1. The appellants/claimants in the present action are the parents of a victim of a motor accident, who succumbed to injuries suffered from that accident on 23rd June, 2000. The victim was the "khalasi", which broadly means helper in the common parlance of the transport trade. The death was caused on account of a collision between the bus, of which he was the khalasi, and a lorry.
2. The appellants made a claim before the Motor Accident Claim Tribunal, 4th Court, Burdwan u/s 163A of the Motor Vehicles Act, 1988 (the "Act" in short) for an award of Rs. 3,00,000/- (rupees three lacs) as compensation, impleading the owners and the insurance companies of both the vehicles as opposite parties. Before the Tribunal, the death of the victim on account of accident between the two vehicles was proved, as also the insurance coverage of the vehicles. A sum of Rs. 3,00,000/- (rupees three lacs) was awarded as compensation upon considering the age of the victim, the applicable multiplier as contained in the second schedule to the Act, and the claim statement. The award also contained provision for interest, penal in nature, to be paid at the rate of 15% per annum, in the event of failure to pay the sum awarded within the stipulated time, being sixty days. The two insurance companies were directed to pay the awarded amount jointly, in equal shares.
3. The present appeal has been preferred against the said award by the claimants on several grounds, but argument was advanced on behalf of the appellants on the limited ground of non-payment of interest and non-pecuniary damages.
4. In connection with the appeal, an application being C. A. N. 1825 of 2005 has been filed, praying for early disposal of the appeal. We decided to take up hearing of the appeal itself at this stage, as the appeal was ready as regards service against the two insurance companies. So far as the owners of the vehicles are concerned, they did not contest before the Tribunal, and we decided to dispense with the service of notice upon them.
5. The main issue that arises in this appeal as we have indicated above is as to whether the appellants/claimants are entitled to receive interest on the award amount in the present case for the period subsequent to making of the application. The provision relating to grant of interest is contained in Section 171 of the Act which was reproduced below:
171. Award of interest where any claim is allowed.- Where any claims Tribunal allows a claim for compensation made under this Act, such Tribunal may direct that in addition to the amount of compensation simple interest shall also be paid at such rate and from such date not earlier than the date of making the claim as it may specify in this behalf.
6. As would be evident from the provision of Section 171, though the expression "may" has been used in the statute, while conferring the power on the Tribunal to grant interest, no Legislative guideline has been prescribed in the statute as regards the. conditions under which the Tribunal would award interest to a successful claimant in a motor accident claim case. However, as per the provisions of Section 171 of the Act, the interest becomes payable from a date not earlier from the date when the application for compensation is filed. This clause, in effect divests the Tribunal or the Court to award interest on claim for compensation for the pre-litigation period.
7. Before we proceed to decide the entitlement of the claimants to receive interest in the present appeal, we would like to briefly discuss the rationale for grant of interest in a legal action. The reason for grant of interest broadly can be explained to be the right of an individual to be compensated for being deprived of enjoyment of certain legitimate right from the day such enjoyment ceases by certain acts, against which complain is made. It was observed by the Hon''ble Supreme Court in the case of
It would thus be noticed that the claim for interest proceeds on the assumption that when the owner of immovable property loses possession of it, he is entitled to claim interest in place of right to retain possession.
8. In respect of claim arising out of a motor accident, in our opinion, whenever a claimant is successful in establishing his claim for compensation, his right to receive compensation is established on the day when the injury or the death of the victim occurs. Our law in this regard is primarily based on the principles of Tort, and the victim or his family (when the victim is no more) is awarded compensation for loss sustained because of an accident. The loss is primarily in the nature of monetary loss and such monetary loss obviously occurs immediately on the happening of the accident because from that day only the victim loses his ability to earn any amount for living for himself or his family. The principle thus, as enunciated by the Hon''ble Supreme Court to which we have referred to above, becomes in our opinion applicable in a motor accident claims case also. However, as per the provision of Section 171 of the Act, the interest becomes payable from the date when the application for compensation is filed.
9. In these circumstances the expression "may" as used in Section 171 of the Act, under which power or jurisdiction is conferred on the Tribunal becomes coupled with a duty to grant of interest and this leaves the Court or the Tribunal with little discretion but to award interest. In such circumstances, in our opinion, we are of the view that the word, "may" as used in the above referred provision of the Act is ought to the construed as "shall." No situation we can conceive of, where once right to receive compensation is established, a victim or his family members can be deprived of the right to receive interest. There is large body of authorities in which in appropriate cases, the Courts have constructed the expression "may" as shall. In this regard the following passage from Principles of Statutory Interpretation by Justice G. P. Singh (Eighth Edition 2001) may be referred to:
The word ''may'' may also be used in the sense of ''shall'' or ''must'' by the Legislature while conferring power on a high dignitary. When the context shows that the power is coupled with an obligation, "the word ''may'' which denotes discretion should be construed to mean a command. The use of the word ''may'' in such cases is" out of deference to the high status of the authority on whom the power and the obligation are intended to be conferred and imposed.
10. As per the provisions of Section 171, in our opinion, so far as the issue of award of interest is concerned, it shall be deemed to be a mandatory legislative mandate. In view of the legislative mandate as regards the date from which the interest could be awarded, such interest shall be payable only from the date on which the application for claim is made. However, discretion has been vested with the Tribunal to pay simple interest as may be specified in that behalf.
11. This is an area i.e. quantum of interest which is to be awarded, the Tribunal is required to exercise its discretion having regard to the prevailing rate of interest in the market, because this interest has been mandated by the Legislature because of delay in conclusion of the proceeding before the claims Tribunal, and the right to receive the compensation accrues on the very day of occurrence of injury or death by a motor accident. Thus the Tribunal is required to calculate the earning capacity of money which is eventually awarded as compensation at the time the accident occurs and the award of interest is meant to compensate the claimant for the delay in receiving the compensation amount. Under these circumstances, in our opinion, the Tribunal ought to have awarded interest in the present case and it erred in law in not doing so. Accordingly, we direct the appearing respondents insurance companies to award interest at the rate of seven percent per annum from the date of making of the claim up to till the date of payment of the awarded amount, having regard to the prevailing rate of interest in the market. This amount is to be shared equally by the two insurance companies. As regards, the claim for loss of estate and funeral expenses, we further direct the insurance company to pay Rs. 4,500/-(rupees four thousand five hundred) under these two heads, which was not awarded in the present case. This amount must be paid peremptorily in equal share by the two insurance companies within a period of three weeks from the date of communication of the award, by drawing cheques in favour of the claimants jointly before the Tribunal. The Tribunal shall hand over the cheques to the claimants or anyone of them on proper identification and against appropriate receipt.
The appeal and the application are thus disposed of.
There shall be no order as to cost.
