Railway Accident | Claimant Entitled To Receive Compensation With Interest From Incident Date Until Payment: Jharkhand HC

The Jharkhand High Court observed that the claimant, in railway accident compensation cases, will be entitled to receive compensation with interest from the incident date until payment from the Railway Administration.

The Court partly allowed an Appeal filed by the family members, of an individual who accidentally fell from the train, for enhancement of compensation.

The Court enhanced the simple interest from 6 % to 9 % per annum from the date of the accident till the date of actual payment.

The Bench of Justice Pradeep Kumar Srivastava observed, “the Tribunal has awarded maximum amount of compensation as per Rules but withholding interest from the date of accident to the date of condonation of delay is not justified under law. Therefore, the appellants are held entitled for simple interest @ 9 % per annum from the date of accident i.e. 25/26.02.2018 till the date of actual payment”.

Advocate Krishna Mohan Murari appeared for the Appellants and Government Counsel Awanish Ranjan Mishra appeared for the Respondents.

An appeal was filed before the High Court under Section 23 of the Railway Claims Tribunal Act, 1987 (RCT Act) by the Appellants who were aggrieved and dissatisfied with a specific portion of the order issued by the Railway Claims Tribunal (Tribunal). The Tribunal had awarded a compensation amount of Rs.8 lakhs to the Appellants due to the unfortunate demise of Sankh Nath Dubey in an untoward incident involving an accidental fall from the train. Furthermore, the Tribunal had granted interest at a rate of 6% on the awarded amount of Rs.8 lakhs, calculated from the date of the condonation of delay in applying, i.e., March 17, 2021.

The Union of India contended that the claim application had been filed on August 02, 2019, even though the alleged incident occurred on February 25/26 2018. The delay in filing was condoned on March 17, 2021, and the application was subsequently admitted for hearing. Therefore, the appellants were not entitled to interest from the incident date.

The Bench noted that a claim petition was officially filed by the Appellants on August 02, 2019, accompanied by an application under Rule 17 (2) of the RCT Act, seeking the condonation of a five-month delay in submitting the claim application. The Tribunal, upon careful examination, deemed the reasons provided for the delay sufficient for condonation.

The Court observed the Tribunal’s order that the deceased was a victim of an untoward incident transpiring during the journey on the relevant train. Consequently, the applicants were deemed entitled to compensation under Section 124 A of the Railways Act, 1989 (R Act). The Tribunal also affirmed the deceased's status as a bona fide passenger, and the applicants, being dependent on the deceased, were declared entitled to compensation of Rs.8 lakhs, along with interest at a rate of 6% from the date of condonation admission until the date of the judgment, without incurring any costs.

The Court referred to the case of Rathi Menon v Union of India [(2001) 3 SCC 714] and reiterated the relevant date from which compensation would be payable under the provisions of the Railways Act, 1989. The Court observed that per Section 124 A of the Act the right to claim compensation is acquired by the injured from the date of the incident.

The Court also referred to the case of Union of India v Rina Devi [(2019) 3 SCC 572] and emphasized that in the absence of a specific statutory provision, interest could be awarded from the date of the accident itself. The precedent applied to Railway Claims Tribunal cases, aligning with the principles of accident claims under the Motor Vehicle Act, 1988, and resolving conflicting views.

In this case, the Bench noted that the claim petition had initially been barred by the limitation period. However, the delay was subsequently condoned without any associated costs, as the court was satisfied with the claimants' sufficient explanation for the delay. Consequently, the tribunal's assertion that interest would be payable from the date of condonation of delay was deemed unsustainable under the prevailing legal framework.

The Court examined the directive for fixing the deposit of the compensation amount. This was contingent upon the Government of India's notification dated June 3 2020, which amended the Railway Accidents and Untoward Accident (Compensation) Amendment Rules, 2020 (Rules).

The Bench observed that Rule 5.1 allows the tribunal to protect the awarded sum for the claimant, considering factors like illiteracy or impairments. It can direct the award disbursal through annuities, fixed deposits, or other just modes. Under Rule 5.2, if the claimant is a minor or mentally incapacitated, the tribunal may permit the guardian to use the deposit interest for the minor's maintenance. Rule 5.3 maintains the tribunal's authority to modify disbursal, contingent on written reasons. This flexibility applies when exigencies require liquidation of annuity corpus or premature closure of fixed deposits for the claimant's benefit.

The Court noted that the Tribunal, considering the aforementioned rule, ordered a fixed deposit of the compensation amount, specifically 90% for Appellants Nos. 2 and 3 for two years. Additionally, the Tribunal allowed the applicants the liberty to approach the tribunal with reasons if they wished to prematurely liquidate the fixed deposits due to any exigency. In such cases, the tribunal would consider modifying the mode of disbursement per Clause 5.3 of the Gazette notification dated March 03 2020.

Upon reviewing the records and the challenged order, the Bench noted that the Appellants submitted an application demonstrating justifiable reasons for the premature withdrawal of the compensation amount before the Tribunal. Consequently, the Bench noted that there was no apparent illegality or flaw in the impugned order directing the deposit of the compensation amount in fixed deposits after the disbursement of 10%, along with a proportionate rate of interest. Therefore, the Appellants were granted the liberty to apply before the Tribunal for the disbursal of the entire amount, substantiating their exigencies.

Accordingly, the Court partly allowed the appeal and held that the Appellants were entitled to simple interest @ 9 % per annum from the date of the accident till the date of actual payment.

Cause Title: Pratima Devi v Union of India

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