Supreme Court Modifies Order, Awards Interest, and Costs

The Supreme Court allowed the appeal, modifying the High Court's order. The Court directed that the awarded sum would carry interest at 6% per annum from the date of the application until the date of the award and thereafter at 9% per annum until the actual payment. The respondents were also directed to pay the costs of the proceedings, assessed at Rs. 25,000.

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Issues Involved:
1. Entitlement to compensation for the death of Kunhi Moosa.
2. Determination of the date from which compensation is payable.
3. Award of interest on the compensation amount.
4. Discretionary power of courts and tribunals to award interest.

Detailed Analysis:

Entitlement to Compensation:
On 13th November 1998, Kunhi Moosa, the husband of Appellant No.1, was robbed and thrown out of a train, resulting in his death. The appellants filed a claim for compensation amounting to Rs. 4 lakhs before the Railway Claims Tribunal, Ernakulam, in 1999. The Tribunal awarded the compensation on 26th March 2007, directing the Union of India to pay Rs. 4 lakhs, distributed among the appellants. This award was challenged in the Kerala High Court, which dismissed the appeal, leading to the present appeal before the Supreme Court.

Determination of the Date from Which Compensation is Payable:
The appellants argued that compensation should be payable from the date of the incident, relying on the Supreme Court's decision in Rathi Menon Vs. Union of India, which held that the right to claim compensation arises from the date of the incident. The High Court, however, upheld the Tribunal's decision to grant interest only in case of default in compliance with the order for deposit of the compensation amount.

Award of Interest on the Compensation Amount:
The primary question before the Supreme Court was whether the Tribunal and the High Court were justified in not granting interest on the awarded amount from the date of the incident or the date of filing the claim petition until the actual payment. The appellants cited several cases, including Tejinder Singh Gujral Vs. Inderjit Singh and Dr. K.R. Tandon Vs. Om Prakash, to argue that interest should be granted as compensation for the delay in payment.

Discretionary Power of Courts and Tribunals to Award Interest:
The Supreme Court noted that neither the Railway Claims Tribunal Act, 1987, nor the Railways Act, 1989, specifically provided for the payment of interest on awarded amounts. However, the Court emphasized that the power to award interest could be derived from the Interest Act, 1978, and Section 34 of the Civil Procedure Code. The Court highlighted that interest is a form of compensation for being denied the use of money due and should be granted from the date of the claim or the date of the order for recovery.

The Court observed that the Tribunal had delayed the award by approximately eight years, and the appellants should not be deprived of the beneficial interest of the awarded amount due to this delay. The Court concluded that both the Tribunal and the High Court erred in not granting interest from the date of the application until the date of the award and thereafter until the actual payment.

Conclusion:
The Supreme Court allowed the appeal, modifying the High Court's order. The Court directed that the awarded sum would carry interest at 6% per annum from the date of the application until the date of the award and thereafter at 9% per annum until the actual payment. The respondents were also directed to pay the costs of the proceedings, assessed at Rs. 25,000.

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