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IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 3608 OF 2009
(Arising out of SLP(C) No. 17525 of 2006)
R. K. Malik & Anr. .....Appellants
Versus
Kiran Pal & Ors. .....Respondents
With
CIVIL APPEAL No. 3609 OF 2009
(Arising out of SLP(C) No. 1686 of 2007)
And
CIVIL APPEAL No. 3607 OF 2009
(Arising out of SLP(C) No. 13397 of 2007)
JUDGMENT
Dr. Mukundakam Sharma, J.
1. Leave granted.
2. Challenge in these appeals is made to the legality and validity of
the judgment and order dated 17.05.2006 rendered by a Single
Judge of Delhi High Court in a bunch of motor accident claims
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petitions bearing MACT Nos. 194, 195, 196, 197, 199, 200, 201-
202, 203-204, 207-208, 209-210, 213, 214, 215, 217, 221, 222,
228-229, 231-232, 233-234 and 742-743 of 2005, whereby and
whereunder the High Court was pleased to dispose of the claim
petitions of the appellants herein.
3. In order to decide these appeals, it would be necessary to state few
basic facts. The appellants herein are claimants whose children
were studying in school. On 18.11.1997 when these children were
proceeding to the school in a bus bearing No. DL IP-1644, the bus
after overrunning the road and breaking the railing got drowned in
Yamuna river at Wazirabad Yamuna Bridge. Consequent to the
accident, 29 children died.
4. The bus was being driven by Mr. Karan Pal (respondent No.1
herein) and was owned by Mr. Hari Kishan (respondent No.2) and
was insured with National Insurance Company Ltd. (respondent No.
3). It was alleged that the driver was driving the bus in a rash and
negligent manner and at a very fast speed. It was further alleged
that the bus driver lost control of the bus and after breaking the
railing of the bridge on left side, the same fell into the river
Yamuna.
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5. The appellants filed claim petitions individually on account of fault
liability and sought for payment of compensation under Section
163-A read with Second Schedule of the Motor Vehicle Act, 1988 (in
short `the Act'). It was pleaded that the deceased-children would
have earned good amount per month in future and would have
provided financial assistance and pecuniary help to their parents-
appellants. The claim petitions of the appellants were heard
together by the Motor Accident Claims Tribunal, Delhi (in short `the
Tribunal').
6. During the course of trial before the Tribunal, several witnesses
were examined in support of the respective claims. The appellants
also examined themselves as witnesses. The Tribunal by award
dated 06.12.2004 held that the accident had taken place due to the
negligence of the driver (respondent No. 1) and, therefore, the said
respondent along with respondent Nos. 2 and 3 were jointly and
severally liable to pay compensation. The Tribunal by its common
award awarded a sum of Rs. 1, 55,000/- to the dependents of
children between age group of 10 to 15 years and Rs. 1, 65,000/-
between 15 to 18 years. Three of the children namely Kailash
Rathi, Neena Jain and Jatish Sharma were less than 10 years. In
the case of Kailash Rathi, compensation of Rs. 1, 05,000/- was
awarded and in the cases of Neena Jain and Jatish Sharma,
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compensation of Rs. 1, 30,000/- and Rs. 1, 31,000/- respectively
was awarded. Additional Rs. 1000/- was awarded in the case of
Jatish Sharma, as in some other cases, for loss of books. The
figures mentioned above include Rs. 5,000/- each towards funeral
and last rites. It awarded interest @ 6% for four years. As per the
Second Schedule of the Act, the balance amount was awarded for
loss of dependency that was calculated on notional income of Rs.
15,000/- per annum. Rs. 5,000/- was deducted towards personal
living expenses. The Tribunal applied multiplier of 15 for children
below 15 years and multiplier of 16 for children between 16 and 18
years respectively.
7. Against the said order of the Tribunal, appeals were filed before the
High Court by the appellants who were heard together by the High
Court. It was submitted before the High Court that the amount
awarded by the Tribunal was not just and reasonable and the
Tribunal erred in not awarding interest from the date of petition till
realization.
8. The High Court by its common order held that the appellants are
entitled to enhancement of compensation in all the cases by Rs.
75,000/- and Rs. 1000/- (if not already awarded by the Tribunal)
and interest @ 7.5% per annum from the date of filling of the claim
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petition till payment. It was further held that 50% of the enhanced
compensation with interest shall be paid and the balance 50% shall
be kept in the form of fixed deposit or in the post office for a period
of six years. The High Court directed that the dependents would be
entitled to interest but would not withdraw the principal amount
during the lock-in period of six years without the permission of the
Tribunal.
9. Feeling aggrieved, the appellants have preferred the present special
leave petition contending that the High Court ought to have applied
the ratio of Lata Wadhwa v. State of Bihar, (2001) 8 SCC 197 to
the facts of the case and also that it failed to award a fair and
reasonable compensation. It was submitted that the High Court
ought to have awarded compensation of Rs. 10, 00,000/-. It was
the further contention that the High Court erred in applying notional
income of deceased child as Rs. 15,000/- per annum only. It was
further contended that the Tribunal ought to have enhanced the
income considering the rise in cost of living as well as inflation.
10.Undoubtedly, the compensation in law is paid to restore the person,
who has suffered damage or loss in the same position, if the
tortuous act or the breach of contract had not been committed.
The law requires that the party suffering should be put in the same
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position, if the contract had been performed or the wrong had not
been committed. The law in all such matters requires payment of
adequate, reasonable and just monetary compensation.
11.In cases of motor accidents the endeavour is to put the
dependents/claimants in the pre-accidental position. Compensation
in cases of motor accidents, as in other matters, is paid for
reparation of damages. The damages so awarded should be
adequate sum of money that would put the party, who has
suffered, in the same position if he had not suffered on account of
the wrong. Compensation is therefore required to be paid for
prospective pecuniary loss i.e. future loss of income/dependency
suffered on account of the wrongful act.
12.However, no amount of compensation can restore the lost limb or
the experience of pain and suffering due to loss of life. Loss of a
child, life or a limb can never be eliminated or ameliorated
completely. To put it simply-pecuniary damages cannot replace a
human life or limb lost. Therefore, in addition to the pecuniary
losses, the law recognises that payment should also be made for
non pecuniary losses on account of, loss of happiness, pain,
suffering and expectancy of life etc. The Act provides for payment
of "just compensation" vide section 166 and 168. It is left to the
6
courts to decide what would be "just compensation" in facts of a
case.
13.For calculating pecuniary loss or loss of dependency, this Court has
repeatedly held that it is the multiplier method which should be
applied. The said method is based upon the principle that the
claimant must be paid a capital sum, which would yield sufficient
interest to provide material benefits of the same standard and
duration as the deceased would have provided for the dependents,
if the deceased had lived and earned. The multiplier method is
based upon the assessment that yearly loss of dependency should
be equal to interest that could be earned in normal course on the
capital sum invested. The capital sum would be the compensation
for loss of dependency or the pecuniary loss suffered by the
dependents. Needless to say, uniform application of the multiplier
method ensures consistency and certainty and prevents different
amounts being awarded in different cases.
14. For calculating the yearly loss of dependency the starting point is
the wages being earned by the deceased, less his personal and
living expenses. This provides a basic figure. Thereafter, effect is
given to the future prospects of the deceased, inflation and general
price rise that erodes value and the purchasing power of money.
7
To the multiplicand so calculated, multiplier is to be applied. The
multiplier is decided and determined on the basis of length of
dependency, which must be estimated. This has to be necessarily
discounted for contingencies and uncertainties. Reference in this
regard may be made to the judgments of this Court in the case of
Sarla Dixit v. Balwant Yadav, (1996) 3 SCC 179; Managing
Director TNSTC Ltd. v. K. T. Bindu, (2005) 8 SCC 473; T. N.
State Transport Corp. Ltd. v. S. Rajapriya, (2005) 6 SCC 236;
New India Assurance Co. Ltd. v. Charlie, (2005) 10 SCC 720
and United India Insurance Co. Ltd. v. Patrica Jean Mahajan
(2002) 6 SCC 281.
15. The real problem that arises in the cases of death of children is that
they are not earning at the time of the accident. In most of the
cases they were still studying and not working. However, under no
stretch of imagination it can be said that the parents, who are
appellants herein, have not suffered any pecuniary loss. In fact,
Loss of dependency by its very nature is awarded for prospective or
future loss. In this context, Lord Atkinson aptly observed in Taff
Vale Rly. Co. v. Jenkins, (1911-13) All England Reporter 160 as
follows:
"In case of the death of an infant, there may
have been no actual pecuniary benefit derived by its
8
parents during the child's lifetime. But this will not
necessarily bar the parents' claim and prospective loss
will found a valid claim provided that the parents
establish that they had a reasonable expectation of
pecuniary benefit if the child had lived."
16. Then, how does one calculate pecuniary compensation for loss of
future earnings and loss of dependency of the parents, grand
parents etc. in the case of non-working student? Under the Second
Schedule of the Act in case of a non earning person, his income is
notionally estimated at Rs. 15,000/- per annum. The Second
Schedule is applicable to claim petitions filed under Section 163 A of
the Act. The Second Schedule provides for the multiplier to be
applied in cases where the age of the victim was less than 15 years
and between 15 years but not exceeding 20 years. Even when
compensation is payable under Section 166 read with 168 of the
Act, deviation from the structured formula as provided in the
Second Schedule is not ordinarily permissible, except in exceptional
cases. [see Abati Bezbaruah v. Dy. Director General,
Geological Survey of India, (2003) 3 SCC 148); United India
Insurance Company Ltd. v. Patricia Jean Mahajan, (2002) 6
SCC 281 and UP State Road Transport Corp. v. Trilok Chandra,
(1996) 4 SCC 362].
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17. Reverting back to the factual position of the present case, the date
of accident is 18.11.1997. Prior to this, the Second Schedule of the
Act was already introduced w. e. f. 14.11.1994. Thus, the notional
income mentioned in the Second Schedule and the multiplier
specified therein can form the basis for the pecuniary compensation
for the loss of dependency in the present cases. No fact and reason
was highlighted during the arguments why the Second Schedule
should not apply in the present cases. The Second Schedule also
provides for deduction of 1/3rd consideration towards expenses;
which the victim would have incurred on himself if he had lived. As
compensation for loss of dependency is to be calculated on the
basis of notional income because the deceased was a child. It by
necessary implication takes into account future prospects, inflation,
price rise etc.
18.Therefore keeping in view of Second Schedule of the Act, this Court
do not see any reason to differ with the view taken by the Tribunal
as well as the High Court in so far as award of pecuniary
compensation to the dependents/claimants is concerned. We must
point out here that the learned counsel for the appellants had
argued that the notional sum of Rs. 15,000/- should be enhanced
and increased as the legislature has not amended the Second
Schedule and the same continues to be in existence since it was
10
enacted on 14.11.1994. We are not examining and going into this
aspect as the accident had taken place in the present case nearly
three years after the enactment of the Second Schedule. The time
difference between the date of the enactment and the date of
accident is not substantial.
19.The other issue is with regard to non-pecuniary compensation to
the appellants-dependents on the loss of human life, loss of
company, companionship, happiness, pain and suffering, loss of
expectation of life etc.
20. In the Halsbury's Laws of England, 4th Edition, Vol. 12, page 446, it
has been stated with regard to non-pecuniary loss as follows:
"Non-pecuniary loss: the pattern.
Damages awarded for pain and suffering and loss
of amenity constitute a conventional sum which is
taken to be the sum which society deems fair,
fairness being interpreted by the Courts in the light
of previous decisions. Thus there has been evolved
a set of conventional principles providing a
provisional guide to the comparative severity of
different injuries, and indicating a bracket of
damages into which a particular injury will currently
fall. The particular circumstance of the plaintiff,
including his age and any unusual deprivation he
may suffer, is reflected in the actual amount of the
award.
The fall in the value of money leads to
a continuing reassessment of these awards and to
periodic reassessments of damages at certain key
points in the pattern where the disability is readily
11
identifiable and not subject to large variations in
individual cases."
21. In the case of Ward v. James, (1965) I All E R 563, it was
observed:
"Although you cannot give a man so
gravely injured much for his `lost years', you can,
however, compensate him for his loss during his
shortened, span, that is, during his expected `years
of survival'. You can compensate him for his loss
of earnings during that time, and for the cost of
treatment, nursing and attendance. But how can
you compensate him for being rendered a helpless
invalid? He may, owing to brain injury, be
rendered unconscious for the rest of his days, or,
owing to a back injury, be unable to rise from his
bed. He has lost everything that makes life
worthwhile. Money is no good to him. Yet Judges
and juries have to do the best they can and give
him what they think is fair. No wonder they find it
well nigh insoluble. They are being asked to
calculable. The figure is bound to be for the most
part a conventional sum. The Judges have worked
out a pattern, and they keep it in line with the
changes in the value of money."
22. The Supreme Court in the case of R. D. Hattangadi v. Pest
Control (India) (P) Ltd., (1995) 1 SCC 551, at page 556, has
observed as follows in para 9:
"9. Broadly speaking while fixing an amount
of compensation payable to a victim of an accident,
the damages have to be assessed separately as
pecuniary damages and special damages. Pecuniary
damages are those which the victim has actually
incurred and which are capable of being calculated
in terms of money; whereas non-pecuniary
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damages are those which are incapable of being
assessed by arithmetical calculations. In order to
appreciate two concepts pecuniary damages may
include expenses incurred by the claimant: (i)
medical attendance; (ii) loss of earning of profit up
to the date of trial; (iii) other material loss. So far
non-pecuniary damages are concerned, they may
include (i) damages for mental and physical shock,
pain and suffering, already suffered or likely to be
suffered in future; (ii) damages to compensate for
the loss of amenities of life which may include a
variety of matters i.e. on account of injury the
claimant may not be able to walk, run or sit; (iii)
damages for the loss of expectation of life, i.e., on
account of injury the normal longevity of the
person concerned is shortened; (iv) inconvenience,
hardship, discomfort, disappointment, frustration
and mental stress in life."
In this case, the Court awarded non-pecuniary special damages of Rs.
3, 00,000/- to the claimants.
23. In Common Cause, A Registered Society v. Union of India,
(1999) 6 SCC 667 @ page 738, it was observed:
"128. The object of an award of damages is to give
the plaintiff compensation for damage, loss or
injury he has suffered. The elements of damage
recognised by law are divisible into two main
groups: pecuniary and non-pecuniary. While the
pecuniary loss is capable of being arithmetically
worked out, the non-pecuniary loss is not so
calculable. Non-pecuniary loss is compensated in
terms of money, not as a substitute or replacement
for other money, but as a substitute, what
McGregor says, is generally more important than
money: it is the best that a court can do. In
Mediana, Re87 Lord Halsbury, L.C. observed as
under:
"How is anybody to measure pain and
suffering in moneys counted? Nobody can suggest
that you can by arithmetical calculation establish
what is the exact sum of money which would
13
represent such a thing as the pain and suffering
which a person has undergone by reason of an
accident.... But nevertheless the law recognises
that as a topic upon which damages may be given."
24.It is extremely difficult to quantify the non pecuniary compensation
as it is to a great extent based upon the sentiments and emotions.
But, the same could not be a ground for non-payment of any
amount whatsoever by stating that it is difficult to quantify and
pinpoint the exact amount payable with mathematical accuracy.
Human life cannot be measured only in terms of loss of earning or
monetary losses alone. There are emotional attachments involved
and loss of a child can have a devastating effect on the family which
can be easily visualized and understood. Perhaps, the only
mechanism known to law in this kind of situation is to compensate
a person who has suffered non-pecuniary loss or damage as a
consequence of the wrong done to him by way of
damages/monetary compensation. Undoubtedly, when a victim of a
wrong suffers injuries he is entitled to compensation including
compensation for the prospective life, pain and suffering, happiness
etc., which is sometimes described as compensation paid for "loss
of expectation of life". This head of compensation need not be
restricted to a case where the injured person himself initiates action
but is equally admissible if his dependant brings about the action.
14
25.That being the position, the crucial problem arises with regard to
the quantification of such compensation. The injury inflicted by
deprivation of the life of a child is extremely difficult to quantify. In
view of the uncertainties and contingencies of human life, what
would be an appropriate figure, an adequate solatium is difficult to
specify. The courts have therefore used the expression "standard
compensation" and "conventional amount/sum" to get over the
difficulty that arises in quantifying a figure as the same ensures
consistency and uniformity in awarding compensations.
26.While quantifying and arriving at a figure for "loss of expectation of
life", the Court have to keep in mind that this figure is not to be
calculated for the prospective loss or further pecuniary benefits that
has been awarded under another head i.e. pecuniary loss. The
compensation payable under this head is for loss of life and not loss
of future pecuniary prospects. Under this head, compensation is
paid for termination of life, which results in constant pain and
suffering. This pain and suffering does not depend upon the
financial position of the victim or the claimant but rather on the
capacity and the ability of the deceased to provide happiness to the
claimant. This compensation is paid for loss of prospective
happiness which the claimant/victim would have enjoyed had the
child not been died at the tender age.
15
27. In the case of Lata Wadhwa (supra), wherein several persons
including children lost their lives in a fire accident, the Court
awarded substantial amount as compensation. No doubt, the Court
noticed that the children who lost their lives were studying in an
expensive school, had bright prospects and belonged to upper
middle class, yet it cannot be said that higher compensation
awarded was for deprivation of life and the pain and suffering
undergone on loss of life due to financial status. The term
"conventional compensation" used in the said case has been used
for non pecuniary compensation payable on account of pain and
suffering as a result of death. The Court in the said case referred to
Rs.50, 000/- as conventional figure. The reason was loss of
expectancy of life and pain and suffering on that account which was
common and uniform to all regardless of the status. Unless there is
a specific case departing from the conventional formula, non-
pecuniary compensation should not be fixed on basis of economic
wealth and background.
28. In Lata Wadhawa case (supra), wherein the accident took place
on 03.03.1989, the multiplier method was referred to and adopted
with approval. In cases of children between 5 to 10 years of age,
compensation of Rs.1.50 lakhs was awarded towards pecuniary
16
compensation and in addition a sum of Rs.50, 000/- was awarded
towards `conventional compensation". In the case of children
between 10 to 18 years compensation of Rs.4.10 lakhs was
awarded including "conventional compensation". While doing so the
Supreme Court held that contribution of each child towards family
should be taken as Rs.24, 000/- per annum instead of Rs.12, 000/-
per annum as recommended by Justice Y. V.Chandrachud
Committee. This was in view of the fact that the company in
question had an un-written rule that every employee can get one of
his children employed in the said company.
29. In the case of M. S. Grewal v. Deep Chand Sood, (2001) 8 SCC
151, wherein 14 students of a public school got drowned in a river
due to negligence of the teachers. On the question of quantum of
compensation, this Court accepted that the multiplier method was
normally to be adopted as a method for assigning value of future
annual dependency. It was emphasized that the Court must ensure
that a just compensation was awarded.
30. In Grewal case (supra), compensation of Rs.5 lakhs was awarded
to the claimants and the same was held to be justified. Learned
Counsel for the respondent no.3, however, pointed out that in the
said case the Supreme Court had noticed that the students
17
belonged to an affluent school as was apparent from the fee
structure and therefore the compensation of Rs.5 lakhs as awarded
by the High Court was not found to be excessive. It is no doubt
true that the Supreme Court in the said case noticed that the
students belonged to an upper middle class background but the
basis and the principle on which the compensation was awarded in
that case would equally apply to the present case.
31. A forceful submission has been made by the learned counsels
appearing for the claimants-appellants that both the Tribunal as
well as the High Court failed to consider the claims of the appellants
with regard to the future prospects of the children. It has been
submitted that the evidence with regard to the same has been
ignored by the Courts below. On perusal of the evidence on record,
we find merit in such submission that the Courts below have
overlooked that aspect of the matter while granting compensation.
It is well settled legal principle that in addition to awarding
compensation for pecuniary losses, compensation must also be
granted with regard to the future prospects of the children. It is
incumbent upon the Courts to consider the said aspect while
awarding compensation. Reliance in this regard may be placed on
the decisions rendered by this Court in General Manager, Kerala
S. R. T. C. v. Susamma Thomas, (1994) 2 SCC 176; Sarla Dixit
18
v. Balwant Yadav, (1996) 3 SCC 179; and Lata Wadhwa case
(supra).
32. In view of discussion made hereinbefore, it is quite clear the claim
with regard to future prospect should have been be addressed by
the courts below. While considering such claims, child's
performance in school, the reputation of the school etc. might be
taken into consideration. In the present case, records shows that
the children were good in studies and studying in a reasonably good
school. Naturally, their future prospect would be presumed to be
good and bright. Since they were children, there is no yardstick to
measure the loss of future prospects of these children. But as
already noted, they were performing well in studies, natural
consequence supposed to be a bright future. In the case of Lata
Wadhwa (supra) and M. S. Grewal (supra), the Supreme Court
recognised such future prospect as basis and factor to be
considered. Therefore, denying compensation towards future
prospects seems to be unjustified. Keeping this in background, facts
and circumstances of the present case, and following the decision in
Lata Wadhwa (supra) and M. S. Grewal (supra), we deem it
appropriate to grant compensation of Rs. 75,000/- (which is
roughly half of the amount given on account of pecuniary damages)
as compensation for the future prospects of the children, to be paid
19
to each claimant within one month of the date of this decision. We
would like to clarify that this amount i.e. Rs. 75,000/- is over and
above what has been awarded by the High Court.
33. Besides, the Courts have been awarding compensation for pain and
suffering and towards non-pecuniary damages. Reference in this
regard can be made to R. D. Hattangadi case (supra). Further,
the said compensation must be just and reasonable. This Court has
observed as follows in State of Haryana v. Jasbir Kaur, (2003) 7
SCC 484, at 486:
"7. It has to be kept in view that the Tribunal constituted
under the Act as provided in Section 168 is required to
make an award determining the amount of compensation
which is to be in the real sense "damages" which in turn
appears to it to be "just and reasonable". It has to be
borne in mind that compensation for loss of limbs or life
can hardly be weighed in golden scales. But at the same
time it has to be borne in mind that the compensation is
not expected to be a windfall for the victim. Statutory
provisions clearly indicate that the compensation must be
"just" and it cannot be a bonanza; not a source of profit;
but the same should not be a pittance. The courts and
tribunals have a duty to weigh the various factors and
quantify the amount of compensation, which should be
just. What would be "just" compensation is a vexed
question. There can be no golden rule applicable to all
cases for measuring the value of human life or a limb.
Measure of damages cannot be arrived at by precise
mathematical calculations. It would depend upon the
particular facts and circumstances, and attending peculiar
or special features, if any. Every method or mode adopted
for assessing compensation has to be considered in the
background of "just" compensation which is the pivotal
consideration. Though by use of the expression "which
appears to it to be just" a wide discretion is vested in the
Tribunal, the determination has to be rational, to be done
by a judicious approach and not the outcome of whims,
20
wild guesses and arbitrariness. The expression "just"
denotes equitability, fairness and reasonableness, and
non-arbitrary. If it is not so it cannot be just."
34.So far as the pecuniary damage is concerned we are of the
considered view both the Tribunal as well as the High Court has
awarded the compensation on the basis of Second Schedule and
relevant multiplier under the Act. However, we may notice here that
as far as non-pecuniary damages are concerned, the Tribunal does
not award any compensation under the head of non-pecuniary
damages. However, in appeal the High Court has elaborately
discussed this aspect of the matter and has awarded non-pecuniary
damages of Rs. 75,000. Needless to say, pecuniary damages seeks
to compensate those losses which can be translated into money
terms like loss of earnings, actual and prospective earning and
other out of pocket expenses. In contrast, non-pecuniary damages
include such immeasurable elements as pain and suffering and loss
of amenity and enjoyment of life. In this context, it becomes duty
of the court to award just compensation for non-pecuniary loss. As
already noted it is difficult to quantify the non-pecuniary
compensation, nevertheless, the endeavour of the Court must be to
provide a just, fair and reasonable amount as compensation
keeping in view all relevant facts and circumstances into
consideration. We have noticed that the High Court in present case
21
has enhanced the compensation in this category by Rs. 75, 000/- in
all connected appeals. We do not find any infirmity in that regard.
35.With respect to the interest, the Tribunal had directed for payment
of interest for only four years at the rate of 6% per annum from the
date of filing of the claim petition till the award and in case of
payment was not made within 30 days then further interest at the
rate of 6% from the date of award till payment. In appeal, the High
Court awarded 7 and = % per annum from the date of filing of the
petition till payment. We find the interest awarded by the High
Court as just and proper, so the same need not be disturbed.
36.The appeals are disposed of in terms of aforesaid order.
...............................J.
[S.B. Sinha]
................................J.
[Dr. Mukundakam Sharma]
New Delhi
May 15, 2009 22
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