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TMI Blog2009 (5) TMI 966X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 of 1999 before the Railway Claims Tribunal, Ernakulam, for compensation amounting to Rs. 4 lakhs. On 18th August, 2006, the accused persons were convicted under Section 392 of the Indian Penal Code (`IPC', for short) and sentenced to 10 years rigorous imprisonment and to pay a fine of Rs. 15,000/- each, in default to undergo rigorous imprisonment for a further period of one year. 4. The Railway Claims Tribunal by its order dated 26th March, 2007, allowed the application in part and in terms of Section 123(c) of the Railways Act, 1989, directed the Union of India and its authorities to pay to the appellants herein compensation of Rs. 4 lakhs, out of which a sum of Rs. 2 lakhs was given to the Appellant No.1, a sum Rs. 1,50,000/- was allotted to the Appellant No.2 and Rs. 50,000/- was allotted to the Appellant No.3. The Railway Claims Tribunal granted 45 days' time to the respondents herein to comply with the order for payment of the compensation amount, failing which it was directed that the appellants would be entitled to 6.5% interest per annum on the award amount from the date of default. 5. The said Award of the Railway Claims Tribunal was challenged before the Keral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Railway Administration would be acquired by the injured from the date of the said incident, which principle was also considered in the case of Pratap Narain Singh Deo Vs. Srinivas Sabata & Anr. [(1976) 1 SCC 289]. 9. Mr. Dinesh also submitted that the question of payment of interest on the compensation awarded was considered by this Court in the case of Tejinder Singh Gujral Vs. Inderjit Singh & Anr. [(2007) 1 SCC 508], which was a case under the Motor Vehicles Act. While considering the question of compensation payable, the question of payment of interest on such compensation also fell for consideration of this Court and it was held that grant of interest was discretionary and was not required to be claimed separately. It was held that interest is granted by way of compensation and has to be reasonable depending upon the facts of the case and taking into account all relevant factors. In the said case, the interest awarded 9% per annum was not interfered with by the Division Bench of the High Court upon reference to the provisions of Section 166 of the Motor Vehicles Act, 1988 and Section 34 of the Civil Procedure Code. 10. In the case of Dr. K.R. Tandon Vs. Om Prakash & Anr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. Mr. Radhakrishnan submitted that the said decision did not really further the appellants' case since, in any event, the appellants could be awarded interest, if at all, from the date of the Award and not from any previous period. Mr.Radhakrishnan urged that in the instant case a direction had been given by the Railway Claims Tribunal to make payment of the compensation amount within 45 days from the date of the Award, failing which the appellants would be entitled to the interest at the rate of 5% per annum from the date of default. According to Mr. Radhakrishnan, even if the claim of the appellants was accepted, having regard to the decision in Rathi Menon's case (supra), such claim would be restricted only to the period of 45 days within which period payment of awarded amount was to be made, since in default of such payment, interest would be payable on the awarded sum at the rate indicated in the order. Mr. Radhakrishnan submitted that no interference was called for with the order of the Tribunal and the High Court impugned in this appeal. 13. Admittedly, neither the Railway Claims Tribunal Act, 1987, nor the Railways Act, 1989, make provision for payment of intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rupees, and (b) The sum represents or includes damages in respect of personal injuries to the plaintiff or any other person, or in respect of a person's death, then, the power conferred by that subsection shall be exercised so as to include ill that sum interest on those damages or on such part of them as the court considers appropriate for the whole or part of the period from the date mentioned in the notice to the date of institution of the proceedings, unless the court is satisfied that there are special reasons why no interest should be given in respect of those damages. (3) Nothing in this section, - (a) shall apply in relation to- (i) Any debt or damages upon which interest is payable as of right by virtue of any agreement; or (ii) Any debt or damages upon which payment of interest is barred, by virtue of all express agreement; (b) Shall affect- (i) The compensation recoverable for the dishonour of a bill of exchange, promissory note or cheque, as defined in the Negotiable Instruments Act, 1881 (26 of 1881); or (ii) The provisions of rule 2 of Order 11 of the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908); (c) Shall empower the court to award ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the payment of further interest 3[on such principal sum] from the date of the decree to the date of payment or other earlier date, the Court shall be deemed to have refused such interest, and a separate suit therefore shall not lie." 16. It is, therefore, clear that the Court, while making a decree for payment of money is entitled to grant interest at the current rate of interest or contractual rate as it deems reasonable to be paid on the principal sum adjudged to be payable and/or awarded, from the date of claim or from the date of the order or decree for recovery of the outstanding dues. There is also hardly any room for doubt that interest may be claimed on any amount decreed or awarded for the period during which the money was due and yet remained unpaid to the claimants. 17. The Courts are consistent in their view that normally when a money decree is passed, it is most essential that interest be granted for the period during which the money was due, but could not be utilized by the person in whose favour an order of recovery of money was passed. As has been frequently explained by this Court and various High Courts, interest is essentially a compensation payable on acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny interest after the decree was made in terms of the award. This Court went on to observe that the Courts have taken a view that the award on interest under Section 34 of the Civil Procedure Code is a matter of procedure and ought to be granted in all cases where there is a decree for money unless there are strong reasons to decline the same. In the said case, this Court modified the decree of the Court of the Subordinate Judge by including a direction for payment of interest @12% per annum from the date when the award was made the Decree of the Court of the Subordinate Judge, till realization. 21. A similar view was expressed by a Three Judge Bench of this Court in Hindustan Construction Co. Ltd. Vs. State of Jammu & Kashmir [(1992) 4 SCC 217]. 22. Though, both the two aforesaid cases were in relation to Awards having been made under the Arbitration Act, a principle has been enunciated that in cases where a money award is made, the principles of Section 34 of the Civil Procedure Code and Section 3 of the Interest Act could be invoked to award interest from the date of the Award till the realisation thereof. 23. In the instant case, the claim for compensation accrued on 13th No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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