Case Note & Summary
The appellants, being the widow, minor children, and mother of the deceased Arvindkumar Bhimjiyani, filed a claim before the Railway Claims Tribunal for compensation arising from a railway accident. The Tribunal awarded compensation of Rs. 4 lacs with interest at 7% per annum from the date of its order (8.4.2009) till realization. The appellants appealed, seeking modification to award interest at 12% per annum from the date of application (26.6.2005) till realization. The High Court, relying on the precedent in Tahazhathe Purayil v. Union of India (2009 ACJ 2444), held that the issue was no longer res integra. The court noted that the Tribunal had erred in awarding interest only from the date of order instead of from the date of application. The court modified the Tribunal's order, directing that interest at 12% per annum be paid from the date of application (26.6.2005) till realization, with the amount of compensation already paid to be deducted. The appeal was allowed accordingly.
Headnote
A) Railway Law - Compensation - Interest - Section 13 of Railway Claims Tribunal Act, 1987 - The Tribunal awarded interest at 7% per annum from date of order. The High Court modified it to 12% per annum from date of application, following the principle that interest should be compensatory and not penal, and relying on precedent in Tahazhathe Purayil v. Union of India (2009 ACJ 2444). (Paras 2-4) B) Civil Procedure - Interest - Section 34 of Code of Civil Procedure, 1908 - The court held that interest on compensation should be awarded from the date of filing of the application, not from the date of the order, to compensate the claimant for the delay in payment. (Para 4)
Issue of Consideration
Whether the Railway Claims Tribunal was correct in awarding interest on compensation from the date of its order (8.4.2009) at 7% per annum, or whether interest should be awarded from the date of application (26.6.2005) at 12% per annum.
Final Decision
The appeal is allowed. The order of the Railway Claims Tribunal is modified to the extent that the appellants are entitled to interest at the rate of 12% per annum on the compensation amount of Rs. 4 lacs from the date of application i.e. 26.6.2005 till realization. The amount of compensation already paid shall be deducted.
Law Points
- Interest on compensation under Railway Claims Tribunal Act
- 1987 should be awarded from date of application
- not from date of order
- rate of interest should be 12% per annum as per Section 34 of CPC and Section 3(3)(c) of the Railway Claims Tribunal Act
- 1987.
