Motor Accident Interest Accrues From Evidence Filing Date If Claimants Delay Prosecution: Gauhati HC

The Gauhati High Court has curtailed the accrual of interest in motor accident claims where claimants are responsible for protracted delays, ruling that interest should run from the date of filing evidence rather than the date of the claim petition. This intervention balances the scales of equity, ensuring that insurance companies are not penalized with interest for periods of systemic delay caused by the litigants themselves.

A single-judge bench of Justice Rajesh Mazumdar presided over the appeal preferred by the insurer against a 2014 tribunal award. The Court was tasked with determining the liability and the appropriate period for interest calculation in a decade-old motor accident dispute.

Key Takeaways

Interest Liability Tied to Litigation Diligence

Claimants cannot claim interest for the entire pendency of a case if they are responsible for significant delays in leading evidence.

Equitable Substitution of Interest Dates

Courts possess the discretion to substitute the starting date of interest accrual from the 'date of filing petition' to the 'date of filing evidence' to prevent unjust enrichment.

Right of Recovery Preserved

Insurance companies retain the statutory right to recover compensation amounts from the vehicle owner or driver if the policy terms were violated, even after paying the claimants.

Court Observations and Directions

The Court noted the significant time gap between the filing of the claim in 2005 and the filing of evidence nine years later. In its reasoning, the Court observed: "...it is a matter of record that there was some delay in filing the evidence by the claimants and that it would be equitable and just if interest on the compensation is levied from the date of filing of the evidence and not from the date of filing of the claim petition."

The Court issued the following directions:

"(i) The direction for accrual of interest on the awarded amount of compensation at the rate of 6% per annum from the date of filing of the claim petition is set aside and substituted by a direction that the amount of compensation awarded shall carry interest at the rate of 6% per annum from the date of filing of evidence by the claimant before the learned Tribunal.

(ii) The appellant company shall also be at liberty to exercise its right to recover the amount paid by it from the driver and/or owner of the offending vehicle, if so entitled in law.

(iii) It is noticed that, while filing the appeal, the appellant-Company had deposited a total amount of Rs.25,000/- along with 50% of the awarded amount before the Registry of this Court. The aforesaid amount shall be released to the claimant or his authorised representative upon proper identification being made by Mr. S.K. Talukdar, learned counsel appearing for the claimant. It is further provided that the remaining amount, to be calculated in accordance with the directions passed today, shall be paid by the Insurance Company to the claimant within 6 (six) weeks from today, in which case, the awarded amount shall not carry any further interest.

(iv) The appellant shall be at liberty either to deposit the amount of compensation so calculated before the learned Tribunal, with an intimation thereof being forwarded to the claimant, or to make payment directly to the claimant, if so convenient."

Ratio

Where a claimant causes inordinate delay in the prosecution of a claim petition, specifically in the filing of evidence, the Court may exercise its equitable jurisdiction to modify the period of interest, directing it to run from the date of filing of evidence instead of the date of filing the petition, to ensure fairness to the indemnifying insurer.

Background

The dispute originated from a road traffic accident on May 9, 2005, in Dibrugarh, where the deceased, a pillion rider on a motorcycle, died after a collision with a truck. A criminal case was registered under Sections 279, 338, and 304-A of the Indian Penal Code against the truck driver. While the truck lacked insurance, the motorcycle was insured by the appellant. The Motor Accident Claims Tribunal (MACT) originally awarded Rs. 8,90,200 with 6% interest from the date of filing (2005).

The appellant insurer challenged this, arguing that the claimants took nearly nine years to file their evidence, making the interest burden from 2005 unfair. The Court, aiming to bring a "quietus" to the long-standing claim, modified the award regarding the interest commencement date while upholding the insurer's right to recover the amount from the offending parties.

Case Details:
Case No.: MACApp./80/2015
Case Title: UNITED INDIA INSURANCE CO LTD v. SMT SALO KARMAKAR and 7 ORS
Appearances:
For the Petitioner(s): Mr. R.K. Bhatra, Advocate
For the Respondent(s): Mr. S.K. Talukdar, Advocate

Source: 2026 CaseBase(GAU) 1169