DHARAMPAL & ORS. versus U.P. STATE ROAD TRANSPORT CORPN.

Citation: [2008] 8 S.C.R. 194 · Decided: 12-05-2008 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Disposed off

Judgment (excerpt)

A 
B 
c 
D 
E 
F 
[2008] 8 S.C.R. 194 
DHARAMPAL & ORS. 
v. 
U.P. STATE ROAD TRANSPORT CORPN. 
(Civil Appeal No.3501 Of 2008) 
MAY 12, 2008 
[S.S. SINHA AND DR. MUKUNDAKAM SHARMA, JJ] 
"'·, ., 
Motor Vehicles Act, 1988- s.171 - Fatal Motor Accident 
- Interest@ 6% p.a. awarded by tribunal as a/so High Court-
Enhancement, claim of - Held: At the relevant time, the pre-, 
vailing rate of interest on bank deposits was 7. 5% p.a. - In 
view of the same, interest on compensation sum awarded @ 
6% p.a. enhanced to 7.5 % p.a. 
The question which arose for consideration in this 
appeal is with regard to the quantum of interest to be 
awarded on th~ compensation awarded to the legal ~ep-
resentatives of the deceased who died in an accident. 
Disposing of the appeal, the Court 
HELD: 1.1 As per section 171 oi the Motor Vehicles 
Act, 1988 where the claim for compensation made under 
the Act is allowed by the Claims Tribunal, the tribunal may 
direct that in addition to the amount of compensation simple 
interest shall also be paid al such rate from such date no\ 
earlier than the date of making claim. [Para 8] [198-8,C] · 
1.2 Interest is compensation for forbearance or de-
tention of money, which ought to have been paid to the 
claimant. No rate of interest is fixed under section 171 of 
the Act and the duty has been bestowed upon the court · 
G to determine such rate of interest. [Para 10] [198-E,F] 
1.3 In order to determine such rate, the observationi 
made by this Court over the years are referred. The acci-
H dent in the instant case to~~l{
4 
pl<ice on 1.9.2004 and the J 
I '1 
l 
{:
•
J, 
. 
...... 
DHARAMPAL & ORS. v. U.P. STATE ROAD 
TRASNPORT CORPN. 
195 
tribunal had passed the award on 18.5.2005. Rate at which A 
the interest is to be awarded would normally depend upon 
the bank rate prevailing at the relevant time. Since in the 
case of Tamil Nadu State Transport Corpn. Ltd. decided in 
the month of April, 2005, the prevailing rate of interest on 
bank deposits was found and held to be 7.5% per annum, s 
' 
it is appropriate to award the same rate of interest, as the 
same was the prevailing rate of interest on the date of the 
passing of the award i.e. 18.05.2005. Consequently, the 
appellants would be entitled to be paid interest at the rate 
of 7.5% from the date of application till the date of pay- c 
ment. [Paras 10 and 14] [198-F, 200-C,D,E] 
Tamil Nadu State Transport Corpn. Ltd. vs. S. Rajapriya 
(2005) 6 sec 236 - relied on. 
National Insurance Co. Ltd. vs. Keshav Bahadur (2004) 
0 
2 SCC 370; Kaushnuma Begaum (Smt.) and others vs. New 
India Assurance Co. Ltd. & others (2001) 2 SCC 9; United 
India Insurance Co. Ltd. and others vs. Patricia Jean Mahajan 
and others (2002) 6 SCC 281; Abati Bezbaruah v. Dy Direc-
tor General, Geological Survey of India and Another (2003) 3 
SCC 148 - referred to. 
E 
2. The issue with regard to enhancement of compen-
sation is not pressed before this Court and consequently 
the prayer for enhancement of quantum of compensation 
as raised in the memorandum of appeal is dismissed. 
F 
[Para 15] [200-F,G] 
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 3501 
of 2008 
From the final Judgment and Order dated 22/3/2007 of G 
~ 
the High Court of Uttarakhand at Nainital in Appeal from Order 
(A.O.) No. 102/2007 
Yun us Malik, Abhishek Vikas, Ravi Kishore and P1ash::mt 
Chaudhary for the Appellant. 
H 
196 
SUPREME COURT REPORTS 
(2008] 8 S.C.R. 
A 
Sangeeta Kumar and Ashwani Garg for the Respondent. 
The Judgment of the Court was delivered by 
DR. MUKUNDAKAM SHARMA, J. 1. Leave granted. 
2. The present appeal revolves around a very short issue, 
B namely, the quantum of interest to be awarded on the compen-
sation awarded to the legal representatives of the deceased 
who died in an accident. Before we deal with the issue that arises 
for our consideration, we will deal with the factual matrix out of 
c 
which the aforesaid issue arises. 
3. Deceased, Pradeep Kumar was driving a motorcycle 
along with his wife, two minor daughters and a minor son. When 
they reached village Dadiaki on the Muzaffarnagar - Roorkee 
Road, Bus No. UP15L 7640, allegedly driving at a very high 
0 
speed, rashly and negligently, hit the motorcycle. All the five 
persons traveling on the motorcycle died on the spot due to the 
aforesaid accident. The driver of the bus fled away from the 
place of occurrence immediately after the accident, leaving 
behind the bus. The age of the deceased Pradeep Kumar was 

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