Motor Accident | Literate Claimants Can Exercise Discretion, Tribunals Must Avoid Investing Their Money In FDRs Without Recording Reasons: Gujarat HC

The Gujarat High Court has permitted the premature withdrawal of Fixed Deposit Receipt of the compensation awarded in Motor Accidents Claims to an Air Force person who intended to purchase a house for his permanent residence. Justice Gita Gopi stated: "The deposited money are of the claimants. The literates can prudently exercise discretion, manage their funds and can individually decide about systematic planning for investing the money...In case of literate person, the Tribunal is required to give relaxation by not adopting pedantic approach of investing the money in long term FDR without recording reasons for investing the money in long term deposits." The High Court also observed that Tribunals are often taking a 'rigid stand' and are 'mechanically ordering' that the compensation should be invested in long-term FDRs. The Petitioner herein, a Radar Operator, with the Indian Air Force was in need of a permanent residence for his family. The Petitioner was required to furnish INR 20 lakh for the same. He had submitted earnest money but required the remaining sum. As a result, he had moved the Motor Accidents Claims Tribunal for premature withdrawal in FDR. The same was partly allowed. The Petitioner had taken a Bank Loan for the house. The Petitioner submitted that the Tribunal had failed to invoke the Parens Patriae jurisdiction wherein it could allow the withdrawal considering the sale agreement which was presented and the nature of the cause. The Tribunal had rejected the liquidation of FD on the ground that agreement of a fixed property like a residential house was not a registered document. Hence, the tribunal viewed it as a 'hoax.' The Petitioner placed reliance on A.V. Padma & Ors. Vs. R. Venugopal & Ors., to argue that thoughtful consideration must be given to genuine requirements of the Claimant and should avoid mechanical approach ignoring the 'object and the spirit of the Act.' Further reference was made to General Manager, Kerala State Road Transport Corporation, Trivandrum Vs. Susamma Thomas & Ors., (1994) 2 SCC 176 to reiterate the Apex Court's stance that in case of literate persons seeking premature withdrawal, the Tribunal can relax the criterion of making sure that the amount is not used as a ruse to withdraw money. The fiscal background and the strata of society to which the Claimant belongs needs to be factored in for the same. The High Court particularly noted from the Susamma Thomas judgement: "In all cases Tribunal should grant to the claimants liberty to apply for withdrawal in case of an emergency. To meet with such a contingency, if the amount awarded is substantial, the Claims Tribunal may invest it in more than one Fixed Deposit so that if need be one such F.D.R. can be liquidated." From the AV Padma judgement, Justice Gopi concluded that sufficient discretion had been given to the Tribunal to exercise, considering the need of the Claimant. In case of literate persons, the Tribunal should not adopt a 'pedantic approach' of investing money in the longer term in FDRs without recording a reason for the same. The High Court discarded the rationale that the sale agreement could not be considered for withdrawal due to non-registration. Noting the hardship it would cause the Claimant if the premature withdrawal was not allowed, the High Court permitted premature withdrawal with interest upon receipt of the judgement order. Case No.: C/SCA/5501/2022 Case Title: DHAVALKUMAR ASHOKBHAI AGHERA v/s RELIANCE GENERAL INSURANCE CO. LTD.Citation: 2022 LiveLaw (Guj) 332Click Here To Read/Download Order

Motor Accident | Literate Claimants Can Exercise Discretion, Tribunals Must Avoid Investing Their Money In FDRs Without Recording Reasons: Gujarat HC

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Motor Accident | Literate Claimants Can Exercise Discretion, Tribunals Must Avoid Investing Their Money In FDRs Without Recording Reasons: Gujarat HC

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