9911796707
TMI Blog2004 (1) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... ho lost his life in a vehicular accident on 5.6.1987. The deceased was working as a Chowkidar of Hydel Project, Sikidri. A claim petition was filed by his sons under Section 110A of the Motor Vehicles Act 1939 (in short 'the Act'). The Motor Vehicle Accidents Tribunal (hereinafter referred to as 'the Tribunal') awarded compensation of Rs.72,000/- along with interest @ 12% per annum. The amount was directed to be paid within 60 days. It was further directed that in case of failure to pay within 60 days, the rate of interest would be 18%. The insurer questioned the legality of the direction that the whole amount of compensation was to be paid by the insurer; and the direction regarding default rate of interest. According to it, the liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for any enhanced liability, the statutorily fixed liability of Rs.50,000/- was the maximum that could have been awarded and nothing beyond it. It is also submitted that the High Court had directed payment of the amount within a particular time with the default stipulation of higher penal interest @ 18% p.a. It took note of the fact that pursuant to the order dated 23.2.1998 insurer deposited Rs.50,000/- on 6.3.1998. It was pointed out that neither the Tribunal nor the High Court could have stipulated any penal interest as was done. The High Court directed payment of the balance amount of compensation with interest and had stipulated that in case insurer does not pay the balance amount with interest at the rate indicated in the judgment pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unlimited or higher than the statutory liability." In case insurer-appellant not taking any higher liability by accepting higher premium, the liability is neither unlimited nor higher than the statutory liability fixed under Section 95(2) of the Act. Even if a vehicle is the subject matter of comprehensive insurance and a higher premium is paid on that score, limits of the liability with regard to third party risk does not become unlimited or higher beyond the statutory liability fixed. For this purpose, a specific agreement has to be arrived at between the insured and the insurer and separate premium has to be paid in respect of additional amount of liability undertaken by the insurer in that regard. This position was highlighted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 34 of the Code of Civil Procedure, 1908 (in short the 'CPC'). In fact, the provisions require payment of interest in addition to 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 provision is discretionary and is not and cannot be bound by rules. In the words of Lord Cairns, L.C. in Julius v. Bishop of Oxford (1880 (5) AC 214), "But there may be something in the nature of the thing empowered to be done, something in the object for which it is to be done, something in the conditions under which it is to be done, something in the title of person or persons for whose benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equity and colorable glosses and pretences, and not to do according to the will and private affections of persons. When it is said that something is to be done within the discretion of the authorities, that something is to be done according to the rules of reason and justice, not according to private opinion; according to law and not humour. It is to be not arbitrary, vague, and fanciful, but legal and regular. And it must be exercised within the limit, to which an honest man, competent to the discharge of his office ought to confine himself (Per Lord Halsbury, L.C., in Sharp v. Wakefield, (1891) Appeal Cases 173). Also (See S.G. Jaisinghani v. Union of India and Ors. (AIR 1967 SC 1427). The word "discretion" standing single and un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discretion, regulated according to the known rules of law, and not the mere whim or caprice of the person to whom it is given on the assumption that he is discreet (Per Willes J. in Lee v Budge Railway Co., (1871) LR 6 CP 576, and in Morgan v. Morgan, 1869, LR 1 P & M 644). Though Section 110CC of the Act (corresponding to Section 171 of the New Act) confers a discretion on the Tribunal to award interest, the same is meant to be exercised in cases where the claimant can claim the same as a matter of right. In the above background, it is to be judged whether a stipulation for higher rate of interest in case of default can be imposed by the Tribunal. Once the discretion has been exercised by the Tribunal to award simple interest on t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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