Case Note & Summary
The appellant, Jatin Becharbhai Patel, was the original claimant in a motor accident claim petition (M.A.C.P. No.331 of 1991) before the Motor Accident Claims Tribunal (Aux.) & Fast Track Court No.1, Vadodara. The claim arose from a vehicular accident that occurred on 07.07.1990 at about 6:30 p.m., when the appellant was returning to Halol and was trying to cross the road. The respondent No.1, N S Patel, drove a car bearing registration No.GUC-9700 at excessive speed and in a rash and negligent manner, dashing into the appellant and causing grievous bodily injuries. A complaint was lodged at Waghodia Police Station vide I-C.R.No.145 of 1990. The Tribunal partly allowed the claim petition and awarded compensation of Rs.72,534/- with interest at 9% per annum, but exonerated the respondent No.2 Insurance Company from liability to pay any interest for the period before its impleadment. The appellant challenged this exoneration in the present appeal. The sole legal issue was whether the Insurance Company could be exonerated from paying interest for the period prior to its impleadment. The appellant argued that interest is compensatory and should run from the date of filing of the petition. The Insurance Company contended that it should not be liable for interest before it was made a party. The Court analyzed Section 171 of the Motor Vehicles Act, 1988, which empowers the Tribunal to award interest from the date of filing of the claim petition. The Court held that interest under Section 171 is compensatory in nature and not penal, and therefore the Insurance Company cannot be absolved from liability to pay interest for the period prior to its impleadment. The Court allowed the appeal, modifying the Tribunal's order to make the Insurance Company liable for interest from the date of filing of the claim petition, i.e., 1991, at the rate of 9% per annum.
Headnote
A) Motor Accident Claims - Interest Liability - Section 171 of Motor Vehicles Act, 1988 - Insurance Company's Liability for Pre-Impleadment Period - The issue was whether the Insurance Company could be exonerated from paying interest for the period before it was impleaded as a party. The Court held that interest under Section 171 is compensatory in nature and not penal, and therefore the Insurance Company cannot be absolved from liability to pay interest for the period prior to its impleadment. The claimant is entitled to interest from the date of filing of the claim petition. (Paras 1-12) B) Motor Accident Claims - Compensation - Interest Rate - Section 171 of Motor Vehicles Act, 1988 - The Court upheld the rate of interest at 9% per annum as awarded by the Tribunal, but modified the order to make the Insurance Company liable for interest from the date of filing of the claim petition, i.e., 1991, instead of from the date of its impleadment. (Paras 1-12)
Issue of Consideration
Whether the Insurance Company can be exonerated from liability to pay interest for the period prior to its impleadment in the claim petition?
Final Decision
Appeal allowed. The impugned judgment and award is modified to the extent that the respondent No.2 Insurance Company is held liable to pay interest on the awarded amount from the date of filing of the claim petition, i.e., 1991, at the rate of 9% per annum.
Law Points
- Interest liability under Section 171 of Motor Vehicles Act
- 1988 is compensatory and not penal
- Insurance company cannot be exonerated from interest for period prior to its impleadment
- Claimant is entitled to interest from date of filing of claim petition
