Allowed

Durga Charan Gouda@Durga Gouda v. Union of India

Orissa HC9 Sept 2021FAO/264/2020

Case brief

AI extract

What is this about?

The High Court allowed appeals against Railway Claims Tribunal awards directing fixed deposit of compensation. The court held that for adult claimants without proven illiteracy or disability, depositing compensation in fixed deposits is unlawful. Claims passed after the 2020 Rules became effective are also remanded for release.

What did the court decide?

Tribunal directed to disburse awarded amount by liquidating fixed deposits to claimants on identification within one month.

Durga Charan Gouda@Durga Gouda Vs Union of… — Pension and Retirement Benefits | Orissa HC (2021)

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IN THE HIGH COURT OF ORISSA AT CUTTACK

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FAO NOS.262, 264, 265, 267, 275, 359, 363 & 570 OF 2020

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(Appeals under Section 23 of the Railway Claims Tribunal Act, 1987 challenging the judgments and awards dated 7^th November, 2019, 11^th February, 2020, 9^th January, 2020, 21^st January, 2020, 17^th February, 2020, 29^th January, 2020, 6^th January, 2020 and 20^th February, 2020 passed by the Railway Claims Tribunal, Bhubaneswar Bench, Bhubaneswar in O.A. No. 203 of 2015, O.A. No. 76 of 2017, O.A. No. 59 of 2017, O.A. No. 83 of 2017, O.A. No. 214 of 2013, O.A. No. 41 of 2017, O.A. No. 18 of 2016 and O.A. No. 145 of 2017 respectively)

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….. In FAO No. 262 of 2020 Kabi Pradhan and another …… Appellants -VersusUnion of India, represented through General Manager, East Coast Railway, Bhubaneswar …… Respondent

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In FAO No. 262 of 2020

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In FAO No. 264 of 2020

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Durga Charan Gouda @ Durga Gouda …… Appellant -Versus-

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Union of India, represented through General Manager, East Coast Railway, Bhubaneswar …… Respondent

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In FAO No. 265 of 2020

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Pabitra Majhi and another …… Appellants

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-Versus-

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Union of India, represented through General Manager, East Coast Railway, Bhubaneswar …… Respondent In FAO No. 267 of 2020 Buda Sisha and another …… Appellants -Versus-

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FAO NOS.262, 264, 265, 267, 275, 359, 363 & 570 OF 2020

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Page 1 of 12

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// 2 //

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Union of India, represented through General Manager, East Coast Railway, Bhubaneswar …… Respondent In FAO No. 275 of 2020 Smt. Komal Karad @ Kamala Karad and others …… Appellants -VersusUnion of India, represented through General Manager, East Coast Railway, Bhubaneswar …… Respondent In FAO No. 359 of 2020 Jagannath Biswal and another …… Appellants -VersusUnion of India, represented through General Manager, East Coast Railway, Bhubaneswar …… Respondent In FAO No. 363 of 2020 Madhu Manda …… Appellant -VersusUnion of India, represented through General Manager, East Coast Railway, Bhubaneswar …… Respondent In FAO No. 570 of 2020 Smt. Jaila Bisoyi and others …… Appellants -VersusUnion of India, represented through General Manager, East Coast Railway, Bhubaneswar …… Respondent

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Advocates appeared in these cases: (In all the appeals)

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For Appellants : Miss Deepali Mahapatra, Advocate

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For Respondents : Mr. Dhanoj Kumar Sahoo, Advocate

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275, 359, 363 & 570 OF 2020

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FAO NOS.262, 264, 265, 267,

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Page 2 of 12

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// 3 //

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CORAM : MR. JUSTICE K.R. MOHAPATRA

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JUDGMENT 09.09.2021

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K.R. Mohapatra, J.

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This matter is taken up through hybrid mode.

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These appeals are filed by the claimants under Section 23 of the Railway Claims Tribunal Act, 1987 (for short ‘the Act, 1987’) being aggrieved by the judgments and awards passed by the Railway Claims Tribunal, Bhubaneswar Bench, Bhubaneswar (for short ‘Tribunal’) assailing the mode of payment of compensation amount to the respective claimants therein.

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FAO No. 262 of 2020 has been filed by the parents of the deceased, namely, Kailash Pradhan, assailing the judgment and award dated 7^th November, 2019 passed by learned Tribunal in O.A. No. 203 of 2015.

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3.1 FAO No. 264 of 2020 has been filed by the husband of the deceased, namely, Mamini @ Mamina Gouda, assailing the judgment and award dated 11^th February, 2020 passed by learned Tribunal in O.A. No. 76 of 2017.

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3.2 FAO No. 265 of 2020 has been filed by the parents of the deceased, namely, Debananda Majhi, assailing the judgment and award dated 9^th January, 2020 passed by learned Tribunal in O.A. No. 59 of 2017.

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3.3 FAO No. 267 of 2020 has been filed by the parents of the deceased, namely, Krushna Sisha, assailing the judgment and award FAO NOS.262, 264, 265, 267,

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275, 359, 363 & 570 OF 2020

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Page 3 of 12

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// 4 //

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dated 21^st January, 2020 passed by learned Tribunal in O.A. No. 83 of 2017.

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3.4 FAO No. 275 of 2020 has been filed by the widow, minor son and parents of the deceased, namely, Narendra Karad, assailing the judgment and award dated 17^th February, 2020 passed by learned Tribunal in O.A. No. 214 of 2013.

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3.5 FAO No. 359 of 2020 has been filed by the parents of the deceased, namely, Prakash Biswal, assailing the judgment and award dated 29^th January, 2020 passed by learned Tribunal in O.A. No. 41 of 2017.

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3.6 FAO No. 363 of 2020 has been filed by the injured assailing the judgment and award dated 6^th January, 2020 passed by learned Tribunal in O.A. No. 18 of 2016.

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3.7 FAO No. 570 of 2020 has been filed by the widow and parents of the deceased assailing the judgment and award dated 20^th February, 2020 passed by learned Tribunal in O.A. No. 145 of 2017.

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The legal issue involved in all these appeals being similar in nature, the same are taken up for hearing & final disposal and are disposed of by this common judgment.

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Miss Mahapatra, learned counsel for the Appellants contended that Railway Accidents and Untoward Incidents (Compensation) Amendment Rules, 2020 (for short ‘Amendment Rules’) being a subordinate legislation cannot be made applicable retrospectively and thus, mode of payment provided in Rule 5 of the said Rules is not applicable to the cases at hand. She further submitted that even for the sake of argument, it is assumed that the rule has a retrospective application in view of sub-rule (2) of Rule 1 of the Amendment Rules, FAO NOS.262, 264, 265, 267,

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275, 359, 363 & 570 OF 2020

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Page 4 of 12

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the applicability of Rule 5 being directory in nature, learned Tribunal should not have directed to deposit a major portion of the compensation amount in term deposits instead of releasing it in favour of the Claimants without recording reasons in support thereof. It is her submission that Amendment Rules have no application to the award passed in FAO No. 262 of 2020 as the award was passed much prior to the date when the said Amendment Rules came into force. She further submitted that Rules have been promulgated keeping in mind the illiteracy and other disabling factors of the claimants impairing the judicious use of compensation. In all these appeals, the ClaimantsAppellants are able bodied adults and have no disability which would attract the provisions of Rules 5.1 and 5.2 of the Amendment Rules. None of the Claimants are also minor or persons of unsound mind. Thus, learned Tribunal has committed an error of law in directing to deposit a major portion of the awarded amount to be kept in fixed deposit. In support of her case, she relied upon the orders passed in W.P.(C) No. 8867 of 2020 disposed of on 7^th December, 2020 by the Delhi High Court , Civil Revision No. 3730 of 2019 disposed of on 8^th April, 2021 by Punjab and Haryana High Court, FAO No. 183 of 2020 (I.A. No. 549 of 2020) disposed of on 4^th November, 2020 by this Court and also the case law reported in 2021(I) TAC 543 (Jharkhand High Court) . Hence, she prayed for disbursal of the awarded amount in favour of the Claimants by releasing it from the term deposits.

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Mr. Sahoo, learned counsel for the Railways-Respondent, on the other hand, contended that Amendment Rules have been framed in compliance of the order dated 22^nd February, 2019 passed by the Delhi High Court in the case of Geeta Devi –v- Union of India (FAO No. 22 of 2015 and CMA No.4501 of 2015). Accordingly, the Central FAO NOS.262, 264, 265, 267, 275, 359, 363 & 570 OF 2020 Page 5 of 12

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Page 5 of 12

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// 6 //

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Government in exercise of power under Section 129 of the Railways Act, 1989 amended the Railway Accidents and Untoward Incidents (Compensation) Rules, 1990 and framed the Amendment Rules. The Principal Bench of Railway Claims Tribunal, Delhi also formulated the Railway Claims Tribunal Annuity Deposit (RCTAD) Scheme in the matter of release of compensation amount in conformity with Rules 5.1 and 5.2 of the Amendment Rules. Although the Amendment Rules was published by the Government of India in the official gazette on 4^th June, 2020, but Rule 1(2) of the Amendment Rules stipulates that said Rules deemed to have come into force with effect from 1^st January, 2020. As such, the Amendment Rules has application to the awards passed on or after 1^st January, 2020. Nothing in the said Rules limits the power of learned Tribunal to make modification of the mode of disbursal of the awarded amount for the reasons to be recorded in writing. Thus, the Claimants-Appellants are at liberty to move learned Tribunal for modification of the mode of disbursing of the awarded amount. The orders and case laws relied upon by learned counsel for the Appellants do not deal with the provisions of the Amended Rules. As such, the same have no application to the present batch of appeals. He, therefore, prayed for dismissal of the appeals.

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The issue raised by Miss Mahapatra, learned counsel for the Appellants with regard to retrospective application of the Amendment Rules cannot be decided by this Court while exercising power under Section 23 of the Act. The same can be decided in a properly constituted application as and when cause of action for the same arises.

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Upon hearing learned counsel for the parties and on perusal of the records, it is apparent that the Amendment Rules have no application to the award passed by learned Tribunal impugned in FAO FAO NOS.262, 264, 265, 267,

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275, 359, 363 & 570 OF 2020

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Page 6 of 12

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No. 262 of 2020 as the award therein was passed on 7^th November, 2019, i.e. much before the Amendment Rules came into force. It also appears that the Appellants in the said appeal are adults and there is no material on record to show that either they are illiterate or of unsound mind or they have any disability both mental and physical. As held by Hon’ble Supreme Court in the case of H.S. Ahammed Hussain and another v. Irfan Ahammed and another , reported in 2002 (6) SCC 52, the amount of compensation awarded to an adult cannot be ordered to be deposited in fixed deposit in a nationalized bank. The relevant paragraph of the aforesaid judgment is as under:

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“8. Learned counsel for the appellant lastly submitted that the amount of compensation payable to the mothers of the victims should not have been directed to be kept in fixed deposit in a nationalised bank. In the facts and circumstances of the present case, we are of the view that the amount of compensation awarded in favour of the mothers should not be kept in fixed deposit in a nationalised bank. In case the amounts have not been already invested, the same shall be paid to the mothers, but if, however, invested by depositing the same in fixed deposit in a nationalised bank, there may be its premature withdrawal in case the parties so intend.”

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Learned counsel for the Railways-Respondent could not justify the direction of learned Tribunal to deposit a major portion of compensation awarded in fixed deposits in O.A. No. 203 of 2015 out of which FAO No. 262 of 2020 arises. Thus, I am of the considered view that the Appellants in FAO No. 262 of 2020 being adults and there being no material on record to show that they have any disability or incapability to utilize the compensation amount in a judicious manner, I direct that the entire compensation amount be released in favour of the Claimants on proper identification.

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FAO NOS.262, 264, 265, 267, 275, 359, 363 & 570 OF 2020

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Page 7 of 12

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// 8 //

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So far as rest of the appeals are concerned, the awards impugned in those cases are passed after 1^st January, 2020 when the Amendment Rules had already come into force. Hence, it is to be examined whether the Appellants are entitled to the relief claimed in these appeals by directing the Tribunal to release the compensation amount in favour of the respective Claimants, which are deposited in fixed deposits.

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In the case of Geeta Devi (supra), Delhi High Court held as follows:

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“5. As Regards Amendment to the Railway Accidents and Untoward Incidents (Compensation) Rules, 1990. 5.1. Many of the claimants are drawn from rural areas with low levels of literacy and lower levels of making appropriate decision for the use of amounts guaranteed under the awards. There are several instances of their exploitation by middlemen and touts operating in the field. The scope for such exploitation is itself one of the incentives for fomenting bogus claims, fabricated documents and duplicate claims in different Benches of the Tribunal for the same cause of action. The availability of bulk funds in the name of an ill-informed claimant is also a cause for exploitation. A scheme for protection of the amount due to such a claimant is the need of the hour. Earlier, this Court has involved 21 Nationalized Banks in dialogue to evolve a scheme of annuities for disbursement of claims. They have been ordered already to be implemented in this case, vide directions passed on 22^nd February, 2019. This scheme as applied to motor accident claims has been approved by the Supreme Court in its order dated 05^th March, 2019 in Krishnamurthi –v- New India Insurance Company, SLP (C) No. 31521-31522 of 2017. A statutory rule backing will therefore best serve the interest of the litigant in the manner set out below:

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5.2. Insert following Rule 5 after Rule 4:-

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Rule 5: Mode of payment- (1) The Tribunal may, in order to protect the sum awarded to the claimant, having due regard to the illiteracy or other disabling factors impairing the judicious use of such sum, issue directions for

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FAO NOS.262, 264, 265, 267,

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Page 8 of 12

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275, 359, 363 & 570 OF 2020

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disbursing the award in terms of annuities, fixed deposits or other suitable mode as shall subserve justice.

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(2) If any of the claimants is a minor or person of unsound mind, the Tribunal may give liberty to the guardian ad litem to use the interest accruals on the deposit that shall be made during the minority for maintenance.

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(3) Nothing in this Rule shall limit the power of the Tribunal to make modifications of the mode of disbursal for reasons to be stated in wiring depending on the exigencies requiring liquidation of any corpus created for annuity or premature closure of fixed deposit, for the benefit of the claimant.”

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On the basis of the recommendation made by Delhi High Court, the Government of India in Ministry of Railways in exercise of power under Section 129 of the Railways Act, 1989 issued a notification on 3^rd June, 2020 amending the Railway Accidents and Untoward Incidents (Compensation) Rules, 1990. The said Rule is called as Railway Accidents and Untoward Incidents (Compensation) Amendment Rules, 2020. Rule 1(2) of the Amendment Rules makes it effective from 1^st January, 2020. By virtue of Rule 2, Rule 5 has been inserted by way of amendment, which runs thus:

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“ 5. MODE OF PAYMENT -

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5.1 THE TRIBUNAL MAY, IN ORDER TO PROTECT THE SUM AWARDED TO THE CLAIMANT, HAVING DUE REGARD TO THE ILLITERACY OR OTHER DISABLING FACTORS IMPAIRING THE JUDICIOUS USE OF SUCH SUM, ISSUE DIRECTIONS FOR DISBURSING THE AWARD IN TERMS OF ANNUITIES, FIXED DEPOSITS OR OTHER SUITABLE MODE AS SHALL SUBSERVE JUSTICE.

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5.2 If any of the claimants is a minor or person of unsound mind, the Tribunal may give liberty to the guardian ad litem to use the interest accruals on the deposit that shall be made during the minority for maintenance.

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5.3 Nothing in this rule shall limit the power of the Tribunal to make modifications of the mode of disbursal for reasons to be stated in writing depending on the exigencies requiring

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FAO NOS.262, 264, 265, 267,

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Page 9 of 12

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275, 359, 363 & 570 OF 2020

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liquidation of any corpus created for annuity or premature closure of fixed deposit, for the benefit of the claimant.

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5.4 The orders dated 21^st April, 2017, 24^th May, 2019 and 06^th November, 2019 of Hon’ble High Court of Delhi in FAO No. 22/2015 and CM Application No.4501/2015 in Geeta Devi Vs Union of India, relating to disbursement of compensation shall be read as part of this rule.”

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Conspectus of Rule 5.1 and Rule 5.2 of the Amendment Rules makes it clear that learned Tribunal having regard to the illiteracy or other disabling factors impairing judicious use of sum awarded by it may order to protect the said sum by issuing directions for disbursing of the award in terms of annuities, fixed deposits or other suitable mode so as to subserve the justice. Further, Rule 5.2 makes it clear that if the claimant is a minor or a person of unsound mind, the Tribunal may give liberty to the guardian ad litem to use the interest accruals on the deposit that shall be made during the minority for his/her maintenance. Thus, it is clear from the aforesaid Rules that the Tribunal has the discretion to pass suitable orders for disbursal of the awarded amount either in terms of the annuities, fixed deposits or other suitable mode in order to subserve judicious utilization of the awarded amount. When the discretion is conferred on the learned Tribunal to determine the mode of payment of the awarded amount as per Rule 5.1 of the Amendment Rules, learned Tribunal has to exercise the same judiciously and see that withholding disbursal of any amount does not cause any injustice to the claimant. Thus, learned Tribunal has to pass a speaking order specifying the reasons for disbursal of the awarded amount in terms of annuities, fixed deposits or by any other mode to subserve the justice. Likewise, when the claimant is a minor or a person of unsound mind, learned Tribunal has the discretion to give liberty to the guardian ad litem to use the interest accruals on such FAO NOS.262, 264, 265, 267,

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275, 359, 363 & 570 OF 2020

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Page 10 of 12

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deposits made in terms of Rule 5.1 during the minority of the claimant for his/her maintenance. The orders/case law relied upon by learned counsel for the Appellants have no application to the awards passed subsequent to 1^st January, 2020 impugned in the aforesaid appeals as the said decisions/case law have not taken into consideration the effect of Amendment Rules, more particularly Rule 5.1 and Rule 5.2 of the said Amendment Rules.

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In the instant appeals, all the Appellants are admittedly adults and are not of unsound mind. Thus, learned Tribunal, while directing for deposit of a major portion of the awarded amount in fixed deposits, ought to have taken into consideration the object and intent of Rule 5.1 of the Amendment Rules and the order passed in Geeta Devi (supra) . There is no material on record to show that the Appellants in the aforesaid appeals are illiterate or there is any disabling factors, which may impair judicious use of such sum.

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Law is well settled that when a Court/Tribunal is conferred with the discretionary power, it is not required to exercise the same in all cases in a routine manner. The discretionary power conferred on the Court or the Tribunal, should be exercised judiciously in appropriate cases assigning good reason for the same. Discretion should not be exercised in a blanket form which may otherwise lead to improper exercise of such power and will frustrate the object of grant of compensation. In the cases at hand, there being no material on record to come to a conclusion that requirements of Rule 5.1, Rule 5.2 or Rule 5.4 are satisfied, I am of the considered view that learned Tribunal has committed an error of law in directing for deposit of a major portion of the awarded amount to be kept in fixed deposits.

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FAO NOS.262, 264, 265, 267, 275, 359, 363 & 570 OF 2020

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Page 11 of 12

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// 12 //

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Rule 5.3 of the Amendment Rules prescribes that learned Tribunal has power to modify the mode of disbursal of the awarded amount for the reasons to be stated in writing depending upon the exigencies requiring liquidation of any purpose created for annuity or premature closure of fixed deposit for the benefit of the claimant.

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Rule 5.3 of the Amendment Rules will come into play when the discretion conferred on the learned Tribunal is exercised judiciously by assigning good reason thereto for issuance of a direction for disbursal of the awarded amount in terms of annuities or fixed deposits etc. This Court could have remitted the appeals back to the Tribunal granting liberty to the Claimants to file application for modification of the mode of disbursal under Rule 5.3 of the Amendment Rules. Since it is already held that the direction of the Tribunal to deposit major portion of the awarded amount is not proper, the occasion for remitting the matter to the Tribunal does not arise.

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In that view of the matter, all the appeals are allowed and learned Tribunal is directed to disburse the awarded amount by liquidating the fixed deposits, if any, to the claimants on proper identification, as expeditiously as possible preferably within a period of one month from the date of filing of an application along with certified copy of this order following due procedure of law. In the circumstances, there shall be no order as to cost.

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Orissaa High Court, Cuttack, Dated 9^th September, 2021/bks

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FAO NOS.262, 264, 265, 267, 275, 359, 363 & 570 OF 2020

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Page 12 of 12

Durga Charan Gouda@Durga Gouda v. Union of India

Case brief

What is this about?

What did the court decide?

Durga Charan Gouda@Durga Gouda v. Union of India

Case brief

What is this about?

What did the court decide?

What the court decided

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