Sobat Singh vs Ramesh Chandra Gupta & Anr.
2010 Latest Caselaw 438 Del

*IN THE HIGH COURT OF DELHI AT NEW DELHI

                      +   MAC.APP.No.422/2009

                                Date of Decision: 27th January, 2010
%
SOBAT SINGH                                     ..... Appellant
                           Through : Mr. Kishan Nautiyal, Adv.

                      versus

RAMESH CHANDRA GUPTA & ANR.           ..... Respondents
                 Through : Mr. Kanwal Choudhary, Adv.
                           for R-2.
                           Dr. Arun Mohan, Sr. Adv. as
                           amicus curiae.

CORAM :-
THE HON'BLE MR. JUSTICE J.R. MIDHA

1.      Whether Reporters of Local papers may                  YES
        be allowed to see the Judgment?

2.      To be referred to the Reporter or not?                 YES

3.      Whether the judgment should be                         YES
        reported in the Digest?

                          JUDGMENT (Oral)

1. The learned counsel for the appellant submits that the

cheque towards the award amount has been released to the

appellant by the Claims Tribunal but the cheque has become

stale and, therefore, needs to be revalidated. The learned

counsel for the appellant submits that no notice of deposit of

the award amount was received by the appellant from

respondent No.2 or from the Claims Tribunal.

2. The learned counsel for the appellant submits that the

Nazirs of the Claims Tribunals do not properly maintain the

record of the receipt of the award amount. It is further

pointed out that neither the Insurance Companies give any

notice of deposit to the claimants nor the Claims Tribunals

give notice of deposit to the claimants and the claimants

keep on making oral enquiries from the Nazir who most of

the times does not give correct information to the claimants.

It is submitted by the counsel that there are number of other

aberrations involved in the process which the Court would

not like to detail.

3. The learned counsel for the appellant submits that

apart from the harassment suffered, the appellant could not

utilize the award amount and has lost interest for six months.

4. Respondent No.2 is directed to file affidavit within two

weeks as to the date of deposit of the award amount, date of

notice under Order XXI Rule 1(2) of the Code of Civil

Procedure and the amount of interest due under Order XXI

Rule 1(4) of the Code of Civil Procedure. The responsible

Officer of respondent No.2 shall also remain present in Court

on the next date of hearing along with the original file

containing the aforesaid particulars.

5. This was, in so far as the present case is concerned.

The matter being of wider ramifications, it is necessary to

take note of the submissions and examine the same with a

view to prevent injustice.

6. The learned counsel points out that the Claims

Tribunals are not following the principles laid down in

Order XXI Rule 1 of the Code of Civil Procedure. It is further

pointed out that when the cheques are released to the

claimants, Claims Tribunals do not ensure the compliance of

Order XXI Rule 1(2) of the Code of Civil Procedure and do not

award interest to the claimants in terms of Order XXI

Rule 1(4) of the Code of Civil Procedure.

7. If the submissions made by the learned counsel for the

appellant are correct, there is serious violation of the

principles laid down in Order XXI Rule 1 of the Code of Civil

Procedure by the Insurance companies as well as the Claims

Tribunals. The net result is that apart from unreasonable

delay in releasing of the award amount to the claimants, the

claimants suffer undue harassment and also loss of interest

on the award amount. On the other hand, the Insurance

companies are unjustly enriched because the award amount

remains in their account till the cheques are cleared and they

utilize the award amount without paying the interest under

Order XXI Rule 1(4) of the Code of Civil Procedure.

8. Order XXI Rule 1(a) and (2) of the Code of Civil

Procedure provides that the judgment debtor (Insurance

company) shall give notice of deposit of the award amount to

the decree-holder (claimant) either through Court or directly

to the decree-holder (claimant). Order XXI Rule 1(4) of the

Code of Civil Procedure provides that the interest shall cease

to run from the date of service of the notice referred to in

Sub-Rule (2). Order XXI Rule 1 of the Code of Civil Procedure

is reproduced hereunder:-

"Order XXI Rule 1. Modes of paying money under decree. - (1) All money, payable under a decree shall be paid as follows, namely:-

(a) by deposit into the Court whose duty it is to execute the decree, or sent to that Court by postal money order or through a bank; or

(b) out of Court, to the decree-holder by postal money order or through a bank or by any other mode wherein payment is evidenced in writing; or

(c) otherwise, as the Court which made the decree, directs.

(2). Where any payment is made under clause (a) or clause (c) of sub-rule (1), the judgment-debtor shall give notice thereof to the decree-holder either through the Court or directly to him by registered post, acknowledgement due.

(3) Where money is paid by postal money order or through a bank under clause (a) or clause (b) of sub-rule (1), the money order or payment through bank, as the case may be, shall accurately state the following particulars, namely:-

(a) the number of the original suit;

(b) the names of the parties or where there are more than two plaintiffs or more than two defendants, as the case may be, the names of the first two plaintiffs and the first two defendants;

(c) how the money remitted is to be adjusted, that is to say, whether it is towards the principle, interest or costs;

(d) the number of the execution case of the Court, where such case is pending; and

(e) the name and address of the prayer.

(4) On any amount paid under clause (a) or

(c) of sub-rule (1), interest, if any, shall cease to run from the date of service of the notice referred to in sub-rule (2).

(5) On any amount paid under clause (b) of sub-rule (1), interest, if any shall cease to run

from the date of such payment;

Provided that, where the decree-holder refuses to accept the postal money order or payment through a bank, interest shall cease to run from the date on which the money was tendered to him, or where he avoids acceptance of the postal money order or payment through bank, interest shall cease to run from the date on which the money would have been tendered to him in the ordinary course of business of the postal authorities or the bank, as the case may be.]"

9. It is well settled that interest will not cease to run

merely by reason of making the deposit into Court unless it is

followed by the service of notice as required by Sub-Rule (2),

and that is only when the factum of deposit is brought to the

knowledge of the decree-holder by service of such notice

that the deposit will amount to payment within the meaning

of Order XXI Rule 1. The provision for notice rather indicates

that the decree-holder‟s right should be affected only after

he is informed that the decretal amount is available for him

and that he can draw it out of Court.

10. The Claims Tribunal possess inherent jurisdiction to

enforce its own award in accordance with the provisions of

the Motor Vehicles Act and also according to the provisions

of the Code of Civil Procedure as applicable to execution of

orders and decree passed by a Civil Court. Reference in this

regard may be made to the Full Bench judgment of the

Madhya Pradesh High Court in the case of Sarmaniya Bai

vs. Madhya Pradesh Rajya Parivahan Nigam, AIR 1990

MP 306 (FB) where the Full Bench held as under:-

"We are of the view that the Claims Tribunal possesses inherent jurisdiction to enforce its own award in accordance also with the provisions of CPC as applicable to execution or orders and decree passed by a Civil Court."

11. The Hon‟ble Supreme Court, in the case of Rajasthan

State Road Transport Corporation, Jaipur Vs. Smt.

Poonam Pahwa, 1997 ACJ 1049, held that Order XXI

Rule 1 of the Code of Civil Procedure is applicable to motor

accident claim cases. In that case, the appellant -

Corporation, deposited the award amount before the Tribunal

on 27th June, 1986. However, no intimation was given to the

claimants either by the Court or by the judgment debtor

about the deposit and the claimant - decree holder came to

know of the deposit only on 19th April, 1989. The decree-

holder made a claim for interest from 27th June, 1986 to 19th

April, 1989 which was opposed on the ground that there was

no obligation of the appellant-Corporation to give intimation

about the deposit to the decree-holder and the provisions of

Order XXI Rule 1(2) of the Code of Civil Procedure were not

applicable in respect of the award passed by the Motor

Accident Claims Tribunal and, in any event, it is failure of the

Court to give such intimation and the judgment debtor would

not suffer on account of mistake committed by the Court.

The Claims Tribunal rejected the above contentions and

directed deposit of interest amount by the judgment debtor

against which the appellant-Corporation filed a revision

petition before the Punjab and Haryana High Court which was

dismissed. The Hon‟ble Supreme Court dismissed the appeal

holding that Order XXI Rule 1 of the Code of Civil Procedure

was applicable to the motor accident cases. The findings of

the Hon‟ble Supreme Court are as under:-

"28. Order XXI Rule 1 Civil Procedure Code as amended in 1976 expressly provides that the judgment debtor shall give notice of the deposit of the decretal amount to the decree holder either through the Court or directly to the decree holder. The obligation of giving the notice to the decree holder is not absolved by simply depositing the amount without taking steps to ensure service of the notice of such deposit to the decree holder through Court or otherwise. Therefore, the appellant cannot escape its liability to pay interest to the decree holder for the period between the date of deposit of the decretal amount and the date of notice of such deposit of the decree holder."

"32. It appears to us that the provisions of Order XXI Rule 1 are not in any way inconsistent with the provisions for awarding just and fair compensation in Motor Accident Claims. The real purpose of awarding just and fair compensation to the victim of the accident or the legal heirs of such victim will be fulfilled by applying the principle of Order XXI Rule 1 Civil Procedure Code so that the awardee is not deprived of the opportunity of gainfully utilising the amount under the award for want of notice about the deposit made by judgment debtor resulting in the sum remaining unutilised. In our view, therefore, there is no difficulty to apply the underlying principles under Order XXI, Rule 1 Civil Procedure Code in executing the award of compensation passed by the Motor Accidents Claims Tribunal and the Tribunal must be held to be competent to invoke the beneficial provisions of Order XXI Rule 1 Civil Procedure Code."

12. It is also pointed out that the Claim Tribunals are not

following the directions passed by this Court in the case of

New India Assurance Co. Ltd. Vs. Kashmiri Lal and

Ors., 2007 ACJ 688. This Court gave the following

directions to all Motor Accident Claims Tribunals in the

aforesaid case:-

"7. In view of the above pleas, the following directions are issued which are required to be followed by all Motor Accidents Claims Tribunals.

(a) While filing the written statement, the concerned insurance company is required to furnish details of its Bank account and the Bank to the Court. In case a written statement has already been filed in an existing claim, all insurance companies are required to furnish the name of the concerned Bank and their account numbers within 3 months from today.

(b) Within a period of 30 days of the award, which is the period prescribed for depositing the amount under Section 168(3) of the Act to the High Court, the insurance company is required to tender the payment awarded by the MACT by issuing cheques in the name of the claimant(s) unless and until a stay order has been obtained from the High Court. The names of the claimants who are to be paid the amounts along with the amount payable is required to be stated in the award.

(c) If after the expiry of 90 days which is the prescribed period for preferring an appeal under Section 173(1) of the Act, payment of the amount awarded by the MACT has not been made, notice must be issued to the Bank named by the Insurance Company directing such Bank to deposit the cheque drawn in the name of the claimant/claimants legally entitled as per the award covering the amount(s) as per the MACT award within a week of receipt of such orders and cheques should be retained for being given to the claimant.

(d) Once the amount is deposited by cheque as per the aforesaid procedure the MACT is required to ensure that within a period of six

weeks thereafter the amount is disbursed to the claimants under the supervision of the Presiding Officer by issuing the said cheque to the claimant so that the claimants are not put to undue harassment.

(e) In case for some reason it is not possible to make the payment to the claimant within six months of the issue of the cheques in the name of the claimant, then the MACT should ensure that such cheques are returned to the Insurance Companies in lieu of fresh cheques drawn in favor of the appropriate account of the MACT which are required to be deposited in an interest bearing short term fixed deposit for a six monthly period by the MACT.

(f) In case the MACT has to resort to the procedure prescribed under sub para (c) above which requires it to secure the amount through the banks upon a failure of the insurance company to deposit the amount within the time stipulated by Section 168(3) and the above procedure, cost of Rs. 5000/- payable to the claimant is required to be imposed on the Insurance Companies.

(g) If directions given by the MACT to the Banks are not complied with, the MACT may order freezing of Bank Accounts to the extent covered by the award."

13. All the Claim Tribunals are directed to send a report of

compliance of Order XXI Rule 1(2) and (4) of the Code of Civil

Procedure within a period of two weeks. The report be filed

initially in respect of last one year. The report should contain

the following particulars in tabular form:-

      (i)     Case title and number.

      (ii)    Date of award.

      (iii)   Award amount.

      (iv)    Date of deposit of cheque of the award amount.

      (v)     Date of notice by the Insurance company to the

              claimant.

(vi) Date of notice by the Claims Tribunal to the

claimant.

(vii) Date of release of the cheque towards the award

amount to the claimant.

(viii) Period for which the claimant is entitled to interest

under Order XXI Rule 1(4), CPC.

(ix) Amount of interest to which the claimant is

entitled under Order XXI Rule 1(4), CPC.

(x) Amount of the interest actually awarded to the

claimant under Order XXI Rule 1(4), CPC.

14. The Report should also indicate as to how many

cheques are presently deposited with the Claims Tribunals

for being released to the claimants, how many cheques have

expired and whether any cheques have been lost.

15. A separate report should indicate the format in which

the Nazirs are maintaining the record; to consider whether it

enables convenient access to the relevant information.

Further, if there be room for improvement, the Claims

Tribunals may indicate a possible revised format.

16. The Claims Tribunals are also directed to submit a

report whether the Insurance companies have furnished the

details of the bank account and the bank in all pending cases

in terms of the judgment dated 9th December, 2005 of this

Court in the case of New India Assurance Co. Ltd. (supra).

The number of cases in which such details have been

furnished and the number of cases in which such details

have not been furnished be mentioned in the report. The list

of cases in which the recovery of the award amount and the

cost of Rs.5,000/- has been effected by attachment of Bank

account during last one year in terms of the directions of this

Court be also furnished.

17. The Report of all the Claims Tribunals be submitted

before the Registrar (Vigilance) of this Court within two

weeks. The Registrar (Vigilance) shall also examine the

records maintained by the Nazirs of all the Claims Tribunals.

The Claims Tribunals shall direct their Nazirs to produce the

records maintained by them before the Registrar (Vigilance),

who shall submit a report to this Court as to whether the

records are being properly maintained. The Registrar

(Vigilance) may also suggest measures for due

implementation of the aforesaid provisions of law and the

directions of this Court.

18. All the Insurance companies are directed to file the

affidavit of compliance of Order XXI Rule 1 of the Code of

Civil Procedure as well as the directions dated 9 th July, 1997

passed by this Court. The affidavit shall initially contain the

data for the last one year. The affidavit shall contain the

following particulars in tabular form:-

      (i)      Case title and number.

      (ii)     Date of award.

      (iii)    Award amount.

(iv) Date of deposit of the award amount.

(v) Date of notice of deposit under Order XXI

Rule 1(2) of the Code of Civil Procedure.

(vi) Date of clearance of the cheque of the award

amount by the Bank.

(vii) Amount of interest payable under Order XXI

Rule 1(4) of the Code of Civil Procedure (If no

notice was given, the interest be calculated from

the date of cheque up to the date of clearance of

the cheque).

(viii) Amount of interest actually paid.

19. The affidavit shall also state whether the bank account

number and the name of the Bank has been furnished in all

pending cases to the Claims Tribunals in terms of directions

of this Court. The affidavit be filed by all the Insurance

companies within two weeks. The responsible officer of all

the Insurance companies shall remain present in the Court

on the next date of hearing along with all the relevant

records.

20. Dr. Arun Mohan, Senior Advocate and Mr. O.P. Mannie,

Advocate are appointed as amicus curiae to assist this Court

in this matter.

21. List for hearing on 23rd February, 2010.

22. Copy of this order be sent to all the Claims Tribunals

through Registrar (Vigilance) to this Court.

23. Copy of this order be given „Dasti‟ to learned counsel

for the parties as well as the nominated counsels for all the

Insurance companies under signature of the Court Master, for

compliance. Copy of this order be also given „Dasti‟ to the

learned Amicus Curiae under the signature of the Court

Master. The amicus curiae shall send a copy of this order to

all the Insurance companies by e-mail.

J.R. MIDHA, J.

JANUARY 27, 2010 s.pal/aj