TMI Blog2009 (5) TMI 966X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants in making the claim, which was ultimately granted for the maximum amount of ₹ 4 lakhs on 26th March, 2007. Even if, the appellants may not be entitled to claim interest from the date of the accident, we are of the view that the claim to interest on the awarded sum has to be allowed from the date of the application till the date of recovery, since the appellant cannot be faulted for the delay of approximately 8 years in the making of the Award by the Railway Claims Tribunal. Had the Tribunal not delayed the matter for so long, the appellants would have been entitled to the beneficial interest of the amount awarded from a much earlier date and we see no reason why they should be deprived of such benefit. As we have indicated earlier, payment of interest is basically compensation for being denied the use of the money during the period which the same could have been made available to the claimants. Both the Tribunal, as also the High Court, were wrong in not granting any interest whatsoever to the appellants, except by way of a default clause, which is contrary to the established principles relating to payment of interest on money claims. We, therefore, allow the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t per annum on the award amount from the date of default. 5. The said Award of the Railway Claims Tribunal was challenged before the Kerala High Court at Ernakulam by the appellants herein on the ground that in view of the decision of this court in Rathi Menon Vs. Union of India [(2001) 3 SCC 714], the claim for compensation would arise from the date of the incident. Such a view was expressed by this Court on account of the fact that the Railways Act, 1989 did not fix the amount of compensation, but left it to be determined by the Central Government from time to time. Reliance was also placed on another decision of this Court in N. Parameswaran Pillai Anr. Vs. Union of India Anr. [(2002) 4 SCC 306], whereby 12% interest was granted from the date of application till the date of judgment following the decision in Rathi Menon's case (supra). 6. The Division Bench of the Kerala High Court took the view that even though the interest for the prior period had not been awarded, the Tribunal had awarded interest in case of default in compliance with the order for deposit of the compensation amount. The High Court was of the view that since the Tribunal had applied its mind whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. [(1998) 8 SCC 421], which was also a claim for compensation under the Motor Vehicles Act, the grant of interest on the compensation award was not only upheld but keeping in mind the surrounding circumstances, this Court also enhanced the rate of interest from 6% to 12% from the date of the application being made. It was held that omission on the part of the Courts below to award interest, irrespective of its rate, from the date of the application was held to be unjustified. Mr. Dinesh submitted that a decision, which was closer to the facts of this case, was referred to by this Court in Union of India Vs. Prabhakaran Vijaya Kumar Ors. [(2008) 9 SCC 527], in which, while considering the provisions of Sections 123(c)(2), 124-A and 127 of the Railways Act, 1989 and the expression untoward incident held that the provisions of Section 124-A is in the nature of a no-fault liability in case of railway accidents and a bona fide passenger traveling on a train would be entitled to compensation for such untoward incident irrespective of wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t impugned in this appeal. 13. Admittedly, neither the Railway Claims Tribunal Act, 1987, nor the Railways Act, 1989, make provision for payment of interest on any awarded amount. While Section 16 of the 1987 Act prescribes the procedure for making an application to the Claims Tribunal, the right to receive compensation is contained in Sections 124 and 124-A comprising Chapter XIII of the 1989 Act dealing with the liability of the Railway Administration for death and injury to passengers due to accidents. Even though there is no provision in either of the Acts for payment of interest on the awarded sum, there is no denying the fact that the right to claim compensation accrued on the date of the incident, although, compensation has been held in Rathi Menon's case (supra) is to be computed from the date of the Award of the Claims Tribunal. In cases where the statute does not make any specific provision for payment of interest on any awarded sum, the power of the Courts to grant interest can also be referred to from the provisions of the Interest Act, 1978 and the Code of Civil Procedure. Section 3 of the Interest Act 1978, which confers power on the Court to allow interest rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 interest upon interest. 14. As will be evident from the aforesaid provisions, the same, inter alia, provided that in any proceedings for the recovery of any debt or damages the Court may, if it thinks fit, allow interest to the person entitled to the debt or damages at a rate not exceeding the current rate of interest for the whole or part of the period from the date when the debt is payable to the date of the incident of the proceedings, if such debt was payable by virtue of a written instrument at a certain time or if the proceedings do not relate to any such debt, then, from the date mentioned in any written notice given by the person making a claim to the person liable that interest would be claimed from the date of institution of the proceedings. 15. As indicated hereinbefore, apart from the provisions of the Interest Act, Section 34 of the Civil Procedure Code also empowers the Court to order interest on a decree for payment of money in the following manne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 account of denial of the right to utilise the money due, which has been, in fact, utilized by the person withholding the same. Accordingly, payment of interest follows as a matter of course when a money decree is passed. The only question to be decided is since when is such interest payable on such a decree. Though, there are two divergent views, one indicating that interest is payable from the date when claim for the principal sum is made, namely, the date of institution of the proceedings till the recovery of the amount, the other view is that such interest is payable only when a determination is made and order is passed for recovery of the dues. However, the more consistent view has been the former and in rare cases interest has been awarded for periods even prior to the institution of proceedings for recovery of the dues, where the same is provided for by the terms of the agreement entered into between the parties or where the same is permissib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rinciples 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 November, 1998, when Kunhi Moosa, the husband of the Appellant No.1, died on account of being thrown out of the moving train. The claim before the Railway Claims Tribunal, Ernakulam, (O.A.No.68/1999) was filed immediately thereafter in 1999. There was no delay on the part of the claimants/appellants in making the claim, which was ultimately granted for the maximum amount of ₹ 4 lakhs on 26th March, 2007. Even if, the appellants may not be entitled to claim interest from the date of the accident, we are of the view that the claim to interest on the awarded sum has to be allowed from the date of the application till the date of recovery, since the appellant cannot be faulted for the delay of approximately 8 years in the making of the Award by the Railway Claims Tribunal. Had the Tribunal not delayed the matter for so long, the appellants would have been entitled to the beneficial interest of the amount awarded from a much earlier dat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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