FA/5324/2007 1/5 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 5324 of 2007 With CIVIL APPLICATION No. 14906 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE D.H.WAGHELA Sd/- ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? 1 to 5 NO ========================================================= NEW INDIA ASSURANCE CO. LTD. - Appellant(s) Versus MULJI MESAN MAKWANA & 2 - Defendant(s) ========================================================= Appearance : MS MEGHA JANI for Appellant(s) : 1, MR SURESH M SHAH for Defendant(s) : 1, None for Defendant(s) : 2 - 3. ========================================================= CORAM : HONOURABLE MR.JUSTICE D.H.WAGHELA Date : 11/01/2008 ORAL JUDGMENT 1. By filing the appeal under section 173 of the Motor Vehicles Act, 1988 ("the Act" for short), the appellant-insurance company has called into question the award dated 12.10.2006 FA/5324/2007 2/5 JUDGMENT of Motor Accident Claims Tribunal, Kutch, Bhuj in Motor Accident Claim Petition No.938 of 1996 for the limited purpose of challenging the quantum of compensation under the head "loss of future income" and rate of interest awarded by the Tribunal. 2. It was vehemently argued by learned counsel Ms.Megha Jani that the Tribunal had taken an extreme and unreasonable view in assessing the loss of earning capacity to the extent of 100% only on the basis that the applicant would no longer be able to drive because of permanent disablement of 90% of right lower limb. Though it was true that right leg of the applicant below knee was amputated, the doctor examined in evidence opined that the disability could be reduced to half for the body as a whole. It was, on that basis, submitted that the applicant could have pursued some other avocation in life for earning something. As against that, it was argued, with the support of observations of this Court in Bharat Premjibhai v. Municipal Corporation of the City of Ahmedabad [1978 GLR 585], that, in estimating future loss of income, the primary consideration must be the nature and extent of the disablement of limb and its likely resultant effect on the earning capacity in the chosen avocation, profession or employment of the FA/5324/2007 3/5 JUDGMENT injured person. It is, therefore, not right to treat this problem as an abstract mathematical exercise and to make the future loss of income co-extensive with the percentage of permanent disability regardless of other relevant consideration. Learned counsel submitted that, since the claimant had crossed his youthful age, he could not have adapted himself to any other avocation and the loss of his earning capacity was complete. It was also pointed out that the Tribunal had, in the impugned award, failed to consider the prospect of future increase in income of the claimant and, therefore, reduction, if any were justified, could be more than compensated by increase on account of loss of future prospect in life. In view of the fact that the Claims Tribunal had indeed failed to consider the loss of future prospect and increase in income, this Court would not be justified in interfering with the total amount of compensation awarded under the head of "loss of dependency benefit". 3. The only other contention of the appellant was that award of interest on the amount of compensation @ 15% per annum from the date of filing of the petition till 30.6.1997 was on the higher side, particularly in view of the judgment of Division Bench of this Court in FA/5324/2007 4/5 JUDGMENT National Insurance Co. Ltd. v. Sureshbhai [2007 (14) G.H.J.]. After extensive reference to recent judgments of the Supreme Court, the Division Bench was, in the said judgment and in similar facts, inclined to reduce the rate of interest from 12% to 9% per annum. As against that, learned counsel Mr.Shah relied upon recent judgment of the Supreme Court in M/s.Manalal v. Oriental Insurance Co. Ltd. [2006 (8) Scale 129] and pointed out the following observations: "12. Having considered the rival contentions of the parties, in our opinion, the appeal deserves to be allowed by granting relief to the appellant-firm. It is well settled that award of interest is in the discretion of court. Normally, when interest is granted, appellate, revisional or revisional or writ court would not interfere with exercise of discretion unless the discretion has been exercised arbitrarily or capriciously. It is equally well settled that like grant of interest, rate of interest is also in the discretion of the court and in the absence of any agreement between the parties, usually the court would not interfere with rate of interest unless it is convinced that the direction of the lower court was ex facie bad in law. "16. Once it is conceded that an arbitrator has power to grant interest and has also discretion in granting interest at a particular rate provided it is reasonable, the award of the arbitrator cannot be held to be bad in law or interfered with on the ground that he could not have granted interest or could not have awarded it at a particular rate unless the court is convinced that the grant of interest was not at a 'reasonable rate'. From the record, it is FA/5324/2007 5/5 JUDGMENT clear that the arbitration proceedings started in 1995 and the award was passed in 1999. The arbitrator had granted uniform interest @ 12 per cent per annum all throughout. The award was made rule of the court and the Court of Civil Judge (Senior Division), Bhubaneswar did not find illegality therein. The High Court, in our opinion, therefore, should not have interfered with the said order and reduced the rate of interest from the date of award till the date of realization of the amount." 4. Following the aforesaid recent judgment of the Supreme Court, this Court would not be justified in interfering with the rate of interest applied in the impugned judgment. No other ground having been made out to interfere with the impugned award, the appeal is summarily dismissed with no order as to costs. The amount deposited with this Court for the purpose of appeal shall be transmitted to the Claims Tribunal concerned. Part of the compensation which is stated to have yet not been deposited with the Tribunal shall be deposited immediately in compliance with the provisions of section 168 of the Act. 5. Civil application does not survive and stands disposed as rejected. Sd/- ( D.H.Waghela, J.) (KMG Thilake)