- (1.) This appeal has been filed by the claimants/appellants is restricted to the issue of legality of the interest awarded by the learned Tribunal.
(2.) The claimants/appellants also contend that the learned Tribunal erred in awarding only post award interest in the event of default, from the date of default and that too at the low rate of 6% per annum. Section 171 of the Motor Vehicles Act 1988 provides that where the Tribunal allows a claim application under the said, the Tribunal might direct that in addition to compensation, simple interest should be paid at such rate and from such date not earlier than the date of making the claim application, as the Tribunal might specify. It is true that the Tribunal has absolute discretion to determine the rate of interest and also the date from which such interest would be payable, subject to the condition that interest cannot be granted from any date prior to the date of preferring the claim application. However, having regard to the principles of equality envisaged under the Constitution of India, it is not desirable that similarly circumstanced claimants should be treated differently in the matter of awarding interest. In our view, there should be some uniformity in the principles for grant of interest in motor accident claim cases. This is imperative for the ends of justice and also to inspire faith and confidence of litigants in general in the impartiality of the judicial system. The Tribunal has expressly been conferred with the power to grant interest from the date of filing of the claim application. Interest should ordinarily be granted from the date of filing of the claim application, unless there are good reasons for awarding interest from a later date, for example when disposal of the claim application has been delayed due to reasons attributable to the claimants, such as delay in service of notice, repeated adjournments etc. In F.M.A. No. 1346 of 2013 (Smt. Niva Devi -Vs. - The New India Assurance Company Limited and another) a Division Bench to which one of us (Sahidullah Munshi, J.) was party, examined the question of the rate of interest that should be awarded to a successful claimant under Section 171 of the Motor Vehicles Act, 1988, referring to the decisions of the Supreme Court in Narchinva V. Kamat and Ors. Vs. Alferdo Antonio Deo Martins and Ors., 1985 AIR(SC) 1281; R.K. Tandon Vs. Om Prakash and Anr.,2000 1 TAC 212; Kaushnuma Begum and Ors. Vs. New India Assurance Co. Ltd. and Ors., 2001 2 SCC 9; National Insurance Co. Ltd. Vs. Keshav Bahadur and Ors., 2004 AIR(SC) 1581; Dharampal and Ors. Vs. U. P. State Road Transport Corporation,2008 SAR(Civ) 666 and N. Manjegowda Vs. Manager, United India Assurance Co. Ltd., 2014 1 TAC 1.
(3.) The Division Bench found that from 1985 till 1999 the Supreme Court generally granted 12% per annum interest. In R. K. Tandon the Supreme Court granted 12% interest referring to galloping inflation and erosion of rupee value. However, referring to the change in economy, Reserve Bank of India's policy and fixed deposit interest rates of nationalised banks, the rate of interest was reviewed in Kaushnuma Begum and the rate of interest was lowered from 12% to 9%. In Dharampal the Supreme Court held that the claimant should be paid 7.5% interest which was the bank rate on 18th May, 2005 when the award was passed by the Tribunal.;