HIGH COURT OF JUDICATURE OF ANDHRA PRADESH THE HONOURABLE SRI JUSTICE C.V. RAMULU CIVIL MISC. APPEAL NO. 103 OF 2006 Thursday, the Twenty Sixth day of August, Two Thousand and Ten Between Pulidindi Kademma and another Appellants AND Union of India Through the General Manager, South Central Railway, Secunderabad Respondent JUDGMENT: This Civil Miscellaneous Appeal under Sec. 23 of Railway Claims Tribunal Act is directed against the order made on 12.7.2005 in O.A.A. No. 133 of 2000 on the file of the learned Railway Claims Tribunal, Secunderabad Bench at Secunderabad, insofar as denying the interest from the date of application till the date of realization, while granting compensation of Rs.4.00 lakhs for the death of the husband of the first applicant/appellant under Sec. 16 of the Railway Claims Tribunal Act. While granting compensation of Rs.4.00 lakhs, the respondent – Railways was directed to pay the amount of compensation to the appellants-applicants within sixty days from the date of the order, failing which it shall carry interest at 6% p.a. from the date of order till realization. Learned counsel for the appellants/applicants stated that whether there is interest clause in the Railway Claims Tribunal Act or not, a claimant is entitled for interest automatically once he is entitled for the compensation from the date of application till the date of realization. Whereas, in the case on hand, the interest was allowed if the respondent – railways fail to deposit the amount within sixty days from the date of order at the rate of 6% p.a.; whereas the appellants – applicants are entitled for interest on the compensation amount from the date of application. Learned counsel for the appellants relied upon the judgment of the Supreme Court in Tahazhathe Purayil Sarabi and others Vs. Union of India and another ([1]) and drawn attention of the court to para Nos. 20, 21, 25, 38 and 39, which reads as under: 20. Admittedly, neither the Railway Claims Tribunal Act, 1987 nor the Railways Act, 1989 make provision for payment of interest on any awarded amount. While Section 16 of the 1987 Act prescribes the procedure for making an application to the Claims Tribunal, the right to receive compensation is contained in Sections 124 and 124-A comprising Chapter XIII of the 1989 Act dealing with the liability of the Railway Administration for death and injury to passengers due to accidents. 21. Even though there is no provision in either of the Acts for payment of interest on the awarded sum, there is no denying the fact that the right to claim compensation accrued on the date of the incident, although compensation has been held in Rathi Menon case1 is to be computed from the date of the award of the Claims Tribunal. In cases where the statute does not make any specific provision for payment of interest on any awarded sum, the power of the courts to grant interest can also be referred to from the provisions of the Interest Act, 1978 and the Code of Civil Procedure. 25. It is, therefore, clear that the court, while making a decree for payment of money is entitled to grant interest at the current rate of interest or contractual rate as it deems reasonable to be paid on the principal sum adjudged to be payable and/or awarded, from the date of claim or from the date of the order or decree for recovery of the outstanding dues. There is also hardly any room for doubt that interest may be claimed on any amount decreed or awarded for the period during which the money was due and yet remained unpaid to the claimants. 38. As we have indicated earlier, payment of interest is basically compensation for being denied the use of the money during the period in which the same could have been made available to the claimants. In our view, both the Tribunal, as also the High Court, were wrong in not granting any interest whatsoever to the appellants, except by way of a default clause, which is contrary to the established principles relating to payment of interest on money claims. 39. We, therefore, allow the appeal and modify the order of the High Court dated 24-5-2007 affirming the order of the trial court and direct that the awarded sum will carry interest @ 6% simple interest per annum from the date of the application till the date of the award and, thereafter, at the rate of 9% per annum till the date of actual payment of the same. The appeal is allowed to the aforesaid extent. In view of the above, no further discussion requires to be made. The appellants are entitled to claim interest at the rate of 6% p.a. from the date of application till the date of award and at 9% p.a. from the date of award till the date of realization on the compensation amount of Rs.4.00 lakhs, as awarded by the Railway Claims Tribunal. The appeal is accordingly allowed. No order as to costs. _________________ Justice C.V. Ramulu August 26, 2010 MAS [1] (2009) 7 Supreme Court Cases 372= 2009(8) SCJ 587