NATIONAL INSURANCE CO LTD Vs. M K MOIDU

JUDGEMENT

(1.) The short question that arises for consideration is whether the direction made by the Tribunal to pay interest at the rate of 12% per annum from the date of petition till the date of realisation, on the appellants' failure to deposit the compensation with interest at 9% within three months from the date of the award is penal in nature and if so whether it is illegal and unsustainable. The learned Tribunal directed that the appellant should deposit the amount determined as compensation with interest at 9% per annum from the date of petition till the date of realisation. The learned Tribunal further directed that if the amount is not deposited within a period of three months from the date of the award, the amount of compensation awarded will carry interest at the rate of 12% per annum from the date of the petition till the date of realisation. The learned counsel for the respondent would submit that there is nothing illegal in the direction so issued by the learned Tribunal, for, the object and purpose of the default clause as aforesaid is to put pressure on the insurance company not to delay but to make them prompt to deposit the amount within the time directed by the Tribunal. It is further contended that the learned Tribunal has only exercised the discretion judicially and judiciously to ensure that the claimants are not compelled to wait indefinitely for getting the award amount.

(2.) Since the appellant insurance company raised an interesting question that the direction to pay interest at an enhanced rate after prescribing a specific period of time for deposit is not justified and that it is without jurisdiction, we requested the learned counsel for the claimant and appellant to research and make detailed submissions. We requested Adv. Mr. K.M. Firoz and Adv. Mr. V.P.K. Panicker also to help us as amicus curiae. We have heard in detail the learned counsel for the appellant, the counsel appearing for the claimant and also Adv. Mr. V.P.K. Panicker and Adv. Mr. K.M. Firoz.

(3.) The learned counsel Mr. K.M. Firoz has cited the decisions in Rajendra Kumari v. Shanta Trivedi, 1989 AIR(SC) 1074 State of Karnataka v. Gopal Ramachandra Madaqouda, 2010 2 SCC 327, Dharampal v. U.P. State Road Transport Corporation, 2008 2 KerLT 691 , Thazhathe Purayil Sarabi v. Union of India, 2009 AIR(SC) 3098 and Kauhnuma Begaum v. New India Assurance Co. Ltd., 2001 2 SCC 9.