A.V. Padma & Ors.
Vs. R. Venugopal & Ors.
[Civil Appeal No.
1095 of 2012 arising out of SLP (C) No. 22521 of 2008]
J U D G M E N T
CYRIAC JOSEPH, J.
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.
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 2filed 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
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. 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.
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
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.
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 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 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.
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 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.
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.
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 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.