Ori HC | Discretion not to be exercised in blanket form which may otherwise lead to improper exercise of such power and will frustrate object of grant of compensation under Railway Accidents and Untoward Incidents (Compensation) Amendment Rules, 2020

Orissa High Court: K. R Mohapatra J. allowed the appeals and directed to disburse the awarded amount by liquidating the fixed deposits, if any, to the claimants on proper identification, as expeditiously as possible.

 The facts of the case are such that these appeals are filed by the claimants under Section 23 of the Railway Claims Tribunal Act, 1987 (for short ‘the Act, 1987’). Being aggrieved by the judgments and awards passed by the Railway Claims Tribunal, Bhubaneswar Bench, Bhubaneswar (for short ‘Tribunal’) assailing the mode of payment of compensation amount to the respective claimants therein. In all these appeals, the Claimants- Appellants are able bodied adults and have no disability. It was stated in the petition that Railway Accidents and Untoward Incidents (Compensation) Amendment Rules, 2020 (for short ‘Amendment Rules’) being a subordinate legislation cannot be made applicable retrospectively and thus, mode of payment provided in Rule 5 of the said Rules is not applicable to the cases at hand.

Counsel for the appellant Ms. Deepali Mahapatra submitted that even if it is assumed that the rule has a retrospective application in view of sub-rule (2) of Rule 1 of the Amendment Rules, the applicability of Rule 5 being directory in nature, learned Tribunal should not have directed to deposit a major portion of the compensation amount in term deposits instead of releasing it in favour of the Claimants without recording reasons in support thereof. She further submitted that Rules have been promulgated keeping in mind the illiteracy and other disabling factors of the claimants impairing the judicious use of compensation. Thus, Tribunal has committed an error of law in directing to deposit a major portion of the awarded amount to be kept in fixed deposit.

Counsel for the respondents submitted that the Central Government in exercise of power under Section 129 of the Railways Act, 1989 amended the Railway Accidents and Untoward Incidents (Compensation) Rules, 1990 and framed the Amendment Rules. The Railway Claims Tribunal Annuity Deposit (RCTAD) Scheme in the matter of release of compensation amount in conformity with Rules 5.1 and 5.2 of the Amendment Rules was also amended. According to Rule 1(2) of the Amendment Rules the said Rules deemed to have come into force with effect from 1st January, 2020. As such, the Amendment Rules has application to the awards passed on or after 1st January, 2020. Nothing in the said Rules limits the power of learned Tribunal to make modification of the mode of disbursal of the awarded amount for the reasons to be recorded in writing. Thus, the Claimants-Appellants are at liberty to move learned Tribunal for modification of the mode of disbursing of the awarded amount.

The Court reiled on judgment Geeta Devi v Union of India, 2019 SCC OnLine Del 8919 wherein it was observed that

“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.

The Court observed that Conspectus of Rule 5.1 and Rule 5.2 of the Amendment Rules makes it clear 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 Tribunal to determine the mode of payment of the awarded amount as per Rule 5.1 of the Amendment Rules, Tribunal has to exercise the same judiciously and see that withholding disbursal of any amount does not cause any injustice to the claimant. Thus, the 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.

The Court held “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.”[Kabi Pradhan v. Union of India, FAO Nos. 262 of 2020, decided on 09-09-2021]


Arunima Bose, Editorial Assistant has reported this brief.


 Appearances

For Appellants: Miss Deepali Mahapatra

For Respondents: Mr. Dhanoj Kumar Sahoo

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