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Smt. Mohini Ram v. New India Assurance Co. Through D.M. Kanpur And Others - WRIT - C No. 21458 of 2004  RD-AH 12870 (25 July 2007)
Civil Misc. Writ Petition No. 21458 of 2004
Smt. Mohini Ram
New India Assurance Company & others
Hon'ble Pankaj Mithal, J.
It is a very strange and unfortunate case where the parties entered into the compromise before Lok Adalat under the Legal Services Authorities Act, 1987 and got the matter decided with the intention to get the compensation payable under the motor accident case at the earliest to avoid hardship to the widow of the deceased and his minor children. The most unfortunate part is that despite the above compromise dated 28.2.1998 claimants have not been paid the compensation as of date. Thus, negating the very object of the settlement and defeating the purpose of the Legal Services Authorities Act, 1987.
In a motor accident which took place on 9.3.1987 between a private truck insured with the New India Assurance Company and the State Government vehicle, Dr. Om Prakash Ram, Medical Officer aged about 37 years was killed. His widow Smt. Mohini Ram on her behalf and on behalf of her three minor children Km. Poonam, Km. Seema and Rahul preferred Motor Accident Claims Application No. 162 of 1987 before the Motor Accident Claims Tribunal, Jalaun. The said claim was decreed in part and the total amount of Rs. 8,56,390/- was awarded by the Tribunal, out of which 80% was payable by the New India Assurance Company (insurer) and Surjeet Singh (truck owner) and Mool Chandra (driver of the truck) jointly and the balance of 20% was payable by the State Government. In short, the New India Assurance Company was to pay a total of Rs.6,85,112/- and the State Government a sum of Rs. 1,17,278/-. The aforesaid awarded amount carried with it an interest of 6% from the date of the claim application till its payment.
The New India Assurance Company preferred F.A.F.O. No. 270 of 1993 challenging the award of the Tribunal. The said appeal was admitted and an interim order was passed by the Division Bench of this Court on 20.1.1993 directing the New India Assurance Company to deposit a lump sump of Rs. 7,00,000/- as against the decreed amount payable by it within two month which was directed to be invested in a fixed deposit of a Nationalized Bank. The interest on the said fixed deposit was permitted to be withdrawn by the claimants on monthly basis. The said order also clearly stated that the principal amount payable shall be subject to the result of the appeal. In pursuance of the above order, the New India Assurance Company deposited a sum of Rs. 7,00,000/- and invested it in a fixed deposit, the interest accruing thereon was withdrawn by the claimants.
During the pendency of the above appeal the matter was referred to the Lok Adalat under Section 20 of the Legal Services Authorities Act, 1987 wherein a settlement was entered into between the New India Assurance Company and the claimants for the full and final settlement of the claim at a sum of Rs. 5,20,000/-. The appeal was decided by the judgment and order of the High Court dated 28.02.1998 in terms of the above settlement. The basic conditions of the settlement are as under:-
1.The claimants shall be entitled to get Rs. 5,20,000/- in full and final satisfaction of the their claim;
2.The amount already deposited/received shall be adjusted towards the amount due;
3.The case has been compromised by the parties for Rs. 5,20,000/- in totto in full and final discharge of the payment; and
4.The amount as above shall be deposited/paid to the claimants through cheque within 30 days from the receipt of the copy of the order of the High Court failing which interest at the rate of 12% shall accrue from such date till payment.
After the above decision in the appeal, the New India Assurance Company moved an application before the Tribunal that it had deposited a sum of Rs.7,00,000/- on 20.3.1993 in pursuance of the interim order of the High Court. Now since the claimants are entitled to only Rs. 5,20,000/- the amount of interest paid to them may be adjusted against the said amount and the balance be released to it. The application was opposed by the claimants by filing objections. It was registered as Misc. Case No. 1 of 1999 Mohini Ram Vs. Sujeet Singh and others. On the said application the Tribunal passed the impugned order dated 17.10.2003 rejecting the objections of the claimants and holding that the claimants are only entitled to Rs. 5,20,000/- and the interest on the fixed deposit already paid to them is not liable to be excluded from this amount.
Aggrieved by the aforesaid order on behalf of the claimants this writ petition has been preferred. In the writ petition necessary counter and rejoinder affidavits have been exchanged between the contesting parties i.e. claimants/petitioner Smt. Mohini Ram and respondent No.1 New India Assurance Company.
I have heard Sri Murlidhar, Senior Advocate, assisted by Sri R.P. Singh, learned counsel for the appellant and Sri Satish Chaturvedi for the respondent No.1 New India Assurance Company and proceed to decide the writ petition finally with their consent.
Sri Murlidhar has submitted that under the award of the Tribunal the New India Assurance Company was liable to pay a sum of Rs. 6,85,112/- along with 6% interest from the date of filing of the claim petition till its payment. This decreed amount formed the principal amount payable/admissible to the claimants. Thereafter, under interim order of the High Court in appeal, the New India Assurance Company was directed to deposit a round figure of Rs.7,00,000/- as condition for stay and the claimants were permitted to withdraw the interest accruing on the said deposit. The Court has further made it clear that the payment of the principal amount shall be subject to the decision of the appeal. Therefore, the settlement arrived at between the parties was only with regard to the principal amount. In the settlement the principal amount payable by the Insurance Company was reduced from 6,85,112/- and 6% interest thereof to Rs. 5,20,000/- in full and final settlement, The settlement was totally silent with regard to the interest which had accrued on the fixed deposit and was paid to the claimants. Therefore, this amount was not liable to be adjusted while making the payment of the principal amount with 6% interest.
Sri Satish Chaturvedi in opposition submitted that a plain reading of the terms and conditions of the settlement indicates that the claimants are entitled to only Rs. 5,20,000/- and nothing more. This amount includes the interest accrued and paid on the fixed deposit. The claimants have withdrawn interest of more than 5,00,000/- and as such nothing remains to be payable to them. The petition therefore has no merits and deserves to be dismissed.
I have perused the record including the terms and conditions of settlement. The settlement though clear is not very happily worded and it appears that a very casual approach was taken by the parties in drafting the same. The object of settlement in such cases is to mitigate the hardship of the claimants and to avoid delay in the payment of compensation. It is with this intention that the parties have entered into a settlement and agreed for Rs.5,20,000/- in full and final settlement without mentioning anything about interest.
The payment of 6% interest on the amount awarded and further interest earned on fixed deposit finds no mention in the settlement. Therefore, the intention gathered from the said settlement is that the parties have agreed for settling the claim of Rs.5,20,000/- as against the principal awarded amount of Rs.6,85,112/- and 6% interest thereof from 1987 till its payment. The words full and final settlement used therein as such denotes the above amount only. Even the interim order of the High Court had made it clear that the dispute to be resolved in the appeal is with regard to the principal amount inasmuch as it stated "so far as the principal amount is concerned, the same shall be subject to the result of the appeal". So the intention of the parities was to settle the principal amount only and the principal amount settled excluded the interest which accrued on the fixed deposit and was paid to the claimants.
In view of the above, the Tribunal erred and misconstrued the settlement in its true spirit and tenor in passing the impugned order dated 17.10.2003. Accordingly, the order of the Tribunal dated 17.10.2003 is liable to be set aside.
However, it may not be out of context to mention that under the settlement the claimants became entitled to Rs. 5,20,000/- in full and final settlement of the amount awarded with 6% interest from the date of claim application till its payment. The New India Assurance Company had deposited a sum of Rs.7,00,000/- in a fixed deposit. In pursuance of the interim order of the High Court the claimants have withdrawn interest accrued on this Rs. 7,00,000/- for the period 20.3.1993 (when the amount was deposited) till 28.2.1998 (when the appeal was decided). Therefore, the claimants have withdrawn interest even on the excess amount (i.e. Rs. 7,00,000 - 5,20,000 = 1,80,000/-) Accordingly, the claimants are liable to refund interest received by them on the aforesaid sum of Rs. 1,80,000/- for the period 20.3.1983 to 20.2.1998.
Now, since the said principal amount of Rs. 5,20,000/- was not paid to the claimants within 30 days as stipulated in the settlement or even till date, the claimants are entitled to 12% interest per annum on account of delay in payment. The period of said delay is obviously starts from the expiry of 30 days from the date of receipt of the copy of the order of the High Court dated 28.2.1998 and continues till payment is made.
Thus, to conclude in short the claimants are entitled for payment of Rs. 5,20,000/- with 12% interest thereon from the expiry of 30 days from receipt of the copy of the order of the High Court till its payment after adjusting the excess amount of interest which has been withdrawn by them on a sum of Rs. 1,80,000/- for the period the fixed deposit of Rs. 7,00,000/- remained with the bank i.e. from 20.3.1993 to till 28.2.1998.
In the result, petition succeeds, the impugned order dated 17.10.1998 passed by the M.A.C.T., Jalaun in Misc. Case No. 01 of 1999 Mohini Ram Vs. Surjeet Singh is set aside and the respondent No.1 New India Assurance Company is directed to make payment forthwith of a sum of Rs. 5,20,000/- to the claimants along with interest as directed above. No order as to costs.
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