JUDGMENT
C.L. Pangarkar, J.
1. These three First Appeals can be disposed of by common judgment, since identical question of law and facts are involved.
2. All the appellants had instituted applications under Section 166 of the Motor Vehicles Act, 1988 before the Motor Accident Claims Tribunal at Akola. All the applicants claimed compensation on account of death of their kith and kin. The learned Judge of the Motor Accident Claims Tribunal passed awards in all the petitions. While passing the said award, the learned Judge of the Tribunal, however, awarded 12% interest from date of award till realisation of the amount. Being aggrieved by that order of award of interest from date of award and not from date of application, these first appeals have been preferred.
3. I have heard the Learned Counsel for the appellants and the respondents.
The only point which arises for my consideration is-
Point Findings Whether the learned Member of the Tribunal had properly exercised the discretion vested in him in awarding the interest from date of award? No.
4. The learned Member of the Tribunal has awarded 12% P.A. interest from date of award. It is not disputed that in all three matters the amount of award was deposited in the Court immediately on passing of the award. The only question that needs consideration is whether the interest should have been awarded from date of the application. While awarding interest from date of award, the learned Member did not give any reasons why he is not awarding interest from date of the application, There is no doubt that Section 171 of the Motor Vehicles Act does not mandate awarding interest from date of application as the word used in Section is ‘may’. This means that judicial discretion is left to the Tribunal. However, every discretion has to be used judiciously. Learned Counsel for the respondents submitted that the discretion has been used by the judgment and this Court should not interfere with it. The Learned Counsel relied on two decisions, one; , National Insurance Co. Ltd. v. Keshav Bahadur and Ors. in , Bhayla and Anr. v. Abdul Kayum and Ors. The Supreme Court in National Insurance Company case has observed as follows-
14. Though Section 110-CC of the Act (corresponding to Section 171 of the New Act) confers a discretion on the Tribunal to award interest, the same is meant to be exercised in cases where the claimant can claim the same as a matter of right. In the above background, it is to be judged whether a stipulation for higher rate of interest in case of default can be imposed by the Tribunal. Once the discretion has been exercised by the Tribunal to award simple interest on the amount of compensation to be awarded at a particular rate and from a particular date, there is no scope for retrospective enhancement for default in payment of compensation. No express or implied power in this regard can be culled out from Section 110-CC of the Act or Section 171 of the New Act. Such a direction in the award for retrospective enhancement of interest for default in payment of the compensation together with interest payable thereon virtually amounts to imposition of penalty which is not statutorily envisaged and prescribed. It is, therefore, directed that the rate of interest as awarded by the High Court shall alone be applicable till payment, without the stipulation for higher rate of interest being enforced, in the manner directed by the Tribunal.
The Supreme Court, no doubt, holds that Section 171 of the Motor Vehicles Act confers discretion. In the reported case what had happened is that the Tribunal awarded interest at 12% P.A. on the amount of Award but further directed that if amount is not paid within 60 days it would carry interest at 18%. This order, the Supreme Court has held, was not proper in view of the fact that the discretion to award interest at 12% was already used and awarding interest at 18% on failure to pay within sixty days was not proper. The Supreme Court in the same decision further observes thus-
9. Discretion, in general, is the discernment of what is right and proper. It denotes knowledge and prudence, that discernment which enables a person to judge critically of what is correct and proper united with caution; nice discernment, and judgment directed by circumspection; deliberate judgment; soundness of judgment; a science or understanding to discern between falsity and truth, between wrong and right, between shadow and substance, between equity and colourable glosses and pretences, and not to do according to the Will and private affections of persons. When it is said that something is to be done within the discretion of the authorities, that something is to be done according to the rules of reason and justice, not according to private opinion; according to law and not humour. It is to be not arbitrary, vague and fanciful, but legal and regular. And it must be exercised within the limit, to which an honest man, competent to the discharge of his office ought to confine himself Per Lord Halsbury, L.C. in Sharp v. Wakefield (1891) Appeal Cases 173. Also See S.G. Jaisinghani v. Union of India and Ors. ).
12. If a certain latitude or liberty accorded by statute or rules to a Judge as distinguished from a ministerial or administrative official, in adjudicating on matters brought before him, it is judicial discretion. It limits and regulates the exercise of the discretion, and prevents it from being wholly absolute, capricious, or exempt from review.
It is, therefore, obvious that the discretion has to be used judiciously and when it is so used, reasons ought to be given so that reader knows what weighed with the learned Judge.
5. It was rightly contended by the Learned Counsel for the appellants that had the respondents settled the claim of the appellants before institution of the proceedings then there would have been no question of awarding interest. When an award is passed, it must necessarily relate back to the date of petition for the Court holds that the petitioner was entitled to that much amount on the date the petition or the suit was filed. If, therefore, the claim would have been settled and amount paid immediately, the petitioner could have earned interest on the said amount by depositing the same in the bank. It is because the claim is not settled immediately that the need to pay the interest arises. It would be a different case where the decision of the petition is delayed due to serious lapse on the part of the petitioner in prosecuting the petition. In such cases, the Court may use discretion not to award interest from date of the application. But where there are no lapses on the part of the petitioner and the proceedings unnecessarily drag on, he must be awarded interest. The Court holds while passing the award that on the date of the filing of the petition the petitioner was entitled to compensation. Therefore, it is from the date of the application that the Tribunal should award interest unless there are circumstances suggesting protraction on part of petitioners.
6. In the instant appeals, it does not appear that there was any lapse on the part of the petitioners which delayed the decision in the matter. Since the learned Judge of the Tribunal has not given any reason for not awarding interest from date of the application, it has to be said that the use of such discretion was not sound. Hence, there is a need to interfere in the said discretion. As a result, the appeals must succeed. The appeals are therefore, allowed. In all petitions the respondents against whom award is passed shall jointly and severally pay interest on the decretal amount to the petitioners at the rate of 7.5% from the date of application.