HIGH COURT OF JUDICATURE AT ALLAHABAD LUCKNOW FIRST APPEAL FROM ORDER No. - 361 of 2025 Court No. - 7 HON'BLE JASPREET SINGH, J. 1. Heard learned counsel for the appellant. 2. The instant appeal has been preferred under Section 173 of Motor Vehicle Act, 1988, against the award dated 21.03.2025 passed by Motor Accident Claims Tribunal/Presiding Officer, Sultanpur (hereinafter referred to as 'Tribunal') in Claim Petition No.59 of 2017, whereby, in a death case, a sum of Rs.7,72,500/- has been awarded to the claimants along with interest at the rate of 6% per annum, provided that the awarded amount is paid to the claimants within a period of one month, failing which, the rate of interest would stand enhanced to 12% per annum. 3. Submission of learned counsel for the appellant is that the insurance company is challenging the award only to a limited extent. There is no dispute regarding the quantum awarded, nor is there any dispute with respect to the findings recorded by the Tribunal concerning the occurrence of the accident, the involvement of the offending vehicle, the fact that the vehicle was insured and that it was being driven by a person holding a valid and subsisting driving licence. 4. Since only a limited question has been raised, this Court is not inclined to issue notice to the respondents, as it would not serve any purpose. There is no substantial dispute except for the issue concerning the penal enhancement of interest from 6% to 12% per annum, which is under challenge. It is settled law that such penal interest cannot be sustained. 5. This aspect of the matter has been considered by this Court in the case Versus Counsel for Appellant(s) : Subhash Chandra Gulati Counsel for Respondent(s) : Oriental Insurance Co. Ltd. Thru. Manager Lko. .....Appellant(s) Naeem And 6 Others .....Respondent(s) of Oriental Insurance Company Ltd. vs. Mohd. Saleem and Others reported in MANU/UP/2724/2013 : 2014 (32) LCD 393, wherein it has been held that the Tribunal, while passing the award along with interest, is not entitled to enhance the rate of interest in the event of non-payment within the specified time. The relevant paragraph 28 is reproduced hereunder :- "28. Before parting with the judgment, it is necessary to observe that under the statute there is no provision to fix penal interest and the direction of the Tribunal in the judgment impugned that in case the appellants will not pay the awarded amount within time, then in that case the interest would be enhanced to 9% is not correct." 6. In view of the judgment, this Court is also of the opinion that the Tribunal has erred in enhancing the rate of interest upon default in paying the amount within the time granted. 7. Accordingly, the award dated 21.03.2025 passed by the Tribunal in Claim Petition No.59 of 2017 shall stand modified to the extent that the awarded amount shall carry interest at the rate of 6% per annum and the clause enhancing the rate to 12% per annum upon default is hereby set aside. 8. It is further made clear that the dismissal of the present appeal filed by the insurance company shall not come in the way of the claimants, should they choose to file an appeal at a future stage, which shall be considered on its own merit. 9. With the aforesaid observations, the appeal is partly allowed. 10. The amount deposited before this Court shall be remitted to the Tribunal for release in favour of the claimants-respondents in accordance with the modified order passed by this Court. 11. There shall be no order as to cost. September 4, 2025 Shubhankar FAFO No. 361 of 2025 2 (Jaspreet Singh,J.) Digitally signed by :- SHUBHANKAR THAKUR High Court of Judicature at Allahabad, Lucknow Bench