The Punjab & Haryana High Court has laid down guidelines illustrating when compensation awarded by Railway Claims Tribunals should be placed in fixed deposits, particularly to safeguard claimants from potential exploitation.

The Single-Judge Bench of Justice Pankaj Jain emphasized that these guidelines are not to be treated as statutory provisions but should be applied pragmatically. He noted that tribunals are justified in ordering fixed deposit investments when there is a risk that claimants may be robbed or exploited.

The Court outlined broad parameters for when tribunals should consider fixed deposits for compensation:

1. Claimants who are minors: 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.

2. Physically disabled claimants: 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

3. Future treatment needs: Where future treatment of the claimant needs to be taken care of by spending amount of compensation.

The Bench clarified that the list is illustrative rather than exhaustive, and in cases where claimants are adults with no apprehension of being exploited, fixed deposits may not be necessary. "The list is merely illustrative and not exhaustive. 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," the Court said.

The Court's observations were made while hearing appeals against Railway Claims Tribunal awards, where 90% of the compensation had been ordered to be invested in fixed deposits for three years. The Court emphasized that the issue of safeguarding vulnerable claimants has been a recurring concern for courts, with the doctrine of parens patriae often invoked to protect their interests.

The Single-Judge referred to the Supreme Court’s landmark decision in Union Carbide Corporation vs. Union of India (1991), which approved principles governing the disbursal of compensation. These principles were also reiterated in cases like Kerala State Road Transport Corporation vs. Susamma Thomas (1994), which aimed to protect the rights of minors, individuals with disabilities, widows, and illiterate persons.

Consequently, while allowing the appeals, the Court noted that in cases involving minors, their compensation should be placed in fixed deposits until they reach adulthood or until a guardian demonstrates a valid need for the funds. "In view of aforesaid parameters laid down by this Court, the appeals are allowed. However, in appeals bearing FAO Nos. 4331 & 4333 of 2024, wherein the claimant(s) are minors and 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 ordered.

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Justice Pankaj JainPunjab & Haryana High Court

Sukriti Mishra