MANOJ RAMBHAI GADHVI Vs. VAGHASIA BALUBAHI KHODABHAI

JUDGEMENT

(1.) These are appeals filed under section 173 of the Motor Vehicles Act, 1988 by the Insurance Company together with owner and driver as appellants.

(2.) At the outset we may make it clear that the award so far as the quantum of compensation is concerned, is not in challenge. The only question raised in this group of appeals is as regards the rate of interest awarded by the Tribunal at the rate of 15% per annum from the date of the claim petition till payment. We may further clarify that the period during which the interest is to accrue viz. from the date of the claim petition till realisation is also not in dispute. In short, the only contention raised by the appellants is that the rate of 15% per annum is excessive and the same requires to be reduced.

(3.) Learned counsel for the appellant particularly contends that due to various factors affecting the economy of the country, the interest rates which were at their peak in or about the year 1994 had thereafter stabilised for some time, but had started to show a dropping trend in or about the year 1997. Accordingly he submits that the discretion vested in Tribunals and Courts to award interest must be exercised in the light of the current trend in the economy of the country, and cannot be pegged at 15% as has been the practice so far. As against this, learned counsel for the respondents in these appeals seek to rely upon a number of decisions of this court where an interest rate at 15% has been approved or where the interest rate has been enhanced from a lower rate to 15%. The respondents, therefore, submit that the rate of 15% awarded by the Tribunal is perfectly justified and no reduction should be permitted. In this context respondents sought to rely upon a decision of a Division Bench of this court in Mohanbhai Gemabhai Vs. Balubhai Savjibhai and others, reported at 1993(1) GLR page 249. In this case the Division Bench of this Court increased the rate of interest on the award from 12% to 15%, "in view of the changed circumstances". In paragraph 24 of the said decision the Division Bench has considered the question of interest on the claim allowed in the light of section 171 of the Motor Vehicles Act, 1988. While observing that "this is a question within the discretion of the Tribunal, such discretion has to be exercised judicially". On the facts of that case the Division Bench was faced with an award which had granted interest only at the rate of 6%, and after noting the various decisions where such interest rate was gradually raised from 4% to 6% and from 6% to 12% periodically, this decision ultimately holds that the rate of 15% per annum would be just and reasonable "in view of the changed circumstances".