JUDGMENT [ENTITY], J.
1. These five C.M.As arise out of the common order dated 27.6.2001 passed by the Motor Vehicle Accidents Claims Tribunal-cum-the Court of District Judge, Ongole, in [CASE NUMBER] and batch. As these C.M.As arise out of one accident, they are being disposed of by this common judgment.
2. About forty passengers boarded the lorry bearing No. AP 7T 6549 on 25.5.2000. At about 2.00 a.m., when the lorry reached near Railway gate at Rajupalem due to rash and negligent driving of the driver, it turned turtle resulting in death of some persons and injuries to some others. The claimants of the deceased in these cases filed different OPs before the Tribunal claiming compensation. The OPs were opposed by the New India Assurance Company Limited, appellant herein, inter alia on the ground that the deceased in these cases were unauthorised passengers in the goods vehicle and therefore, the insurance policy does not cover the risk. The Tribunal rejected the contention of the Insurance Company and awarded compensation. The details of the OPs, corresponding C.M.As, amount claimed and amount awarded are as under.
Sl. No. O.P.No. C.M.A.No. Amount claimed Rs.
Amount awarded Rs.
1. 722 of 2000 3146 of 2001 50,000 50,000
2. 727 of 2000 3l92 of 2001 50,000 50,000
3. 723 of 2000 3226 of 2001 50,000 50,000
4. 724 of 2000 3324 of 2001 50,000 50,000
5. 726 of 2000 3348 of 2001 50,000 50,000
3. The Tribunal directed the amounts to be paid with interest at 9% from the date of petition within 30 days from the date of pronouncement of the order, and also directed that the Insurance Company and the owner shall pay interest at 12% per annum if they fail to pay the amount awarded. Aggrieved by the compensation awarded by the Tribunal, these C.M.As are filed by the Insurance Company.
4. The learned Counsel for the appellant raised two submissions. He would submit that all the deceased were gratuitous passengers and therefore they are not covered under the insurance policy. He would also submit that as per [SECTION] of the [ACT] (for short, the Act) the Tribunal is empowered to award simple interest and there is no power to award penal interest. He placed reliance on [PRECEDENT], [PRECEDENT], and [PRECEDENT], in support of the said submission .
5. Insofar as the first point is concerned, the question is no more res integra as it is squarely covered by the judgment of the Supreme Court in [PRECEDENT], , wherein their Lordships held that under the [ACT] all insurance policies covering third party risks are not required to exclude gratuitous passengers in the vehicle though vehicle is of any type or class. It was held:
Under Clause (ii) of the proviso to [SECTION] of the [ACT] (for short "the old Act") the insurance policy was not required to cover liability in respect of the death of or bodily injury to persons who were gratuitous passengers of that vehicle. But the [SECTION] of the [ACT] (for short, "the new Act") shows that it is a recast provision! by placing the erstwhile Clause (iii) as the present Clause (ii). In other words, Clause (ii) of the proviso to [SECTION] of the old Act is totally non-existent in the [SECTION] of the new Act. Moreover, under [SECTION] of the new Act there is no upper limit for the insurer regarding the amount of compensation to be awarded in respect of death or bodily injury of a victim of the accident. It is, therefore, apparent that the limit contained in the old Act has been removed and the policy should insure the liability incurred and cover injury to any person including owner of the goods or his authorised representative carried in the vehicle Therefore, under the new Act an insurance policy covering third-party risk is not required to exclude gratuitous passengers in a vehicle, no matter that the vehicle is of any type or class.
6. The other submission of the learned Counsel for the Insurance Company is that in view of the fact that the question decided in [PRECEDENT]'s case (supra) is referred to a Larger Bench in [PRECEDENT], , the decision in [PRECEDENT] 's case (supra) is not a binding authority.
7. This submission of the learned Counsel cannot be countenanced. In [PRECEDENT] (unreported judgment in [CASE NUMBER] and batch, dated 20.8.2002), I considered this aspect of the matter. After referring to the judgments of the Supreme Court in [PRECEDENT], , and [PRECEDENT], , I held that when a judgment of the Supreme Court, which is binding on the High Court, is referred to a subsequent Bench of equal strength, the same does not take away the binding effect of earlier Supreme Court judgment. Therefore, the decision in [PRECEDENT]'s case (supra) is binding on this Court and it would be improper for this Court to ignore the binding authority.
8. The second contention of the learned Counsel regarding penal interest has force. [SECTION] of the Act lays down that where the Tribunal passed an award for payment of compensation, the Tribunal in addition to the amount may direct payment of simple interest at such rate and from such date from the date of making claim or some other date as the Tribunal may deem fit. There is no power which inheres the Tribunal to award penal interest. In [PRECEDENT] 's case (supra) it was observed that the Award of the Tribunal indicating payment 12% interest in case of default in payment cannot be sustained. Similar view was taken in [PRECEDENT]'s case (supra) and [PRECEDENT]'s case (supra). Therefore, the impugned Award of the Tribunal insofar as it directs payment of interest at 12% per annum after expiry of thirty days of the Award is wholly illegal and unsustainable.
9. In the result, the appeals are partly allowed modifying the Award to the effect that the insurer and the owner shall be liable to pay simple interest at 9% per annum from the date of petition till the date of realisation on the amount awarded by the Tribunal.