TAHAZHATHE PURAYIL SARABI & ORS. versus UNION OF INDIA & ANR.

Citation: [2009] 10 S.C.R. 70 · Decided: 14-05-2009 · Supreme Court of India · Bench: ALTAMAS KABIR · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

(2009] 10 S.C.R. 70 
A 
TAHAZHATHE PURAYIL SARABI & ORS. 
v. 
UNION OF INDIA & ANR. 
(Civil Appeal No. 3568 of 2009) 
B 
MAY 14, 2009 
[ALTAMAS KABIR AND DR. MUKUNDAKAM 
SHARMA, JJ.] 
Interest Act, 1978 - s.3 - Code of Civil Procedure, 1908 
c - s.34 - Money decree - Interest on, since when payable -
Death of railway passenger - Compensation claim - Railway 
Claims Tribunal awarded compensation but did not grant 
interest on awarded amount from date of incident or date of 
claim - It awarded interest only in case of default in 
D compliance with order for deposit of compensation amount -
~ 
Held: Payment of interest follows as a matter of course when 
a money decree is passed - Interest is essentially a 
compensation payable on account of denial of the right to 
utilize the money due, which was, in fact, utilized by the person 
E withholding the same - Though neither the Railway Claims 
Tribunal Act nor the Railways Act made provision for payment 
of interest on the awarded amount, power of Courts to grant 
interest can also be referred to, from provisions of the Interest 
i 
Act and CPC - On facts, there was no delay on part of 
F claimants in making the claim - Even if, claimants may not 
be entitled to claim interest from date of accident, interest on 
the awarded sum has to be allowed from date of claim till date 
of recovery, since the claimants cannot be faulted for delay 
of approximately 8 years in making of the Award by the 
G Tribunal - Courts below erred in not granting any interest 
whatsoever to the claimants, except by way of a default clause, 
-4 
which is contrary to established principles relating to payment 
of interest on money claims - Direction given that the 
awarded sum be paid with interest @ 6% simple interest p.a. 
H 
70 
TAHAZHATHE PURAYIL SARABI & ORS. v. UNION 
71 
OF INDIA & ANR. 
from date of claim till date of Award and, thereafter, at the rate 
A 
~ 
of 9% p.a. till date of actual payment of the same - Railways 
Act, 1989 - ss.123(c), 124 and 124A ,... Railway Claims 
Tribunal Act, 1987 - s. 16. 
Appellant no.1's husband was robbed of money and 
B 
thrown out of a moving train by certain assailants as a 
result of which he died. The accused persons were 
convicted under Section 392 IPC and sentenced to 10 
years rigorous imprisonment. 
'·· 
The appellants claimed compensation before the c 
Railway Claims Tribunal. The Tribunal, in terms of Section 
123(~) of the Railways Act, 1989, awarded compensation 
but did not grant interest on the awarded amount from 
the-pate of incident or the date of claim. Interest @ 6.5% 
p.a, w~s awarded only in case of default in compliance 
with the order for deposit of compensation amount. 
D 
Appellants filed 11ppe11I on the question of interest but the 
High Court declined to interfere. 
In appeal to this Court, the question which arose for 
E 
consideration was whether both Tribunal and the High 
Court erred in not granting interest on the awarded 
amount from date of incident or date of claim petition. 
~ 
Allowing the appeal, the Court 
... 
F 
HELD:1.1. Neither the Railway Claims Tribunal Act, 
1987, nor the Railways Act, 1989, make provision for 
payment of interest on any awarded amount. In cases 
where the statute does not make any specific provision 
for payment of interest on any awarded sum, the power G 
of the Courts to grant interest can also b~ referred to from 
-
>-
the provisions of the Interest Act, 1978 and the Code of 
Civil Procedure. [Para 13] [79-E; 79-G-H; 80-A] 
H 
72 
SUPREME COURT REPORTS 
[2009] 10 S.C.R. 
A 
1.2. The Court, while making a decree for payment of 
" 
money is entitled to grant interest at the current rate of 
interest or contractual rate as it deems reasonable to be 
paid on the principal sum adjudged to be payable and/ 
or awarded, from the date of claim or from the date of the 
B otder or decree for recovery of the outstanding dues. 
There is also hardly any room for doubt that interest may 
be claimed on any amount decreed or awarded for the 
period during which the money was due and yet 
remained unpaid to the claimants. (Para 16] (79-0-E, G-
c 
H~ 80-A] 
1.3. Normally when a money decree i§ passed, it is 
most essential that ;nterest be granted for the period 
-
during which the money was due, but could not be 
D 
utilized by lhe person in whose favour an order of 
recovery of me>ney was passed. Interest is essentially a 
cbmpensation payable on a1.count of denial of th~ right 
to utilize th2 money due, wh

Excerpt shown. Read the full judgment & AI analysis in Lexace.