Smt Jayanti Devi & Ors. vs Union Of India

AMIT BANSAL, J. (Oral)

The present writ petition has been filed seeking setting aside of the impugned order dated 24^th February, 2026, passed by the Railway Claims Tribunal, Principal Bench, Delhi.

In terms of the impugned order, the Railway Claims Tribunal has awarded compensation of Rs.8 lakhs to the petitioners. However, it has been directed that only 10% of the amount awarded shall be paid to the petitioners and the remaining amount shall be kept in FDRs for a period of three (3) years.

Issue Notice.

Notice is accepted by counsel for the respondent/Railways.

Since the issue involved in the present petition is only legal, with the consent of counsel, the present writ petition is taken up for disposal at this stage.

Brief facts necessary for deciding the present petition are as follows:

The husband of petitioner no.1 suffered fatal injuries in an untoward railway incident which occurred on 14^th May, 2013 at Hazrat Nizamuddin Railway Station and succumbed to the said injuries on 15^th May, 2013.

The petitioners filed a claim application bearing No. OA/ll/U/52/2014 before the Railway Claims Tribunal, Principal Bench, Delhi, which came to be dismissed on 9^th February, 2017.

The petitioners preferred an appeal against the aforesaid order in FAO No.331/2017, which was allowed by this Court vide judgment dated 7^th January, 2026 and the matter was sent back to the Railway Claims Tribunal for deciding the compensation amounts with a direction to disburse the same within two (2) weeks.

Pursuant thereto, the Railway Claims Tribunal passed an order, granting Rs.8 lakhs as the compensation amount however, it was directed that only 10% of the amount would be released to the petitioners and the rest amounts will be kept in a fixed deposit for 3 years.

Aggrieved by the aforesaid direction, the present writ petition has been filed.

Counsel for the petitioners submits that the petitioners are in urgent requirement of funds and the entire amount should be released to them. He has drawn the attention of the Court to paragraph 12 of the order passed by this Court on 7^th January, 2026 in FAO 331/2017 whereby a direction was issued that the compensation be disbursed to the petitioners within two (2) weeks. Paragraph 12 of the said order is set out below:

Counsel for the petitioners has also placed reliance on order passed by the Allahabad High Court on 17^th March 2026 in Writ-C No.98985 of 2026 titled “Smt. Prema v. Union of India” in similar circumstances.

Counsel appearing on behalf of the respondent submits that in terms of the Railway Accidents and Untoward Incidents (Compensation) Amendment Rules, 2020 (hereinafter ‘Amendment Rules’), the Tribunal has the discretion to require deposit of part of the compensation in annuity/fixed deposit or other suitable mode.

I have heard counsel for the parties.

To begin with, a reference may be made to Rules 5.1, 5.3 and 5.4.1 of the Railway Accidents and Untoward Incidents (Compensation) Rules, 1990 as inserted by the Amendment Rules, which are set out below:

[Emphasis supplied.]

A conjoint reading of the aforesaid provisions would show that though the Railway Claims Tribunal is vested with the discretion to direct disbursement of the awarded compensation by way of annuities, fixed deposits or any other suitable mode, such discretion is neither absolute nor mechanical. Rule 5.1 makes it evident that the power is to be exercised having due regard to the illiteracy or other disabling factors impairing the judicious use of the compensation amount and only where such mode of disbursement would subserve the ends of justice. Rule 5.3 further mandates that any modification in the mode of disbursement must be supported by reasons recorded in writing and should operate for the benefit of the claimant. Furthermore, Rule 5.4.1 obligates the Tribunal to examine the financial condition, financial requirements and appropriate mode of disbursement in respect of the claimant before determining the amount, if any, that deserves to be retained in fixed deposits. Thus, the statutory scheme contemplates an individualized exercise of judicial discretion founded on the facts and circumstances of each case. The Rules do not envisage a uniform or inflexible practice of directing that a fixed percentage of the awarded compensation be retained in fixed deposits irrespective of the claimant's individual circumstances.

In the present case, the Tribunal has directed release of only 10% of the awarded compensation while directing that the remaining amount be kept in fixed deposits for a period of three years. However, the impugned order neither records any finding with regard to the financial condition or financial requirements of the petitioners nor identifies any illiteracy or other disabling factor warranting protection of the compensation amount. There is also no discussion as to why retention of 90% of the awarded compensation would be for the benefit of the petitioners. The discretion vested in the Tribunal has thus been exercised mechanically, without undertaking the enquiry mandated under Rule 5.4.1 and without recording the reasons contemplated under Rule 5.3.

The petitioners have expressed immediate and urgent requirement of the funds. To be noted, the incident in the present case occurred in the year 2013 and the petitioners have been deprived of the compensation for all these years. The petitioners have been pursuing the claim for more than twelve years. This Court, while allowing FAO No.331/2017 on 7^th January, 2026, had directed that the compensation be disbursed to the petitioners within two weeks. In these facts and circumstances, the direction to release only 10% of the awarded amount, without any individualised assessment or reasons, defeats the very object of the award of compensation and cannot be sustained.

In Smt. Prema v. Union of India (supra), the claim arose out of the death of the husband of petitioner no.1 in a railway accident. The Railway Claims Tribunal had awarded compensation of Rs.8 lakhs however, it directed release of only Rs.80,000/- to the claimants and the balance amount was to be kept in fixed deposits for a period of three years. The Allahabad High Court has held that the principle of the compensation amount being released partially and the balance invested in fixed deposit cannot be applied as a rule of thumb in all cases. The discretion has to be applied in the individual case and the facts and circumstances of the case. It was held that the principle invoked by the Tribunal must be blended with practicality so as to release a reasonable amount, keeping in mind the overall circumstances of the case.

In the present case, as discussed above, the Tribunal has passed the direction in a mechanical manner without assessing the needs and requirements of the petitioners.

Accordingly, the impugned order is set aside.

A direction is issued to the Registry, Railway Claims Tribunal, Principal Bench, Delhi to release the entire amount of Rs.8 lakhs in favour of the petitioners along with accrued interest in the manner as directed in the impugned order.

The writ petition stands disposed of in the above terms.