A 9% interest award is reasonable in motor accident death claims.

In brief

The question

1. Whether the driver’s lack of a valid driving licence justified interfering with the Tribunal’s pay-and-recover order.

The court held

The Court dismissed the insurer’s appeal and upheld the Tribunal’s award, including compensation of ₹7,74,000, interest at 9% per annum, and the pay-and-recover order.

It also directed

It directed that the amount deposited by the insurer be transmitted to the Tribunal for disbursement, closed pending applications, and made no order as to costs.

01Facts

On 13 February 2016, an autorickshaw collided with a motorcycle, causing the motorcycle rider’s death.

pp. 3–4

His wife and children brought a claim before the Motor Accident Claims Tribunal, which awarded them ₹7,74,000 with interest at 9% per annum and made a pay-and-recover order concerning the driver’s licence.

pp. 3–4, 6

The insurer appealed, challenging the licence-related liability and the rate of interest.

p. 4

02Issues

i.1. Whether the driver’s lack of a valid driving licence justified interfering with the Tribunal’s pay-and-recover order.

pp. 4–6

ii.2. Whether the Tribunal’s award of interest at 9% per annum was excessive and should be reduced.

pp. 4, 6–8

03Law Applied

Under National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297, and the authorities cited by the Court, including Rama Bai v. M/s. Amit Minerals, 2025 SCC OnLine SC 2067, and Shamanna v. Divisional Manager, Oriental Insurance Co. Ltd., (2018) 9 SCC 650, the insurer may be directed to satisfy the award and recover the amount from the insured where the driver lacked a valid licence; the insurer’s liability is not avoided in the first instance.

pp. 5–6

The Court also relied on Manjunath Naik v. Smt. Annapoorna Ranade (MFA No. 2298/2020 c/w MFA Cross Objection No. 9/2021, order dated 19 February 2026) on pay and recovery.

p. 6

On interest, the rate must be just, fair and reasonable in the circumstances; the Court relied on United India Insurance Co. Ltd. v. Sri. Malyadri M. and Others, 2026 SCC OnLine Kar 4090, and the Division Bench decision in Bimal Gogai and Another v. Managing Director, Bengaluru Metropolitan Transport Corporation (MFA No. 10401/2018 c/w MFA No. 5507/2018, 9 June 2026), which supported 9% interest, particularly in death and serious-injury cases.

pp. 6–8

The appeal was brought under Section 173(1) of the Motor Vehicles Act.

p. 2

Provisions in the judgment · 1 · Linked ones open on LawLens

Motor Vehicles Act, 1988 Section 173

04Reasoning

The Tribunal had already made a pay-and-recover order, and the insurer’s counsel accepted that this approach was consistent with the settled law on a driver’s lack of a valid licence.

p. 6

The Court therefore found no basis to interfere with that order.

p. 6

As the claim arose from a death and the 9% rate was considered fair in light of the applicable precedents and prevailing economic conditions, the Court also rejected the challenge to the interest rate.

pp. 7–8

05Holding

The Court dismissed the insurer’s appeal and upheld the Tribunal’s award, including compensation of ₹7,74,000, interest at 9% per annum, and the pay-and-recover order.

pp. 8–9

It directed that the amount deposited by the insurer be transmitted to the Tribunal for disbursement, closed pending applications, and made no order as to costs.

p. 9

LawLens.Karnataka High Court

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