IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE J.B.KOSHY & THE HONOURABLE MR. JUSTICE K.P.BALACHANDRAN TUESDAY, THE 4TH NOVEMBER 2008 / 13TH KARTHIKA 1930 MFA.No. 16 of 2008() -------------------- TA.89/2001 of RAILWAY CLAIMS TRIBUNAL, ERNAKULAM .................... APPELLANT(S): APPLLICANTS: ----------------------------------------------- 1. LISSY JOHNY, W/O. LATE JOHNY, EDAKKULATHOOR HOUSE, ST.JOHN'S STREET, CHIYYARAM P.O., THRISSUR DISTRICT, KERALA. 2. JOSSY JOHNY, D/O. LATE JOHNY, -DO- -DO-. 3. LIJO JOHNY, S/O. LATE JOHNY, -DO- -DO-. 4. LIJI JOHNY, D/O. LATE JOHNY, -DO- -DO-. BY ADV. SRI.DILIP J. AKKARA RESPONDENT(S): RESPONDENTS: ---------------------------------------------------- 1. UNION OF INDIA, REP. BY THE GENERAL MANAGER, WESTERN RAILWAY, MUMBAI. 2. SOUTHERN RAILWAY, REP. BY THE GENERAL MANAGER, SOUTHERN RAILWAY, CHENNAI. 3. THE KONKAN RAILWAY CORPORATION LTD., REP. BY THE CHAIRMAN, KONKAN RAILWAY HEADQUARTERS, NAVI MUMBAI. ADV. SRI.M.C.CHERIAN,SR.SC.,RAILWAYS FOR R1,2,3 THIS MISC. FIRST APPEAL HAVING COME UP FOR ADMISSION ON 20/10/2008, THE COURT ON 4/11/2008 DELIVERED THE FOLLOWING: Kss J.B. Koshy & K.P.Balachandran, JJ. -------------------------------------- M.F.A. No. 16 of 2008 --------------------------------------- Dated this the 4th day of November, 2008 Judgment Koshy,J. Whether the Railway Claims Tribunal has the power to grant interest while awarding compensation in accident claims under section 124-A of the Railways Act, 1989 (hereinafter referred to as 'the Act') read with Railway Accidents and Untoward Incidents (Compensation) Rules, 1990 (hereinafter referred to as 'the Rules') is the question to be decided in this case. A railway passenger while travelling from Nizamudhin to Thrissur by train No.2618 Nizamudhin - Ernakulam Mangala Express sustained serious injuries in an accident. The train while passing through Karbude Tunnel, a medium large stone loosened from the tunnel face and it struck on the deceased on his head causing him to fall down. He was taken to Ratnagiri Civil Hospital and from there to K.E.M. Hospital, Parel, Mumbai, where he succumbed to the injuries. His wife and three daughters (two were minors) filed an application before the Railway Claims Tribunal claiming a compensation of Rupees Five lakhs. The Railway Claims Tribunal awarded an amount M.F.A.No.16/2008 2 of Rupees Four lakhs in terms of section 124 of the Act read with Part I of Schedule to Rule 3. The Tribunal directed to pay the amount within 45 days from the date of receipt of a copy of the order failing which the appellants will be entitled to 6% interest per annum from the date of default. The contention of the appellant is that the tribunal failed to award interest from the date of accident/untoward incident, that is, from 10.4.2000. It is also contended that the Railway Claims Tribunal, Ernakulam Bench has taken a consistent stand that since there is no provision for granting interest under the Act or Rules, it has no power to grant pendente lite interest. In all cases, it is granting interest only from the date of default of payment of compensation if the amount is not paid within the time stipulated by the Tribunal in the order awarding compensation. 2. Before going into the question, whether the Railway Claims Tribunal can award interest for the compensation, we may refer to the statutory provisions enabling the Tribunal to grant compensation. Section 124-A of the Act contemplates liability towards compensation on account of untoward incidents to bonafide passengers. Section 124-A reads as follows: M.F.A.No.16/2008 3 '124-A. Compensation on account of untoward incident:- When in the course of working a railway an untoward incident occurs, then whether or not there has been any wrongful act, neglect or default on the part of the railway administration such as would entitle a passenger who has been injured or the dependant of a passenger who has been killed to maintain an action and recover damages in respect thereof, the railway administration shall, notwithstanding anything contained in any other law, be liable to pay compensation to such extent as may be prescribed and to that extent only for loss occasioned by the death of, or injury to, a passenger as a result of such untoward incident: Provided that no compensation shall be payable under this section by the railway administration if the passenger dies or suffers injury due to -- (a) suicide or attempted suicide by him; (b) self-inflicted injury; (c) his own criminal act; (d) any act committed by him in a state of intoxication or insanity; (e) any natural cause or disease or medical or surgical treatment unless such treatment becomes necessary due to injury caused by the said untoward incident. Explanation: For the purpose of this section 'passenger' includes -- M.F.A.No.16/2008 4 (i) a railway servant on duty; and (ii) a person who has purchased a valid ticket for travelling, by a train carrying passengers, on any date or a valid platform ticket and becomes a victim of an untoward incident." This section is a piece of social security legislation and the ambit of the section is very wide. While interpreting such a welfare legislation, court cannot deal with such cases with a narrow interpretation. By the amendment Act No. 28 of 1994, compensation is payable not only in the case of accidents, but, injuries caused towards "untoward incidents" such as terrorists acts, riotous attacks, robbery and dacoity while travelling in the train or those who wait within the precincts of the railway station. Accidental falls of any passenger from a train carrying passengers is specifically included as an untoward incident and railway is mulcted with the responsibilities to pay compensation in such cases. Section 123 (c) defines 'untoward incident' as follows: "(1) (i) the commission of a terrorist act within the meaning of sub-section (1) of section 3 of the Terrorist and Disruptive Activities (Prevention) Act, 1987 (28 of 1987); or (ii) the making of a violent attack or the commission of robbery or dacoity; or M.F.A.No.16/2008 5 (iii) the indulging in rioting, shoot-out or arson, by any person in on any train carrying passengers, or in a waiting hall, cloak room or reservation or booking office or on any platform or in any other place within the precincts of a railway station; or (2) The accidental falling of any passenger from a train carrying passengers." Therefore, when a bona fide passenger falls from the train and sustains injuries, liability is fastened on the Railway to pay compensation as prescribed by the Rules unless it is proved by the Railway that it is coming within any of the exceptions mentioned in the section and burden is on the Railway to prove that it is not liable to pay compensation as the injury occurred due to any of the acts mentioned in the section like, suicide, self-inflicted injury etc.(See: Union of India v. Jashna Kanhar - AIR 2000 Ori. 147; Rakesh Saini v. Union of India - AIR 2004 Del. 107; Agam Shanthamma v. Union of India - 2004 ACJ 713 AP and Union of India v. Baburao Koddekar - AIR 2003 AP 23). The amount of compensation payable is prescribed by the Railway Accidents and Untoward Incidents (Compensation) Rules, 1990 (as amended). Section 125 of the Act provides for filing of application for compensation under section 124 or 124-A before the Claims Tribunal and section 126 provides for M.F.A.No.16/2008 6 grant of interim relief by the Railway Administration pending disposal of application under section 125. Jurisdiction of the Claims Tribunal is mentioned under section 13 of the Railway Claims Tribunal Act, 1987 (hereinafter referred to as 'the 1987 Act'). Under section 13 (1-A) of the 1987 Act, it is provided as follows: "The Claims Tribunal shall also exercise, on and from the date of commencement of the provisions of section 124-A of the Railways Act, 1989 all such jurisdiction powers and authority as were exercisable immediately before that date by any civil court in respect of claims for compensation now payable by the railway administration under section 124-A of the said Act or the rules made thereunder." Section 18 (1) provides that Claims Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908, but, shall be guided by the principles of natural justice and, subject to the provisions of the Act, it has powers to regulate its own procedure. Section 18 (3) provides that the Claims Tribunal have, for the purpose of discharging its functions under the Act, the same powers as are vested in a civil court under the Code of Civil Procedure. There is no express provision to award interest under the Act or Rules, but, it is argued that the word 'compensation' includes interest on the same also as the claimants were deprived M.F.A.No.16/2008 7 of the amount of compensation due to long pending litigation and as the Railway Claims Tribunal has got all powers vested in the civil court, it can grant interest on the amount due. 3. A Division Bench of this Court in Union of India v. Thankaraj (2000 ACJ 651) it was held as follows at paragraph 15: "15. There is one more common question to be considered in this case that is regarding payment of interest. We are of the view that the claimants are entitled to interest from the date of filing the petition before the Tribunal. In order to make the compensation just and fair it is only proper that interest is paid to the claimant from the date of filing the petition. A similar view was taken by a Division Bench of the Madhya Pradesh High Court in Union of India v. Laxmi Pati, 1995 ACJ 644 (MP). It was held that even if section 34 of Civil Procedure Code has not been expressly made applicable to the proceedings before the Commissioner under the Indian Railways Act, 1890, there is no reason to hold that principles of section 34, Civil Procedure Code would be inapplicable. Court, therefore, directed payment of interest from the date of filing the petition before the Commissioner. The same view was taken by the Madras High Court in Union of India v. A.Janardhanan, 1998 ACJ 791 (Madras). In A.A.Haja Muniuddin v. Indian Railways, 1993 ACJ 235 (SC), the Supreme Court had occasion to consider the question whether the provisions of the Order 33 of the Civil Procedure Code would be applicable to the proceedings before the Railway Claims Tribunal. It was held that although the Railway Claims Tribunal Act and the Rules thereunder do not specifically provide for the application of Order 33 of the Civil M.F.A.No.16/2008 8 Procedure Code, there is nothing in the Act or the Rules which precludes the Tribunal from following that procedure if the ends of justice so require. Nowhere in the Act is there any provision which runs counter to or is inconsistent with the provisions of Order 33 of the Civil Procedure Code. Same principle can be applied to hold that even though section 34 of Civil Procedure Code as such is not applicable, the principles contained therein can be made applicable to proceedings before the Railway Claims Tribunal." In that case, this court awarded 12% interest from the date of application. In Union of India v. Laxmipati (1995 ACJ 644 = AIR 1995 Madhya Pradesh 90), it was held as follows: "Section 34 CPC deals with interest for the post-litigation period. Where decree is for payment of money, the Court may order interest at a reasonable rate on the principal sum adjudged from the date of the suit to the date of the decree in addition to any interest adjudged for any period prior to the institution of the suit. It is unnecessary to refer to the other details of the provision. It is true that the Indian Railways Act, 1890 or the Rules framed thereunder do not contain an express provision making section 34 CPC applicable to proceedings before the Claims Commissioner. But for the provisions in the Indian Railways Act, 1890 the claimant would have resorted to a suit for damages in a Civil Court. Had such a suit been filed, the Civil Court would have been in a position to award post litigation interest. The provisions under the Indian Railways Act, 1890 had the object of changing the forum from Civil Court to the Claims Commissioner with a view to provide cheaper and more expeditious remedy for the claimants. It could not be that M.F.A.No.16/2008 9 the legislature intended that a benefit which the claimant would have derived at the hands of the Civil Court should be taken away by the mere change of forum. Under the 1950 Rules, a person shall not be qualified for appointment as Claims Commissioner unless he has been or is qualified for appointment as a Judge of the High Court, or is/has been exercising powers of a District Judge, or is or has been exercising the powers of a District Magistrate. The Act provided a right of appeal to the High Court by the claimant but not by the Government or the railways. To deny post-litigation interest would amount to depriving the claimant of compensation for delay in obtaining relief for no fault of his. We hold that even though section 34, CPC has not been expressly made applicable to the proceedings before the Claims Commissioner, there is no reason to hold that the principles of section 34 CPC would be inapplicable." (Emphasis supplied) After considering the above decision and decision of the Madras High Court and in Union of India v. A.Janardhanan, (1998 ACJ 791 - Madras), a Division Bench of the Karnataka High Court in Avalakki v. Union of India (2001 ACJ 1258 - Karnataka) held that though there is no provision in the Act for awarding interest, Railway Claims Tribunal has to exercise the powers of the civil court and in its discretion, it can grant interest. 4. A Division Bench of the High Court in CIT v. Dr.Sham Lal Narula (AIR 1963 Punjab 411) considered the meaning of the word 'compensation' and held as follows: M.F.A.No.16/2008 10 "The words 'interest' and 'compensation' are sometimes used interchangeably and on other occasions they have distinct connotation. 'Interest' in general terms is the return or compensation for the use or retention by one person of a sum of money belonging to or owed to another. In its narrow sense, 'interest' is understood to mean the amount which one has contracted to pay for use of borrowed money ..... In whatever category 'interest' in a particular case may be put, it is a consideration paid either for the use of money or for forbearance in demanding it, after it has fallen due, and thus, it is a charge for the use or forbearance of money. In this sense, it is a compensation allowed by law or fixed by parties or permitted by custom or usage, for use of money belonging to another, or for the delay in paying money after it has become payable." 5. In Union of India v. Oinam Keirungba Meetel (2008 ACJ 783 - Gauhati) after noticing that the word 'compensation' has not been defined under the Railway Claims Tribunal Act and after referring the meaning of the word 'compensation' in Black's Law Dictionary, it was held as follows: "6. Thus, we find that 'compensation' is the sum total of the amount which a court finds just and proper for reimbursing the loss caused to the claimant. The compensation was payable to the claimant on the date on which the accident occurred or within a reasonable period thereafter considering the usual time taken for processing such matter. The claimant comes to the court only when there is a failure on the part of the concerned authority to pay the compensation. M.F.A.No.16/2008 11 7. The amount which was due to the claimant and has not been paid due to the fault of the authority, who was bound to pay the same and as the said amount has been utilised by the Railways for the above period and the claimant has been deprived from using the said amount, the interest on such amount becomes the liability of the Railways and they are bound to make good the loss caused on that count to the claimant. Thus, in other words, the payment of interest may be considered to be a part of the compensation itself. There is no bar under the relevant Act that no interest is payable to the claimant." Same view was taken by the Orissa High Court in Prasant Kumar Choudhury v. Union of India (2008 ACJ 685). In that case, 12% interest was awarded from the date of filing the application till its payment. 6. This Division Bench has considered the matter in Union of India v. Brigeet Chacko (2008 ACJ 348) and held that there is no specific provision to grant interest from the date of application in the Motor Vehicles Act also unlike the Workmen's Compensation Act. It is true that section 171 of the Motor Vehicles Act provides that the Tribunal may direct that in addition to the amount of compensation, simple interest shall also be paid at such rate and from such date not earlier than the date of making the claim. Even though the word 'may' is used, the Hon'ble Supreme Court in M.F.A.No.16/2008 12 National Insurance Co. Ltd. v. Keshav Bahadur ((2004) 2 SCC 370) held that payment of interest in addition to the compensation already determined and except in exceptional cases interest shall be paid from the date of application at the rate of interest granted by natioinalised banks. Under section 4A of the Workmen's Compensation Act interest is payable as it is provided under the Workmen's Compensation Act that interest is payable at 12% or at the bank rate whichever is higher from the date when the compensation falls due, that is, the date of accident. It was held by a three-member Bench of the Supreme Court in KSEB v. Valsala (1999 (3) KLT 348 SC) that compensation falls due on the date of the accident itself. Same view was taken earlier by a Constitution Bench of the Hon'ble Supreme Court in Pratap Narain Singh Deo v. Sriniwas Sabata (AIR 1976 SC 2222 - paragraph 8). In Maghar Singh v. Jashwant Singh ((1998) 9 SCC 134 = 1997 ACJ 197), the Hon'ble Supreme Court granted interest from 27.5.1984 till payment. But, due to long delay 12% interest was reduced to 9% using the constitutional powers of the Supreme Court. But, rate of interest is not provided in the Motor Vehicles Act or Railways Act. Therefore, in Brigeet Chacko's case (supra) we have held that interest as allowed by the bank for fixed deposits is payable from the date of M.F.A.No.16/2008 13 application in railway accidents claims also as in motor accidents claims except in exceptional circumstances where there is ample justification for denying interest. 7. The learned counsel for the Railway relied on the decision of the Hon'ble Supreme Court in Rathi Menon v. Union of India ((2001) 3 SCC 714). In that case, the question considered by the Hon'ble Supreme Court was regarding the amount of compensation to be paid taking into account the amended provision of the Act which came into force after the accident. The question of paying interest was not in issue in that case. It is true that in that case, the Supreme Court allowed interest only from the date of award. The decision in Rathi Menon's case (supra) was again considered by the Hon'ble Supreme Court in N. Parameswaran Pillai and another v. Union of India and another ((2002) 4 SCC 306). A Division Bench of this Court awarded Rupees Two lakhs with interest at 12% per annum from 29.12.1997, the date of application till 29.11.1998, the date of actual payment for the death of a railway passenger. While enhancing the compensation relying on the decision in Rathi Menon's case (supra), the Hon'ble Supreme Court directed the Railway to pay an additional amount of Rupees Two lakhs with interest from the date of application till the actual M.F.A.No.16/2008 14 payment. There, the Hon'ble Supreme Court also awarded interest from the date of application in a similar claim filed under section 124-A of the Act and Rules. 8. The learned counsel for the Railway again referred to the decision of the Andhra Pradesh High Court in Union of India v. Konduru Venkata Reddy (AIR 2008 AP 211). There, the Andhra Pradesh High Court held that awarding of interest is discretionary on the part of the Tribunal and it cannot be claimed as a matter of right in the absence of specific provision. According to the counsel for the Railways, the right to claim interest and liability to pay interest is automatically fastened only on the date of determination of compensation, but, not from the date of filing of the application before the Tribunal. In that case, the Andhra Pradesh High Court held that compensation can be determined by the Tribunal and on determination of the compensation, the Tribunal can fix a date for paying the amount and only from the date of default, the Tribunal can award interest. We are unable to accept the above view. Like section 163-A of the Motor Vehicles Act and second schedule, the amount of compensation is fixed in the case of untoward incidents as per the Rules and complicated question is to be adjudicated. It provides for a specific rate. Under section 163-A, monthly income M.F.A.No.16/2008 15 has to be determined. Age also has to be determined to calculate the compensation. Here, that is also not necessary. Like section 140 of the Motor Vehicles Act, compensation payable for death and permanent disability are fixed under the schedule of the rules whatever may be the monthly income or age of the victim of the accident. On the report of the accidental death in the railway accident, the railway ought to have paid the amount. There is no dispute in this case that the deceased was a bonafide passenger. He was travelling with ticket in a reserved compartment on his return journey from his work place to his home. 9. Now, we also refer to the Division Bench decision of the Rajasthan High Court in Union of India and others v. Smt.Shamim and others (AIR 2008 Rajasthan 99). While answering the reference, the Rajasthan High Court held that discretion is vested with the Tribunal to grant interest from the date of filing of the application or from the date of award on the facts and circumstances of each case. It is not disputed that the Tribunal has to exercise judicial discretion and there should be valid reasons for denying interest. 10. In Dr. K.R. Tandon (Mrs.) v. Om Prakash and another ((1998) 8 SCC 421), the Apex Court held that omission on the part of M.F.A.No.16/2008 16 the court to award interest from the date of application without valid reason is illegal. There, even though interest is to be awarded at the discretion of the Tribunal, as provided under section 170 of the Motor Vehicles Act, since the judicial discretion was not exercised properly, the Supreme Court enhanced the interest. At paragraph 3 of the above judgment, it was observed as follows: "3. The Tribunal had awarded interest at the rate of 6% per annum from the date of the award but the High Court chose to curb it to 3% per annum. In the first place, we do not appreciate the reasoning of the High Court to reduce the rate of interest. We also see no justification by the courts below of not having awarded interest, whatever be its rate, from the date of the application. The way inflation has galloped in the past two decades and the value of the rupee eroded, we see no justification why interest at the rate of 12% per annum was not awardable in the instant matter. We, therefore, order that the interest on the sums modifyingly awarded by us, shall be payable from the date of the application itself and at the rate of 12% per annum. Payments which might have been made by the respondents be adjusted." 11. In Union