Mirdhe, J.:— This Miscellaneous First Appeal is filed by the appellant against the judgment and award dated 14.2.1992 passed by the Motor Accident Claims Tribunal, Bangalore Rural District, Bangalore, in M.V.C No. 208 of 1987.
2. We have heard the learned Counsel for the appellant and the learned Counsel for the respondents fully and perused the records of the case.
3. Though the appellant has preferred an Appeal against the quantum of compensation awarded to him by the Tribunal, he has confined himself in this Appeal only regarding the award of interest. The Tribunal has awarded interest at the rate of 6 per cent per annum whereas the contention of the appellant is that the Tribunal ought to have awarded interest at 12 per cent per annum from the date of the petition till the date of realisation.
4. The learned Counsel for the appellant submitted that in view of the provisions of Section 34 C.P.C and the rate of interest granted in the Land Acquisition Cases, the Tribunal ought to have granted interest at the rate of 12 per cent per annum. The learned Counsel for the respondent-Insurance Company has opposed this contention of the learned Counsel for the appellant on the ground that the Motor Vehicles Act is a self contained Act and Section 110C of the said Act provides granting of interest. Therefore, Section 34 C.P.C or the provisions of the Act or the rate of interest awarded in L.A.C Cases are not relevant.
5. The learned Counsel for the appellant relied on Hardeo Kaur v. Rajasthan State Transport Corporation . 1992 2 SCC 567, wherein the Supreme Court awarded the appellants interest at 12 per cent per annum instead of 6 per cent per annum awarded by the Tribunal. In the said Ruling, in para 12 the Supreme Court has referred to the case of Chameliwati v. Delhi Municipal Corporation . 1985 ACJ 645, where in interest at the rate of 12 per cent per annum was awarded. Similarly, the Supreme Court has referred to the case of Jasbir Singh v. General Manager, Punjab Roadways . 1987 ACJ 15, wherein the interest awarded by the Tribunal at 6 per cent per annum was enhanced to 12 per cent per annum.
6. Now the question before the Court is whether the observation of the Supreme Court in Hardeo Kaur v. Rajasthan State Transport Corporation and in Chameliwati v. Delhi Municipal Corporation, and also in Jasbir Singh v. General Manager, Punjab Roadways, can be said to be the law declared by the Supreme Court.
7. In State of Punjab v. Surinder Kumar . 1992 1 SCC 489, the Supreme Court has laid down as to how the Judgment of the Supreme Court can be held to be a precedent in the following words:—
“A decision is available as a precedent only if it decides a question of law. Thus the temporary lectures in a Writ Petition before High Court, would not be entitled to rely upon an order of the Supreme Court which directs a temporary employee to be regularised in his service without assigning reasons………. The Constitution has, by Article 142, empowered the Supreme Court to make such orders as may be necessary “for doing complete justice in any case or matter pending before it, which authority the High Court does not enjoy.”
8. The Supreme Court in Municipal Corporation Of Delhi v. Gurnam Kaur . . 1989 1 SCC 101 has laid down that quotability as ‘law’ applies to the principle of a case, its ratio decidendi, that in a Judge's decision what is binding as an authority upon the subsequent Judge is the principle upon which the case was decided; that the statements which are part of ratio decidendi are distinguished as obiter dicta and are not authoritative; that the weight accorded to dicta varies with the type of dictium; that mere casual expressions carry no weight and that not every passing expression of a Judge, however, eminent, can be treated as an ex cathedra statement, having the weight of authority. In that case, the question was whether the direction given by the Supreme Court in Jamna Das v. Delhi Administration to the Municipal Corporation . W.P Nos 981-82 of 84 DD 29.3.1985 SC. to construct walls and put the petitioning pavement squatters in possession thereof was a precedent binding on the other Judges. Dealing with this aspect, their Lordships of the Supreme Court have held as follows:—
“The direction given by the Supreme Court in Jamna Das v. Delhi Administration to the Municipal Corporation (W.P Nos. 981-82/84 dated 29.3.1985) (SC), to construct walls and put the petitioning pavement squatters in possession thereof was made not only with the consent of the parties but there was an interplay of various factors and the Supreme Court was moved by compassion to evolve a situation to mitigate hardship which was acceptable by all the parties concerned. It was delivered without argument, without reference to the relevant provisions of the Act conferring express power on the Municipal Corporation to direct removal of encroachments from any public place like pavements or public streets, and without any caution or authority. That being so, the direction made by the Supreme Court in Jamna Das case could not be treated to be a precedent. Thus where in the petition filed by a pavement squatter to the High Court for the issuance of an appropriate writ or direction restraining the Municipal Corporation from evicting her without the due process of law, the High Court relying upon the Supreme Court decision in Jamna Das case gave a direction to the Municipal Corporation either to construct a stall similar to the one they had constructed in compliance with the direction made by the Supreme Court in Jamna Das case or, in the alternative, furnish to the petitioner a plan of the stall with requisite permission so that she could build her own stall accordingly, the direction given was improper. The High Court could not have made the impugned direction contrary to the provisions contained in Sections 320 and 322 of the Delhi Municipal Corporation Act. Decision of Delhi High Court, Reversed.”
In O.V Shanthakumari v. Kokila* . ILR 1990 KAR 4324., a Full Bench of this Court has laid down what is the law declared by the Constitution under Article 141 of the Constitution of India as follows:—
“(B) CONSTITUTION OF INDIA - Article 141 - “Law Declared”, binding precedent not because of conclusions but in regard to ratio or principle laid down - Decision on facts of particular cases ordinarily decision on such case - Observations or remarks to be confined to precise issues unless clarified as intended to have wider ambit - Sentence, clause or word not to be divorced from context and regarded as full exposition of law.
A decision of a Court being that rendered in the setting of the facts of a particular case is ordinarily regarded as a decision on such case. But, a decision of a Court becomes “the law declared” - a binding precedent for future cases not because of its conclusion but in regard to its ratio or principle laid down therein. A word, a clause or a sentence occurring in a decision (Judgment) of the Supreme Court, cannot be divorced from its context and be regarded as that containing a full exposition of the law on a question which did not even fall to be answered in such decision. As an obiter cannot take the place of the ratio, observations or remarks of a Judge in a decision (Judgment) are to be confined to the precise issues considered there, even though expressed in broad terms unless it is made clear therein that such observations or remarks were intended to have a wider ambit. There is a peril in treating the words in a decision of a Court as a legislative enactment.”
If we read the order of the Supreme Court in Hardeo Kaur v. Rajasthan State Transport Corporation, or the order of the Supreme Court in Chameliwati v. Delhi Municipal Corporation or the order of the Supreme Court in Jasbir Singh v. General Manager, Punjab Roadways, it is clear that these orders are passed by the Supreme Court on the facts and circumstances of the case enhancing the interest from 6 per cent per annum to 12 per cent per annum. But, it cannot be said that the Supreme Court has laid down a law in this regard to the effect that the interest to be awarded in a case arising under Section 10-D of the M.V Act, 1939, must be 12 per cent per annum. This aspect came up for consideration directly in Managing Director, Karnataka Power Corporation Ltd. v. Geetha* . ILR 1987 KAR 142. wherein M.N Venkatachalaiah, J. as he then was has observed as regards the indiscriminate manner in which the Claims Tribunals were awarding interest on the awards referring to the pronouncement by the High Courts and the Supreme Court at 12 per cent per annum. The words of his Lordship are as follows:—
“In some pronouncements of the High Courts and of the Supreme Court, interest at 12 per cent per annum has come to be awarded. The pronouncement of the Supreme Court in Narcinva Kamat v. Alfredo Antonio Doe Martins (1985 ACJ 397) and in Chameliwati v. Delhi Municipal Corporation (1985 ACJ 645) are decisions on the facts of the cases. They are not declaration of the law under Article 141 of the Constitution, on the point. As the Supreme Court has had occasion to point out that the decision in particular cases are not to be treated as the words of a Statute. Supreme Court in Amaranth Om Prakash v. State of Punjab ((1985) 1 SCC 345 : A.I.R 1985 Supreme Court 218) observed:
“11…… We consider it proper to say, as we have already said in other cases that judgments of course are not to be construed as statutes. To interpret words, phrases and provisions of a Statute, it may become necessary for Judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes………………………..
12…….. It is needless to repeat the oft quoted truism of Lord Halsbury that a case is only an authority for what it actually decides and not for what may seem to follow logically from it……………..”
Supreme Court recalled with approval aforesaid words of Lord Morris of Borth-y-Gest, in Herrington v. British Rue. Board [(1972) 2 WLR]
“There is always peril in treating the words of a speech or a judgment as though they were words in a legislative enactment, and it is to be remembered that judicial utterances are made in the setting of the facts of a particular case…”
In paragraph-13 Their Lordships of the Division Bench dealing with the question of awarding interest with reference to Section 110CC held as follows:—
“It is erroneous to predicate that there is anything in the law or the binding precedents that wherever interest is awarded, its rate should not be less than 12%. Both the award and the rate of interest are in the discretion of the Tribunal to be exercised judicially and judiciously, not arbitrarily or capriciously; but in accordance with sound principles.”
In the said paragraph, this Court further held:
“Generally speaking, a composite rate of 6% should be considered satisfactory without any specific itemisation because the component of compensation in the ‘interest-pool’ is comparatively smaller and the sizable component is the amount awarded for the loss of future dependency. We, however, hasten to add that the Tribunals have an undoubted discretion to award higher rates of interest, if in their opinion the circumstances of the particular case justify such higher rates.”
Considering the purpose of Section 110CC, this Court held as follows:—
“….. The determination of the rate of interest is guided, not by a single criterion, but a combination of factors. The purpose in Section 110CC fixing the date of the petition as the earliest part from which interest could be reckoned is to see that a claimant does not stand to gain by his own delay in bringing the action. Unlike the position under the Administration of Justice Act, 1969 in England, the Tribunals under Section 110CC are not compelled to exercise the power to award interest.”
Therefore, the pronouncement of the Supreme Court in the Ruling of Hardeo Kaur v. Rajasthan State Transport Corporation or Chameliwati v. Delhi Municipal Corporation, or Jasbir Singh v. General Manager, Punjab Roadways is not the law declared by the Supreme Court?.
9. Again a Division Bench of this Court in Oriental Insurance Co. Ltd. v. S. Jagadish* . ILR 1990 KAR 4384. reiterated what another Division Bench of this Court in Geeta's case held in Jagadish's case this Court dealing with the awarding of interest has held on facts as follows:—
“The manner in which the Claims Tribunal has dealt with the question of award of interest as found in paragraphs 20 and 21 of its judgment, excerpted, there is every justification for the criticism that the interest awardable on the amounts of compensation awarded in the instant cases by the claims Tribunal totally ignores the Division Bench judgment of this Court in Managing Director, Karnataka Power Corporation Ltd. v. Geetha* (ILR 1987 KAR 142). Though, in the said Division Bench Judgment, it is clearly stated that what is stated by the Supreme Court in Chameliwati v. Delhi Municipal Corporation (1985 ACJ 645) as to interest, is a decision on the facts of that case and it is not a declaration of law on the point under Article 141 of the Constitution, the Claims Tribunal, as seen from paragraph 20 of the common judgment, has depended upon the Chamelwati's case for awarding interest on the amount of compensation at 12% per annum. Again, as seen from paragraph 21 of that common judgment it seeks to draw support for award of interest at 12% on the compensation (damages) in Accidents Claims cases, on the basis of the provisions of the Land Acquisition Act providing for payment of interest on compensation for acquired lands. Such reliance on the provisions of the Land Acquisition Act for awarding of interest on compensation in fatal accidents cases indicates the Claim Tribunal's unpreparedness to follow the principles enunciated by the Division Bench Judgment of this Court as to how the rate of interest on compensation in claims cases has to be determined….. As the component of special damages is about one-third of the amount of the compensation payable towards general damages, it would be reasonable to fix the rate of interest payable on the amount of total compensation to the claimant at 6% per annum.”
Indeed it was brought to the notice of this Court that in large number of cases arising out of the motor vehicle accidents, there had been a deliberate failure on the part of the subordinate Courts to follow the Decisions of this High Court in this behalf. Therefore, the Division Bench came heavily, making further observations as follows:—
“Deliberate failure by subordinate Court to follow the decision of the High Court - Undermines respect for law laid down by High Court, impairs constitutional authority of High Court and has disastrous impact on persons having respect for Rule of Law.”
10. The Motor Vehicles Act is a self-contained Act. The awarding of interest under the said Act depends upon not on compassion but on judicial discretion. It cannot also be a ground to compensation for the loss of erosion of the value of money due to inflation. The provisions of the interest Act providing of interest on compensation under the Land Acquisition Cases are not relevant. The compensation paid is on account of pecuniary loss or non-pecuniary loss. The interest is paid on such amount to compensate the person to whom the compensation is awarded for delayed payments. Compensation is an amount paid in advance for any loss of life or loss of dependency or loss of earnings. It is not a debt. Therefore, the interest to be awarded under Section 110-CC of the Motor Vehicles Act could only be at 6% per annum. Therefore, the interest awarded by the Claims Tribunal at 6% per annum is legal and proper. Therefore, there are no grounds to interfere with the said order.
For the reasons discussed above, we proceed to pass the following.
This Appeal fails and the same is dismissed. However, there is no order as to costs.