Punjab & Haryana High Court Issues Guidelines On When Tribunals Can Order Fixed Deposits While Granting Compensation

The Punjab & Haryana High Court has laid down guidelines illustrating cases when Tribunals can order Fixed Deposits of compensation.

Justice Pankaj Jain said, "The guidelines are not to be interpreted like statute but need to be followed in a more pragmatic manner. The Tribunals are right in ordering investment of compensation in Fixed Deposits in the case where a claimant is prone to being robbed off the compensation awarded."

The Court laid down the following broad parameters that can be laid down when the Tribunals should order Fixed Deposits:

"a) the claimant is a minor. From awarded compensation, the share of the minor should be ordered to be invested in Fixed Deposits till he/she attains the age of majority or till the parents/guardians show pressing need to spend the amount for the benefit of minor;

(b) where the claimant is a physically disabled person owing to some disability arising out of birth, injury or extremely old age and the Tribunal is satisfied that the claimant will not be able to protect his/her money from unscrupulous elements; and

(c) where future treatment of the claimant needs to be taken care of by spending amount of compensation."

The judge added that the list is merely illustrative and not exhaustive and "in cases where claimants are major and there is no apprehension that they may fall prey to unscrupulous elements or touts/unethical arrangements etc., the amount need not be invested in Fixed Deposits."

These observations were made while hearing a batch of appeals challenging the awards passed by the Railway Claims Tribunal whereby 90% of the compensation amount awarded by the Tribunal was ordered to be invested in the Fixed Deposit for a period of three years.

After hearing the submissions, the Court said that the issue of safeguarding the interest of the destitute who receive compensation in the claims has repeatedly concerned the Courts. Constitutional Courts have time and again issued guidelines invoking the 'doctrine of parens patriae'.

"The Apex Court in the case of Union Carbide Corporation vs. Union of India (1991) 4 SCC 584 approved of principles enunciated by Division Bench of Gujarat High Court in the case of Muljibhai vs. United India Insurance Co. Limited (1982) 23 (1) Gujarat Law Reporter 756 governing disbursal of compensation amounts to the victims. The said principles were reiterated for disbursal of compensation to the victims in Kerala State Road Transport Corporation vs. Susamma Thomas and others, 1994(2) PLR 01 and certain guidelines were issued to the Tribunals," added the bench.

Reliance was placed on Apex Court's decision in General Manager, Kerala State Road Transport Corporation vs. Susamma Thomas and others, 1994(2) PLR 01 wherein it issued guidelines to protect the rights of the claimants, who are :

a) the minors;

b) under some disability; and

c) widows and illiterate persons i.e. those who apprehend threat at the hands of unscrupulous elements and lack fiscal discipline.

In light of the above, the Court allowed the appeals, however, in one case, the Court noted that the claimants are minors.

"In view of the fact that their interest needs to be taken care of, the compensation amount of the minors is ordered to be kept in fixed deposits till he/she attains the age of majority or till the parents/guardians exhibit pressing need to take care of the expenses for the betterment of the minors," the Court added while disposing of the matter.

Mr. Ujval Mittal, Advocate for the petitioner(s) in all cases.

Mr. Akashdeep Singh, Advocate for the respondent/UOI in FAO-4331-2024.

Mr. Harneet S. Oberoi, Advocate and Ms. Anmolpreet Kaur, Advocate for the respondent/UOI in FAO-4332-2024 (through V.C.)

Mr. Bhisham Kumar Majoka, Advocate for the respondent/UOI in FAO-4337-2024.

Ms. Ayushi Sharma, Advocate for the respondent/UOI in FAO-4335-2024.

Mr. Lalit K. Gupta, Advocate for the respondent/UOI in FAO-4341-2024.

Mr. Aseem Aggarwal, Advocate for the respondent/Union of India in FAO-4334-2024.

Ms. Meher Nagpal, Advocate and Mr. Yash Pal Sharma, Advocate for the respondent/UOI in FAO-4336-2024.

Mr. Aseem Aggarwal, Advocate for Mr. Prajwal Chauhan, Advocate for the respondent/UOI in FAO-4338-2024.

Ms. Bhawna Thakur, Advocate for the respondent/UOI in FAO-4340-2024.

Mr. Karan Bhardwaj, Advocate for the respondent/UOI in FAO-4342-2024.

Mr. Ravi Kumar Indlia, Central Government Counsel for the respondent/UOI in FAO-4333-2024.

Title: Kamaljit Kaur and others vs. Union of India

Citation: 2024 LiveLaw (PH) 269

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