Accident Claimant Gets 6% Interest From Claim Filing Date After Award Was Paid Without Interest: Orissa HC

The Motor Accident Claims Tribunal awarded the claimant ₹1,88,266, directing the insurer to pay within two months and providing for 7% default interest from the date of judgment if payment was delayed.

The claimant appealed, 119 days late, challenging the absence of interest from the date of the claim application. Although the award had been paid, it had been paid without interest.

Section 5 of the Limitation Act, 1963 permits a court to condone delay where sufficient cause is shown.

In considering delay, the Court applied the principle that substantial justice should generally prevail over technical considerations, particularly where the delay is of relatively short duration.

Section 171 of the Motor Vehicles Act, 1988 governs the award of interest on compensation; interest should be awarded from the date of the claim application, rather than made payable only upon default after judgment.

The Court also referred to Order XLI Rule 14(4) of the Code of Civil Procedure to dispense with re-issuance of notice to the owner, who had been set ex parte before the Tribunal.

The Court condoned the delay, noting that the claimant had explained it, the insurer had filed no written objection, and the 119-day delay should be considered liberally in the interests of substantial justice.

On interest, the Tribunal’s order provided only for default interest from the date of judgment, contrary to Section 171. Because the claimant was entitled to interest from the date of filing the claim application, the Court modified the award to provide simple interest at 6% per annum from that date until actual realization.

The insurer was directed to pay the compensation with simple interest at 6% per annum from the date of the claim application until actual realization, within eight weeks; if the claimant had already received the award, the insurer was to pay the differential amount. The award was otherwise confirmed, with no order as to costs.