K. Malla Reddy and Others Vs. the Land Acquisition Officer and Others - Court Judgment

Excerpt:
property - compensation - section 34 of land acquisition act, 1894 and section 34 of code of civil procedure, 1908 - compensation amount determined by land acquisition officer for acquisition of land - determined amount deposited partly in current account and partly in s.b. account - current account carry no interest and s.b. account five percent - gross negligence for not depositing amount under term deposit - held, appellant entitled to interest at rate of 8 percent per annum from date of notice till payment. - motor vehicles act (59 of 1988)section 149 (2): [v. gopala gowda & jawad rahim, jj] insurers entitlement to defend the action joint appeal by insured and insurer - held, the language employed in enacting sub-section (2) of section 149 appears to be plain and simple and there is no ambiguity in it. it shows that when an insurer is impleaded and has been given notice of the case, it is entitled to defend the action only on grounds enumerated in sub-section (2) of section 149 of the act, and no other grounds are available to it. the insurer is not allowed to contest the claim of the injured or heirs of the deceased on other grounds, which are available to the insured. if insurer is permitted to contest the claim on other grounds it would mean adding more grounds of contest to the insurer and will be negation of the intention of the legislature and annihilate mandate of the provisions of sections 170 and 149 of the act. the insured can pursue appeal only after giving up the insurer as the appellant and not otherwise. in the instant case, the insurer has not withdrawn from party array but has remained prosecuting the appeal with the insured on the grounds which are available only to the insured. therefore, the joint appeal as filed by the insured and the insurer is not maintainable. section 166: [v. gopala gowda & jawad rahim, jj] claim for compensation accident due to mechanical defect in the vehicle held, it is not in dispute that the claimant suffered injuries in an accident, which occurred during the course of his employment, albeit due to his negligence but law does not render him remediless. statutory right is conferred on him, accruing by virtue of his employment under insured to claim compensation under workmens compensation act. the insurer is statutorily duty bound to discharge the liability of the owner of the vehicle, to pay such compensation to the employee, as mandated under the provisions of section 149 of the act. the right of an injured employee or his dependents as the case may be to be compensated, when injury is suffered or death occurs during his employment, is recognised not only under workmens compensation act, but also under benevolent provisions under section 166 and 167 of the m.v. act. the right of driver to seek compensation is not restricted only to the workmens compensation act, it has been enlarged to enable such person to seek just compensation (sections 166 and 168), conferring upon him the right of election engrafted under section 167 of the act to choose either of the two forum. the only defence which the insurer could take is limit of its liability as enumerated under section 147 of the act, leading to contest, inter alia, only between insured and insurer and does not impact claimants right to recover the compensation determined by the tribunal which crystallizes into enforceable right against both. in the instant case, the claimant/driver has exercised right of election under section 167 of the act to seek compensation under section 166 of the act resulting in award passed by the tribunal. therefore, the insured and the insurer have no escape but to discharge the said award as directed. undisputedly, in this case as deduced for proved facts, the vehicle in question was not properly maintained by the owner and despite faulty brake system, the claimant had undertaken the hazardous journey to his peril at the behest of and at the instruction of the owner. the owner is therefore, tortfeasor. section 168: [v. gopala gowda & jawad rahim, jj] insurers limit of liability - held, it is well settled that the liability of the insurance company for payment of compensation can be statutory or contractual. is for the insurance company to show that the insurance policy was a statutory policy and not a contractual policy to restrict its liability. that issue was neither raised before the tribunal nor is raised in this appeal requiring decision. thus, if at all the insurer has any valid ground to restrict its liability, it can proceed against the insured but firstly it has to discharge the award as required under section 149 (1) of the act. where the owner/insured has failed to maintain the vehicle as per prescribed safety standards and has caused the claimant to drive the vehicle with mechanical defects, the owner would be the tortfeasor and the claimant can maintain a petition seeking compensation under the provisions of the act, instead of seeking compensation under the workmens compensation act. on facts, held, the material evidence on record, particularly, with regard to the income of the claimant, his age, medical evidence and the evidence relating to pecuniary loss has not been considered by the tribunal in the correct perspective, which has resulted in passing of the impugned award, disproportionate to the pecuniary loss and the loss of future income of the victim. the settled principles governing determination of compensation has been given a go-bye. compensation of rs.4,15,150/- awarded by the tribunal was enhanced to rs.8,20,000/-. orderb. subhashan reddy, j. 1.this court passed the order dt. 28-4-1992 on the premise that the amount determined by the land acquisition officer concerned in this case made deposit in a bank by way of term deposit and as such we directed that the interest which may have accrued on the said determined amount be paid to the appellants herein.2. now it is brought to our notice that the determined amount was not deposited into any bank, but was deposited only in a current account partly and partly in s. b. account. it is pertinent to mention here that so far as current account is concerned, if does not attract any interest whereas the s.b. account attracts only five per cent interest.3. having heard the counsel on either side, we are of the considered view that there is gross negligence on the part of the land acquisition officer herein in not taking appropriate steps in depositing the amount in a bank at least in a term deposit or complying with the mandatory provisions contained in s. 31 of the land acquisition act by depositing the amount into court. it is needless to mention that had the land acquisition officer made reference as contemplated under ss. 30 and 31 of the land acquisition act, the civil court concerned would have deposited the awarded amount by way of a term deposit, carrying a minimum of 8% interest per annum, even if it was for one year at that relevant point of time. in this connection, a judgment of supreme court in chandra bansi singh v. stale of bihar, : [1985]1scr579 is relevant for consideration. in the said case the supreme court had awarded the interest at the rate of 7 1/2 per cent per annum for the laches of the authorities concerned in taking possession for a period of1 1/2 years. the said amount of interest was awarded dehors the provisions of the land acquisition act on equity.4. following the said judgment, we also direct the first respondent herein to pay the writ appellants herein the interest at the rate of 8% per annum which is a normal interest payable by any bank for even one ypar's termsdeposit. while computing the same the date reckoned is the date of service of s. 12(2) notice to the date of payment. further any interest which is accrued on s.b. account shall be set off, 'while' calculating the same as indicated above in this order.5. in so far as other plea advanced by mr, narender reddy, counsel for the appellants complaining about the non-grant of interest under s. 34 of the land acquisition act is concerned, that cannot be a question for consideration in these proceedings. suffice it to say that possession has been taken over by the first respondent on 20-12-1989 and that shall be reckoned as the date for payment of interest under s. 34 of the land acquisition act. but the computation of interest and grant thereof is the issue which has to be raised before a competent civil court to which a reference under s. 18 will be made by the first respondent herein.6. this writ appeal is ordered accordingly. 7. order accordingly.

Judgment:
ORDER

B. Subhashan Reddy, J.

1.This Court passed the order dt. 28-4-1992 on the premise that the amount determined by the Land Acquisition Officer concerned in this case made deposit in a Bank by way of term deposit and as such we directed that the interest which may have accrued on the said determined amount be paid to the appellants herein.

2. Now it is brought to our notice that the determined amount was not deposited into any Bank, but was deposited only in a current account partly and partly in S. B. Account. It is pertinent to mention here that so far as current Account is concerned, if does not attract any interest whereas the S.B. Account attracts only five per cent interest.

3. Having heard the counsel on either side, we are of the considered view that there is gross negligence on the part of the Land Acquisition Officer herein in not taking appropriate steps in depositing the amount in a Bank at least in a term deposit or complying with the mandatory provisions contained in S. 31 of the Land Acquisition Act by depositing the amount into Court. It is needless to mention that had the Land Acquisition Officer made reference as contemplated under Ss. 30 and 31 of the Land Acquisition Act, the Civil Court concerned would have deposited the awarded amount by way of a term deposit, carrying a minimum of 8% interest per annum, even if it was for one year at that relevant point of time. In this connection, a judgment of Supreme Court in Chandra Bansi Singh v. Stale of Bihar, : [1985]1SCR579 is relevant for consideration. In the said case the Supreme Court had awarded the interest at the rate of 7 1/2 per cent per annum for the laches of the authorities concerned in taking possession for a period of1 1/2 years. The said amount of interest was awarded dehors the provisions of the Land Acquisition Act on equity.

4. Following the said Judgment, we also direct the first respondent herein to pay the Writ Appellants herein the interest at the rate of 8% per annum which is a normal interest payable by any Bank for even one ypar's termsdeposit. While computing the same the date reckoned is the date of service of S. 12(2) Notice to the date of Payment. Further any interest which is accrued on S.B. Account shall be set off, 'while' calculating the same as indicated above in this order.

5. In so far as other plea advanced by Mr, Narender Reddy, Counsel for the appellants complaining about the non-grant of interest under S. 34 of the Land Acquisition Act is concerned, that cannot be a question for consideration in these proceedings. Suffice it to say that possession has been taken over by the first respondent on 20-12-1989 and that shall be reckoned as the date for Payment of interest under S. 34 of the Land Acquisition Act. But the computation of interest and grant thereof is the issue which has to be raised before a competent Civil Court to which a reference under S. 18 will be made by the first respondent herein.

6. This Writ Appeal is ordered accordingly.

7. Order accordingly.