R. Rajendra Babu, J.@mdashAn important question of law that has come up for consideration is whether Order XXI, Rule 1 CPC is applicable in execution of awards passed by the Motor Accidents Claims Tribunals. The petitioners filed this O.P. for quashing Ext. P4 order passed by the Motor Accidents Claims Tribunal, Irinjalakuda, fixing the balance amount due to the petitioners as Rs. 18,026 as on 31st May 1999 and interest on Rs. 4,16,000 from 1st June 1999 till deposit. But according to the petitioners the balance amount due would come to Rs. 92,809 as the method adopted by the Tribunal in the appropriation of the deposits made by the Insurance Company was wrong.
2. Heard the learned Counsel for the petitioner and the Insurance Company.
3. The Motor Accidents Claims Tribunal, Irinjalakuda, awarded a total compensation of Rs. 7,66,000 in OP (MV) 2788/93. Out of the above compensation amount, Rs. 66,000 was to be paid to the 4th petitioner whereas the rest of the amount Rs. 7,00,000 was to be paid to petitioners 1 to 3 in OP (MV) 2788/93. Interest at 12% from the date of petition viz. 25th March 1991 also was awarded. In the present O.P. we are concerned with the amount awarded in favour of the petitioners 1 to 3 ie., Rs. 7,00,000 with interest at 12% thereon from the date of petition. Admittedly an amount of Rs. 2,00,000 was deposited by the Insurance Company on 5th February 1996, Rs. 1,20,000 on 20th February 1996 and Rs. 9,85,794 on 5th May 1999, According to the petitioners the total balance due to them was Rs. 92,809. The Tribunal as per Ext. P4 order accepted the contention of the Insurance Company and found that the balance due to the petitioners was Rs. 18,026 as on 31st May 1999 and also the subsequent interest on 4,16,000 from 1st June 1999 till the date of deposit and Rs. 250 towards costs. On going through Ext. P4 it could be seen that the Tribunal had appropriated the deposits made by the Insurance Company towards the principal amount and calculation was made accordingly. According to the learned counsel for the petitioners the appropriation of amount deposited should be first towards the interest and thereafter towards the principal and Order XXI, Rule 1 CPC would be the guideline in the appropriation of the deposits made by the 1st respondent.
4. The question for consideration is whether Order XXI, Rule 1 would be applicable so far as the execution of awards passed by the Motor Accidents Claims Tribunals are concerned. The learned Counsel for the 1st respondent Insurance Company submitted that Order XXI, Rule 1 CPC has no application and the amount deposited should be appropriated first towards the principal and thereafter towards the interest. He placed reliance on the decision of the Supreme Court in
The above decision cannot have any application in the present case as it relates to the award of interest under the Land Acquisition Act where specific provisions are made even in the statute regarding the award of interest. The learned Counsel for the petitioners argued that in view of Rule 394 of the Motor Vehicles Rules (Kerala), the award of the Tribunal has to be treated as a decree in a money suit and it has to be executed adopting the procedure prescribed by the CPC for execution of a money decree. The learned Counsel for the Insurance Company submitted that the procedure to be followed in proceeding before the Tribunals have been prescribed in the Kerala Motor Accidents Claims Tribunal Rules, 1977 and though different provisions under CPC were made applicable, Order XXI CPC was not made applicable, and hence Order XXI CPC cannot be imported in the proceedings. The Kerala Motor Accidents Claims Tribunals Rules, 1977 deals with the procedure to be followed in the trial of the claims petitions before the Tribunal. Rule 21 of the above Rules specify the provisions of the CPC which are made applicable in respect of proceedings before the Claims Tribunals. Rule 21 reads:
"Code of Civil Procedure to apply in certain cases. The provisions of Rules 9 to 13 and 15 to 30 of Order V, Rules 16 to 18 of Order VI, Order IV, Rules 3 to 10 of Order XIII, Rules 1 to 21 of Order XVI, Rules 1 to 3 of Order XXIII, Order XXVI and Order XXXIII of the First Schedule to the Code of Civil Procedure, 1908, shall, so far as may be, apply to the proceedings before the Claims Tribunal."
Rules 395 of the M.V. Rules (Kerala Rules) also specify the provisions of the CPC made applicable to the trial of cases before the Tribunal. Rule395 reads:
"Code of Civil Procedure to apply in certain cases. The provisions of Rules 9 to 13 and 15 to 30 of Order V, Rules 16 to 18 of Order VII, Order IX, Rules 3 to 10 of Order XIII, Rules 1 to 21 of Order XVI, Rules 1 to 3 of Order XXIII, and Order XXVIof the First Schedule to the Code of Civil Procedure, 1908, shall, so far as may be, apply to the proceedings before the Claims Tribunal."
Rule 21 of the Kerala Motor Accidents Claims Tribunals Rules and Rule 395 of the Motor Vehicles Rules are identical and mention exactly the same provisions of the CPC. The learned Counsel for the Insurance Company submitted that Order XXI of CPC was not mentioned in either of the above rules and hence it cannot be applied in the execution of awards. In fact the above rules prescribe the procedure in respect of the trial of cases before the Tribunals and do not mention anything about the execution of awards whereas Rule 394 prescribe the procedure in respect of the execution of awards. Rule 394 of the M.V. Rules (Kerala Rules) reads:
"Enforcement of an award of the Claims Tribunal.- (1) Without prejudice to its power u/s 174 of the Act, the Claims Tribunal shall for the purpose of enforcement of its award, have all the powers of the Civil Court in the execution of a decree under the Code of Civil Procedure, 1908 as if the award were a decree for payment of money passed by such Court in a Civil Suit."
An identical question had been considered by a Division Bench of this Court (including myself) as to whether Order XXI, Rule 1 was applicable in respect of execution of awards passed by the Tribunal. Placing reliance on the decision of the Supreme Court in Rajasthan State Road Transport Corporation v. Smt. Poonam Pahwa, 1998 Company Cases 444 (Vol. 92), this Court held that the provisions of Order XXI, Rule 1 are applicable so far as execution of awards of the Tribunals are concerned. The Supreme Court in R.S.R.T.C.''s case, 1998 Company Cases 444 (Vol. 92), held:
"After the amendment of Order XXI, Rule 1 in 1976, there is no scope for any controversy as to the liability of the judgment-debtor when the decretal amount is deposited in Court but the notice of such deposit is not given to the decree-holder. It is imperative that the judgment-debtor has to give notice to the decree-holder about deposit of the decretal amount. Since the motor accident in the instant case had taken place on 7th May 1983, Order XXI, Rule 1 as amended in 1976 is clearly applicable. Even otherwise also, the provisions of Order XXI, Rule 1, being a procedural law, the amended provisions of Order XXI, Rule 1 are applicable even if the accident had taken place prior to 1976 because such amendment of procedural law is retrospective in its operation."
In view of the above decisions, the amount deposited by the Insurance Company has to be appropriated in accordance with the procedure contemplated under Order XXI, Rule 1 CPC. Order XXI, Rule 1 (1) deals with the modes of payment of decree amount. Deposit of decree amount before court is one of the modes contemplated by Sub-rule (1)(a). Sub-rule (3)(c) says that when decree amount is deposited in Court, such deposit shall disclose the number of the original suit, name of parties, the manner in which the money remitted is to be adjusted ie., whether towards principal or towards interest or costs etc. Hence, when deposit is made, it should disclose the manner in which the deposit should be appropriated. If no such statements are there disclosing the manner in which it has to be adjusted, the amount deposited has to be appropriated towards interest and costs first and then towards principal. Reliance was placed on the decision of the Supreme Court in
"The mortgagors made no payments under the decree directly to the mortgagees. But from time to time they claim to have made deposits in the Court under Order 21, Rule 1 of the Code of Civil Procedure, and in depositing some of the amounts they stated that the payments were towards the principal due. But there is no evidence on the record that the mortgagees were informed that the amounts were deposited towards the principal due, nor is there evidence that the mortgagees accepted the amounts towards the principal. For quite a long time the mortgagees did not withdraw the amount lying in Court. Unless the.mortgagees were informed that the mortgagors had deposited the amount only towards the principal and not towards the interest, and the mortgagees agreed to withdraw the money from the Court accepting the conditional deposit, the normal rule that the amounts deposited in Court should first be applied towards satisfaction of the interest and costs and thereafter towards the principal would apply".
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But the normal rule is that in the case of a debt due with interest any payment made by the debtor is in the first instance to be applied towards satisfaction of interest and thereafter to the principal. It was for the mortgagors to plead and prove an agreement. That the amounts which were deposited in Court by the mortgagors were accepted by the mortgagees subject to a condition imposed by the mortgagors."
The same approach was made by the Supreme Court in Mathunni Mathai v. Hindusthan Organic Chemicals Ltd. 1995 (1) KLT 784. There it was held:
"The right of the decree-holder to appropriate the amount deposited by the judgment-debtor, either in court or paid outside, towards interest and other expenses is founded both on fairness and necessity. The Courts and the law have not looked upon favourably where the judgment-debtor does not pay or deposit the decretal amount within the time granted as one cannot be permitted to take advantage of his own default. Therefore, normal rule that is followed is to allow the deposit or payment if it is in part to be adjusted towards the interest due etc."
In view of the above decisions, the arguments of the learned Counsel for the Insurance Company cannot be accepted as they had no case that since the Insurance Company has specified the manner in which the deposits were to be appropriated when deposits were made and the decree-holder had agreed to the same. Hence the amount deposited will have to be appropriated first towards the interest and thereafter towards the principal. The Tribunal had appropriated the deposits towards principal and thus committed an error. The calculation of interest and the amount mentioned by the petitioner in the OrderP are not at all challenged and as such the amount mentioned in the O.P. has only to be accepted as the interest accrued on the amount. Hence the order passed by the Tribunal fixing the balance amount at Rs. 18,026 is not correct and Ext. P4 is liable to be set aside and this O.P. has only to be allowed.
In the result, Ext. P4 order is set aside. The respondent Insurance Company has to deposit Rs. 92,809 as specified in the O.P. The O.P. is disposed of accordingly.
