United India Insurance Co. Ltd. v. Mathew John

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE S.SIRI JAGAN** **TUESDAY, THE 1ST FEBRUARY 2011 / 12TH MAGHA 1932** **WP(C).No. 11644 of 2007(J)** **-------------------------AGAINST THE ORDER IN EA.142/05,EP.84/02 IN OPMV.197/1985 of MOTOR ACCIDENT CLAIMS TRIBUNAL, KOTTAYAM** **....................** **PETITIONER(S):** **-------------------------** **UNITED INDIA INSURANCE CO. LTD., KOTTAYAM.** **BY ADV. SRI.P.V.JYOTHI PRASAD** **RESPONDENT(S):** **----------------------------** **MATHEW JOHN, KACHIRAVEEDU, MEENKUNNAM P.O.** **BY ADV. SRI.P.V.GEORGE(PUTHIYIDAM)** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 01/02/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **WPC.NO.11644/2007 J** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **P1: COPY OF THE EXECUTION PETITION NO.84/02 FILED BY THE RESPONDENT DATED 5.12.2002.** **P2: COPY OF THE OBJECTION FILED BY THE PETITIONER FOR E.P.84/02.** **P3: COPY OF THE E.A.NO.142/2005 IN E.P. NO.84/02 FILED BY THE PETITIONER.** **P4: COPY OF THE ORDER IN E.A NO.142/05 IN E.P NO.84/02 OF MACT, KOTTAYAM.** ## **RESPONDENT'S EXHIBITS: NIL** **//TRUE COPY//** **P.A TO JUDGE** **KRK** ## **S. SIRI JAGAN, J.** ----------------------------------- ## W.P.(C) No.11644 OF 2007 --------------------------------------- Dated this the 1[st] day of February, 2011 ## **JUDGMENT** An Insurance Company, who was one of the respondents in O.P.(MV)No.197/85 before the Motor Accident Claims Tribunal, Kottayam, is the petitioner in this writ petition. The respondent is the claimant in that original petition. Originally, the Tribunal awarded `.48,200/- with 10% interest and costs as compensation payable to the respondent. The entire award amount with interest and costs was deposited by the petitioner before the Tribunal and notice was given to the respondent regarding the said deposit. The respondent withdrew the amount from the Tribunal. After the withdrawal of the amount, the respondent filed an appeal before this Court as MFA No.288/89 seeking enhanced compensation. This Court modified the award enhancing the compensation to `.1,01,200/- with interest at the rate of 12% per annum and the petitioner Insurance Company was directed to pay the amount. The petitioner deposited the difference in compensation of `.53,000/- with 12% interest W.P.(C)No.11644/07 2 amounting to `.1,41,779/- and gave notice to the respondent regarding the deposit. That was also withdrawn by the respondent. Thereafter, the respondent filed an Execution Petition before the Tribunal claiming an additional amount of `.44,967/-. The petitioner Company also filed an E.A. claiming that the amount already deposited by them is in excess by `.17,054/-. The Execution Petition was filed by the respondent taking the contention that in view of the fact that this Court has granted a total amount of `.1,01,200/- with 12% interest, the appropriation of amounts already paid has to be re-opened and interest calculated afresh and from the total amount, the amounts paid by the insurance company at the two stages should be adjusted, first, against the costs, secondly against the interest and thirdly against the principal in which case there would be a balance of `.44,967/- payable to the respondent. The Tribunal accepted the calculation of the respondent by Ext.P4 order. Ext.P4 order is under challenge before me. 2. I have heard both parties. As I have already stated, W.P.(C)No.11644/07 3 the contention of the petitioner is that the appropriation of the amounts already made at the time of depositing the amounts, as awarded by the Tribunal and this Court, cannot now be reopened insofar as the respondent had accepted the amount towards principal, interest and costs thereafter, no interest would run on the amounts paid and adjusted as principal. The contention of the respondent is that this Court had fixed the compensation payable as a total amount of `.1,01,200/- with enhanced interest also and therefore, the appropriation already made has to be reopened and the calculation should be started all over again from the beginning, and the amount paid adjusted from the said calculated amount on the dates of deposit. The parties rely on two decisions also before me. One is that of a Division Bench decision in _**Oriental Insurance Co.Ltd.**_ v. _**Nirmala**_ [2007(1) KLT 38] and _**GURPREET SINGH**_ v. _**UNION OF INDIA**_ [(2006) 8 SCC 457]. 3. I have considered the rival contentions in detail. The principles regarding appropriation of amounts of debt, particularly decree debts are settled by law. It is provided for 4 W.P.(C)No.11644/07 in Rule 1 of Order XXI of Code of Civil Procedure. As per Sub Rule 3 of Rule 1 thereof, when money is paid, the debtor is to give notice specifying the money remitted and how the money is to be adjusted, that is to say whether it is towards principal, interest or costs. Once, such notice is received by the decree holder, it is up to him to either agree to the appropriation or dispute the same. Once he agrees to the appropriation without any objection, that means, he has accepted the amount paid towards satisfaction of the principal, interest and costs. When the decree holder accepts certain amounts towards principal, on that part of the principal, interest would not run further. The fact that subsequently the superior court has enhanced the decree debt would not alter the situation, insofar as the decree holder had accepted the particular amount towards principal itself. All what he is entitled to is the enhanced amount with interest thereon. Of course, if the interest is also increased, the decree holder would be entitled to the difference in interest on the original principal amount paid also. Apart from that, the decree holder cannot, after W.P.(C)No.11644/07 5 accepting certain amounts towards principal itself, on the superior court enhancing the amount, seek reopening of the appropriation and claim re-adjustment from the beginning towards costs, interest and principal. The two decisions referred to by the parties do not lay down any different law also. Therefore, in this case also, insofar as the respondent has accepted the original amount awarded by the Tribunal namely, `.48,200/- as principal itself along with interest and costs thereon and the additional compensation amount of `.53,000/- also towards principal with interest @ 12%, the respondent cannot now claim re-appropriation by calculating interest from the beginning, on the entire amount of `.1,01,200/- and adjusting the amounts paid by the petitioner, first against costs, secondly against interest and thirdly against principal on the dates of such payment. In respect of the additional interest on the amount awarded by the Tribunal also, insofar as the principal amount has already been paid and accepted, all what the respondent is entitled to is only the additional 2% interest on `.48,000/- already received by him. W.P.(C)No.11644/07 6 That is exactly the law laid down by the Division Bench in _**Nirmala's**_ case (supra). In paragraph 9 of that decision it has been held thus: “9.It is desirable to refer to the decision reported in _Meghraj v. Bayabai_ (AIR 1970 SC 161) which gives the guideline under O.XXI R.1. It is held in that case that 'the normal Rule in the case of a debt due with interest is that any payment made by the debtor is in the first instance to be applied towards satisfaction of interest and thereafter to the principal'. The Apex Court further held that 'unless the mortgagees were informed that the mortgagors had deposited the amount only towards the principal and not towards the interest, and the mortgagees agreed to withdraw the money from the Court accepting the conditional deposit, the normal Rule that the amounts deposited in Court should first be applied towards satisfaction of interest and costs and thereafter towards the principal would apply. The Apex Court had relied on the decision of the _Privy Council in Meka Venkatadri Appa Roa Bahadur Semindhar Garu & Others v. Raja Parthasarathy Appa Rao Bahadur Jamindhar_ (1992 P.C.233). So, if O.XXI is made applicable to the proceedings before the Motor Accidents Claims Tribunal unless the judgment-debtor deposits the amount specifying the nature of deposit and the decree holder consents to the conditions by withdrawing amount so deposited, in all other cases the amount has to be adjusted first towards the interest and costs. From these discussion, we hold that the decision reported in 2002(3)KLT 293 has laid down the correct principles of law to be applied and therefore it has to be affirmed and the request of the learned counsel of the writ petitioners to hold otherwise has to be only rejected”. In this case at the time of the deposit of the amount awarded the entire principal amount of `.48,200/- with interest and cots 7 W.P.(C)No.11644/07 was deposited and on intimation the respondent had withdrawn the same knowing fully well about the appropriation insofar as at that point of time the entire award was satisfied. Therefore the respondent had agreed to the appropriation of `.48,200/- towards principal. Therefore the principal to that extent stands discharged. Again when this Court enhanced the compensation, the difference in principal with interest was also deposited and withdrawn knowing fully well that the payment of `.53,000/- was towards principal. As such the entire principal amount of `.1,01,200/- stands discharged with interest. Thereafter the respondent cannot seek to re-open the appropriation by calculating afresh interest on `.1,01,200/and adjusting the payments already made by the petitioner first towards costs, then interest and the balance against principal as on the dates of deposit. I am of opinion that while passing Ext.P4 order, the Tribunal has lost sight of this position of law. Therefore, Ext.P4 order is clearly vitiated. 4. Accordingly, Ext.P4 order of the Tribunal is quashed. The Tribunal is directed to re-calculate the amounts due to the W.P.(C)No.11644/07 8 respondent in accordance with the law explained as above and dispose of the matter covered by Ext.P4 afresh, after hearing both sides. I note that the petitioner has deposited certain amounts as directed by this Court. Needless to say, the Tribunal shall, after recalculating the amounts due, deal with the said deposit also in accordance with law. In other words if after computation the petitioner is found to have paid any excess amount, the same shall be refunded to the petitioner. The writ petition is disposed of as above. ## **S. SIRI JAGAN, JUDGE** acd W.P.(C)No.11644/07 9 W.P.(C)No.11644/07 10