Report No. 85
14.8. Section 110CC-Recommendation as to rate of interest and making interest mandatory.-
Coming to the rate of interest, generally, in the past, six per cent. interest has been allowed on amounts awarded under the Act.1 In some cases only four per cent. was allowed.2 In our view, the rate of interest should be specifically mentioned in the section and it should ordinarily be twelve per cent. per annum. The award of interest at this rate would expedite realisation of the amount awarded. It may be noted that section 343 of the Code of Civil Procedure, 1908 (as amended), allows interest upto 12 per cent. for "commercial transactions". The case for a suitably high rate of interest on compensation awarded under the Motor Vehicles Act is still stronger. Further, it is, in our opinion, desirable to override contrary laws and to make the grant of interest mandatory unless reasons exist to the contrary.
1. 1. (a)Hanuman Das v. Usha Rani, AIR 1978 P&H 177-180, para. 14; (b)Sushil Kumar v. Binodini Rath, AIR 1977 Ori 112.
2. Kailash Wati v. State, AIR 1975 HP 35.