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when the parties are capable to handle their compensation amount and when they are in dire need of the compensation amount, entire amount should be released with out insisting for fixed deposites==It was pointed out that if the money was locked up in a nationalised bank, only the bank would be benefited by the deposit as they give a paltry interest which could not be equated to the costs of materials which were ever increasing. It was further stated that the delay in payment of compensation amount exposed the appellants to serious prejudice and economic ruin.=The prayer in the application of the appellants for release of the 8 amount invested in long term deposits stands allowed. The entire amount of compensation shall be withdrawn and paid to the appellants without any further delay.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1095 OF 2012

[arising out of SLP (C) No. 22521 of 2008]

 
A.V. Padma & Ors. … Appellants
Versus

 
R. Venugopal & Ors. … Respondents

 

 

J U D G M E N T

 
CYRIAC JOSEPH, J.

 
1. Leave granted.

 

 

2. The appellants were the petitioners in Writ Petition No.

 

10405/2008 which was dismissed by the High Court of Karnataka as

 

per order dated 5.8.2008 which is impugned in this appeal.

 

Respondent Nos. 1 to 3 herein were respondent Nos. 1, 2 and 4 in

 

the writ petition.

 

 

3. One T.S. Subrahmanyam met with a motor accident on

 

12.11.1991 and died on 21.7.1993 due to injuries sustained in the

 

accident. Appellant No. 1 is the widow and appellant Nos.2 and 3 are

 

the daughters of the said T.S. Subrahmanyam. In the claim petition
2

 
filed by the appellants who are the legal heirs of T.S. Subrahmanyam,

 

the Motor Accidents Claims Tribunal-I, Mysore (for short, “the

 

Tribunal”) passed an award granting Rs.60,000/- as compensation.

 

In appeal, the High Court of Karnataka vide its order dated 6.7.2006

 

enhanced the amount of compensation to Rs.4,25,000/-. Respondent

 

No. 3 – United India Insurance Co. Ltd. deposited in the Tribunal an

 

amount of Rs.6,33,038/- on 7.1.2008. On 31.1.2008, the appellants

 

filed an application before the Tribunal praying for release of the

 

amount in deposit in favour of appellant No. 1, A.V. Padma.

 

Appellants Nos. 2 and 3 filed affidavits stating that they had no

 

objection to the payment of the amount to their mother A.V. Padma.

 

However, the Tribunal directed to invest Rs.1,00,000/- each in long

 

term deposits in favour of appellant Nos. 2 and 3 and to disburse only

 

the balance amount to the appellants. The appellants filed a further

 

application dated 19.6.2008 praying to disburse the entire amount to

 

the decree-holders without insisting on deposit of any portion of the

 

amount in any nationalized bank. However, by an order dated

 

28.6.2008, the Tribunal rejected the prayer for release of the amount

 

of Rs.2,00,000/- deposited in the nationalized bank. Aggrieved by the

 

order of the Tribunal, the appellants filed Writ Petition No. 10405 of

 

2008 in the High Court of Karnataka. The High Court dismissed the

 

writ petition observing that the Tribunal had passed the impugned

 

order keeping in mind the law declared by the Supreme Court in
General Manger, Kerala State Road Transport Corporation,
Trivandrum v. Susamma Thomas and Others, AIR 1994 SC 1631.
3

 
According to the High Court, the Tribunal only followed the judgment

 

of the Supreme Court in letter and spirit. Challenging the order of the

 

High Court this appeal has been filed.

 
4. In the case of Susamma Thomas (supra), this Court issued

 

certain guidelines in order to “safeguard the feed from being frittered

 

away by the beneficiaries due to ignorance, illiteracy and

 

susceptibility to exploitation”. Even as per the guidelines issued by

 

this Court Court, long term fixed deposit of amount of compensation

 

is mandatory only in the case of minors, illiterate claimants and

 

widows. In the case of illiterate claimants, the Tribunal is allowed to

 

consider the request for lumpsum payment for effecting purchase of

 

any movable property such as agricultural implements, rickshaws etc.

 

to earn a living. However, in such cases, the Tribunal shall make sure

 

that the amount is actually spent for the purpose and the demand is

 

not a ruse to withdraw money. In the case of semi-illiterate claimants,

 

the Tribunal should ordinarily invest the amount of compensation in

 

long term fixed deposit. But if the Tribunal is satisfied for reasons to

 

be stated in writing that the whole or part of the amount is required

 

for expanding an existing business or for purchasing some property

 

for earning a livelihood, the Tribunal can release the whole or part of

 

the amount of compensation to the claimant provided the Tribunal

 

will ensure that the amount is invested for the purpose for which it is

 

demanded and paid. In the case of literate persons, it is not

 

mandatory to invest the amount of compensation in long term fixed
4

 
deposit. The expression used in guideline No. (iv) issued by this Court

 

is that in the case of literate persons also the Tribunal may resort to

 

the procedure indicated in guideline No. (i), whereas in the guideline

 

Nos. (i), (ii), (iii) and (v), the expression used is that the Tribunal
should. Moreover, in the case of literate persons, the Tribunal may
resort to the procedure indicated in guideline No. (i) only if, having

 

regard to the age, fiscal background and strata of the society to which

 

the claimant belongs and such other considerations, the Tribunal

 

thinks that in the larger interest of the claimant and with a view to

 

ensure the safety of the compensation awarded, it is necessary to

 

invest the amount of compensation in long term fixed deposit.

 

 

5. Thus, sufficient discretion has been given to the Tribunal not to

 

insist on investment of the compensation amount in long term fixed

 

deposit and to release even the whole amount in the case of literate

 

persons. However, the Tribunals are often taking a very rigid stand

 

and are mechanically ordering in almost all cases that the amount of

 

compensation shall be invested in long term fixed deposit. They are

 

taking such a rigid and mechanical approach without understanding

 

and appreciating the distinction drawn by this Court in the case of

 

minors, illiterate claimants and widows and in the case of semi-

 

literate and literate persons. It needs to be clarified that the above

 

guidelines were issued by this Court only to safeguard the interests of

 

the claimants, particularly the minors, illiterates and others whose

 

amounts are sought to be withdrawn on some fictitious grounds. The
5

 
guidelines were not to be understood to mean that the Tribunals were

 

to take a rigid stand while considering an application seeking release

 

of the money. The guidelines cast a responsibility on the Tribunals to

 

pass appropriate orders after examining each case on its own merits.

 

However, it is seen that even in cases when there is no possibility or

 

chance of the feed being frittered away by the beneficiary owing to

 

ignorance, illiteracy or susceptibility to exploitation, investment of the

 

amount of compensation in long term fixed deposit is directed by the

 

Tribunals as a matter of course and in a routine manner, ignoring the

 

object and the spirit of the guidelines issued by this Court and the

 

genuine requirements of the claimants. Even in the case of literate

 

persons, the Tribunals are automatically ordering investment of the

 

amount of compensation in long term fixed deposit without recording

 

that having regard to the age or fiscal background or the strata of the

 

society to which the claimant belongs or such other considerations,

 

the Tribunal thinks it necessary to direct such investment in the

 

larger interests of the claimant and with a view to ensure the safety of

 

the compensation awarded to him. The Tribunals very often dispose of

 

the claimant’s application for withdrawal of the amount of

 

compensation in a mechanical manner and without proper application

 

of mind. This has resulted in serious injustice and hardship to the

 

claimants. The Tribunals appear to think that in view of the

 

guidelines issued by this Court, in every case the amount of

 

compensation should be invested in long term fixed deposit and under

 

no circumstances the Tribunal can release the entire amount of
6

 
compensation to the claimant even if it is required by him. Hence a

 

change of attitude and approach on the part of the Tribunals is

 

necessary in the interest of justice.

 

 

6. In this case, the victim of the accident died on 21.7.1993. The

 

award was passed by the Tribunal on 15.2.2002. The amount of

 

compensation was enhanced by the High Court on 6.7.2006. Neither

 

the Tribunal in its award nor the High Court in its order enhancing

 

compensation had directed to invest the amount of compensation in

 

long term fixed deposit. The Insurance Company deposited the

 

compensation amount in the Tribunal on 7.1.2008. In the application

 

filed by the appellants on 19.6.2008 seeking withdrawal of the

 

amount without insisting on investment of any portion of the amount

 

in long term deposit, it was specifically stated that the first appellant

 

is an educated lady who retired as a Superintendent of the Karnataka

 

Road Transport Corporation, Bangalore. It was also stated that the

 

second appellant Poornachandrika is a M.Sc. degree holder and the

 

third appellant Shalini was holding Master Degree both in Commerce

 

and in Philosophy. It was stated that they were well versed in

 

managing their lives and finances. The first appellant was already

 

aged 71 years and her health was not very good. She required money

 

for maintenance and also to put up construction on the existing house

 

to provide dwelling house for her second daughter who was a co-

 

owner along with her. The second daughter was stated to be residing

 

in a rented house paying exorbitant rent which she could not afford in
7

 
view of the spiralling costs. It was further stated in the application

 

that the first appellant was obliged to provide a shelter to the first

 

daughter Poornachandrika. It was pointed out that if the money was

 

locked up in a nationalised bank, only the bank would be benefited by

 

the deposit as they give a paltry interest which could not be equated

 

to the costs of materials which were ever increasing. It was further

 

stated that the delay in payment of compensation amount exposed the

 

appellants to serious prejudice and economic ruin. Along with the

 

application, the second and third appellants had filed separate

 

affidavits supporting the prayer in the application and stating that

 

they had no objection to the amount being paid to the first appellant.

 

 

7. While rejecting the application of the appellants, the Tribunal

 

did not consider any of the above-mentioned aspects mentioned in the

 

application. Unfortunately, the High Court lost sight of the said

 

aspects and failed to properly consider whether, in the facts and

 

circumstances of the case, there was any need for keeping the

 

compensation amount in long term fixed deposit.

 

 

8. Having regard to the facts and circumstances of the case and in

 

view of the uncontroverted averments in the application of the

 

appellants referred to above, we are of the view that the Tribunal

 

ought to have allowed the prayer of the appellants. Hence the

 

impugned orders of the Tribunal and the High Court are set aside.

 

The prayer in the application of the appellants for release of the
8

 
amount invested in long term deposits stands allowed. The entire

 

amount of compensation shall be withdrawn and paid to the

 

appellants without any further delay. The appeal is allowed in the

above terms. There will be no order as to costs.

 

 

………………………………………J.

(CYRIAC JOSEPH)

 

 

……………………………………..J.

(T.S. THAKUR)

New Delhi;

January 27, 2012.

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