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2018 DIGILAW 8 (GUJ)

NEW INDIA ASSURANCE CO. LTD v. PUNAMBHAI ISHWARBHAI

2018-01-08

A.Y.KOGJE, AKIL KURESHI

body2018
JUDGMENT : MR.JUSTICE AKIL KURESHI, J. 1. This appeal is filed by the insurance company challenging judgement and award dated 24.11.2016 passed by the Motor Accident Claims Tribunal, Vadodara in M.A.C.P No. 1798 of 1998. The claimant received bodily injuries in a vehicular accident which took place on 26.08.1998. He filed claim petition seeking compensation of Rs. 22,29,700/- from the opponents. The Claims Tribunal awarded a compensation of Rs. 12,80,000/- which included a sum of Rs. 5 lacs for future medical expenses. The Tribunal directed the opponents to jointly and severally pay the said amount of Rs. 12,80,000/- with interest @ 9% per annum from the date of the petition till actual payment. The insurance company has challenged the said award on the limited ground viz. that the Claims Tribunal should not have awarded interest on the sum of Rs. 5 lacs awarded to the claimant towards future medical expenses. In this respect, reliance is placed on the decision of Supreme Court in case of R.D.Hattangadi vs. Pest Control (India) Pvt. Ltd and ors reported in (1995) 1 SCC 551 . Our attention was drawn to para 18 of the said judgement in which, this issue has been discussed and decided by the Supreme Court. 2. On the other hand, the claimant opposes the modification suggested by the insurance company. His counsel relied on two judgments of the Supreme Court viz. G Ravindranath @ R Chowdary vs. E Srinivas & Anr reported in 2013 (12) SCC 455 and in case of Jakir Hussein vs. Sabir & Ors reported in 2015 (7) SCC 252 in which, the Supreme Court has awarded interest on the entire amount of compensation including future expenses. 3. Insofar as the law is concerned, the same has been clearly laid down by the Supreme Court in case of R.D.Hattangadi (supra). General proposition is that the compensation for future expenditure would not invite interest. The Supreme Court in the said case observed as under: “18. So far the direction of the High Court regarding payment of interest at the rate of 6% over the total amount held to be payable to the appellant is concerned, it ha to be modified. The High Court should have clarified that the interest shall not be payable over the amount directed to be paid to the appellant in respect of future expenditures under different heads. The High Court should have clarified that the interest shall not be payable over the amount directed to be paid to the appellant in respect of future expenditures under different heads. It need not be pointed out that interest is to be paid over the amount which has become payable on the date of award and not which is to be paid for expenditures to be incurred in future. As such we direct that appellant shall not be entitled to interest over such amount.” 4. We have perused the judgments cited by the counsel for the claimant in case of G Ravindranath @ R Chowdary (supra) and Jakir Hussein (supra). Neither of these two judgements disturb the ratio of the judgment in case of R.D.Hattangadi (supra). The direction for payment of interest on the entire amount of compensation which included component for future expenditure has been issued without discussion or reference to the judgement in case of R.D.Hattangadi (supra).We would therefore follow the declaration of law made in the said case. 5. Application of this legal principle would, however, be suitably modified in facts of the present case which are somewhat peculiar. The record would show that the claimant was aged about 7 years at the time of accident which took place, as noted, on 26.08.1998. The right leg of the claimant was amputated above the knee which required fitting of artificial foot. The Tribunal observed that this would require periodic replacement as the claimant would grow. The approach of the Tribunal is perfectly logical and even the insurance company has not questioned awarding of the sum of Rs. 5 lacs for future expenditure. The principle for not granting interest on future expenditure flows from the concept that the interest would be awarded on the amount which becomes payable on the date of the accident and not one which becomes payable at a future date. Even applying this principle, in the present case we cannot disentitle the claimant from interest on the future expenditure for the entire period from the date of the claim petition till actual payment. This is so because though the accident took place on 22.08.1998, the award was passed many years later on 24.11.2016. Obviously the amount would be actually paid over sometime later. This is so because though the accident took place on 22.08.1998, the award was passed many years later on 24.11.2016. Obviously the amount would be actually paid over sometime later. Thus, more than 18 years passed from the date of filing of the claim petition till passing of the award and payment of compensation. In the meantime, the expenditure can be safely taken to have been incurred. We would, therefore, apply a broad formula for paying interest for the reduced period qua component of the compensation instead of for the entire period which the Claims Tribunal has awarded. We adopt the formula of the foot being changed every two years for five times by which time the claimant would have reached the age of 17 years and would no longer be in the growth category. 6. In partial modification of the impugned award therefore, it is provided that the claimant shall get interest on the sum of Rs. 5 lacs at the rate provided in the award in the following manner: (i) No interest for first two years after filing of the claim petition on the entire amount of Rs. 5 lacs. After a period of two years i.e. from 24.08.2001, a sum of Rs. 1 lac would be paid with interest from such date till actual payment. From 24.08.2003, interest would be paid on additional sum of Rs. 1 lac. From 24.08.2005 interest would be paid on additional sum of Rs. 1 lac. From 24.08.2007, interest would be paid on additional sum of Rs. 1 lac. From 24.08.2009 interest would be paid on additional sum of Rs. 1 lac. 7. First Appeal along with Civil Application is disposed of accordingly.