TMI Blog2004 (1) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... um of ₹ 50,000/- which is the liability of the insurer; from the date of claim till 6.3.1998, be paid within a period of three months from today, if not already paid or deposited before the Tribunal/High Court. The appeal is allowed to the extent indicated, without any order as to costs. - Appeal (civil) 399 of 2004 - - - Dated:- 20-1-2004 - DORAISWAMY RAJU ARIJIT PASAYAT, JJ. J U D G M E N T ARIJIT PASAYAT, J. Leave granted. National Insurance Company Limited (hereinafter referred to as 'the insurer') questions legality of the judgment of a Division Bench of the Jharkhand High Court holding that the insurer has to pay the compensation of Rs.72,000/- awarded to the legal representatives of one Hasta Bahadur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed before the Tribunal and the High Court it is pointed out that a sum of Rs.240/- was paid as the third party insurance premium. The limits of liability were also indicated in the following terms: "Limits of Liability: (a) Limit of the amount of the Company's liability under Section II-I (i) in respect of any one accident. Such amount as is necessary to meet the requirements of the Motor Vehicles Act, 1939. (b) Limit of Amount of the Company's Liability under Section II-I((ii) in respect of any one claim or series of claims arising out of the one event: Rs.50,000/-" In the Schedule of premium under the heading B. "LIABILITY TO PUBLIC RISK" it was indicated to be Rs. 240/-. The stand in essence, therefore, is that when ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A three-Judge Bench of this Court in New India Assurance Company Limited v. Shanti Bai (1995 (2) SCC 539) held as follows: "(i) a comprehensive policy which has been issued on the basis of the estimated value of the vehicle does not automatically result in covering the liability with regard to third-party risk for an amount higher than the statutory limit, (ii) that even though it is not permissible to use a vehicle unless it is covered at least under an "Act only" policy, it is not obligatory for the owner of a vehicle to get it comprehensively insured, and (iii) that the limit of liability with regard to third-party risk does not become unlimited or higher than the statutory liability in the absence of specific agreement to make t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of penal rate of interest as done by the Tribunal and affirmed by the High Court. So far as the higher rate of interest stipulation is concerned, it is to be noted that grant of interest under Section 110CC of the Act (corresponding to Section 171 of the Motor Vehicles Act, 1988) (in short the 'new Act') is discretionary. The purpose for award of interest is to put pressure on the relevant person not to delay in making the payment; and, to compensate the victim or his dependents at least to some extent for such delay as may occur, by way of interest. In determining the quantum of interest awardable under the relevant Section, the Tribunal acting under Section 110 of the Act corresponding to Section 166 of the new Act can derive direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore a decision is taken whether to act and how to act. Moreover, there may be a discretion whether to exercise a power, but no discretion as to the mode of its exercise; or a duty to act when certain conditions are present, but a discretion how to act. Discretion may thus be coupled with duties". Discretion, in general, is the discernment of what is right and proper. It denotes knowledge and prudence, that discernment which enables a person to judge critically of what is correct and proper united with caution; nice discernment, and judgment directed by circumspection; deliberate judgment; soundness of judgment; a science or understanding to discern between falsity and truth, between wrong and right, between shadow and substance, betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain latitude or liberty accorded by statute or rules to a judge as distinguished from a ministerial or administrative official, in adjudicating on matters brought before him, it is judicial discretion. It limits and regulates the exercise of the discretion, and prevents it from being wholly absolute, capricious, or exempt from review. Such discretion is usually given on matters of procedure or punishment, or costs of administration rather than with reference to vested substantive rights. The matters which should regulate the exercise of discretion have been stated by eminent judges in somewhat different forms of words but with substantial identity. When a statute gives a judge a discretion, what is meant is a judicial discretion, r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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