(1.) This appeal has been filed by the claimants/appellants is restricted to the issue of legality of the interest awarded by the learned Tribunal.
(2.) The claimants/appellants also contend that the learned Tribunal erred in awarding only post award interest in the event of default, from the date of default and that too at the low rate of 6% per annum. Section 171 of the Motor Vehicles Act 1988 provides that where the Tribunal allows a claim application under the said, the Tribunal might direct that in addition to compensation, simple interest should be paid at such rate and from such date not earlier than the date of making the claim application, as the Tribunal might specify.
(3.) The Division Bench found that from 1985 till 1999 the Supreme Court generally granted 12% per annum interest. In R. K. Tandon the Supreme Court granted 12% interest referring to galloping inflation and erosion of rupee value. However, referring to the change in economy, Reserve Bank of India's policy and fixed deposit interest rates of nationalised banks, the rate of interest was reviewed in Kaushnuma Begum and the rate of interest was lowered from 12% to 9%. In Dharampal the Supreme Court held that the claimant should be paid 7.5% interest which was the bank rate on 18th May, 2005 when the award was passed by the Tribunal.