vide order dated 17-07-2009, in FAO No.110 of 2009, titled as Des Raj (supra), these appeals are allowed with a direction to the respondent to pay the interest at the rate of 9% p.a. on the amount so awarded by the Railways Tribunal from the date of the petition till payment.
(NIRMALJIT KAUR) 23.09.2009 JUDGE gurpreet