Sabanam Begum And Another vs Union Of India
2025 Latest Caselaw 4191 Ori

Orissa High Court

Sabanam Begum And Another vs Union Of India on 19 February, 2025

                 IN THE HIGH COURT OF ORISSA AT CUTTACK

                              FAO No.583 of 2024

            Sabanam Begum and another             ....        Appellant(s)
                                                 Mr. D. Patnaik, Advocate
                                      -versus-
            Union of India                        ....    Respondent(s)


                                    Mr. S. Sethi, Central Govt. Counsel

                                    CORAM:

                       JUSTICE SIBO SANKAR MISHRA

                                   ORDER

Order No.                         19.02.2025

   01.      1.       Heard Mr. Pattnaik, learned counsel for the

Appellants and Mr. Sethi, learned Central Government Counsel for the Respondent-Union of India.

2. It is submitted on behalf of the Appellants that challenge in the present appeal is against the direction of keeping 90% of the compensation amount in fixed deposit and is covered by a similar judgment of this court.

3. It is admitted by both parties that the challenge in present appeal is squarely covered by the decision of this Court rendered in FAO No.262 of 2020 and batch, titled as Kabi Pradhan and another v. Union of

India represented through General Manager, East Coast Railway, Bhubaneswar, disposed of on 9th September, 2021. The relevant paragraphs of the said judgment relied upon are reads thus:

8. Upon hearing learned counsel for the parties and on perusal of the records, it is apparent that the Amendment Rules have no application to the award passed by learned Tribunal impugned in FAO No. 262 of 2020 as the award therein was passed on 7 th November, 2019, i.e. much before the Amendment Rules came into force. It also appears that the Appellants in the said appeal are adults and there is no material on record to show that either they are illiterate or of unsound mind or they have any disability both mental and physical. As held by Hon'ble Supreme Court in the case of H.S. Ahammed Hussain and another v. Irfan Ahammed and another, reported in 2002 (6) SCC 52, the amount of compensation awarded to an adult cannot be ordered to be deposited in fixed deposit in a nationalized bank. The relevant paragraph of the aforesaid judgment is as under:

"8. Learned counsel for the appellant lastly submitted that the amount of compensation payable to the mothers of the victims should not have been directed to be kept in fixed deposit in a nationalised bank. In the facts and circumstances of the present case, we are of the view that the amount of compensation awarded in favour of the mothers should not be kept in fixed deposit in a nationalised bank. In case the amounts have not been already invested, the same shall be paid to the mothers, but if, however, invested by depositing the same in fixed deposit in a nationalised bank, there may be its premature withdrawal in case the parties so intend."

9. Learned counsel for the Railways-Respondent could not justify the direction of learned Tribunal to deposit a major portion of compensation awarded in fixed deposits in O.A. No. 203 of 2015 out of which FAO No. 262 of 2020 arises. Thus, I am of the considered view that the Appellants in FAO No. 262 of 2020 being adults and there being no material on record to show that they have any disability or incapability to utilize the compensation

amount in a judicious manner, I direct that the entire compensation amount be released in favour of the Claimants on proper identification.

10. So far as rest of the appeals are concerned, the awards impugned in those cases are passed after 1st January, 2020 when the Amendment Rules had already come into force. Hence, it is to be examined whether the Appellants are entitled to the relief claimed in these appeals by directing the Tribunal to release the compensation amount in favour of the respective Claimants, which are deposited in fixed deposits.

11. In the case of Geeta Devi (supra), Delhi High Court held as follows:

"5. As Regards Amendment to the Railway Accidents and Untoward Incidents (Compensation) Rules, 1990. 5.1. Many of the claimants are drawn from rural areas with low levels of literacy and lower levels of making appropriate decision for the use of amounts guaranteed under the awards. There are several instances of their exploitation by middlemen and touts operating in the field. The scope for such exploitation is itself one of the incentives for fomenting bogus claims, fabricated documents and duplicate claims in different Benches of the Tribunal for the same cause of action. The availability of bulk funds in the name of an ill- informed claimant is also a cause for exploitation. A scheme for protection of the amount due to such a claimant is the need of the hour. Earlier, this Court has involved 21 Nationalized Banks in dialogue to evolve a scheme of annuities for disbursement of claims. They have been ordered already to be implemented in this case, vide directions passed on 22nd February, 2019. This scheme as applied to motor accident claims has been approved by the Supreme Court in its order dated 05th March, 2019 in Krishnamurthi -v- New India Insurance Company, SLP (C) No. 31521-31522 of 2017. A statutory rule backing will therefore best serve the interest of the litigant in the manner set out below:

Rule 5: Mode of payment- (1) The Tribunal may, in order to protect the sum awarded to the claimant, having due regard to the illiteracy or other disabling

factors impairing the judicious use of such sum, issue directions for disbursing the award in terms of annuities, fixed deposits or other suitable mode as shall subserve justice. (2) If any of the claimants is a minor or person of unsound mind, the Tribunal may give liberty to the guardian ad litem to use the interest accruals on the deposit that shall be made during the minority for maintenance. (3) Nothing in this Rule shall limit the power of the Tribunal to make modifications of the mode of disbursal for reasons to be stated in wiring depending on the exigencies requiring liquidation of any corpus created for annuity or premature closure of fixed deposit, for the benefit of the claimant."

13. Conspectus of Rule 5.1 and Rule 5.2 of the Amendment Rules makes it clear that learned Tribunal having regard to the illiteracy or other disabling factors impairing judicious use of sum awarded by it may order to protect the said sum by issuing directions for disbursing of the award in terms of annuities, fixed deposits or other suitable mode so as to subserve the justice. Further, Rule 5.2 makes it clear that if the claimant is a minor or a person of unsound mind, the Tribunal may give liberty to the guardian ad litem to use the interest accruals on the deposit that shall be made during the minority for his/her maintenance. Thus, it is clear from the aforesaid Rules that the Tribunal has the discretion to pass suitable orders for disbursal of the awarded amount either in terms of the annuities, fixed deposits or other suitable mode in order to subserve judicious utilization of the awarded amount. When the discretion is conferred on the learned Tribunal to determine the mode of payment of the awarded amount as per Rule 5.1 of the Amendment Rules, learned Tribunal has to exercise the same judiciously and see that withholding disbursal of any amount does not cause any injustice to the claimant. Thus, learned Tribunal has to pass a speaking order specifying the reasons for disbursal of the awarded amount in terms of annuities, fixed deposits or by any other mode to subserve the justice. Likewise, when the claimant is a minor or a person of unsound mind, learned Tribunal has the discretion to give liberty to the guardian ad litem to use the interest accruals on such deposits made in terms of Rule 5.1 during the minority of the claimant for his/her maintenance. The orders/case law relied upon by learned counsel for the Appellants have no application to the awards passed subsequent to 1st January, 2020 impugned in the aforesaid appeals as the said decisions/case law have not taken into consideration the effect of Amendment Rules,

more particularly Rule 5.1 and Rule 5.2 of the said Amendment Rules.

14. In the instant appeals, all the Appellants are admittedly adults and are not of unsound mind. Thus, learned Tribunal, while directing for deposit of a major portion of the awarded amount in fixed deposits, ought to have taken into consideration the object and intent of Rule 5.1 of the Amendment Rules and the order passed in Geeta Devi (supra). There is no material on record to show that the Appellants in the aforesaid appeals are illiterate or there is any disabling factors, which may impair judicious use of such sum.

15. Law is well settled that when a Court/Tribunal is conferred with the discretionary power, it is not required to exercise the same in all cases in a routine manner. The discretionary power conferred on the Court or the Tribunal, should be exercised judiciously in appropriate cases assigning good reason for the same. Discretion should not be exercised in a blanket form which may otherwise lead to improper exercise of such power and will frustrate the object of grant of compensation. In the cases at hand, there being no material on record to come to a conclusion that requirements of Rule 5.1, Rule 5.2 or Rule 5.4 are satisfied, I am of the considered view that learned Tribunal has committed an error of law in directing for deposit of a major portion of the awarded amount to be kept in fixed deposits.

16. Rule 5.3 of the Amendment Rules prescribes that learned Tribunal has power to modify the mode of disbursal of the awarded amount for the reasons to be stated in writing depending upon the exigencies requiring liquidation of any purpose created for annuity or premature closure of fixed deposit for the benefit of the claimant.

17. Rule 5.3 of the Amendment Rules will come into play when the discretion conferred on the learned Tribunal is exercised judiciously by assigning good reason thereto for issuance of a direction for disbursal of the awarded amount in terms of annuities or fixed deposits etc. This Court could have remitted the appeals back to the Tribunal granting liberty to the Claimants to file application for modification of the mode of disbursal under Rule 5.3 of the Amendment Rules. Since it is already held that the direction of the Tribunal to deposit major portion of the awarded amount is not proper, the occasion for remitting the matter to the Tribunal does not arise.

18. In that view of the matter, all the appeals are allowed and learned Tribunal is directed to disburse the awarded amount by liquidating the fixed deposits, if any, to the claimants on proper identification, as expeditiously as possible preferably within a period of one month from the date of filing of an application along with certified copy of this order following due procedure of law. In the circumstances, there shall be no order as to cost."

4. Accordingly, present appeal is disposed of in terms of the principles decided in the said decision of this Court with a direction to disburse entire compensation amount in favour of the claimant by keeping 50% of their shares in interest bearing fixed deposits separately in their names in any Nationalized Bank for a period of five years.

5. With the aforesaid observation and direction, the FAO is disposed of.

6. Urgent certified copy of this order be granted on proper application.

(S.S. Mishra) Judge

Swarna

Location: High court of orissa