NC: 2026:KHC:25458 MFA No. 3895 of 2018 1 HC-KAR IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 1ST DAY OF JUNE, 2026 BEFORE HON'BLE MS. JUSTICE TARA VITASTA GANJU MISCELLANEOUS FIRST APPEAL NO.3895 OF 2018(MV-D) BETWEEN: UNITED INDIA INSURANCE CO. LIMITED, REGIONAL OFFICE, TP HUB NO.18, 6TH FLOOR, KRISHI BHAVAN, NRUPATHUNGA ROAD, OPP. HUDSON CIRCLE, BENGALURU-560 001. REP. BY ITS AUTHORIZED SIGNATORY. …APPELLANT (BY SRI. A.M.VENKATESH & SRI. K.S.LAKSHMI NARAYANAPPA., ADVOCATES) AND: 1. SRI. MALYADRI.M S/O KONDAIAH, AGED ABOUT 42 YEARS, 2. MALLIKARJUN S/O MALYADRI.M, AGED ABOUT 22 YEARS, 3. MAHENDRA S/O MALYADRI.M., AGED ABOUT 20 YEARS, ALL ARE R/AT E-36/1, 4TH MAIN ROAD, NEAR FCI GODOWN, CHINNAPPA LAYOUT, VIJINAPURA, DOORAVANINAGAR POST, BENGALURU-560 016. 4. THE PROPRIETOR, L.V.TRAVELS, 19/12, DEEPA COMPLEX, Digitally signed by JAI JYOTHI J Location: HIGH COURT OF KARNTAKA NC: 2026:KHC:25458 MFA No. 3895 of 2018 2 HC-KAR RING ROAD, NAGARABHAVI 2ND STAGE, OPP AIT, PAPAREDDY PALYA, BENGALURU-560 072. (ONWER OF THE VEHICLE BEARING REG NO.KA-41/B-4546). …RESPONDENTS (BY SRI. YASHWANTH NETHAJI.N.T., AMICUS CURIAE; R4-SERVED AND UNREPRESENTED; V/O DTD: 07.07.2025, NOTICE TO R1 TO R3 IS HELD SUFFICIENT) THIS MFA IS FILED U/S 173(1) OF MV ACT, AGAINST THE JUDGMENT AND AWARD DATED 16/02/2018, PASSED IN MVC NO.7434/2016, ON THE FILE OF THE XV ADDL. SMALL CAUSES JUDGE & MEMBER, MACT, MAYO HALL UNIT, (SCCH-19), BENGALURU, AWARDING COMPENSATION OF RS.16,57,000/- WITH INTEREST @ 9% P.A., FROM THE DATE OF PETITION TILL ITS REALIZATION. THIS MFA HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 25.02.2026, COMING ON FOR PRONOUNCEMENT THIS DAY, HON'BLE MS. JUSTICE TARA VITASTA GANJU, PRONOUNCED THE FOLLOWING: CORAM: HON'BLE MS. JUSTICE TARA VITASTA GANJU CAV JUDGMENT 1. The present appeal seeks to challenge an award dated 16.02.2018, passed by the XV Additional Small Causes Judge & Member, MACT, Mayo Hall Unit (SCCH-19) in MVC No.7434/2016 (hereinafter referred to as ‘the Impugned Award’). By the Impugned Award, the respondent Nos.1 to 3/claimants were awarded compensation in a sum of Rs.16,57,000/- along with interest at 9% per annum. NC: 2026:KHC:25458 MFA No. 3895 of 2018 3 HC-KAR 2. Although the Impugned Award was passed in two claim petitions, the present appeal challenges the Impugned Award insofar as it concerns MVC No.7434/2016 alone. 3. The brief facts are that on 14.11.2016, at about 7.15 p.m., the deceased Smt. Ravanamma was crossing the Outer Ring Road in front of HDFC Bank, Kasturinagara while on a cycle, when one Tempo Traveller bearing Registration No.KA-41/B 4546 being stated to be driven in a rash and negligent manner, came at a high speed from the opposite direction and hit the deceased. Due to the impact, the deceased fell down and sustained grievous injuries. The deceased was taken to K.R. Puram Government Hospital, wherein the Doctors declared her as ‘brought dead’. 4. A claim petition was filed by the husband and children of the deceased. The petition was contested by the appellant/Insurance Company. However, despite service of notice, the respondent No.4/owner did not appear before the learned Tribunal and were proceeded exparte. The appellant/Insurance Company filed its defence. Based on NC: 2026:KHC:25458 MFA No. 3895 of 2018 4 HC-KAR the pleadings between the parties, the following issues were framed: 1) Whether the Petitioners prove that they are the legal heirs of deceased Ravanamma? 2) Whether Petitioners prove that, on 14.11.2016 at about 7.15 p.m., when the deceased was crossing Ramamurthynagara Outer Ring Road along with Mallikarjuna, Lakshmikantha and Rajamohana Reddy in front of HDFC Bank, Kasthurinagara at that one Tempo Traveler bearing Registration No.KA-41-B-4546 drove the same in a rash and negligent manner endangering human life without following any traffic rules came at a high speed from Hebbal towards Tin factory and dashed against pedestrians as a result the deceased fell down and sustained grievous injuries? 3) Whether the Petitioners are entitled for compensation? If so, how much and from whom? 4) What award / order?” 5. In order to prove the case, the husband of the deceased was examined as PW.1 and 14 documents were marked and exhibited as Exhibits P.1 to P.14. The Insurance Company did not produce any oral or documentary evidence. The learned Tribunal, after examining the evidence between the parties, found that the driver of the offending vehicle was driving in a rash and negligent manner and that nothing has come on record to contradict these allegations. In addition to the finding that the deceased was about 35 years of age and was stated to be NC: 2026:KHC:25458 MFA No. 3895 of 2018 5 HC-KAR earning money as a coolie doing Mason work, the learned Tribunal took the income of the deceased at Rs.9,000/- per month. After adding future prospects and deducting one- third as personal expenses, took the monthly income of the deceased as Rs.8,400/- p.m, and applying the multiplier of ‘15’, since the deceased was 35 years of age, awarded the following compensation: Sl.No. Particulars Amount (Rs.) 1. Loss of dependency 15,12,000-00 2. Loss of consortium 40,000-00 3. Towards Love and affection 75,000-00 4. Towards loss of estate 15,000-00 5. Towards funeral and obsequies ceremonies 15,000-00 Total 16,57,000-00 6. The learned Tribunal also found that there was no breach in the Insurance Policy issued by the Insurance Company and thus the liability was fastened on the appellant/Insurance Company entirely. The learned Tribunal thus granted compensation of Rs.16,57,000/- along with interest at 9% per annum from the date of filing the petition. 7. This Court, by its order dated 04.07.2018, had directed a stay of the Impugned Award subject to a deposit NC: 2026:KHC:25458 MFA No. 3895 of 2018 6 HC-KAR of a sum of Rs.11,50,000/- along with interest at 6% per annum. 8. This Court had on 22.01.2026, after recording the contentions of the appellant/Insurance Company that the only challenge in the present appeal is to the award of interest at 9% per annum given by the learned Tribunal, appointed an Amicus Curiae in the matter. 8.1. This Court has heard the learned counsel for the appellant, as well as the learned Amicus Curiae. 9. The issues that have arisen for consideration in the present case are: “i) Whether the amounts awarded are in accordance with law? ii) Whether in a motor accident compensation case, the interest is to be mechanically pegged at the Bank rate at 6% per annum or whether the Court has the discretion to award interest? i iii) Whether the award of interest at 9% per annum can be sustained in a motor accident vehicle case given the current advancement of law? NC: 2026:KHC:25458 MFA No. 3895 of 2018 7 HC-KAR 10. As stated above, the only challenge by the appellant is on the aspect of interest, which has been awarded at 9% per annum. The learned counsel for the appellant/Insurance Company, has while relying on a judgment of a Division Bench of this Court in Union of India vs. K.S. Lakshmi Kumar1, has submitted that the Division Bench of this Court has found that where there is no delay on either side, the rate of interest was reduced from 9% to 6% p.a. The learned counsel for the appellant further contends that the interest at the rate of 8% per annum would be fair and reasonable in the circumstances of this case. 11. The learned Amicus Curiae on the other hand, contends that the issue of award of interest is no longer res integra. The Courts have examined the same in several judgments and have found that interest at the rate of 9% per annum is consistently being awarded by the Supreme Court. 12. At the outset, this Court has undertaken an examination of the compensation awarded. An 1 ILR 2000 KAR 3809 NC: 2026:KHC:25458 MFA No. 3895 of 2018 8 HC-KAR examination of the records shows that the learned Tribunal has awarded compensation towards loss of dependency in a sum of Rs.15,12,000/- based on the income of Rs.8,400/- per month. However, as per the Notional Income Chart, the Notional Income for year 2016 is Rs.9,500/- per month. Thus, the amounts awarded need to be modified. In addition, since the deceased was 35 years of age as on the date of death, the appropriate multiplier applicable would be ‘16’ and not ‘15’ as has been awarded by the learned Tribunal. The deceased is survived by 3 family members being her husband and two sons. It has also given a finding that the husband was not dependent on the deceased. Accordingly, after adding future prospects of 40% in terms of the judgment of the Supreme Court in the case of Sarla Verma vs. Delhi Transport Corporation2 and deducting 1/3rd towards personal income, the loss of dependency would be recalculated as follows: (a) Income of the deceased is taken at Rs.9,500/- (b) Adding future prospectus of 40% to the actual income: Rs.9,500 + 3800 (40%) = 13,300/- (c) Deduction towards personal expenses: 2 (2006) 6 SCC 121 NC: 2026:KHC:25458 MFA No. 3895 of 2018 9 HC-KAR Rs.13,300 – 4,433 (1/3rd) = 8,867/- (d) Therefore, the loss of dependency would be calculated as: Rs.8,867/- x 12 x 16 = 17,02,464/- 13. The learned Tribunal has awarded amounts towards ‘loss of consortium’ as well as towards ‘loss of love and affection’. In terms of the judgment of the Supreme Court in the case of National Insurance Co. Ltd. v. Pranay Sethi3 the ‘loss of consortium’ is to be awarded at Rs.40,000/- per family member. In the present case, the deceased was survived by her husband and two children. Thus, the loss of consortium would be Rs.1,20,000/- (Rs.40,000 x 3). 14. Thus, the compensation awarded by the learned Tribunal is re-assessed in the following manner: 3 (2017) 16 SCC 680 Sl.No. Particulars Amount (Rs.) 01 Loss of Dependency 17,02,464/- 02 Loss of Consortium 1,20,000/- 04 Towards Loss of Estate 15,000/- 05 Towards Funeral and Obsequies Ceremonies 15,000/- Total 18,52,464/- NC: 2026:KHC:25458 MFA No. 3895 of 2018 10 HC-KAR 15. The other issue raised is on interest awarded. It is apposite to set out the applicable provision. Section 171 of the Motor Vehicles Act, 1988 [hereinafter referred to as ‘the MV Act’] provides for the award of interest in the following manner: “171. Award of interest where any claim is allowed. - Where any Claims Tribunal allows a claim for compensation made under this Act, such Tribunal may direct that in addition to the amount of compensation simple interest shall also be paid at such rate and from such date not earlier than the date of making the claim as it may specify in this behalf.” 15.1 A plain reading of the said provision shows that Section 171 of the MV Act does not prescribe any rate of interest and gives the discretion to the learned Tribunal to do so. It further sets out that the Tribunal shall award simple interest from the date of filing the claim. 16. Interest is the compensation for the factum of money being held back from the family of a deceased or the injured. The Courts have from time to time while discussing the principles for award of interest, held that the interest is awarded not because of any contractual obligation but NC: 2026:KHC:25458 MFA No. 3895 of 2018 11 HC-KAR because of the delay in claimants receiving compensation after the occurrence of the accident. 16.1 In Abati Bezbaruah vs. Geological Survey of India4, the Supreme Court has held that the interest rate must be fixed by taking all relevant factors including inflation, change of economy, policy being adopted by RBI from time to time, how long the case is pending, permanent injuries suffered by the victim, enormity of suffering, loss of future income, loss of enjoyment of life etc., into consideration. It was further held that Section 34 of the Code of Civil Procedure,1908 nor Section 4A(3) of Workmen Compensation Act, 1923 are applicable in fixing the rate of interest. The relevant extract is below: “18. Three decisions were cited before us by Mr.A.P. Mohanty, learned counsel appearing on behalf of the appellant, in support of his contentions. No ratio has been laid down in any of the decisions in regard to the rate of interest and the rate of interest was awarded on the amount of compensation as a matter of judicial discretion. The rate of interest must be just and reasonable depending upon the facts and circumstances of each case and taking all relevant factors including inflation, change of economy, policy being adopted by Reserve Bank of India from time to time, how long the case is pending, permanent injuries suffered by the victim, enormity of suffering, loss of future income, loss of enjoyment of life etc., into consideration. No rate 4 (2003) 3 SCC 148 NC: 2026:KHC:25458 MFA No. 3895 of 2018 12 HC-KAR of interest is fixed under Section 171 of the Motor Vehicles Act, 1988. Varying rates of interest are being awarded by Tribunals, High Courts and the Supreme Court. Interest can be granted even if a claimant does not specifically plead for the same as it is consequential in the eye of law. Interest is compensation for forbearance or detention of money and that interest being awarded to a party only for being kept out of the money which ought to have been paid to him. No principle could be deduced nor can any rate of interest be fixed to have a general application in motor accident claim cases having regard to the nature of provision under Section 171 giving discretion to the Tribunal in such matter. In other matters, awarding of interest depends upon the statutory provisions, mercantile usage and doctrine of equity. Neither Section 34 CPC nor Section 4-A(3) of the Workmen’s Compensation Act are applicable in the matter of fixing rate of interest in a claim under the Motor Vehicles Act. The Motor Vehicles Act. The courts have awarded the interest at different rates depending upon the facts and circumstances of each case. Therefore, in my opinion, there cannot be any hard-and-fast rule in awarding interest and the award of interest is solely on the discretion of the Tribunal or the High Court as indicated above.” [Emphasis Supplied] 17. The Supreme Court in Kaushnuma Begum (Smt) and Others vs. New India Assurance Co. Ltd. And Others5, recognised a shift in economic conditions and reduced the earlier standard interest rate from 12% to 9%, aligning it with prevailing bank rates. It held that interest at 9% per annum is reasonable and should ordinarily be 5 (2001)2 SCC 9 NC: 2026:KHC:25458 MFA No. 3895 of 2018 13 HC-KAR awarded from the date of filing of the claim petition. The relevant extract of the judgment is set out below: “24. Now, we have to fix up the rate of interest. Section 171 of the MV Act empowers the Tribunal to direct that “in addition to the amount of compensation simple interest shall also be paid at such rate and from such date not earlier than the date of making the claim as may be specified in this behalf”. Earlier, 12% was found to be the reasonable rate of simple interest. With a change in economy and the policy of Reserve Bank of India the interest rate has been lowered. The nationalised banks are now granting interest at the rate of 9% on fixed deposits for one year. We, therefore, direct that the compensation amount fixed hereinbefore shall bear interest at the rate of 9% per annum from the date of the claim made by the appellants. The amount of Rs 50,000 paid by the Insurance Company under Section 140 shall be deducted from the principal amount as on the date of its payment, and interest would be recalculated on the balance amount of the principal sum from such date.” [Emphasis Supplied] 18. In National Insurance Co. Ltd. vs. Keshav Bahadur6, it was held by the Supreme Court that the Tribunal cannot impose a penal rate of interest in case of default by the Insurance Company to pay the compensation within stipulated time. Such imposition of penalty is not statutorily prescribed and envisaged under Section 171 of the MV Act. However, interest @ 9% per annum was upheld 6 (2004) 2 SCC 370 NC: 2026:KHC:25458 MFA No. 3895 of 2018 14 HC-KAR by the Supreme Court. The relevant extract of the said judgment reads thus: “8. The inevitable conclusion on the factual background is that the liability of the appellant insurer is limited to Rs.50,000. The residual question is whether there could be any stipulation of penal rate of interest as done by the Tribunal and affirmed by the High Court. So far as the higher rate of interest stipulation is concerned, it is to be noted that grant of interest under Section 110-CC of the Act (corresponding to Section 171 of the Motor Vehicles Act, 1988, in short “the new Act”) is discretionary. The purpose for award of interest is to put pressure on the relevant person not to delay in making the payment; and to compensate the victim or his dependants at least to some extent for such delay as may occur, by way of interest. In determining the quantum of interest awardable under the relevant section, the Tribunal acting under Section 110 of the Act corresponding to Section 166 of the new Act can derive direct guidance from Section 34 of the Code of Civil Procedure, 1908 (in short “CPC”). In fact, the provisions require payment of interest in addition to compensation already determined. Even though the expression “may” is used, a duty is laid on the Tribunal to consider the question of interest separately with due regard to the facts and circumstances of the case. The provision is discretionary and is not and cannot be bound by rules. xxx xxx xxx 13. 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 NC: 2026:KHC:25458 MFA No. 3895 of 2018 15 HC-KAR 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.” [Emphasis Supplied] 18.1 A similar view has been taken by the Supreme Court in Dharampal vs. U.P.S.R.T.C.7, wherein it was held that interest is the compensation for the delay in making payment to a claimant. It was further held that given the policy of the RBI, where interest on fixed deposits for one year is at 9% per annum, the award however directed interest at 7.5% per annum, as the interest on bank deposits for the year 2004-05. The relevant extract reads as under: “10. Interest is compensation for forbearance or detention 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 to determine such rate of interest. In order to determine such rate we may refer to the observations made by this Court over the years. In the year 2001 in Kaushnuma Begum v. New India Assurance Co. Ltd.[(2001) 2 SCC 9 : 2001 SCC (Cri) 268] , on the question of the rate of interest to be awarded it was held that earlier, 12% was found to be the reasonable rate of simple interest but with a change in economy and the policy of Reserve Bank of India the interest rate has been lowered and the nationalised banks are now granting interest @ 9% 7 (2008) 12 SCC 208 NC: 2026:KHC:25458 MFA No. 3895 of 2018 16 HC-KAR on fixed deposits for one year. Accordingly, interest @ 9% was awarded in the said case…. xxx xxx xxx 11. In the year 2002, in United India Insurance Co. Ltd. vs. Patricia Jain Mahajan, this Court held that the interest is payable on the equitable grounds to the aggrieved person who is deprived of using the money which is due and payable to him following the observations made in Kaushnuma Begum, interest @ 9% was awarded in this case also. It was held as follows: (Mahajan case SCC p.304 para 39): “39….. In our view, the reason indicated in Kashnuma Begum is a valid reason and it may be noticed that the rate of interest is already on the decline. We therefore reduce the rate of interest to 9% in place of 12% as awarded by the High Court.” 12. In the year 2003, in Abati Bezbaruah v. Geological Survey of India [(2003) 3 SCC 148 : 2003 SCC (Cri) 746] it was held that the question as to what should be the rate of interest, in the opinion of this Court, would depend upon the facts and circumstances of each case. Award of interest would normally depend upon the bank rate prevailing at the relevant time. After referring to the aforementioned decisions interest @ 9% was awarded in the said case. xxx xxx xxx 14. In the backdrop of the aforesaid legal position, we may now examine the facts of the present case. The accident in the present case had taken place on 1-9-2004 and the Tribunal had passed the award on 18-5-2005. Rate at which the interest is to be awarded would normally depend upon the bank rate prevailing at the relevant time. Since in T.N. State Transport Corpn. Ltd. [(2005) 6 SCC 236 : 2005 SCC (Cri) 1436] 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, we consider it 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. 18-5-2005 in the present case. Consequently, we hold that the appellants would be entitled to be paid interest at the rate of 7.5% from the date of application till the date of payment.” [Emphasis Supplied] NC: 2026:KHC:25458 MFA No. 3895 of 2018 17 HC-KAR 19. The Supreme Court in Supe Dei (Smt) and Others vs. National Insurance Company Limited and Another8 affirmed that 9% per annum is an appropriate and consistently applied rate of interest in motor accident compensation cases, reinforcing uniformity in such awards. The relevant extract of the judgment is set out below: “11. Coming to the question of interest this Court in Kaushnuma Begum v. New India Assurance Co. Ltd. observed that 9% is the appropriate rate of interest to be awarded and that rate is being applied in motor accident compensation cases.” [Emphasis Supplied] 20. However recently, the Supreme Court in Jagadish vs. Mohan9 awarded interest at 9% per annum on compensation, reaffirming that such rate is appropriate in cases involving death, serious injury and substantial loss. The relevant extract of the judgment is set out below: “15. The Tribunal has noted that the appellant is unable to even eat or to attend to a visit to the toilet without the assistance of an attendant. In this background, it would be a denial of justice to compute the disability at 90%. The disability is indeed total. Having regard to the age of the appellant, the Tribunal applied a multiplier of 18. In the circumstances, the compensation payable to the appellant on account of the loss of income, including future 8 (2009) 4 SCC 513 9 (2018) 4 SCC 571 NC: 2026:KHC:25458 MFA No. 3895 of 2018 18 HC-KAR prospects, would be Rs 18,14,400. In addition to this amount, the appellant should be granted an amount of Rs 2 lakhs on account of pain, suffering and loss of amenities. The amount awarded by the Tribunal towards medical expenses (Rs 98,908); for extra nourishment (Rs 25,000) and for attendant's expenses (Rs 1 lakh) is maintained. The Tribunal has declined to award any amount towards future treatment. The appellant should be allowed an amount of Rs 3 lakhs towards future medical expenses. The appellant is thus awarded a total sum of Rs.25,38,308 by way of compensation. The appellant would be entitled to interest at the rate of 9% p.a. on the compensation from the date of the filing of the claim petition. The liability to pay compensation has been fastened by the Tribunal and by the High Court on the insurer, owner and driver jointly and severally which is affirmed. The amount shall be deposited before the Tribunal within a period of 6 weeks from today and shall be paid over to the appellant upon proper identification.” [Emphasis Supplied] 21. The Supreme Court in Savita Devi & Ors. vs SBI General Insurance Company Limited and Others10 relying on the judgment in the case of Malarvizhi & Ors. vs. United India Insurance Co. Ltd. & Ors.11 has enhanced the rate of interest from 6% to 9%, holding that “just compensation” must be determined on principles of fairness, reasonableness, and equitability, and that lower rates may not adequately compensate claimants. The relevant extract of the judgment is set out below: “9. In view of the aforesaid, the present appeals succeed and the impugned order(s) by the High Court are 10 CIVIL APPEAL NO.10053-10054/2024- order dated 02.09.2024. 11 (2020) 4 SCC 228 NC: 2026:KHC:25458 MFA No. 3895 of 2018 19 HC-KAR set aside and that of the Tribunal is restored. Furthermore, the rate of interest awarded @ 6% per annum by the Tribunal is enhanced to 9% per annum as has been held in Malarvizhi & Ors. vs. United India Insurance Co. Ltd. & Ors. and in the interest of determining 'just compensation' based fairness, reasonableness, and equitability.” [Emphasis Supplied] 22. A similar view has been taken by the Supreme Court in The Oriental Insurance Company Ltd. vs. Niru @ Niharika & Others12 wherein 9% interest awarded was upheld noting that despite fluctuations in economic conditions, such rate remains justified, especially in cases involving prolonged delay. It emphasized that interest should ordinarily run from the date of filing unless delay is clearly attributable to claimants. The relevant extract of the judgment is set out thus: “3. The Insurance Company filed an appeal before the High Court against the award amounts raising multifarious contentions. It was first contended that the accident occurred only due to the rashness and negligence of the car driver. On the quantum, it was submitted that admittedly the wife married in the year 2002 and the multiplier should have been only 7, taken from the death of the first husband. The exchange rate as adopted by the Tribunal, was also assailed together with the interest granted at the rate of 9%, which it was contended was against the existing interest rates. Specific contention was taken against the long delay in disposing of the claim petition, which was filed in the year 1995 and disposed of in the year 2017. The allegation was that the claimants who were residing in the U.K. were solely responsible for the delay occasioned. We 12 2025 INSC 822 dated 14.07.2025 NC: 2026:KHC:25458 MFA No. 3895 of 2018 20 HC-KAR see the said contention having been taken relying on Annexure A-4 produced in the memorandum of SLP filed. xxx xxx xxx 7. Yet another contention taken up is the interest granted at the rate of 9%. The Insurance Company relies on Annexure P-1 history of the case to contend that there was undue delay caused by reason of the claimants having not entered their evidence. From Annexure P-1, we see that the claim petition was filed on 28.12.1995 and it first came up for hearing on 11.09.2012. It is seen from Annexure P-1 that the case was posted for applicants' evidence on various dates from 2012 to 2016. However, there is nothing to indicate that it was only by reason of the claimants' absence that the consideration was delayed. Merely because, on various dates, for 4 years, the case was posted for the claimants' evidence, it does not necessarily mean that the claimants were responsible for the delay. Laws delays cannot, without proper substantiation, be cast upon the shoulders of one or other party to the lis. We hence do not find any reason to find the delay to be the sole responsibility of the claimants and in that circumstance necessarily interest must run from the date of filing of the claim petition, to the date of payment; for which precedents are legion, and we need not refer to them. 8. Further contention taken is the higher rate of interest of 9%, in challenge of which several precedents were placed before us. From the decisions perused what emanates is that in the 1980's, Courts were awarding 12% interest which stood reduced to 9% in the 1990's. With the advent of the 21st century and the economic recession world over, the interest rates fell considerably. But even now the rates offered by National Banks for long term deposits are 7% or more. Considering the over-all circumstances especially the long delay caused, we are of the opinion that 9% interest rate granted by the Tribunal is perfectly in order especially noticing the accident having occurred in the year 1995.” [Emphasis Supplied] NC: 2026:KHC:25458 MFA No. 3895 of 2018 21 HC-KAR 23. In another a recent decision the Supreme Court in Nidhi Bhargava & Ors. v. National Insurance Company Limited And Others13 the issue of grant of interest in motor accident compensation claims was discussed and considered. In the accident in question, one of the claimants survived and suffered grievous injuries. The Tribunal had awarded compensation together with interest at the rate of 9% per annum. Although the Delhi High Court reduced the compensation amount under certain heads, it maintained the award of interest at 9% per annum. The Supreme Court ultimately restored the compensation awarded by the Tribunal and specifically directed that payment be made with interest at the rate of 9% per annum. Here again, the Supreme Court did not interfere with the rate of interest and, in fact, reinforced the obligation of timely payment by directing that in case of delay beyond two months, an additional 9% interest per annum would be payable on both the principal amount and accrued interest. The relevant extract is below: 15. The High Court interfered and reduced the compensation as awarded by the Tribunal only on the ground that Return for the Assessment Year 2008-2009 13 2025 INSC 526 NC: 2026:KHC:25458 MFA No. 3895 of 2018 22 HC-KAR had to be excluded from consideration. It is not in dispute that the deceased was a businessman. The relevance of the Income Tax Return stems, in the context of the Act, for the period which it relates to i.e., the Financial Year concerned, and not on the date on which it is filed with the Income Tax Department. When faced with Returns for different Assessment Years, it would be upto the Tribunal concerned to adopt either the average income therefrom or choose an Assessment Year to rely upon. There is good reason to leave judicial discretion on the Tribunal to adopt one of the afore-noted two courses of action, bearing in nature the social purpose and object behind the Act, which is a beneficial legislation. It is quite unfortunate that the High Court in the present case has dealt with the matter in such a casual and superficial way where the rightful claim of the appellants under a welfare legislation has been drastically reduced without any cogent reason on a very tenuous ground, which we find to be totally unjustified. As pointed out in Shivaleela v. Divisional Manager, United India Insurance Co. Ltd., 2025 SCC OnLine SC 563: ‘13. … In K Ramya v. National Insurance Co. Ltd., 2022 SCC OnLine SC 1338, after taking note of, inter alia, Ningamma v. United India Insurance Co. Ltd., (2009) 13 SCC 710, the Court held that the ‘… Motor Vehicles Act of 1988 is a beneficial and welfare legislation that seeks to provide compensation as per the contemporaneous position of an individual which is essentially forward- looking. Unlike tortious liability, which is chiefly concerned with making up for the past and reinstating a claimant to his original position, the compensation under the Act is concerned with providing stability and continuity in peoples' lives in the future. …’ (underlined in original) 16. On the strength of the reasons afore-indicated, the Impugned Order is modified to the extent that the original amount [Rs. 31,41,000/- (Rupees Thirty-One Lakhs Forty-One Thousand)] awarded by the Tribunal in MACT No. 357515/2016 as compensation is restored. Payment be made to the Appellants by the Respondent No. 1 at the rate of 9% interest per annum after adjusting amount(s), if any, that may have been paid during the interregnum. The exercise be NC: 2026:KHC:25458 MFA No. 3895 of 2018 23 HC-KAR completed within two months from today, failing which an additional 9% interest per annum shall be payable for the period of delay, both on the principal amount as well as on the interest component, till the date of actual payment. No order as to costs, in the circumstances. [Emphasis Supplied] 23.1 In S. Kumar v. United India Insurance Co. Ltd.14, case a similar view was taken where the Supreme Court approved the award of interest at 9% per annum, observing that the learned Tribunal’s grant of 15% interest was ‘exorbitant’ but that the High Court had still allowed a ‘comparatively higher’ rate of interest at 9% p.a. 24. Thus, an analysis of the precedents shows that the award of interest over the last 5-10 years has infact consistently been awarded @ 9% p.a. or upholding such an award. 25. The learned counsel for the appellant has sought to rely upon the judgment in K.S. Laxmi Kumar case to submit that a Division Bench of this Court held that interest should normally be awarded @ of 6% per annum. 14 (2019) INSC 217 NC: 2026:KHC:25458 MFA No. 3895 of 2018 24 HC-KAR 26. The Division Bench of this Court in the K.S. Laxmi Kumar case had set out certain guidelines for the award of interest. It was held that (a) interest is to be awarded from the date of claim and (b) to meet expenditure in future. It was further held that where compensation awarded is general or non-pecuniary damages the rate should normally be 6% per annum. In addition, it was held that where the injuries are in the nature of per disablement, interest should be awarded @ 9% per annum. In certain other circumstances, it should be awarded @ 12%. The Division Bench concluded that in fatal injury cases, interest should be @ 6% per annum and where any increase is made it should be supported by reasons. It is apposite to extract this below: “32. To ensure exercise of judicial discretion in regard to interest in a fair, reasonable and judicious manner, it is necessary for Tribunal to keep in view the following broad guidelines: a) Interest can be awarded only from the date of claim and not from the date of accident [Section 171 of Motor Vehicles Act, 1988 and the decision of the Supreme Court in United India Insurance Company Ltd. v. Narendra Pandurang Kadam [(1995) 1 SCC 320 : AIR 1995 SC 782.] ] b) Interest should not be awarded on the amount awarded to meet expenditure in future [e.g. compensation awarded for the future surgery or future medical expenses] (vide decision in R.D. Hattangadi supra) NC: 2026:KHC:25458 MFA No. 3895 of 2018 25 HC-KAR c) Where compensation awarded consists of only general or nonpecuniary damages, or where the general or nonpecuniary damages constitute the bulk, as in cases of claims relating to death, the rate of interest should normally be 6% P.A. d) Where the compensation awarded is a fair mix of general damages and special damages [as in the case of an personal injuries resulting in permanent disability, leading to loss of earning capacity], the interest should normally be 9% per annum e) Where compensation awarded consists only of special or pecuniary damages or where special or pecuniary damages constitute the bulk of the award, (as in cases of damage to vehicles or in cases of personal injury where there is no loss of future earning capacity) interest may be awarded at 12% per annum. f) The interest to be awarded may be suitably increased if the claim proceedings were unduly protracted at the instance of owner/insurer [respondents in the claim petition], keeping in view a ceiling of 12% P.A. as interest. g) The rate of interest may be decreased suitably, where the claim proceedings were unduly delayed by the claimants. 33. In the absence of reasons, interest awarded should be 6% P.A. in fatal accident cases and 9% P.A. in personal injury cases. Any increases beyond those rates should be supported by reasons. The guidelines stated above are neither general rules for all cases, nor inflexible. The Tribunal may, for reasons to be specified, refuse to award interest or award interest at a rate higher than what is normally granted in the interest of justice.” [Emphasis Supplied] 26.1. The learned Amicus Curaie has however referenced the matter of Sanjeevini Anand Awate vs. Managing NC: 2026:KHC:25458 MFA No. 3895 of 2018 26 HC-KAR Director Hiranyakeshi Sahakara Sakkare Karkhane, Nippani15 to contend that the K.S. Laxmi Kumar case has been overruled. 27. The judgment in the Sanjeevini Anand case was given by a Coordinate Bench of Justice R.V. Raveendran (as he was then) and held that the award of interest under Section 171 of the Motor Vehicles Act is discretionary and not governed by the Interest Act. As a guiding principle, interest should ordinarily align with the rate offered by nationalised banks on one-year fixed deposits which was held to be 8% per annum. However, this is not rigid, and deviation is permissible where justified by specific facts, provided reasons are recorded. The relevant extract of the Sanjeevini Anand case judgment is set out below: “1. This matter is placed before me as per the order of the Hon'ble Chief Justice, under Section 98(2) of the Code of Civil Procedure, 1908 in view of difference of opinion on a point of law (regarding interest to be awarded in Motor Accident Claims) between two learned Judges of a Division Bench of this Court, which heard the appeal. The differing views of the two learned Judges is in the case of Sanjeevini Ananda Awate v. The Managing Director, Hiranyakeshi Sahakara Sakkare Karkhane. xxx xxx xxx 10. As the Supreme Court has held that the interest payable should be normally linked to the rate of interest 15 2001 SCC OnLine Kar 706 NC: 2026:KHC:25458 MFA No. 3895 of 2018 27 HC-KAR paid by Nationalised Banks on fixed deposits for one year, it may be appropriate to adopt the same, as the basis, subject, however, to the discretion to change the rate of interest based on the facts and circumstances of the case. In view of the decision of the Supreme Court, guidelines (c), (d) and (e) given in K.S. Lakshmi Kumar's case, supra, will no longer operate. In all motor accident claims, irrespective of whether they relate to death, injury or damage, the rate of interest should normally be the rate of interest given by Nationalised Banks on deposits for one year. I should note that the rate of interest on deposits for one year was 9% p.a. when Supreme Court rendered its decision. I am informed that Nationalised Banks have now reduced the rate of interest payable on fixed deposits and the prevailing rate of interest on fixed deposit for a term of one year is 8% per annum. 11. I, therefore, answer the questions of law, as follows: (a) The provisions of Interest Act, 1978 are inapplicable for awarding compensation under the Motor Vehicles Act, 1988; (b) Having regard to the provisions of Section 171 of the Motor Vehicles Act, 1988, the rate of interest is a matter within the judicial discretion of the Tribunal. The rate of interest should, therefore, be determined keeping in view the following broad guidelines (subject however to the changes that may be indicated by the Supreme Court or this Court from time to time): (i) Interest can be awarded from the date of claim petition on the compensation amount awarded (excluding the amount awarded to meet future expenditure); (ii) The rate of interest to be awarded in all motor accident claims (whether relating to death, injury or damage) shall normally be the rate of interest offered by Nationalised Banks on fixed deposits for one year. At present the rate of such interest is 8% per annum; (iii) Any variation from the said interest rate of 8% per annum, while awarding interest, if warranted by the special facts or circumstances of the case, should be supported by reasons.” [Emphasis Supplied] NC: 2026:KHC:25458 MFA No. 3895 of 2018 28 HC-KAR 27.1 The findings in K.S.Laxmi Kumar case qua award of compensation have been set aside in the judgment of the Supreme Court in R.Valli And Others vs. Tamil Nadu State Transport Corporation Limited16 in the following manner: “8. Mr Amit Anand Tiwari, learned Additional Advocate General has referred to certain orders of the High Courts reported as Uma Shankar v. Revathy Vadivel [Uma Shankar v. Revathy Vadivel, 2014 SCC OnLine Mad 846] , Kamlesh Devi v. Kitab Singh [Kamlesh Devi v. Kitab Singh, 2011 SCC OnLine Del 2843] and Union of India v. K.S. Lakshmi Kumar [Union of India v. K.S. Lakshmi Kumar, 2000 SCC OnLine Kar 406] to support the applicability of split multiplier i.e. multiplier up to the date of retirement and another multiplier after retirement. 9. The judgments referred to by Mr Tiwari are prior to the enunciation of law by this Court in Pranay Sethi [National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680 : (2018) 2 SCC (Cri) 205 : (2018) 3 SCC (Civ) 248] . Therefore, such judgments no longer can be said to be good law as suitable multiplier is to be applied keeping in view the age of the deceased in terms of para 59.7 of the judgment in Pranay Sethi [National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680 : (2018) 2 SCC (Cri) 205 : (2018) 3 SCC (Civ) 248] . xxx xxx xxx 13. Thus, the appellants are found entitled to compensation of Rs 24,33,064 with interest @ 9% from the date of filing of the claim application till realisation. [Emphasis Supplied] 16 (2022) 5 SCC 107 NC: 2026:KHC:25458 MFA No. 3895 of 2018 29 HC-KAR 28. In addition, the reliance placed by the learned counsel for the appellant on the decision of the Division Bench in K.S. Lakshmi Kumar case is also required to be considered in the light of subsequent judicial pronouncements. The position that emerges is that while bank rates may serve as a guiding factor, they are not determinative, and the discretion of the Court remains paramount. In addition, the Supreme Court has awarded/upheld the award of 9% per annum even in fatal injury cases/death cases. Thus, the distinction drawn in the K.S. Laxmi Kumar case qua “injury” and ”death” cases cannot be sustained in the light of recent judicial precedents. 29. An analysis of the aforegoing discussions of the Supreme Court, reflects that the Supreme Court has consistently held that the award of interest is intended to recompensate the claimant for being deprived of the use of money, which ought to have been paid at the time of occurrence of the accident. The rate of interest, therefore, must be just, fair and reasonable, having regard to the prevailing economic conditions and bank rates. NC: 2026:KHC:25458 MFA No. 3895 of 2018 30 HC-KAR 29.1. The award of interest is usually determined at the prevailing bank rate of interest on a case-to-case basis and at the rate which is just and fair and reasonable. 29.2 There cannot be any ‘straitjacket formula’ in determining the rate of interest and that the same must depend on the facts and circumstances of each case. The guiding principle remains that the rate must neither be punitive nor non-existent but must strike a balance between fairness to the claimant and reasonableness to the insurer. 29.3 The rate of interest 9% is more appropriate in case involving death and serious injury especially, where there is a long delay in the claimants receiving the compensation. 30. In the present case, the accident occurred in the year 2016 leading to the death of the wife of respondent No.1 and mother of respondent Nos.2 and 3. The award came to be passed in the year 2018. The learned Tribunal has deemed it apposite to award interest on the compensation @ 9% per annum. The award of interest is not punitive as is fair considering the prevailing economic condition and NC: 2026:KHC:25458 MFA No. 3895 of 2018 31 HC-KAR bank rates. In addition, it is now 10 years since the date of the accident. 31. The learned Trial Court has awarded interest at the rate of 9% per annum. This Court finds no infirmity with the Impugned Award of 9% interest in the circumstances of the present case. 32. However, and as discussed above, compensation is required to be recalculated as is set out in para 14 above and a sum of Rs.18,52,464/- is to be awarded to the respondent Nos.1 to 3/claimants. 33. Accordingly, the Court proceeds to pass the following directions: ORDER (i) The appeal is disposed of directing that the Impugned Judgment and Award dated 16.02.2018, passed by the XV Additional Small Causes Judge & Member, MACT, Mayo Hall Unit (SCCH-19) in MVC No.7434/2016 is modified to the extent that the claimants are entitled to enhanced compensation of Rs.1,95,464/- NC: 2026:KHC:25458 MFA No. 3895 of 2018 32 HC-KAR along with interest @ 9% per annum from the date of petition till the date of realization, in addition to Rs.16,57,000/- that has been awarded by the Tribunal. (ii) The remaining portion of the Impugned Award of the Tribunal is undisturbed. (iii) The Insurance Company shall deposit the enhanced compensation with interest at 9% p.a. within a period of eight weeks from the date of receipt of the judgment. (iv) The amount in deposit by the Insurance Company before this Court inclusive of updated interest shall be transmitted to the Tribunal within a week. (v) The Registry is directed to draw the modified Award accordingly. (vi) The Registry is directed to transmit a copy of this judgment to the concerned Tribunal, along with its records. NC: 2026:KHC:25458 MFA No. 3895 of 2018 33 HC-KAR (vii) No order as to costs. All pending applications stand disposed of. Sd/- (TARA VITASTA GANJU) JUDGE KS/JJ Sl.No.8, List No. I