Rules Allowing Claims Tribunal To Withhold Compensation Based On Claimant's Literacy, Financial Condition Violate Article 14: Allahabad High Court
The Allahabad High Court has held that Rules 5.1 and 5.4.1(i) and (ii) of the Railway Accidents and Untoward Incidents (Compensation) Rules, 1990, which allow the Railway Claims Tribunal to release only a part of the awarded compensation and park the rest in fixed deposit depending on the claimant's literacy and financial condition, discriminate between claimants and violate Article 14...
The Allahabad High Court has held that Rules 5.1 and 5.4.1(i) and (ii) of the Railway Accidents and Untoward Incidents (Compensation) Rules, 1990, which allow the Railway Claims Tribunal to release only a part of the awarded compensation and park the rest in fixed deposit depending on the claimant's literacy and financial condition, discriminate between claimants and violate Article 14 of the Constitution of India.
Reading down the provisions, the Court directed that the entire award be released to claimants who are major and not covered by Rule 5.2.
Rule 5 was added to the Rules of 1990 in 2020 through a notification of the Ministry of Railways (Railway Board), following orders passed by the Delhi High Court in Geeta Devi v. Union of India. Under it, the tribunal, having regard to illiteracy or other disabling factors and the claimant's financial condition and needs, decides how much of the award is to be kept in fixed deposit, and directs the claimant to open a savings account in a nationalised bank on which no cheque book or debit card is issued without its permission.
Justice Rohit Ranjan Agarwal held,
“Once the intention of the legislature is clear that benefit has to be passed on in case of death or injury of a passenger in a train accident, rules deferring the extension of benefit granted under the Act and discriminating between class of claimants is violative of Article 14 of the Constitution of India.”
Petitioners, in a bunch of writ petitions, were either passengers injured in train accidents or dependents of passengers who had died. Relying on Rule 5, the Railway Claims Tribunal released 10 percent of the compensation awarded to them and directed that the balance be kept in an interest bearing account in a nationalised bank.
Petitioners argued that all claimants are equal before law and release of compensation could not be held back on the basis of literacy or financial condition, as the railways are used by rich and poor alike. It was also argued that once the award is passed, the tribunal becomes functus officio and cannot restrict how the money is used.
Counsel for the railways submitted that Rule 5 was introduced on the directions of the Delhi High Court to shield claimants from touts and middlemen, and the only question was whether the amount already deposited should be released at once or in parts.
The Court observed that claimants approach the tribunal themselves or through lawyers or agents knowing that the maximum compensation for death or total incapacitating injury is Rs. 8 lakhs under Rule 3, and therefore no question of exploitation arises.
Referring to the Jan Dhan Yojana, the Court noted that most people in the country now hold bank accounts linked with Aadhaar and mobile numbers, and it could not be assumed that an illiterate person would be unable to operate one. It observed that this could not be placed before the Delhi High Court in Geeta Devi.
“In today's world, Rs. 8 Lakhs is not a big amount which cannot be managed by an Indian. There appears no justification in only releasing 10 percent of the awarded amount, that is, Rs. 80,000/- to a claimant and keeping rest of Rs. 7,20,000/- in a fixed deposit for a period of three years.”
Terming the condition in Rule 5.4.1(ii) excessive, the Court held that the tribunal may direct opening of a savings account only where the claimant does not already have one in a nationalised bank, and that a cheque book follows as a natural consequence of opening an account.
“Such riders only creates difference in the society as the weaker section finds that such restrictions are to curb their rights in the garb of protection given to them while the literate people with good financial background enjoys the fruits immediately.”
The Court relied on its earlier decision in Runna v. Vth Additional District Judge/Motor Accidents Claims Tribunal, where it was held that a person who attains majority is free to decide what to do with the money awarded and the State cannot attach a rider to it.
“Act of 1987 is a beneficial piece of legislation while Chapter XIII of Act of 1989 also extends benefit to the claimants and makes railway administration liable for death or injury of a passenger due to an accident. Once the intention of the legislature is clear that benefit has to be passed on in case of death or injury of a passenger in a train accident, rules deferring the extension of benefit granted under the Act and discriminating between class of claimants is violative of Article 14 of the Constitution of India.”
Holding that subordinate legislation cannot curtail the compensation provided under Chapter XIII of the Railways Act, 1989, and relying on Supreme Court precedents on reading down, the Court read down Rule 5.1 to require the tribunal to release the awarded sum to all claimants except those covered by Rule 5.2.
Rule 5.4.1(i) and (ii) were read down to require the tribunal to credit the award to the claimant's account after verification, and to direct opening of an account only where the claimant has no individual savings account in a nationalised bank near his permanent residence. In a newly opened account, no debit card is to be issued, but the claimant may withdraw money by cheque or withdrawal form.
Accordingly, the writ petitions were partly allowed and the tribunal was directed to release the entire awarded amount to petitioners who are major and not covered by Rule 5.2, along with immediate release of amounts kept in fixed deposit.
Case Title: Ram Naresh Singh and 5 others v. Union of India