Interest Liability on Insurer Commences Only From Date of Impleadment in Restored Claim Proceedings

On January 27, 2004, Sh. Swarn Singh died in a motor accident after his car was hit by a truck being reversed negligently

In 2008, an ex-parte award was passed against the owner and driver; however, the Insurance Company was not impleaded at that stage as the owner did not seek their joinder

In 2014, the 2008 award was set aside, and the Appellant/Insurance Company was impleaded for the first time on January 6, 2014

The Motor Accidents Claims Tribunal (MACT) passed a fresh award on March 6, 2017, granting Rs. 8,82,397 with varying interest rates covering periods before the Insurance Company was a party

The Appellant challenged the computation of compensation and the imposition of interest for the period prior to their impleadment

1. Whether the Insurance Company can be held liable for interest on the compensation amount for the period prior to its impleadment in the proceedings

2. Whether the compensation awarded under non-pecuniary heads and future prospects requires realignment with established legal precedents

The Court applied the principles governing compensation under the Motor Vehicles Act, 1988, as settled in National Insurance Co. Ltd v. Pranay Sethi (2017) 16 SCC 680, which standardized the amounts for loss of estate, funeral expenses, and future prospects (25% for self-employed deceased aged 40-50)

It further relied on United India Insurance Co. Ltd. v. Satinder Kaur (2021) 11 SCC 780 to establish that "loss of love and affection" is not a permissible head of compensation, while "loss of consortium" must be awarded to all dependents at Rs. 40,000 each

Regarding interest, the Court applied the equitable principle that a party cannot be saddled with interest for a period where they were "oblivious" to proceedings due to non-impleadment

The Court found that the Tribunal erred by imposing interest on the Appellant for the period between 2006 and 2014, as the Insurance Company was only brought into the litigation on January 6, 2014

Logically, a party cannot be penalized for a delay in payment when they were not a party to the suit

In re-calculating the quantum, the Court removed the Rs. 2,00,000 awarded for "loss of love and affection" per Satinder Kaur and adjusted the funeral expenses and loss of estate to Rs. 15,000 each per Pranay Sethi

Future prospects were added at 25% of the income since the deceased was 42 and self-employed, and consortium was expanded to cover all four dependents

It specifically held that the internal award of interest prior to 2014 was improper; interest at 9% per annum shall only accrue from January 6, 2014 (the date of impleadment) until realization

The Appellant was directed to be refunded the surplus amount deposited, and the statutory deposit was ordered to be returned