Mohram Ali And Anr. vs Rakesh Kapoor
1998 Latest Caselaw 484 Del

JUDGMENT

Usha Mehra, J.

1. The order of the Tribunal appears to be palpably wrong. The petitioners are major and are parents of the unfortunate young boy Phool Mohd. who died in a road accident which took place on 1st February, 1992 with a tempo. While allowing their application under Section 140 of the Motor Vehicles Act (in short the Act) the Tribunal awarded a sum of Rs. 25,000/- which is a statutory requirement. However, the Tribunal imposed a condition on petitioner No. 1 to deposit his entire share of Rs. 12,500/- in the Bank in the form of fixed deposit for five years. So far as petitioner No. 2 i.e. the mother is concerned, she was directed to deposit in the form of FDR for five years a sum of Rs. 10,000/- out of the interim compensation of Rs. 12,500/- awarded in her favour. She was, however, allowed to withdraw a sum of Rs. 2,500/-.

2. Petitioners grievance is that the direction to deposit the money in the Bank in the form of Fixed Deposit for five years was not called for. Their son died in February, 1992. He was ten years old at the time of his death. The interim compensation application has been decided in March, 1988 i.e. almost after six years. The interim compensation which was to be given to them on the principle of 'no fault liability' has in fact been deprived because the Tribunal has placed a condition that the amount be kept in the form of fixed deposit for five years which is against their choice. Contention of the Counsel for the petitioner is that the Tribunal's domain without the consent of petitioners thereby ordering them to put part of their compensation in the form of fixed deposit in the Bank is illegal. No duty is cast upon the Tribunal to direct the legal heirs of the victims to deposit their interim compensation in the form of fixed deposit.

3. Many a time it has been observed that the Tribunals mechanically impose conditions on the victims or their relations to deposit their interim compensation in the form of fixed deposit even though they are major. This practice adopted by the Tribunals as felt by this Court create more problems for the claimants as they have to run to this Court for relief. It was in this background that directions were given to the Tribunals not to impose any conditions on the interim compensation awarded in favour of the claimants. But it appears that some of the Tribunals despite the direction of this Court have been disregarding the directions and have been following their own practice. It is in this backdrop that the comments of Mr. Rakesh Kapoor, Tribunal were called. He has tried to justify his stand by saying that there are judgments of Gujarat High Court as well as Apex Court laying down the guidelines to impose conditions. He has placed reliance on the decision of Supreme Court in the cases of General Manager, Kerala State Transport Corporation v. Susamma Thomas and Ors., Lilaben Udesing Gohel v. Oriental Insurance Co. Ltd. and Ors., 1996 ACC 566 (SC); Union Carbide Corporation v. Union of India, and Bishan Devi v. Sirbaksh Singh, 1979 ACJ 496 (SC). Relying on these judgments Mr. Rakesh Kapoor, the Tribunal has tried to justify his order imposing the above condition because he felt that substantial part of compensation has been granted to the petitioners which would ultimately be adjusted against the final award. Therefore, the condition was imposed so that the amount may not be frittered away, mis-utilised or mis-applied.

4. I am afraid the Tribunal has not applied the law laid down by the Apex Court in its proper prospective. He has misconstrued and mis-applied the decision of the Supreme Court in the case of Lilaben Udesing Gohel (supra). In that case the Apex Court was concerned with the Full Bench judgment of the Gujarat High Court. The Full Bench of Gujarat High Court after relying on the Division Bench judgment of that Court on Muljibhai Ajarambhai Harijan v. United India Insurance Co. Ltd. and Ors., 1983 ACJ 57 laid down general directions which are reproduced as under:

 (i)     Normally, the Claims Tribunal should direct the Insurance Company to pay the amount of compensation periodically by quarterly instalments by calculating interest at the rate of 15 percent per annum on the total amount of compensation determined by it and to pay the principal amount at the end of 10 to 20 years having regard to the facts of each case.  
 

 (ii)    A further provision be made in case where the compensation amount is large or in case the claimants are illiterate and/or poor to pay the corpus after the prescribed period by 2 or 3 instalments depending upon the circumstances in each case. 
 

 (ii-a) It would be open to the Insurance Company to make necessary arrangement through the General Insurance Corporation of India for making payment of annuity or periodical instalments as per the direction of the Motor Accidents Claims Tribunal. 
 

(iii) If the concerned Insurance Company or the General Insurance Corporation of India is not ready and willing to pay the amount in the aforesaid manner, it may be directed to deposit the amount of compensation with the Life Insurance Corporation of India. The Life Insurance Corporation of India may be directed, on receiving the said deposit, to provide for payment by an appropriate annuity to the claimants. Learned Advocate Mr. B.R. Shah, after obtaining instructions from the Authority concerned, has stated that the Life Insurance Corporation of India is having a large network and would pay the amount with interest by appropriate scheme of annuity.

(iv) In the case of minor claimants, the Tribunal shall order that the amount of compensation shall be kept with the Insurance Company till the minor attains the age of 21 years but in any case not before expiry of 10 years from the date of the award.

 (v)    In personal injury cases, if treatment is necessary the Claims Tribunal on being satisfied about the same may after recording reasons for such satisfaction direct the Insurance Company to pay such amount to the claimant as is necessary for incurring the expenses for such treatment. This permission should be granted strictly after verifying the necessity of medical expenses. 
 

 (vi)   These directions would also apply in the case of liability arising under Section 92-A of the Act or under Section 140 of the Motor Vehicles Act, 1988, that is to say, in case of 'no fault liability'.  
 

5. The guidelines laid down were challenged by way of Public Interest Litigation before the Supreme Court in Lilaben's case (supra). In para No. 7 of Lila ben's case the Apex Court after considering the general guidelines laid by the Full Bench of Gujarat High Court granted a limited stay against the general guideline No. VI to the effect that the impugned guidelines would not deter payment to which the victim/legal heir of the victim becomes entitled under the statutory provisions of 'no fault liability' meaning thereby the VIth direction quoted above was stayed by the Supreme Court. Ultimately while disposing of the case of Lilaben Udesing Gohel (supra), the Apex Court only approved those guidelines which were laid down by the Division Bench of Gujarat High Court in the case of Muljibhai Ajarambhai Harijan (supra), in which guideline No. VI did not figure. The Division Bench of Gujarat High Court in Muljibhai Ajarambhai Harijan's (supra), laid down following guidelines:

 (i)     The Claims Tribunal should, in the case of minors, invariably order the amount of compensation awarded to the minor be invested in long term fixed deposits at least till the date of the minor attaining majority. The expenses incurred by the guardian or next friend may however be allowed to be withdrawn; 
 

 (ii)    In the case of illiterate claimants also the Claims Tribunal should follow the procedure set out in (i) above, but if lump-sum payment is required for effecting purchases of any movable or immovable property, such as, agricultural implements, rickshaw, etc. to earn a living, Tribunal may consider such a request after making sure mat the amount is actually spent for the purpose and the demand is not a rouge to withdraw money;  
 

(iii) In the case of semi-literate persons the Tribunal should ordinarily resort to the procedure set out at (i) above unless it is satisfied, for reasons to be stated in writing, that the whole or part of the amount is required for expanding any existing business or for purchasing some property as mentioned in (ii) above for earning his livelihood, in which case the Tribunal will ensure that the amount is invested for the purpose of which it is demanded and paid;

(iv) In the case of literate persons also the Tribunal may resort to the procedure indicated in (i) above, subject to the relaxation set out in (ii) and (iii) above if having regard to the age, fiscal background and strata of society to which the claimant belongs and such other considerations, the Tribunal in the larger interest of the claimant and with a view to ensuring the safety of the compensation awarded to him thinks it necessary to so order;

(v) In the case of widows the Claims Tribunal should invariably follows the procedure set out in (i) above;

(vi) In personal injury cases if further treatment is necessary the Claims Tribunal on being satisfied about the same, which shall be recorded in writing, permit withdrawal of such amount as is necessary for incurring the expenses for such treatment;

(vii) In all cases in which investment in long term fixed deposits is made it should be on condition that the Bank will not permit any loan or advance on the fixed deposit and interest on the amount invested is paid monthly directly to the claimant or his guardian, as the case may be;

(viii) In all cases Tribunal should grant to the claimants liberty to apply for withdrawal in case of an emergency. To meet with such a contingency, if the amount awarded is substantial, the Claims Tribunal may invest it in more than one fixed deposit so that if need be one such F.D.R. can be liquidated.

6. The Division Bench of Gujarat High Court in the case of Muljibhai Ajarambhai Harijan (supra), nowhere directed that these directions would apply even in cases of interim compensation to be awarded under Section 140 of the Act of 1988 i.e. in case of 'no fault liability'. Therefore, what the Supreme Court in Lilaben Udesing Gohel's case approved was the guidelines laid down in Muljibhai Ajarambhai Harijan's case and not the guidelines laid down by the Full Bench of that Court and in particular guideline No. VI quoted above. Therefore, the guideline No. VI having not been approved by the Supreme Court it is a clear indicator that the guidelines approved by the Supreme Court are not to apply to an interim compensation awarded based on the principle of 'no fault liability'.

7. Therefore, Mr. Rakesh Kapoor, Tribunal, to my mind, wrongly presumed that the directions given by the Supreme Court are applicable to interim award compensation also. In fact Section 140 of the Motor Vehicles Act, 1988 was brought on the Statute Book as a measure of social justice in order to meet to some extent the responsibility of society to the deaths and injuries caused in the road accident. The liability to pay compensation on the principle of 'no fault liability' has come to be provided statutorily under Section 140 of the Act. If a condition is imposed on an interim award then there was no need for the Legislature to bring this section on the Statute Book. The concept of 'no fault liability' shows that the Tribunal is expected to hold summary enquiry and thereafter award the interim compensation immediately. This compensation is to be paid immediately to the victim of the road accident or his legal heirs so that they may not become destitute and that society should discharge its liability towards them. But if this amount is not paid to them or is to be kept in fixed deposit for five years then the very purpose of bringing such a legislation would get frustrated by a wrong act of a Tribunal.

8. This Court is pained to note that inspite of directions given some of the Tribunals are not adhering to the same. Mr. Kapoor has tried to defend his act and has not cared to follow the directions given by this Court. By mis-interpreting the law laid down by the Supreme Court, he has flouted the order of this Court. Therefore, the practice adopted by such Tribunals cannot be appreciated. They are creating more problems for the claimants than helping them particularly when the claimants are major understand and their interest. Their son died in February, 1992 and interim compensation was awarded in March, 1998 and still they have been deprived of the interim compensation which is a measure of social legislation. It is in this background directions are given to the Tribunals in Delhi that while awarding interim compensation conditions be not imposed unless facts otherwise warrant. This order may be circulated to all the Tribunals in Delhi by the Registrar by this Court.