SRI S. SRIDHARAN vs VRL LOGISTICS LIMITED NO
- Court
- Karnataka High Court
NC: 2026:KHC:30405-DB
MFA No. 5406 of 2022
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 19 DAY OF JUNE, 2026
R
PRESENT
THE HON'BLE MR. JUSTICE JAYANT BANERJI
AND
THE HON'BLE MS. JUSTICE TARA VITASTA GANJU
MISCELLANEOUS FIRST APPEAL NO.5406 OF 2022(MV-D)
BETWEEN:
1. SRI. S.SRIDHARAN
AGED ABOUT 71 YEARS,
S/O SWAMINATHA IYER,
RESIDING AT FLAT NO.113,
ST
1 FLOOR, V.M.SERENITY,
ND
2 CROSS, BRINDAVAN LAYOUT,
NEAR GANDHI STATUE, HORAMAVU,
BANGALORE-560 043.
2. SMT.S.BHUVANESWARI
AGED ABOUT 68 YEARS,
W/O S.SRIDHARAN IYER,
ST
FLAT NO.113, 1 FLOOR,
ND
V.M.SERENITY, 2 CROSS,
BRINDAVAN LAYOUT,
NEAR GANDHI STATUE,
HORAMAVU, BANGALORE-560 043.
…APPELLANTS
Digitally signed by
SUMATHY KANNAN
Location: HIGH
COURT OF
KARNTAKA
(BY SMT. KUMARI ASHA & SRI. ASHOK MESTA., ADVOCATES)
AND:
1. VRL LOGISTICS LIMITED
NO.67/4, BYE PASS ROAD,
SIR SIVAGANAPATHY NAGAR,
VILLIANUR, PUDUCHERRY-605 110.
REPRESENTED BY ITS AUTHORIZED SIGNATORY.
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2. UNITED INDIA INSURANCE COMPANY LIMITED,
DIVISION OFFICE AT L.NO.2,
ENKAY COMPLEX, KESHWAPOR,
HUMBLI-580 023.
REPRESENTED BY DIVISIONAL MANAGER.
…RESPONDENTS
(BY SRI. H.C.VRUSHABHENDRAIAH., ADVOCATE FOR R2;
V/O/DTD:06.08.2024- NOTICE TO R1-DISPENSED WITH)
THIS MFA FILED U/S 173(1) OF MV ACT AGAINST THE
JUDGMENT AND AWARD DATED 01.04.2022 PASSED IN MVC
NO.791/2020 ON THE FILE OF THE I ADDITIONAL SMALL
CAUSES JUDGE AND MACT, BENGALURU SCCH-11, PARTLY
ALLOWING THE CLAIM PETITION FOR COMPENSATION AND
SEEKING ENHANCEMENT OF COMPENSATION.
THIS APPEAL, COMING ON FOR FINAL HEARING, THIS
DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE JAYANT BANERJI
&
HON'BLE MS. JUSTICE TARA VITASTA GANJU
ORAL JUDGMENT
(PER: HON'BLE MS. JUSTICE TARA VITASTA GANJU)
\
1. The present appeal seeks to challenge the Judgment
and Award dated 01.04.2022 in MVC No.791/2020 passed
by the I Additional Small Causes Judge & ACMM,
Bengaluru (SCCH-11) (hereinafter referred to as the
“Impugned Award”). By the Impugned Award, the learned
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Tribunal has awarded a compensation of Rs.22,17,550/-
along with interest at 6% per annum from the date of
petition till its realization. The present appeal has been
filed by the appellants/claimants seeking enhancement of
the compensation awarded.
2. The brief facts are that one Mr. Bhaskaran S was
travelling on 09.04.2019 at about 8.30 p.m. as a
passenger in a bus bearing Registration No.PY-01-CG-
6671 from Goa to Bangalore. The driver of the bus who is
stated to have driven the bus in a rash and negligent
manner, lost control over the vehicle and collided with a
tree. Due to the injury, Mr. Bhaskaran S, deceased
sustained grievous injuries including injuries to his head.
He was shifted to a Hospital at Margoa and thereafter to
Goa Medical College. While undergoing treatment, he
succumbed to his injuries.
3. The claimants, being the parents of the deceased,
filed a claim petition under Section 166 of the Motor
Vehicles Act, 1988 (hereinafter referred to as ‘the MV Act’)
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seeking compensation before the learned Tribunal. It was
contended in the claim petition that the deceased was
working as a Technical Analyst in Oracle India Private
Limited previously and thereafter started running his own
Company and was earning Rs.1,00,000/- per month. It is
further submitted that he was contributing his entire
income towards the welfare of his family.
3.1 The petition was contested by the Respondent No.2/
Insurance Company. Although notice was issued to both
the respondent No.1/owner of the offending vehicle as well
as the Insurance Company, only the Insurance Company
contested the petition.
3.2 Based on the pleadings filed by the parties, the
following issues were framed by the learned Tribunal:
“ISSUES
st
“1. Whether petitioners prove that the son of 1 and
nd
2 petitioner namely Baskaran S succumbed to the
injuries sustained in the accident that took place on
09.04.2019 at about 8.30 p.m. at near Valley View
Restaurant Nayaband, Cuncolim Salcete, NH-17,
South Goa, while he was travelling as passenger in a
bus bearing Registration No.PY-01-CG-3371 from Goa
to Bengaluru, due to the rash and negligent driving of
the above said bus by the driver?
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2. Whether the petitioners are entitled for
compensation? If so, how much and from whom?
3. What order or award?”
4. The appellant No.1/claimant being the father of the
deceased examined himself as PW-1 and marked several
documents as Exhibits P1 to P24 which included DAR
(Ex.P1), FIR (Ex.P2), Spot panchanama (Ex.P5), Inquest
panchanama (Ex.P6), Post-mortem report (Ex.P7), Medical
bill (Ex.P23) and charge-sheet (Ex.P24). In addition,
reflecting the avocation and income of the deceased,
documents such as Engineering Certificate (Ex.P12), Bank
Passbook (Ex.P15), Income Tax Returns (Ex.P16) were
produced. The respondent No.2/Insurance Company
examined one witness Smt. R. Manjula as RW-1 and
marked the Authorization letter (Ex.R1), copy of notice
(Ex.R2) and copy of the Insurance Policy (Ex.R3).
4.1 On the basis of the evidence adduced by the parties,
the learned Tribunal gave a finding that the rash and
negligent driving of the bus was proved. While assessing
the income, the learned Tribunal found the age of the
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deceased to be 31 years and took the multiplier applicable
as ‘16’. However, since a recent Income Tax Return was
not available and as documents were not produced in
support of the salary of the deceased, the learned Tribunal
did not consider the Income Tax returns produced of the
previous years namely Assessment years 2018-19, 2017-
18 and 2016-17 and took the notional income of the
deceased at Rs.15,000/- per month to arrive at the
compensation to be awarded towards ‘loss of dependency’.
To the said income, future prospects at 40% was added to
arrive at the income of the deceased. Since the deceased
was a bachelor, 50% of his income was deducted towards
his personal expenses and thus, the calculation for ‘loss of
dependency’ was:
Loss of Dependency Amount
(15000 + 40%) x 1/2 x 12 x Rs.20,16,000/-.
16 = 10500 x 12 x 16
4.2 In addition, amounts towards ‘filial consortium’, ‘loss
of estate and funeral expenses’ and ‘medical expenses and
travelling expenses’ were also awarded. The learned
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Tribunal thus awarded compensation in an amount of
Rs.22,17,550/- along with interest at 6% per annum
under the following heads:
Sl.No. Particulars Amount
A. Towards dependency & loss of Rs.20,16,000/-
future earnings
B. Towards filial consortium Rs. 80,000/-
C. Towards loss of estate and
funeral expenses
Rs. 30,000/-
D. Towards Medical expenses and Rs. 91,550/-
travelling expenses
TOTAL COMPENSATION Rs. 22,17,550/-
5. The learned counsel for the appellants/claimants
raises two contentions before this Court. Firstly, she
submits that the deceased was 30 years old as per the
records produced and hence, the learned Tribunal ought to
have taken the multiplier as ‘17’ instead of ‘16’ to arrive at
the compensation towards ‘loss of dependency’.
5.1 Secondly, learned counsel for the appellants/
claimants submits that the deceased was qualified as a
B.Tech. Engineer and was working as a Technical Analyst
in the Company Oracle, till 02.01.2018. Subsequently, he
resigned from this job and set up his own Trucking
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business and that he was earning Rs.1,00,000/- per
month. She submits that the Income Tax Returns were
presented albeit for the Assessment Years 2016-17, 2017-
18 and 2018-19. However, since no Income Tax Returns
for the period prior to his death were placed on record, the
learned Tribunal has wrongly taken his income as notional
income and the compensation awarded thus is less. In
addition, it is contended that the award of interest is not in
accordance with the settled legal principles.
6. Learned counsel for the respondent No.2/Insurance
Company submits that there is no dispute that the
deceased was an Engineer and thus some additional
amounts should have been awarded instead of taking
notional income. He however contends that only an
amount of Rs.20,000/- could be taken as the income of
the deceased to calculate the compensation towards ‘loss
of dependency’. Lastly, it is contended that interest has
been awarded in terms of the settled law.
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7. The points that arise before this Court for
determination are:
(i) Whether the income of the deceased should have been
taken in terms of the notional income chart?
(ii) Given the recent pronouncements by the Supreme
Court, should interest have been awarded at 6% in the
present case?
8. At the outset, it is apposite to note that the date of
birth of the deceased as is available in his Passport and
other documents filed is, 19.07.1988. The accident took
place on 09.04.2019. Thus, the deceased was 30 years
and not 31 years as on the date of the accident. The
appropriate multiplier to be taken as per the judgment of
the Supreme Court in Sarla Verma (Smt.) and Others
1
vs. Delhi Transport Corporation and another and
2
National Insurance Co.Ltd. Vs. Pranay Sethi , would
be ‘17’ and not ‘16’ as adopted by the learned Tribunal.
1
(2009) 6 SCC 121
2
(2017) 16 SCC 680
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8.1. On the aspect of monthly income, undisputedly, the
deceased was an Engineer having completed his Bachelor
of Technology in Computer Science and Engineering and
was placed in the First Class. After his qualification, he
started to work with Dell Company in Bangalore and
thereafter he shifted to C.S.S. Company in Chennai and
subsequently joined as a Technical Analyst in Oracle India
Private Limited, Bangalore, where he worked from 2015 to
2018 and was drawing a salary of Rs.66,083/-. The record
also reflects that the deceased resigned to set up his own
business. This is also reflected from the evidence given by
PW-1 in support of this case. The relevant extract is set
out below:
s
“8. I state that the deceased was a Bachelor and born
on 19.07.1988. Age proof produced as Exhibit 9. He
studied (BE) Bachelor of Technology in
Computer Science and Engineering in Chennai in
Bharath University. Bharath Institute of Higher
Education and Research during the academic year
2010 and he secure first class. BE certificate produced
as Exhibit 10. He also scored first class in tenth
th
and 12 as well. Also in science talented
nd
examination he scored 2 rank in school level. SSLC
and PUC marks cards and certificate issued by the
school produced as Exhibit No.11 and 13.
9. I humbly state that, immediately after the
engineering he started to work with Dell
Company at Bangalore from 2010 to 2012. And
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the said company issued outstanding certificate
produced as Exhibit No.14 and 15. Thereafter he
shifted to C.S.S. Company in Chennai there he
worked from 2012 to 2015 also he had got award
and while he was working he sent to keynote
Texas at United States of America to prove the
same letter written by the HR is produced as Exhibit
16. Subsequently joined Oracle India Pvt. Ltd.
Bangalore in the year 2015 April and was
drawing salary of Rupees 61079/- per month
and resigned on 2.1.2018 in order to run his
own company, the proof of salary and
resignation details issued by the oracle company
produced herewith as Exhibit 17. Income tax
acknowledgement returns for the year 2016-17,
2017-18 and 2018-19 produced as Exhibit 18 to 20.
10. I state that before submitting returns for
the financial year 2019-20 my son expired in the
above accident. I am not able to file the returns.
11. I state that my son S. Bhaskaran was very much
interest in trucking from his childhood and he was
coordinating trucking to go to different places like
Kedar, Dayar Bugiya, Roopkund Sandhuphu and other
places. Since he was interest in trucking business
he resigned his job and opened his own
company just one year back before his death i.e.
15.5.2018 company incorporation certificate
produced as Exhibit 21. He was arranging trucking
for different places including foreign countries
and charging each on head and was earning
enough money. In addition he also pursued to go
Canada and on 19.04.2018 paid yaxis rupees
1,17,050/- and wrote IELTS exam and scored 7.5
grade online marks sheet and passport produced as
Exhibit 22 and 23.
xxx xxx xxx
14. I state that we had no our own residence but
during the year 2012 I obtained housing loan in
State Bank of India thinking that my son will
pay the EMI of rupees 10500/- and he was
paying but untimely death made us to suffer
with financial burden and I took bank loan out
of my pension of Rs.22,000/- and now 18,000/-
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going for the loan. The proof I produced as Exhibit
25.”
[Emphasis Supplied]
9. The learned Tribunal however after examining these
documents, found that the Income Tax Returns produced
were of a previous period and since there was no proof of
annual income, the monthly income was taken as
Rs.15,000/- per month. The evidence also reflects that the
deceased graduated in the year 2010 and subsequently
started working for Dell from 2010 to 2012, CSS in
Chennai from 2012 to 2015 where he got an award and
was sent to United States for his performance. Thereafter,
he joined Oracle India Private Limited in the year 2015
drawing a salary of Rs.61,079/- per month.
9.1 The evidence of PW-1 sets out that the deceased
resigned on 02.01.2018 to run his own business, since he
was interested in the trucking business, and arrangement
of trucking in different places including in foreign
countries. He was also interested in settling in Canada.
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9.2 The Bank statement of the deceased (Ex.P15)
reflects that he had made a Fixed Deposit of Rs.7,00,000/-
just prior to his death on 03.01.2019 in the joint names of
himself and his mother. The deceased was also paying an
equated monthly installment on a housing loan in a sum of
Rs.10,500/- for a house purchased for his parents. The
deceased was the only son of the claimants and was a
bachelor. Thus, the claimants were entirely dependent on
the income of the deceased.
10. Given the evidence placed before us, we are unable
to agree with the finding of the learned Tribunal that the
monthly income should be taken as Rs.15,000/- per
month. The track record of the deceased reflects that he
was a meritorious student who was working continuously
from the time he graduated. He had also got awards. The
deceased had also filed his tax returns and the claimants
produced the last three years of Income tax returns of the
deceased. The Income Tax returns showed a steady rise in
the income of the deceased in the following manner:
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Sl.No. Assessment Income Income Tax
Year
1 2016-17 Rs.5,12,695/- Rs.16,070/-
(Ex.P16)
2 2017-18 Rs.5,69,373/- Rs.14,470/-
(Ex.P16)
3 2018-19 Rs.5,83,727/- Rs.11,870/-
(Ex.P16)
10.1 Thus, in the AY 2018-19, the income of
Rs.5,83,757/- was shown in his income tax return. The
Income Tax in a sum of Rs.11,870/- was also deducted on
this.
11. Given the aforegoing discussion, figures of the most
recent Income Tax Returns of the deceased (AY 2018-
2019) can certainly be taken to calculate the loss of
dependency.
11.1 The gross income of the deceased in the year 2018-
19 is Rs.5,83,727 less the tax deducted at Rs.11,870/-,
comes to Rs.5,71,857/- per annum or Rs.47,655/- per
month. Hence, taking Rs.47,655/- as the monthly income
of the deceased and adding 40% towards future
prospects, the monthly income is arrived at Rs. 47655 +
19062 = Rs.66,717/-. Out of the said amount of
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Rs.66,717/- the deceased being a bachelor, deducting
50% towards his personal expenses, the monthly income
comes to Rs.33,359/-. Hence, taking Rs.33,360/- as the
monthly income and applying multiplier of ‘17’ since he
was aged 30 years old at the time of his death, the
compensation towards ‘loss of dependency’ is calculated as
under:
Loss of dependency Amount
47655+19062=Rs.66,717/-
66717 x 50% = Rs.33,359/-
33360 x 17 x 12
Rs.68,05,440/-
11.2 The amounts awarded for filial consortium, loss of
estate and funeral expenses, medical expenses and other
expenses, as awarded by the learned Tribunal however do
not need to be interfered with.
12. On the said aspect of the interest to be awarded by
the Tribunal, one of us, Justice Tara Vitasta Ganju , has in
a recent judgment captioned United India Insurance
3
Co. Ltd. vs. Sri. Malyadri. M And Others , after
analyzing the precedents of the Supreme Court and this
3
2026 SCC Online Kar 4090
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Court, has found that an award of 9% interest is in
accordance with the settled provisions in the present day
scenario, especially in cases of death and permanent
disability. It was held that the award of 9% interest has
been regularly upheld by the Supreme Court. It is apposite
to extract the relevant portion of the judgment below:
“15. The other issue raised is on interest awarded. It is
apposite to set out the applicable provision. Section 171
of the Motor Vehicles Act, 1988 [hereinafter
referred to as ‘the MV Act’] provides for the award
of interest in the following manner:
“171. Award of interest where any claim is
allowed . - Where any Claims Tribunal allows a
claim for compensation made under this Act,
such Tribunal may 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 it
may specify in this behalf.”
15.1 A plain reading of the said provision shows
that Section 171 of the MV Act does not prescribe
any rate of interest and gives the discretion to the
learned Tribunal to do so. It further sets out that
the Tribunal shall award simple interest from the
date of filing the claim.
16. Interest is the compensation for the factum of
money being held back from the family of a
deceased or the injured. The Courts have from time to
time while discussing the principles for award of interest,
held that the interest is awarded not because of any
contractual obligation but because of the delay in
claimants receiving compensation after the
occurrence of the accident.
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16.1 In Abati Bezbaruah vs. Geological Survey of
4
India , the Supreme Court has held that the interest
rate must be fixed by taking all relevant factors including
inflation, change of economy, policy being adopted by
RBI from time to time, how long the case is pending,
permanent injuries suffered by the victim, enormity of
suffering, loss of future income, loss of enjoyment of life
etc., into consideration. It was further held that
Section 34 of the Code of Civil Procedure,1908 nor
Section 4A(3) of Workmen Compensation Act, 1923
are applicable in fixing the rate of interest. The
relevant extract is below:
“18. Three decisions were cited before us by Mr.
A.P. Mohanty, learned counsel appearing on
behalf of the appellant, in support of his
contentions. No ratio has been laid down in any of the
decisions in regard to the rate of interest and the
rate of interest was awarded on the amount of
compensation as a matter of judicial discretion.
The rate of interest must be just and reasonable
depending upon the facts and circumstances of
each case and taking all relevant factors
including inflation, change of economy, policy
being adopted by Reserve Bank of India from
time to time, how long the case is pending,
permanent injuries suffered by the victim,
enormity of suffering, loss of future income, loss
of enjoyment of life etc., into consideration. No
rate of interest is fixed under Section 171 of the
Motor Vehicles Act, 1988. Varying rates of
interest are being awarded by Tribunals, High
Courts and the Supreme Court. Interest can be
granted even if a claimant does not specifically
plead for the same as it is consequential in the
eye of law. Interest is compensation for
forbearance or detention of money and that
interest being awarded to a party only for being
kept out of the money which ought to have been
paid to him. No principle could be deduced nor can
any rate of interest be fixed to have a general
application in motor accident claim cases having
regard to the nature of provision under Section 171
giving discretion to the Tribunal in such matter. In
4
(2003) 3 SCC 148
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other matters, awarding of interest depends upon the
statutory provisions, mercantile usage and doctrine of
equity. Neither Section 34 CPC nor Section 4-A(3)
of the Workmen’s Compensation Act are
applicable in the matter of fixing rate of interest
in a claim under the Motor Vehicles Act. The
Motor Vehicles Act. The courts have awarded the
interest at different rates depending upon the facts
and circumstances of each case. Therefore, in my
opinion, there cannot be any hard-and-fast rule in
awarding interest and the award of interest is solely
on the discretion of the Tribunal or the High Court as
indicated above.”
[Emphasis Supplied]
xxx xxx xxx
19. The Supreme Court in Supe Dei (Smt) and
Others vs. National Insurance Company Limited
5
and Another affirmed that 9% per annum is an
appropriate and consistently applied rate of
interest in motor accident compensation cases,
reinforcing uniformity in such awards . The relevant
extract of the judgment is set out below:
“11. Coming to the question of interest this Court in
Kaushnuma Begum v. New India Assurance Co.
Ltd. observed that 9% is the appropriate rate of
interest to be awarded and that rate is being
applied in motor accident compensation cases.”
[Emphasis Supplied]
20. However recently, the Supreme Court in Jagadish
6
vs. Mohan awarded interest at 9% per annum on
compensation, reaffirming that such rate is
appropriate in cases involving death, serious injury
and substantial loss. The relevant extract of the
judgment is set out below:
“ 15. The Tribunal has noted that the appellant is
unable to even eat or to attend to a visit to the
toilet without the assistance of an attendant. In
this background, it would be a denial of justice
to compute the disability at 90%. The disability
5
(2009) 4 SCC 513
6
(2018) 4 SCC 571
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is indeed total. Having regard to the age of the
appellant, the Tribunal applied a multiplier of 18. In
the circumstances, the compensation payable to the
appellant on account of the loss of income, including
future prospects, would be Rs 18,14,400. In addition
to this amount, the appellant should be granted an
amount of Rs 2 lakhs on account of pain, suffering and
loss of amenities. The amount awarded by the
Tribunal towards medical expenses (Rs 98,908); for
extra nourishment (Rs 25,000) and for attendant's
expenses (Rs 1 lakh) is maintained. The Tribunal has
declined to award any amount towards future
treatment. The appellant should be allowed an
amount of Rs 3 lakhs towards future medical
expenses. The appellant is thus awarded a total
sum of Rs.25,38,308 by way of compensation.
The appellant would be entitled to interest at the
rate of 9% p.a. on the compensation from the
date of the filing of the claim petition. The liability
to pay compensation has been fastened by the
Tribunal and by the High Court on the insurer, owner
and driver jointly and severally which is affirmed. The
amount shall be deposited before the Tribunal within a
period of 6 weeks from today and shall be paid over to
the appellant upon proper identification.”
[Emphasis Supplied]
21. The Supreme Court in Savita Devi & Ors. vs SBI
7
General Insurance Company Limited and Others
relying on the judgment in the case of Malarvizhi &
8
Ors. vs. United India Insurance Co. Ltd. & Ors. has
enhanced the rate of interest from 6% to 9%,
holding that “just compensation” must be
determined on principles of fairness,
reasonableness, and equitability, and that lower
rates may not adequately compensate claimants .
The relevant extract of the judgment is set out below:
“9. In view of the aforesaid, the present appeals
succeed and the impugned order(s) by the High Court
are set aside and that of the Tribunal is restored.
Furthermore, the rate of interest awarded @ 6%
per annum by the Tribunal is enhanced to 9%
7
CIVIL APPEAL NO.10053-10054/2024- order dated 02.09.2024.
8
(2020) 4 SCC 228
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per annum as has been held in Malarvizhi & Ors.
vs. United India Insurance Co. Ltd. & Ors. and in
the interest of determining 'just compensation' based
fairness, reasonableness, and equitability.”
[Emphasis Supplied]
22. A similar view has been taken by the Supreme
Court in The Oriental Insurance Company Ltd. vs.
9
Niru @ Niharika & Others wherein 9% interest
awarded was upheld noting that despite
fluctuations in economic conditions, such rate
remains justified, especially in cases involving
prolonged delay. It emphasized that interest should
ordinarily run from the date of filing unless delay is
clearly attributable to claimants. The relevant extract of
the judgment is set out thus:
“3. The Insurance Company filed an appeal before the
High Court against the award amounts raising
multifarious contentions. It was first contended that
the accident occurred only due to the rashness and
negligence of the car driver. On the quantum, it was
submitted that admittedly the wife married in the year
2002 and the multiplier should have been only 7,
taken from the death of the first husband. The
exchange rate as adopted by the Tribunal, was
also assailed together with the interest granted
at the rate of 9%, which it was contended was
against the existing interest rates. Specific
contention was taken against the long delay in
disposing of the claim petition, which was filed
in the year 1995 and disposed of in the year
2017. The allegation was that the claimants who were
residing in the U.K. were solely responsible for the
delay occasioned. We see the said contention having
been taken relying on Annexure A-4 produced in the
memorandum of SLP filed.
xxx xxx xxx
7. Yet another contention taken up is the
interest granted at the rate of 9%. The
Insurance Company relies on Annexure P-1
9
2025 INSC 822 dated 14.07.2025
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history of the case to contend that there was
undue delay caused by reason of the
claimants having not entered their evidence.
From Annexure P-1, we see that the claim
petition was filed on 28.12.1995 and it first
came up for hearing on 11.09.2012. It is
seen from Annexure P-1 that the case was
posted for applicants' evidence on various
dates from 2012 to 2016. However, there is
nothing to indicate that it was only by reason
of the claimants' absence that the
consideration was delayed. Merely because,
on various dates, for 4 years, the case was
posted for the claimants' evidence, it does not
necessarily mean that the claimants were
responsible for the delay. Long delays cannot,
without proper substantiation, be cast upon
the shoulders of one or other party to the lis.
We hence do not find any reason to find the delay
to be the sole responsibility of the claimants and
in that circumstance necessarily interest must run
from the date of filing of the claim petition, to the
date of payment; for which precedents are legion,
and we need not refer to them.
8. Further contention taken is the higher rate
of interest of 9%, in challenge of which
several precedents were placed before us.
From the decisions perused what emanates is
that in the 1980's, Courts were awarding
12% interest which stood reduced to 9% in
the 1990's. With the advent of the 21st
century and the economic recession world
over, the interest rates fell considerably. But
even now the rates offered by National Banks
for long term deposits are 7% or more.
Considering the over-all circumstances
especially the long delay caused, we are of
the opinion that 9% interest rate granted by
the Tribunal is perfectly in order especially
noticing the accident having occurred in the
year 1995 .”
[Emphasis Supplied]
23. In another a recent decision the Supreme Court in
Nidhi Bhargava & Ors. v. National Insurance
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10
Company Limited And Others the issue of grant of
interest in motor accident compensation claims was
discussed and considered. In the accident in question,
one of the claimants survived and suffered grievous
injuries. The Tribunal had awarded compensation
together with interest at the rate of 9% per
annum. Although the Delhi High Court reduced the
compensation amount under certain heads, it
maintained the award of interest at 9% per annum .
The Supreme Court ultimately restored the compensation
awarded by the Tribunal and specifically directed that
payment be made with interest at the rate of 9% per
annum. Here again, the Supreme Court did not interfere
with the rate of interest and, in fact, reinforced the
obligation of timely payment by directing that in case of
delay beyond two months, an additional 9% interest per
annum would be payable on both the principal amount
and accrued interest. The relevant extract is below:
15. The High Court interfered and reduced the
compensation as awarded by the Tribunal only on the
ground that Return for the Assessment Year 2008-
2009 had to be excluded from consideration. It is not
in dispute that the deceased was a businessman. The
relevance of the Income Tax Return stems, in the
context of the Act, for the period which it relates to
i.e., the Financial Year concerned, and not on the date
on which it is filed with the Income Tax Department.
When faced with Returns for different Assessment
Years, it would be upto the Tribunal concerned to
adopt either the average income therefrom or choose
an Assessment Year to rely upon. There is good
reason to leave judicial discretion on the
Tribunal to adopt one of the afore-noted two
courses of action, bearing in nature the social
purpose and object behind the Act, which is a
beneficial legislation. It is quite unfortunate that
the High Court in the present case has dealt with the
matter in such a casual and superficial way where the
rightful claim of the appellants under a welfare
legislation has been drastically reduced without any
cogent reason on a very tenuous ground, which we
find to be totally unjustified. As pointed out in
Shivaleela v. Divisional Manager, United India
Insurance Co. Ltd., 2025 SCC OnLine SC 563:
10
2025 INSC 526
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‘13.…In K Ramya v. National Insurance Co. Ltd.,
2022 SCC OnLine SC 1338, after taking note of,
inter alia, Ningamma v. United India Insurance Co.
Ltd., (2009) 13 SCC 710, the Court held that the
‘… Motor Vehicles Act of 1988 is a beneficial and
welfare legislation that seeks to provide
compensation as per the contemporaneous
position of an individual which is essentially
forward-looking. Unlike tortious liability, which is
chiefly concerned with making up for the past and
reinstating a claimant to his original position, the
compensation under the Act is concerned with
providing stability and continuity in peoples' lives
in the future. …’
(underlined in original)
16. On the strength of the reasons afore-indicated,
the Impugned Order is modified to the extent that the
original amount [Rs. 31,41,000/- (Rupees Thirty-One
Lakhs Forty-One Thousand)] awarded by the Tribunal
in MACT No. 357515/2016 as compensation is
restored. Payment be made to the Appellants by
the Respondent No. 1 at the rate of 9% interest
per annum after adjusting amount(s), if any,
that may have been paid during the
interregnum. The exercise be completed within
two months from today, failing which an
additional 9% interest per annum shall be
payable for the period of delay, both on the
principal amount as well as on the interest
component, till the date of actual payment. No
order as to costs, in the circumstances.
[Emphasis Supplied]
23.1 In S. Kumar v. United India Insurance Co.
11
Ltd. , case a similar view was taken where the Supreme
Court approved the award of interest at 9% per
annum, observing that the learned Tribunal’s grant
of 15% interest was ‘exorbitant’ but that the High
Court had still allowed a ‘comparatively higher’
rate of interest at 9% p.a.
24. Thus, an analysis of the precedents shows that the
award of interest over the last 5-10 years has infact
11
(2019) INSC 217
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consistently been awarded @ 9% p.a. or upholding
such an award.
xxx xxx xxx
29. An analysis of the aforegoing discussions of the
Supreme Court , reflects that the Supreme Court has
consistently held that the award of interest is
intended to recompensate the claimant for being
deprived of the use of money, which ought to have
been paid at the time of occurrence of the accident .
The rate of interest, therefore, must be just, fair and
reasonable, having regard to the prevailing economic
conditions and bank rates.
29.1. The award of interest is usually determined at
the prevailing bank rate of interest on a case-to-
case basis and at the rate which is just and fair and
reasonable.
29.2 T here cannot be any ‘straitjacket formula’ in
determining the rate of interest and that the same
must depend on the facts and circumstances of
each case. The guiding principle remains that the
rate must neither be punitive nor non-existent but
must strike a balance between fairness to the
claimant and reasonableness to the insurer.
29.3 The rate of interest 9% is more appropriate in
case involving death and serious injury especially,
where there is a long delay in the claimants
receiving the compensation.
30. In the present case, the accident occurred in the year
2016 leading to the death of the wife of respondent No.1
and mother of respondent Nos.2 and 3. The award
came to be passed in the year 2018. The learned
Tribunal has deemed it apposite to award interest
on the compensation @ 9% per annum. The award
of interest is not punitive as is fair considering the
prevailing economic condition and bank rates. In
addition, it is now 10 years since the date of the
accident.
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31. The learned Trial Court has awarded interest at the
rate of 9% per annum. This Court finds no infirmity with
the Impugned Award of 9% interest in the
circumstances of the present case…”
[Emphasis Supplied]
13. In the present case, the claim petition has been filed
by the parents of the deceased who lost their 30 year old
son who undoubtedly had a bright future. The claimants
were saddled with a home loan as well as other expenses.
Given these circumstances, this Court deems it apposite to
enhance the interest awarded from 6% to 9%.
14. Accordingly, and in view of the aforegoing
discussions, the compensation awarded by the learned
Tribunal is reassessed as follows:
Sl.No. Heads Compensation
1 Towards Loss of dependency Rs.68,05,440/-
2 Towards Filial Consortium Rs. 80,000/-
3 Towards loss of estate and funeral Rs. 30,000/-
expenses
4 Towards medical expenses and Rs. 91,550/-
travelling expenses
Total Rs.70,06,990/-
Less awarded by Tribunal Rs.22,17,550/-
Enhanced compensation Rs.47,89,440/-
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14.1 Hence, the appellants/claimants are entitled to a
total compensation of Rs.70,06,990/- along with interest
at the rate of 9% per annum from the date of petition till
the date of realization.
15. Accordingly, the Court proceeds to pass the
following:
ORDER
(i) The appeal is allowed in part ;
(ii) The Impugned Judgment and Award dated
01.04.2022 in MVC No.791/2020 passed by the
learned I Addl. Small Causes Judge & MACT,
Bengaluru, is modified, to the extent that the
appellants/claimants are entitled to enhanced
compensation of Rs.47,89,440/- along with
interest at the rate of 9% per annum in addition
to Rs.22,17,550/- as awarded by the learned
Tribunal.
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(iii) The remaining portion of the Impugned
Award of the learned Tribunal remains
undisturbed.
(iv) The respondent No.2/Insurance Company
shall deposit the enhanced compensation with
interest applicable thereon, as awarded by the
learned Tribunal, within a period of eight weeks
from the date of receipt of a copy of this
judgment;
(v) On such deposit of compensation, the same
shall be released in favour of the
appellants/claimants, on filing of an appropriate
application by the appellants/claimants for
withdrawal of the enhanced amount.
(vi) The Registry is directed to draw the modified
Award accordingly.
(vii) The Registry is directed to transmit a copy of
this judgment to the concerned Tribunal along
with its records.
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(viii) All pending applications shall stand disposed
of No order as to costs.
Sd/-
(JAYANT BANERJI)
JUDGE
Sd/-
(TARA VITASTA GANJU)
JUDGE
KS/BMV*
List No.: 1 Sl No.: 15
28