Delayed compensation to trafficking survivor attracts 4.5% interest, Calcutta High Court rules

The petitioner, a survivor of human trafficking, was trafficked on 27 March 2017 and rescued on 27 June 2017 with the assistance of police personnel attached to Goreyakothi Police Station, Siwan, Bihar.

She subsequently initiated Victim Compensation Case No. 45 of 2019 before the District Legal Services Authority, South 24-Parganas. An award was passed under Clause 6 of the West Bengal Victim Compensation Scheme, 2017, granting compensation of Rs. 15,00,000/- as recorded in the judgment.

Although the award was made on 19 November 2019, the compensation was actually disbursed only on 4 February 2021, approximately fifteen months later.

The petitioner therefore filed the present writ petition seeking interest for the period of delayed disbursement, asserting that withholding the awarded amount violated her right to live with dignity.

The State opposed the claim on the grounds of non-availability of funds, administrative constraints, and the absence of an express interest provision in the Scheme.

Whether the petitioner was entitled to interest on the compensation amount for the period between the date of the award and the date of actual disbursement, despite the absence of an express interest provision in the West Bengal Victim Compensation Scheme, 2017.

Whether administrative or budgetary constraints could justify the State’s failure to timely disburse the awarded compensation.

The Court relied on the principle that interest may be awarded on a money decree or statutory award where the amount has become due but remains unpaid, as such interest compensates the claimant for being deprived of the use of the money.

It further relied on Sections 3 of the Interest Act and 34 of the Code of Civil Procedure, which permit the Court to award interest where no specific statutory provision governs the payment of interest.

The Court also referred to the principle that interest ordinarily follows a money decree or award unless there are strong reasons to deny it, as recognized in Jagdish Rai & Brothers v. Union of India, (1999) 3 SCC 257.

The Court relied on Tahazhathe Purayil Sarabi & Ors. v. Union of India & Anr., (2009) 10 SCR 70.

The compensation had been formally awarded on 19 November 2019 but was withheld until 4 February 2021, depriving the petitioner of the use of money intended for her rehabilitation.

Applying the principles in Tahazhathe Purayil Sarabi and Jagdish Rai & Brothers, the Court held that interest was compensatory in nature and followed from the State’s failure to pay an adjudicated monetary entitlement within a reasonable time.

The welfare-oriented and humanitarian purpose of the victim-compensation scheme reinforced the conclusion that the petitioner could not be denied interest merely because of governmental funding or administrative difficulties.

The State’s explanation regarding lack of funds was therefore insufficient to defeat the petitioner’s claim for interest.

Applying these principles, the Court treated the victim-compensation award as an enforceable monetary entitlement and held that interest could be granted for the period of delayed payment, notwithstanding the absence of an express provision in the Scheme.

The interest amount was directed to be paid to the petitioner within eight weeks from the date of communication of the order.