No ‘straightjacket formula’ to award interest on compensation in road accident cases: Karnataka High Court
The Karnataka High Court ruled that there is no fixed formula for determining interest rates on compensation in motor vehicle accident cases. The court upheld a 9% interest rate, emphasizing that tribunals must balance fairness to claimants with reasonableness toward insurers.
Why it matters
This decision provides legal clarity for insurance litigation in India, ensuring that compensation remains equitable for victims of road accidents.
There is no “straightjacket formula” in determining the rate of interest on compensation amount awarded in motor vehicle accident cases, said the High Court of Karnataka while rejecting an insurance company’s plea for reducing the rate of interest to 8% from the 9% awarded by a motor accident claims tribunal in a case of death caused due to road accident.
The article is a straightforward legal report summarizing a court judgment.
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