NEW INDIA ASSURANCE CO LTD Vs. SAVITRI DEVI

JUDGEMENT

(1.) We have heard the learned counsel appearing for the parties on both these appeals. In LPA No.32/1995, challenge is to the legality of the order dated 30th March, 1995 passed by the learned Single Judge, to the extent of awarding interest on interest i.e. compound interest. LPA No.34/1995 is filed by the claimants praying for enhancement of the compensation.

(2.) In the original claim, compensation of Rs.1 lakh was claimed by the appellants in LPA No.34/1995 for the death of the deceased Ram Kishan who, as per the findings of the learned Tribunal, was aged about 47 years. The deceased at the time of his death was a teacher and was drawing a salary of Rs.386.90 per month. The learned MACT awarded Rs.46,800/- as compensation after deducting Rs.86.90 from salary towards personal expenses. Being aggrieved, the claimants filed an appeal before the learned Single judge which was registered as FAO No.153/1986. The said appeal was disposed of on 30th March, 1995 holding that compensation was properly assessed at Rs.46,800/- but the claimants would be entitled to interest at 12% p.a. from the date of the petition till realisation. The learned Tribunal had not granted any interest. It was also held that the claimants would also be entitled to further compound interest at 12% p.a. on the interest so awarded.

(3.) So far as the appeal filed by the Insurance Company is concerned it is now settled law that there could be no award directing for payment of compound interest or interest on interest. Section 110CC of the Motor Vehicles Act, 1939 and Section 171 of the Motor Vehicles Act, 1988 provides for payment of only simple interest. In this view of the matter there cannot be an order for payment of compound interest which is found to be unjustified.