Gaya Prasad Patel vs Union Of India
2024 Latest Caselaw 15913 MP

Madhya Pradesh High Court

Gaya Prasad Patel vs Union Of India on 29 May, 2024

Author: Achal Kumar Paliwal

Bench: Achal Kumar Paliwal

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                           IN    THE      HIGH COURT OF MADHYA PRADESH
                                               AT JABALPUR
                                                   BEFORE
                                  HON'BLE SHRI JUSTICE ACHAL KUMAR PALIWAL
                                               ON THE 29 th OF MAY, 2024
                                             MISC. APPEAL No. 1975 of 2022

                          BETWEEN:-
                          1.    GAYA PRASAD PATEL S/O KODU LAL PATEL
                                VILLAGE MATWARA P.S. AMDRA DIST. SATNA
                                MP (MADHYA PRADESH)

                          2.    SMT. AHILYA BAI W/O SHRI GAYA PRASAD R/O
                                VILLAGE MATWARA P.S. AMDRA DISTRICT
                                SATNA M.P. (MADHYA PRADESH)

                          3.    SMT. MAMTA PATEL W/O LATE SHRI PRADEEP
                                KUMAR PATEL R/O VILLAGE MATWARA P.S.
                                AMDRA DISTRICT SATNA M.P. (MADHYA
                                PRADESH)

                          4.    KU. RAGINI D/O LATE SHRI PRADEEP KUMAR
                                PATEL OCCUPATION: MINOR THROUGH SMT.
                                MAMTA PATEL BEING MOTHER AND NATURAL
                                GUARDIAN R/O VILLAGE MATWARA P.S. AMDRA
                                DISTRICT SATNA M.P. (MADHYA PRADESH)

                          5.    ANURGA PATEL S/O LATE SHRI PRADEEP KUMAR
                                PATEL OCCUPATION: MINOR THROUGH SMT.
                                MAMTA PATEL BEING MOTHER AND NATURAL
                                GUARDIAN R/O VILLAGE MATWARA P.S. AMDRA
                                DISTRICT SATNA M.P. (MADHYA PRADESH)

                                                                                  .....APPELLANTS
                          (BY MS.APRARNA SINGH - ADVOCATE)

                          AND
                          UNION OF INDIA THROUGH GENERAL MANAGER
                          WEST CENTRAL RAILWAY JABALPUR MP (MADHYA
                          PRADESH)

                                                                                 .....RESPONDENTS
                          (BY SHRI VIKRAM SINGH - ADVOCATE )

                                This appeal coming on for admission this day, th e court passed the
Signature Not Verified
Signed by: SARSWATI
MEHRA
Signing time: 5/30/2024
11:27:55 AM
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                          following:
                                                               ORDER

With the consent of learned counsel for the parties, heard finally at motion stage.

This miscellaneous appeal has been filed by appellants under Section 23 of Railway Claims Tribunal Act, 1987 against judgment dated 02.02.2022 passed by the Railway Claims Tribunal, Bhopal Bench in case No.O.A./IIU/BPL/23/2020 seeking enhancement of rate of interest from 6% to 9%.

2. Learned counsel for the appellants after relying on MA No.3202 of

2021(Shri Sujan Singh Yadav and Others Vs. Union of India thr. General Manager West Central Railway) decided on 23.09.2023 submits that tribunal has awarded interest at the rate of 6%, which is not proper. In view of Shri Sujan Singh Yadav (supra) rate of interest should be enhanced from 6% to at least 7%, if not 9%.

3. Learned counsel for the respondent after relying on Union of India thr. General Manager West Central Railway Vs. Smt.Vijay Laxmi and Another (Review Petition No.749 of 2022) dated 05.09.2022 submits that judgment passed by Coordinate Bench cannot be treated to be precedent and cannot be made a ground to enhance rate of interest from 6% to 9%.

4. I have heard learned counsel for the parties and perused the record of the case.

5. Present appeal has been filed solely on the ground that rate of interest awarded by the Tribunal is not proper and it should be enhanced to 9%.

6. Principles regarding award of rate of interest have been laid down by Hon'ble Apex Court in the case of Dharampal and Others Vs. U.P. State

Road Transport Corporation ( 2008) 12 SCC 208 as under:-

" 8 . As per Section 171 of the Motor Vehicles Act, 1988 (hereinafter referred as "the Act") where the claim for compensation made under the Act is allowed by the Claims Tribunal, the Tribunal may direct that in addition to the amount of compensation simple interest shall also be paid at such rate from such date not earlier than the date of making the claim.

9. In National Insurance Co. Ltd. v. Keshav Bahadur [(2004) 2 SCC 370], this Court has held that the provisions require payment of interest in addition to compensation already determined. Even though the expression "may" is used, a duty is laid on the Tribunal to consider the question of interest separately with due regard to the facts and circumstances of the case. It was clearly held in the said decision that the provision of payment of interest is discretionary and is not and cannot be bound by rules.

10. Interest is compensation for forbearance or detention of money, which ought to have been paid to the claimant. No rate of interest is fixed under Section 171 of the Act and the duty has been bestowed upon the court to determine such rate of interest. In order to determine such rate we may refer to the observations made by this Court over the years. In the year 2001 in Kaushnuma Begum v. New India Assurance Co. Ltd. [(2001) 2 SCC 9], on the question of the rate of interest to be awarded, it was held that earlier, 12% was found to be the reasonable rate of simple interest but with a change in economy and the policy of Reserve Bank of India the interest rate has been lowered and the nationalised banks are now granting interest @ 9% on fixed deposits for one year. Accordingly, interest @ 9% was awarded in the said case. We may at this stage also refer to the following observations of Their Lordships in the aforesaid decision which are relevant to the present case : (SCC p. 16, para 24). "24. Now, we have to fix up the rate of interest. Section 171 of the MV Act empowers the Tribunal to direct that 'in addition to the amount of compensation simple

interest shall also be paid at such rate and from such date not earlier than the date of making the claim as may be specified in this behalf'. Earlier, 12% was found to be the reasonable rate of simple interest. With a change in economy and the policy of Reserve Bank of India the interest rate has been lowered. The nationalised banks are now granting interest at the rate of 9% on fixed deposits for one year. We, therefore, direct that the compensation amount fixed hereinbefore shall bear interest at the rate of 9% per annum from the date of the claim made by the appellants."

11. In the year 2002, in United India Insurance Co. Ltd. v. Patricia Jean Mahajan [(2002) 6 SCC 281], this Court held that the interest is payable on the equitable grounds to the aggrieved person who is deprived of using the money which is due and payable to him. Following the observations made in Kaushnuma Begum [(2001) 2 SCC 9], interest @ 9% was awarded in this case also. It was held as follows : (Mahajan case [(2002) 6 SCC 281) "39. ... In our view the reason indicated in Kaushnuma Begum (2001) 2 SCC 9 : 2001 SCC (Cri) 268] is a valid reason and it may be noticed that the rate of interest is already on the decline. We therefore, reduce the rate of interest to 9% in place of 12% as awarded by the High Court."

12. In the year 2003, in Arati Bezbaruah Vs. Geological Survey of India [(2003) 3 SCC 148], it was held that the question as to what should be the rate of interest, in the opinion of this Court, would depend upon the facts and circumstances of each case. Award of interest would normally depend upon the bank rate prevailing at the relevant time. After referring to the aforementioned decisions, interest @ 9% was awarded in the said case.

13. However, in the year 2005 in T.N. State Transport Corpn. Ltd. Vs. Rajapriya [(2005) 6 SCC 236 : 2005 SCC (Cri) 1436], this Court again taking note of the then prevailing rate of interest on bank deposits directed for

lowering the rate of interest fixed by the Tribunal at 9% per

annum and altered the same to 7.5% per annum."

7. Hence, principles concerning/regarding award of rate of interest may be summarized as under :-

(i)-Rate of interest would depend upon the facts & circumstances of each case;

(ii)-Interest is payable on the equitable grounds;

(iii)-Provision of payment of interest is discretionary and is not and cannot be bound by rules;

(iv)-But above discretion is required to be used with due regard to the facts and circumstances of the case;

(v)- Award of interest would normally depend upon the bank rate prevailing at the relevant time,i.e. prevailing rate of interest on bank deposits ;

(vi)-As a general rule the rate of interest would be the simple rate of interest being granted by nationalized banks on fixed deposits for one year at relevant point of time.

(vii)-Above principles are applicable to compensation awarded under both Motor Vehicles Act & Railway Claims Tribunal Act.

8. Bearing in mind above principles of law, this court has examined the record of the case & has assessed evidence on record. Perusal of evidence led by appellant before Tribunal/record of the case reveals that appellant has not adduced any evidence with respect to prevailing rate of interest at relevant point of time etc. Learned counsel for appellant has failed to point out any material, whatsoever on record, to show that discretion used by the Tribunal in fixing rate of interest is arbitrary or without any reasonable basis. Hence, in the facts & circumstances of the case, it can not be said that learned Tribunal has exercised discretion arbitrarily Therefore, no interference is required in the rate of interest as awarded by the Tribunal.

9. Hence, appeal filed by the appellant is dismissed.

(ACHAL KUMAR PALIWAL) JUDGE sm